Are you a fan of superhero movies?
Me? Sure…
I’m a fan – but only because I grew up reading comic books as a kid.
I’ve got to admit – seeing their live action counterparts on the big screen – makes me feel like a kid.
My favorites are when the heroes are flawed…
Like how the Incredible Hulk feels like a curse to Bruce Banner…
Or how Batman is driven by the death of his parents…
I think all good heroes should have darker motivation behind their reason for becoming a hero.
As much as I’d like to think that JP Morgan stepping in to rescue another struggling bank is altruistic…
You just KNOW that it’s not.
Let’s take a look at its latest act of “heroism” ….
And we can find out whether or not doing it’s doing so out of the “goodness of its heart” – or the goodness of its wallet.
Yes, that’s right…
JPMorgan Chase is once again stepping up to rescue a struggling bank.
This time they’re providing a $30 billion lifeline to First Republic Bank.
While this move may seem like a noble gesture to save a fellow institution – there could be – and most likely IS – an ulterior motive at play.
JPMorgan CEO Jamie Dimon is known for being a savvy businessman and could be intervening to ultimately take on First Republic’s high-profile clients…
But on the other hand – he COULD be genuinely concerned about the potential for spillover effects from smaller banks to larger ones – especially given the current financial climate.
This rescue mission also highlights a larger problem facing the banking sector…
The potential for a massive run on banks.
Financial pundits suggest that the Federal Reserve could guarantee all bank deposits in the US with a blank check – which could deter customers from withdrawing their money en masse…
However, with almost $20 trillion in US bank deposits – this solution is not without its challenges.
While the likelihood of such a run is low…
The possibility exists – and the Fed may not have the resources to cover it.
This situation is reminiscent of the 1907 financial crisis – where a group of influential Wall Street figures, led by John Pierpont Morgan – came together to rescue the banking system.
The current financial turmoil is not on the same scale as the 1907 crisis – but it highlights the need for cooperation and support among institutions in times of crisis.
JPMorgan’s willingness to step up and provide support to First Republic Bank is a positive example of this cooperation and may serve as a model for future rescue missions.
As you know, the banking sector is no stranger to financial crises and turmoil…
And it is essential for institutions to be prepared to handle such situations.
JPMorgan’s role in this latest rescue mission highlights the importance of having strong and stable institutions that can weather these storms and support other struggling institutions.
While there may be ulterior motives at play – the overall message is clear: when the going gets tough – banks need to come together and support one another to ensure the stability of the entire financial system.
JPMorgan’s $30 billion lifeline to First Republic Bank highlights the potential for spillover effects from smaller banks to larger ones and the need for cooperation and support among institutions in times of crisis.
Again – while there may be ulterior motives at play – the overall message is one of cooperation and support.
Maybe Dimon wanted to take a page out of JP Morgan’s book…
Or maybe it’s just a good bit of PR…
Either way – it’s a smart move – and I’m sure it will pay dividends for JP Morgan down the road.
Will this start a ripple effect?
Maybe…
But you can bet that I’ll be keeping my eye out for any new movement one way or the other.
Actually, I won’t…
The GorillaTrades system will do all the work for me and my members.
If you want to know when to zig or zag at the right time – you should strongly consider becoming a GorillaTrades member today.
Our system works on data – so we’ll be amongst the first to know if we need to run or go all in.
The choice is yours…
Either way – keep your eye on the banking industry – it could determine how our next decade goes!
“A man always has two reasons for doing anything: a good reason and the real reason.” – J. P. Morgan
