Friday, November 27, 2020

Tag: These Charts Show the Fed’s Stress Tests as a Dangerous Illusion

These Charts Show the Fed’s Stress Tests as a Dangerous Illusion

by Pam Martens and Russ Martens, Wall Street On Parade:

Sometimes a picture really is worth a thousand words. The charts above show how four of the largest Wall Street banks traded like clones of one another yesterday. Their share prices rallied at almost identical times and the rallies faded at almost identical times. The chart contrasting the trading pattern of JPMorgan Chase and Morgan Stanley is particularly interesting. JPMorgan’s Chase bank has thousands of retail commercial bank branches spread across the United States. Morgan Stanley, on the other hand, has approximately 17,000 retail stockbrokers, now known as financial advisors. What both firms have in common is that they are among the five banks in the country that control a monster pile of derivatives on Wall Street. Ditto for the other two banks illustrated above: Citigroup and Bank of America.