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- There Was a Blood Bath in Some Bank Stocks Yesterday: So Much for Jamie Dimon’s Prediction That It’s the End of the Banking Crisis
There Was a Blood Bath in Some Bank Stocks Yesterday: So Much for Jamie Dimon’s Prediction That It’s the End of the Banking Crisis
by Pam Martens and Russ Martens Wall Street on Parade
There are two critical things you need to know about JPMorgan Chase’s Chairman and CEO Jamie Dimon’s ability to stabilize the banking crisis: (1) he’s tried twice and failed both times; (2) his bank is a key financier of hedge funds, some of which are undermining bank stock prices with short selling.
The Financial Times reported on April 5 that “Hedge funds made more than $7bn in profits by betting against bank shares during the recent crisis that rocked the sector, their biggest such haul since the 2008 financial crisis.” Shares of First Republic Bank have lost billions of dollars more in market value since April 5, meaning the $7 billion haul for short sellers is now an understatement.
The one thing that would help dramatically to stem the banking crisis is for President Biden (a man who derives his powers from U.S. voters rather than a p.r. machine like Dimon) to immediately issue an Executive Order halting the short selling of federally-insured bank stocks.