Courtesy of Pam Martens.
JPMorgan Chase's Stock Chart, July 16, 2008 Through August 11, 2008
From the looks of JPMorgan's share price, one would think the financial world is bathing in a sea of tranquility rather than experiencing crashing commodity prices, tremors in the Eurozone, Canada acknowledging two quarters of contraction, ruptures in China's stock markets, and energy and mining junk bonds losing 20 to 30 percent in a month.
JPMorgan's share price hit an all-time closing high of $70.08 recently. The scary thing is, JPMorgan's stock had a run from $32 to $42 just one month before Lehman Brothers blew up in 2008, marking the beginning of the biggest financial crash since the Great Depression; and there had been a year of financial warnings prior to that. (So much for global bank share prices being a bellwether on global financial stability.) Once the 2008 crash was clearly underway, JPMorgan shareholders saw 70 percent of their share price evaporate in a six-month stretch ending in March 2009.
JPMorgan is not some folksy community bank in New England with no counterparty exposure to other global banks or debt-ridden corporations. JPMorgan Chase is a global bank with over $2 trillion in assets “serving corporations and individuals in over 100 countries,” according to its web site.
Graph from Office of Financial Research Report on Systemic Risks in U.S. Banking System (Symbols JPM and C denote JPMorgan and Citigroup, respectively.)
In February, the U.S. Treasury's Office of Financial Research released a report showing staggering levels of interconnected risk among global banks. JPMorgan Chase had the highest overall score for systemic and interconnected risk.
