Today, the Fed announced that large US banks passed a new (phony) stress test and were allowed to do share buybacks again.
Fed sees 'strong capital levels' at banks after stress tests, green lights share buybacks https://news.yahoo.com/fed-sees-stron...
Fed allows banks to resume share buybacks, JPMorgan stock jumps 5% https://www.cnbc.com/2020/12/18/fed-t...
Fed loosens restrictions on bank share buybacks after second stress test https://www.aol.com/fed-loosens-restr...
And almost immediately after this announcement, JP Morgan Chase Bank (NYSE: JPM) announces a new $30 billion share buyback plan to start boosting the share price again.
JP Morgan Chase to Launch $30 Billion Share Repurchase Program in 2021 https://www.fool.com/investing/2020/1...
But how are tens of billions per year in large bank profits so insulted from the pain in the real economy and banks are not making loans into the real economy as measured by the velocity of money? Jason talks about how banks have changed their business models for profit over the last few decades thanks to insights from former manager director of Goldman Sachs and Bear Stearns, Nomi Prins.
Jason Burack is an investor, entrepreneur, financial historian, Austrian School economist, and contrarian. Jason co-founded the startup financial education company Wall St for Main St, LLC, to try to help the people of Main Street by teaching them the knowledge, skills, research methods, and investing expertise of Wall Street. You can also find Jason's work at his blog website at www.jasonburack.com.