by Pam Martens and Russ Martens
Wall Street on Parade
Imagine that your neighbor across the street had been criminally charged with five felony counts for financial crimes in the past six years and admitted to committing each and every crime to the U.S. Department of Justice. Would you put one-third of all of your money in a safe, give that neighbor the combination, and ask him to hold the safe in his house for you? You would probably be suited up for a straight jacket if you did something like that.
That’s effectively what the Federal Reserve, the central bank of the United States, has done when it comes to JPMorgan Chase. As of this past Wednesday, the Fed has a $7 trillion balance sheet and $2 trillion of its agency Mortgage-Backed Securities are sitting at JPMorgan Chase, the bank that the Department of Justice has charged with five criminal felony counts since 2014 – all of which it admitted to.
Since JPMorgan Chase first inked a contract with the Federal Reserve Bank of New York on December 31, 2008, it has been the sole custodian of all of the agency Mortgage-Backed Securities (MBS) that the Fed had bought in its long-running Quantitative-Easing programs.