Another trillion-dollar bailout?

CNBC reported, “Fitch warns it may be forced to downgrade dozens of banks, including JPMorgan Chase.”

Downgrading JP Morgan Chase’s credit is a huge alarm because JP Morgan Chase is the bank that bails out the government.

The story said, “A Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase.

“The ratings agency cut its assessment of the industry’s health in June, a move that analyst Chris Wolfe said went largely unnoticed because it didn’t trigger downgrades on banks.

“But another one-notch downgrade of the industry’s score, to A+ from AA-, would force Fitch to reevaluate ratings on each of the more than 70 U.S. banks it covers, Wolfe told CNBC in an exclusive interview at the firm’s New York headquarters.”

The story listed the credit ratings of the big banks. AA- is better than A+. Listed as AA- were Bank of America, Bank of New York Mellon, JP Morgan Chase, and State Street; listed as A+ were Morgan Stanley, Wells Fargo, and BOK Financial Corp.; and, listed as A were Citigroup, Goldman Sachs, and UMB Financial Corp.

Remember the $700 billion TARP Bush and Obama in 2008 threw over the banking meltdown that dropkicked the economy into the goalpost of recession? The government claims every penny was paid back. Show me the receipts.

We have this backward because the people should be bigger than the government. We should be bailing out the government, not the other way around if only because the government is so inept. That happens when you hire people who just want lifetime employment and pensions fit for a king.

Pierpont Morgan — the original JP Morgan — saved the U.S. economy twice.

(By the way, Pierpont attended the the University of Göttingen and earned a degree in art history. Obama mocked art history majors. Maybe one of them would have saved him from having his official portrait painted in crayon.)

Amid the 2008 crisis, Teeka Tiwari wrote, “Pierpont Morgan is widely credited with twice rescuing the banking system and the federal government itself. In 1895, Morgan put together a private syndicate that loaned the federal government gold to shore up the U.S. Treasury. Then in 1907, Morgan pressured other financiers to inject cash into the failing banking system and crashing stock market. That was before the Federal Reserve existed to provide liquidity.

“Many people believe that the Federal Reserve is nothing more than an inside coterie of banks with familial ties that go back for generations. Fact or fiction, is it time to do away with the Fed and try a different approach? If so, what should we replace it with? You tell me.

“It certainly smells like inside baseball. But you know the old saying: It’s not what you know, it’s who you know. And that other old saying: To the victor go the spoils.”

Smells? Is.

If it works, who cares?

But it didn’t work in 2008 and I wonder if 15 years later another trillion-dollar bailout of banks will work because if Fitch downgrades JP Morgan Chase, it is saying the big old bank has lost its mojo.

A downgrade would put the bank closer to the A- that AIG fell to in 2008 when the insurance company helped trigger the panic that led to that TARP which covered up the biggest financial morass since the Depression. JP Morgan Chase helped save AIG.

Which leads me to the sad story of Chief Logan of the Mingo tribe that lived along Yellow Creek near the Ohio River in the time of the French and Indian War. A peaceful man, Virginian soldiers savagely attacked and slaughtered his people while he and other men were on a hunting trip.

More than a century later, Edward S. Ellis wrote in 1905, “The attack was swift and brutal. John Sappington, one of the Virginians, shot and killed Logan's brother and then scalped him. For years after, Sappington took particular delight in boasting of the feat and described the trophy, which still was adorned with trade silver, as a ‘very fine one.’

“Logan's sister was panic stricken; she ran across the courtyard in front of the trading post and stopped six feet in front of one of Greathouse's men. in the split second that their eyes met, he put a bullet into her forehead. Grabbing the infant from her cradleboard, he took hold of its ankles and was about to dash its brains out when one of his companions intervened to save the child's life. The remaining Indians also were shot or tomahawked. Within seconds, all the Mingos were dead.

“The savagery of the attack was astounding, and even James Chambers, a neighbor of Baker's who was not present, declared that the murderers ‘appeared to have lost, in a great degree, all sentiments of humanity as well as the effects of civilization.’”

Logan sought revenge and he had some.

Nevertheless, he had to sign a treaty, and he did so but not before giving his speech:

“I appeal to any white man to say if he ever entered Logan’s cabin hungry, and he gave him not meat; if ever he came cold and naked, and he clothed him not.

“Such was my love for the whites, that my countrymen pointed as they passed and said, ‘Logan is the friend of the white man.’

“I had even thought to have lived with you, but for the injuries of one man. Colonel Cresap, the last spring, in cold blood and unprovoked, murdered all the relatives of Logan, not even sparing my women and children.

“There runs not a drop of my blood in the veins of any living creature. This called on me for revenge. I have sought it. I have killed many. I have fully glutted my vengeance. For my country, I rejoice at the beams of peace. But do not harbor a thought that mine is the joy of fear. Logan never felt fear. He will not turn on his heel to save his life. Who is there to mourn for Logan? Not one.”

If JP Morgan Chase goes down, who is there to mourn for it?

Oh sure, put the government in charge. We saw how well our credentialed and totally expert bureaucracy handled that last one, covid. Wear masks! Social distance! Shut down the economy! Follow the science fiction.

The upside is Red China may fall before we do. Zero Hedge reported, “Fitch May Reassess China's A+ Credit Rating If Debts Balloon As Economy Falters.”

Of course, this year marks the 20th anniversary of reports of the looming collapse of the Chinese economy. Those doomsayers are in a race with global boiling (as the UN now calls it) to see who can be wrong the most often.

But have no fear. Government printing presses are here. More paper money is all we need. Another trillion should do it.