Long time followers of this blog will be familiar with our view that JP Morgan is essentially the Federal Reserve and therefore the US governments bank. JP Morgan's share price provides a proxy for the markets view of whether the Fed and US Treasury are winning or losing the battle. It should also be noted that as the chief government executioner JP Morgan carries hundereds of trillions of dollars worth of derivatives on its books that have been used to manipulate markets. Consequently JP Morgan is a nuclear accident waiting to happen. When (note I didnt say if) JPM fall they will take the Federal Reserve and the current financial system with them. US sovereign default will also occur as a result.
JPM rallied strongly recently but has broken down from long term resistance at $27.50after the Feds PRINT PRINT PRINT policy this week to close just above $23. If JPM breaks recent lows of $15 the US government and financial system are in big trouble.
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