You know the big banks have gotten bigger.
As Rolfe Winkler noted last September:
For the big have gotten even bigger since the start of the financial crisis. At the end of 2007, the Big Four banks — Citigroup, JPMorgan Chase, Bank of America and Wells Fargo — held 32 percent of all deposits in FDIC-insured institutions. As of June 30th, it was 39 percent.
(If the image doesn’t load, click here.)
But Simon Johnson gives an even broader perspective on how big the too big to fails have gotten:
Fifteen years ago, the combined assets of our six biggest banks totaled 17 percent of our GDP. By 2006, that number was 55 percent. Right now, it stands at 63 percent.
Johnson also points out that:
The big four have half of the market for mortgages and two-thirds of the market for credit cards. Five banks have over 95 percent of the market for over-the-counter derivatives. Three U.S. banks have over 40 percent of the global market for stock underwriting.
As I’ve previously noted, the government created the mega-giants (they are not the product of free market competition), and their very size destroys the real economy like a massive black hole destroys the matter around it.
And as Johnson and many others have pointed out, the very size of the giant banks enables them to easily capture politicians … about as easily as the Great Attractor captures galaxies.
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Sometime during the mid-90s, I recall seeing a letter from the president of the Richmond Fed to Greenspan. The letter mentioned that, by the end of the decade, they expected the top half dozen or so banks to have something like 90% of the retail business. I’ve got a copy somewhere.
So, there is no surprise here. They expected it and they applauded it.
Meanwhile, I strongly recommend that, if you don’t have a Kunstler-style place in the woods, you should consider buying one.