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  • The banking industry is surrounded by so many conspiracies that sometimes its quite difficult

  • to separate facts from fiction, starting from Rothschilds banking dynasty

  • to JP morgan.

  • If the Rothschilds banking empire has shrunk dramatically in recent decades, JP morgan's

  • banking empire only expanded to the point, as of 2019, it has $3 ($2.988) trillion dollars

  • in assets under management, while its investment and corporate arm holds 25.45 trillion dollars

  • in assets under custody.

  • In fact, It was JP Morgan himself who pushed the government to create the federal reserve,

  • the center of all modern conspiracies. For over a hundred years, JP Morgan has been in

  • the centre of american banking.

  • In this video, we are going to look at how JP morgan created the worlds largest bank

  • and How he ended up also convincing the government to create the FED.

  • It all started in 1837 in Hartford, Connecticut where John Pierpont Morgan was born.

  • John joined the banking business just when he hit 20, after coming back from Europe,

  • in 1857. Following his father's footsteps. His father J. S. Morgan had already established

  • the merchant banking firm, Peabody, Morgan & Co.

  • Back then the United States wasn't the superpower that it is today, it was more like an emerging

  • market, so the Europeans were investing heavily in United states since returns were quite

  • high, especially in the railroad, it was like the internet of that time, everyone thought

  • that the railroads are the future and no one would dare to miss this opportunity.

  • But Morgan was smart enough not to invest his money because he knew that it was turning

  • into a bubble and everything would crash at any moment as we will later see in this video,

  • however that didn't stop him from funneling European investments through American companies

  • into the railroad. He even got personally involved in the development and management

  • of the railroads across the nation.

  • Morgan was a big believer in Big Corporations because, they enable economies of scale, and

  • make them more competitive.

  • so his vision was to always merge multiple small businesses and turn them into a conglomerate.

  • In 1890 he took control of J.S. Morgan & Co., his vision was to buy Carnegie steel business

  • and merge it with several other steel, coal, mining and shipping firms. And formed the

  • United States Steel Corporation. It became the first billion-dollar company in the world

  • with a market cap of 1.4 Billion dollars. With economies of scale, they reduced their

  • cost and started competing globally against Europeans.

  • His influence was beyond Steel and Railroad although these two were the best 2 industries

  • of that time. He also played an important role and helped to merge Edison electric with

  • its competitors that ended up becoming General Electic.

  • His vision was always, the bigger the company, the bigger economies of scale it can achieve.

  • He also helped to create AT&T and multiple other companies.

  • It seems like it was JP Morgan who rooter the idea of the giant corporations in the

  • United States, but that's exactly what made JP Morgan one of the most powerful banking

  • houses of the world by 1900, Morgan reorganized business's structures and

  • management to return them to profitability. His reputation as a banker also helped bring

  • investors on board to the businesses that he took over.

  • However, not everything was sunshine and rainbows, remember the crisis I told you about in the

  • beginning. Well, after multiple decades of dramatic growth,

  • the bubble finally burst and the stock market crashed like it always does. It ripped the

  • American economy, Even the major banks were on the verge of bankruptcy.

  • The banks tried to get their loans back, but the firms simply weren't able to pay and

  • the United States didn't have a central bank at that time to rescue them,

  • So, Morgan stepped in and saved the economy.

  • He pledged a large sum of his own money and convinced other major new york bankers to

  • do the same. If it wasn't for him, the crises would have deepened.

  • But it also illustrated the vast influence of a single banker on the entire American

  • economy. That was a clear sign for the government to

  • step in and take over the money supply. what would happen if another crisis would

  • hit? relying on rich guys in new york isn't always the best of the options!

  • That's when the US decided to create a central bank. and in 1913, the federal reserve was

  • born. Just a few months after JP Morgan passed away.

  • But that didn't stop, JP Morgan Company from growing even bigger. It played an important

  • role in WW1. However, when the war came to an end, financial crises hit the world again.

  • The great depression lasted almost 10 years and the congress took any measures to save

  • the economy. And part of it was to pass the Banking act of 1933 that Separated the commercial

  • banks from investment banks, that forced JP Morgan & Co. To break up.

  • However, for JP morgan to become as big and powerful as its today, it had to merge with

  • multiple other banks through the century. The most notable of them is probably Chase

  • Manhatanna bank that was already a merger of 2 other big banks, Chase National Bank

  • and Bank of the Manhattan Company that was founded back in 1799, one of the oldest financial

  • institutions in the history of the united states.

  • Another bank that also creating a fierce competition was Chemical Bank Corporation, the name sounds

  • quite unusual for a bank. It was initially a chemical manufacturing company back when

  • it was founded in 1823, however just a year after that it got into the banking sector.

  • After more than a century, in the 1980s and 1990s, it was at the front of the industry.

  • Remember Chase Manhattan Bank, despite its successes, it was extremely weakened by a

  • real estate collapse so it merged with Chemical Bank in 1996 and become the biggest bank in

  • the entire nation.

  • The marriage of the biggest banks of America didn't stop there, the competition was fierce,

  • and Chase Manhattan Bank had to find ways to compete with Goldman Sacks, Morgan Stanely,

  • So in December of 2000, the 2 giant financial institutions merged, Chase Manhattan and JP

  • Morgan to become the largest bank in America - JP Morgan Chase & Co.

  • It might seem like that would be the end of mergers and these banks would finally stop

  • expanding, however that wasn't the case, in 2004, JP morgan purchased Chicago Based,

  • Bank One Corporation for 58 Billion dollars in stocks, Bringing on board Jamie Dimon who

  • would end up becoming the CEO and take the company to where it is now.

  • Despite the fact that JP Morgan was powerful enough to save the nation from the panic of

  • 1907, The bank in its current structure is the result of the combination of several large

  • U.S. banks ( Chase Manhattan Bank, Bank One, Bear Stearns, Washington Mutual, Chemical

  • Bank, Manufacturing Hanover, First Chicago Bank, National Bank of Detroit, Texas Commerce

  • Bank, Providian Financial, Great Western Bank)

  • Like in 1907, the world was hit by another crisis, in 2008 the stock market crashed again,

  • but this time the crisis was much bigger. Companies went bankrupt one after another,

  • including conglomerates such as Lehman brothers. The fifth-largest bank in the US, Bear Stearns

  • lost almost half (47%) of its value and was on the verge of bankruptcy.

  • Unlike 1907, this time there was a central bank (federal reserve) to save the economy.

  • ANd JP Morgan Chase took full advantage of that. To prevent the collapse of such a giant

  • bank, the government rescued Bear Stearns by lending $29 billion to JPMorgan Chase to

  • buy the firm. The tried to purchase bank for around 230 million dollars valuing each share

  • at only 2 dollars, when it was valued above hundred bucks just before the crises, but

  • it didn't work out, so they ended up paying 10 dollars a share.

  • And JP Morgan came out of the crises only stronger and Bigger!

  • JP Morgan isn't without controversies. They were involved in multiple scandals. They paid

  • over 2 billion dollars in fines and legal settlements for their role in financing Enron

  • Corp fraudulent securities. In fact, they also ended up paying another 2.2 billion dollars

  • to settle a lawsuit filed by Enron Investors. The number of controversies and lawsuits that

  • it went through is beyond what we can possibly cover in this video.

  • But JPMorgan Chase is probably exactly how JP Morgan himself envisioned the company,

  • he was a big supporter of mergers and the company consistently merged or purchased other

  • banks to be where they are today.

  • And now its your turn, what do you think? Should banks be allowed to keep merging and

  • get bigger, or the government should intervene and limit banks.

  • Let me know down in the comments below.In anyways, as always hit that like button.

  • Thanks for watching and I will see you in the next one.

The banking industry is surrounded by so many conspiracies that sometimes its quite difficult

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摩根大通如何成為歷史上最富有的銀行家(動畫故事)。 (How JP Morgan Became The Richest Banker In History (Animated Story))

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    Summer 發佈於 2021 年 01 月 14 日
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