After last week's emergency intervention with 11 of the world's largest lenders depositing the $30 billion, the shares of the bank sank an additional 45% yesterday, after S&P Global downgraded the lending entity for a second time this week.
J.P.Morgan was in touch with other big lenders about putting together another rescue plan. But Wall Street does not believe the bank will be able to attract deposits in the short term and the $30 billion may be converted into shares, which would dilute the value of the stock held by other shareholders.
Big US banks are only offering support to small ones as a way to avoid global panic and save their position, just the same way UBS purchased Credit Suisse last week. All these are only patching measures as the cause of the problem is the spectacular global depth growth led by the US.
Another chapter in this global financial system which seems to be entering its final era day after day.
