“We estimate the amount of capital that a financial institution would have to raise in order to continue to function normally if we have another financial crisis like the one in 2008. This is interpreted as a capital cushion to protect against a decline of 40% in the broad equity market over the six months after this occurs . . .Robert Engle via Big Picture
JP Morgan again, Hmmm... The Fed is stuck in a small space. JP Morgan needs to delever first, before the crash in asset prices. otherwise it is toast. But the Fed needs to wait on its boss, Congress, before a delever happens. The only way to avoid the disaster is a two way negotiation between Congress and JP Morgan, kind of a violation of democracy and a mutual bankruptcy.
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