What's going on?

JPMorgan continued its long tradition of riding to the rescue of the embattled banking sector.

What does this mean?

A series of poor decisions and a stampede of frenzied withdrawals sparked a financial disaster: that’s not the story of the current banking turmoil, it�s how the 1907 financial crisis played out. Back then, a group of influential Wall Street titans swooped in to save the banking system, spearheaded by none other than John Pierpont Morgan. Fast forward 116 years, and it�s JPMorgan heading up yet another financial rescue mission. This time the firm has rallied its Wall Street comrades to extend a $30 billion lifeline to First Republic Bank, an institution caught in the eye of the current financial storm.

Why should I care?

Zooming in: Ulterior motives.
JPMorgan�s CEO Jamie Dimon is a businessman first and foremost � so you can be sure he�s not getting involved out of the kindness of his heart. He could be intervening to keep the bank alive long enough to take its clients. (First Republic does have a nice roster of high-flying customers). Or he might be genuinely worried about a spillover: after all, even smaller banks can create shockwaves strong enough to shake the behemoths.

The bigger picture: A $20 trillion problem.
Financial pundits seem to have a one-size-fits-all solution to the banking blues: just have the Federal Reserve (the Fed) whip out a blank check, guaranteeing all bank deposits everywhere in the US. And sure, the mere promise alone could very well slam the brakes on withdrawals � possibly sparing the Fed from coughing up a single penny. Thing is, there�s almost $20 trillion in US bank deposits nationwide. And while the chances of everyone rushing to yank their cash out are virtually zilch, in a world of wild hypotheticals, it could happen � and not even Uncle Sam has pockets deep enough to cover that.