Banking Crisis Ahead?
The Fed Just Opened Unlimited Cash to Wall Street — and Almost Nobody Reported It
Is this the early warning of another 2008? Or routine monetary plumbing? We checked the claims. Here’s what’s verified, what’s disputed, and what you should actually do about it.
01 What’s Verified
The massive repo operations are real. On October 31, 2025, the Fed executed a $29.4 billion overnight repo operation through its Standing Repo Facility — the largest single-day injection since the early 2000s. This came as bank reserves dropped to $2.8 trillion, their lowest level in over four years. Since then, the infusions continued, with $17 billion on the day after Christmas, $34 billion on December 28, and nearly $97 billion more pumped in since December 31. Total infusions over 7 months exceeded $420 billion.
The borrowing limits were removed. On December 10, 2025, the NY Fed announced that standing overnight repo operations would “no longer have an aggregate operational limit.” Individual counterparties can submit propositions up to $40 billion per security type. This policy change was confirmed directly by the Federal Reserve Bank of New York in its official statement. This is not speculation — it is on the NY Fed’s own website.
The silver market is under extraordinary stress. Silver surged roughly 264% year-over-year, reaching $113.25 per ounce in February 2026. JP Morgan’s own research acknowledges demand has outstripped supply by 100–250 million ounces per year for multiple consecutive years. China implemented export restrictions on refined silver effective January 1, 2026, cutting off a major supply artery. Physical premiums over spot prices have soared globally.
Stock market valuations are at historically extreme levels. The S&P 500 CAPE ratio hit 40.1 in January 2026 — the highest since the dot-com crash in September 2000. This valuation level has occurred less than 3% of the time in market history. Multiple analysts now assign a 65% or higher probability to a bear market in 2026. Goldman Sachs noted that without AI spending, U.S. GDP would have nearly flatlined.
02 What’s Disputed or Unproven
JP Morgan’s silver short squeeze. Johnston claims JP Morgan sold 5,900 tons of silver short and is trapped. However, multiple analyses from late 2025 indicate JP Morgan actually reversed its short position and flipped to a massive net long stance — meaning they may be profiting from the silver rally, not being crushed by it. CFTC reports don’t disclose specific bank positions, so no one can state definitively what JP Morgan’s current exposure is. As one analyst put it: these claims are speculation, not confirmed fact.
The crypto claim appears wrong. Johnston states that JP Morgan bet crypto would rise and Bitcoin has fallen by a third. In reality, Bitcoin surged dramatically through 2025. This specific factual error weakens the overall narrative, though it doesn’t invalidate the verified concerns about repo operations and market valuations.
Whether repos signal crisis or routine operations. The NY Fed characterizes these repo operations as standard monetary policy tools. Financial analysts argue this is a structural symptom of quantitative tightening colliding with Treasury cash buildup — concerning but not necessarily a 2008-style meltdown signal. Johnston and fellow experts see the pattern differently. The truth may lie between: the operations are unusual enough to warrant concern but not proof of imminent collapse.
03 The Structural Problem Nobody Denies
Here’s what even the skeptics agree on: the structural incentives that caused 2008 are still in place. And in some ways, they’re worse.
Johnston’s most important point isn’t about any single silver trade or repo operation. It’s about a system designed to privatize profits and socialize losses — and the absence of anyone capable of managing what happens when the bets go wrong.
After the S&L Crisis (1980s)
- Nearly 900 high-level bankers convicted and imprisoned
- Bill Black exposed systematic control fraud
- Regulations tightened significantly
- Public accountability enforced
After the 2008 Crash
- Zero major bank executives prosecuted
- Obama said on 60 Minutes: terrible, but “not crimes”
- Too-big-to-fail banks got bigger
- Glass-Steagall remains repealed
- Same incentive structure intact today
The Glass-Steagall Act, passed after the 1929 crash, forced banks to choose one lane: investment banking, insurance, or retail banking. Its repeal in 1999 let banks combine all three — meaning your checking account, your mortgage, and Wall Street’s speculative bets all sit under the same roof. When the bets fail, your deposits are at risk. When they succeed, the profits go to executives and shareholders. This is the definition of corporate socialism: private gains, public losses.
04 The Leadership Problem
Johnston’s most alarming argument isn’t about the current numbers — it’s about what happens when the numbers get worse and nobody competent is at the controls.
In 2008, whatever you think of the policy choices, Ben Bernanke was a scholar of the Great Depression. The people managing the crisis understood the mechanisms. In 1932, FDR brought in a team that knew how to stabilize a collapsing economy.
Today, Jerome Powell’s tenure as Fed chair is ending. The current administration has shown no indication of understanding economic complexity at this level. The Washington Post recently reported the administration is seeking emergency permission to demolish historic buildings in Washington for “security” reasons. They pardoned a man convicted of importing 400 tons of cocaine. Pete Hegseth announced the Pentagon would deprioritize cyber defense.
This is not a partisan point. It is a competence point. The question isn’t whether you like the people in charge. The question is: if the biggest banks in the country start failing their margin calls at 3 AM on a Sunday, who picks up the phone?
05 What You Should Actually Do
This is not a call to panic. It is a call to prepare. The following actions are recommended by mainstream financial advisors in any overheated market — not just if Johnston is right.
Protect Yourself Now
Don’t Panic-Sell Retirement Investments
If your money is in index funds and you don’t need it for 5+ years, history says every single downturn has been followed by recovery. Selling at the bottom is how people lose permanently. Johnston himself says this in the interview.
Build a Cash Cushion
Have 3–6 months of expenses in liquid savings. In a crisis, nothing beats cash. Even if the bank pays 1% interest, having accessible money means you don’t have to sell investments at the worst possible time or go into debt during a job loss.
Avoid Taking on New Leverage
This is not the time to stretch for a bigger mortgage, finance a luxury purchase on credit, or take on speculative debt. If you don’t need to make a major financial commitment right now, wait.
Check Your Diversification
If your portfolio is heavily concentrated in U.S. tech stocks, you are extremely exposed to the AI valuation bubble. Bonds, international equities, and shorter-duration fixed income may provide cushion.
Protect Your Income
The biggest risk in a downturn isn’t your portfolio — it’s job loss. If your employer or industry is vulnerable to economic slowdown, that cash buffer matters even more. Update your skills. Network. Have a backup plan.
Engage as a Citizen
The structural problems — Glass-Steagall repeal, corporate socialism, lack of prosecution — are policy choices. They can be changed through democratic participation. The 2026 midterm elections are the next opportunity. Your financial future is a political question.
The Bottom Line
David Cay Johnston is a Pulitzer Prize–winning reporter who saw the 2008 crisis coming four years early. The DCReport story is built on verifiable Federal Reserve data that anyone can check. Some specific claims — particularly about JP Morgan’s silver position and crypto exposure — are disputed or appear inaccurate.
But the direction of concern is shared across the mainstream financial world: extreme valuations, concentrated AI-driven growth, massive Fed liquidity operations after years of quiet, and diminished institutional capacity to handle what comes next. Multiple major analysts assign a 65% or higher probability to a significant correction in 2026.
This is not proof of imminent collapse. It is a flashing yellow warning sign. The prudent response is the same one it always is when credible people are raising credible alarms: prepare, don’t panic. Verify the claims yourself. And remember that the system is set up so that when banks gamble and win, they keep the profits — and when they gamble and lose, we pay for it. That’s the part that should make you angry enough to vote.
🔍 Verify It Yourself
Don’t take our word for it. Don’t take Johnston’s word for it. Check the primary sources:
NY Fed — December 10, 2025 Policy Statement The Fed’s own announcement removing aggregate repo limits NY Fed — Repo Operations Data Daily operational results showing the cash infusions Office of Financial Research — U.S. Repo Market Size Government data on the $12.6 trillion repo market DCReport — The Original Investigation Johnston and Henry’s reporting with the repo operations chart CrisisOfTruth — Free Verification Tools Our collection of free tools to check any claim independentlyWe are all being manipulated — by media, by politicians, by systems designed to keep us fighting each other instead of looking up. This site exists to teach critical thinking, not to tell you what to think. Every claim above is sourced. If we’re wrong, prove it. If we’re right, share it.