With the Wall Street banks reporting large quarterly profits and being the stock market yeast for the day, their reports show that those profits come from “trading” and “investment banking” — securities speculation with the huge additional reserves and deposits the Federal Reserve has given them. The Fed’s latest flow-of-funds report shows that compared to the end of March 2020, the U.S. banks at the end of March 2021 had $100 billion less in loans and leases out to the economy despite $2.82 trillion more in deposits and $2 trillion more in total assets. The banks’ ratio of loans and leases to deposits had dropped dramatically during the year from 75% to 61%. By contrast the banks’ securities holdings had risen by $1 trillion, or 23% during the year.