You peasants:  STHU.

Clawback Risk:  Here It Comes!

I hate it when I’m right….. especially about things like this.

MF Global’s burned commodity customers turned their ire from Jon Corzine to Jamie Dimon yesterday after MF’s creditor committee, led by Dimon’s JPMorgan Chase, objected to a plan to distribute $2.1 billion to customers who have seen their accounts frozen since Halloween.

In a Manhattan bankruptcy court filing, the creditors committee, which also includes Bank of America and hedge fund Elliott Management, said they want more assurances that the $2.1 billion is not their money.

Among their requests: They want customers to agree in writing that the money they receive could be clawed back.

Got it?

Even if it turns out that your funds as a customer were stolen through a rank violation of the segregation that is supposed to be in place, JP Morgan and Bank of America, among others, want to be able to claw back your money should their claims against the bankrupt entity prove up.

So much for the alleged “separation” that the entire premise of brokerages rest upon — that your free cash and margin deposits are yours and are not “investments” in the underlying business of the firm you are choosing to trade with.

If you think this risk doesn’t apply to you and you’re in the market in any way, shape or form you’re quite-simply wrong.

This sort of demand by creditors, incidentally, that allegedly-segregated funds be downgraded ex-post-facto to that of a simple creditor is an outrage.

It is my considered opinion that the firms who make such arguments, and their executives, deserve to be dismantled.

JP Morgan agreed to pay $211 million last week to settle allegations that it cheated local governments in 31 states by rigging the bidding process for dozens of muni bond deals.

With all the coverage on the grim jobs numbers and the stirring launch of Atlantis, you might have missed the news about JP Morgan’s settlement. Or maybe you thought it was groundhog day.

Friday’s settlement was just the latest in a series for the banking giant.

• In June, JPMorgan paid the SEC $154 million to settle charges it failed to disclose that hedge fund Magnetar not only helped choose the assets in a CDO transaction called “Squared,” but also bet against much of the deal.
• In April, JPMorgan Chase paid $75 million in fines and forfeited $647 million in fees to settle federal charges that it made unlawful payments to win municipal bond business in Jefferson County, Ala.
• In March 2010, JPM settled for $6 billion with the estate of Washington Mutual, which JPM bought from the FDIC in late 2008 for $1.9 billion. The estate claimed JPMorgan conspired to lower WaMu’s sale price by leaking false information about WaMu’s finances to federal regulators and potential rival bidders.

Meanwhile, Chris Whalen of Institutional Risk Analytics estimates JPMorgan may face up to $50 billion in additional claims stemming from lawsuits related to its crisis-era purchases of Bear Stearns and Washington Mutual. The firm is also exposed to separate settlements with state and federal regulators over illegal foreclosure and servicing practices.

“It has been our view, for some time, that banks are similar to tobacco and asbestos companies in that they are being sued by plaintiffs for a wide variety of problems,” writes Rochdale Securities analyst Dick Bove. “This means that each year for the next five to seven, there will be agreements, some wins and some losses, that will cost these companies billions of dollars. JPMorgan Chase, the nation’s second largest bank, is likely to pay a large amount of this money.”

The BP of Banking

Clearly, JPMorgan is not alone in paying big fines. UBS and Bank of America both paid fines related to muni bond rigging while Goldman Sachs got tagged with a $550 million fine for the “Abacus? transaction that was very similar to JPMorgan’s Magentar deal.

Every Wall Street firm has paid significant fines during the past decade but JPMorgan is starting to look the BP of banking. BP, you’ll recall, was cited for safety violation with far greater frequency than its competitors in the years leading up to its 2010 disaster in the gulf.

I’m not saying JPMorgan is heading for the financial version of the Deepwater Horizon fiasco, but I’d like to take Jamie Dimon to task for creating a culture where bad behavior seems to be epidemic across the bank. Other than some low-level muni bond traders, no one at JPMorgan has been held accountable for these violations, which would suggest Dimon condones the bad behavior.

Any why not? The fines JPMorgan has paid to date are a drop in the bucket of the tens of billions of dollars of government bailouts and subsidies the firm has received — and continues to enjoy — going back to the take-under of Bear Stearns in March 2008. Plus, they’re a tax write-off!

(Editor’s note: The Daily Ticker has extended an invitation to Mr. Dimon to come on the program and respond to this story.)

The World’s Best Grifter

Dimon has taken advantage of Uncle Sam’s generosity — and competitors’ missteps — to turn JPMorgan into the nation’s most powerful bank; if the price of that growth is having to pay some fines that don’t even come with a playful slap on the wrist, he’d be a fool not to pursue this business model.

Dimon is often described as the world’s best banker but these days that’s like being the world’s best grifter — only the law is working for you rather than trying to stop you.

Which brings me to the watchdogs. I’d also like to take to task the SEC, Federal Reserve, Justice Department and other federal regulators to task for failing to seek criminal charges and for what The NY Times calls a “softer approach” in pursuing cases against white-collar criminals.

Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

Tech-Ticker

Total net derivative exposure rated below BBB on JP Morgan’s $90,000,000,000,000 ($90 trillion) books currently stands at 35.4% – MUCH WORSE than Bear Stearns and Lehman‘s derivative portfolio just prior to their CRASH. JPM’s IMPLOSION will be 1000 X’s bigger than Enron!

A 90 trillion dollar financial implosion seen from space

What about JPM’s claim exposure to various lawsuits?

• Whalen – $200 Billion in Claims Against JP Morgan & Banks

What’s JPM’s current market capitalization?  About $160 billion

Max Keiser

I don’t usually swear in the header.  But this time it’s appropriate.

The head of JP Morgan has delivered a furious tirade against “banker bashing”, complaining that the entire industry is being tarred with the same brush and implying that bankers have become political whipping boys.

Oh on the contrary. 

There are a lot of local banks and credit unions that did nothing wrong, and they are in fact honorable people.  I bank at one of them, a local credit union.

I single out for my criticism financial institutions that do things like attempting to prevent disclosure of a lawsuit alleging fraud and double-dipping, the latter amounting to theft of investor funds.

Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear. According to e-mails and internal audits, JPMorgan had known about this fraud since the spring of 2008, but hid it from the public eye through legal maneuvering.

Remember that…. from two days ago?

I do.

Remember this?

The lawsuit’s supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a “sack of shit.”

Emails eh? 

From the actual traders? 

Telling their superiors that they were selling Ambac “A sack of shit“?

We shouldn’t “criticize” or even “bash” bankers for doing things like that? 

Screwing people is supposed to be beyond reproach?

Really Jamie? 

And we definitely shouldn’t bash bankers for trying to cover up that lawsuit, because, well, the people who were alleged to be responsible might still be working in the mortgage business, right?

That wouldn’t be true, would it?

They say senior traders under Tom Marano, who was a Senior Managing Director and Global Head of Mortgages for Bear and is now CEO of Ally’s mortgage operations, were pocketing cash that should have gone to securities holders after Bear had already sold them bonds and moved the loans off its books.

Mike Nierenberg, who ran the adjustable-rate mortgage trading desk at Bear and is now the head of mortgages and securitization for Bank of America, was a key player ensuring the defaulting loans Bear was buying would move off their books right after they bought them, with little concern for the firm’s due diligence standards. He was joined in this scheme by Jeff Verschleiser, his peer and Senior Managing Director on the mortgage and asset-backed securities trading desk and head of whole loan trading. He is now an executive in Goldman Sachs’ mortgage division.

Aw crap, it appears, if The Atlantic’s reporting is correct, that it is true!

If I rob a bank, can I get a job as a bank teller after I get out of prison?  After all I’m a very trustworthy person who can work industriously in a banking environment…. as proven by the fact that I already know how to rob banks! 

If not, can you explain why your bank tried to keep the public – and investors – from knowing that the people alleged to have robbed the bank’s clients are still working in a banking capacity all over Wall Street? 

It’s just a question Jamie. 

I don’t expect that you’ll answer it.

The Market-Ticker

So yesterday, early in the day, the associated press announced  LINK – JPMorgan exits electronic mortgage tracking system…

NEW YORK — JPMorgan Chase’s CEO says the bank has stopped using the electronic mortgage tracking system used by major financial institutions.

JPMorgan’s CEO, Jamie Dimon, made the announcement in a conference call Wednesday to discuss the bank’s quarterly earnings.

Shortly thereafter some of the stories started to change throughout the internet…

Then CNBC Diana Olick reports  LINK – JP Morgan Chase Drops Electronic Mortgage Clearing House…

It was news to me, and to the AP wires, but a spokesman confirms, JP Morgan Chase no longer uses MERS, the electronic mortgage clearing house, that is at issue now in foreclosure litigation across the country. They dropped MERS in 2008.

So I asked Kelly why they dropped MERS. First he said, “In truth some courts won’t accept MERS for foreclosures.” But then he said it was “a matter of policy.” I’m sure they don’t want to come right out and say, well, we’re not exactly sure MERS is all that legal.

So, now my question to you Mr Kelly…

If JPMorgan Chase dropped MERS in 2008, how the heck is your internal Robo-signer Barbara Hindman signing off on hundreds of thousands of documents on behalf of MERS transferring the mortgages to JPMorgan Chase?

LINK – Pigs Ass: Chase Dumped MERS Two Years Ago. (Send out an APB! Rogue JPMCB Robosigner, Barbara Hindman, on the loose!)

From Urban Dictionary: The term “pigs ass” is used in many situations. It is most commonly used when someone claims something is not true.

First you have got to get a load of this propaganda spin! “Chase doesn’t register retail-originated loans with MERS. Many of the correspondent loans we purchase are already registered on MERS as are some of the loans that we service for investors,” says spokesman Tom Kelly. CEO Jamie Dimon kind of mentioned it off-hand on the earnings call this morning without really elaborating. (here)

Oh, so Chase just dabbles in MERS?

Remember people, presumption of falsity. Everything that spews from these American predators, presumption of falsity!

Here are some assignments of mortgage in the name of MERS. What of these, Mr. Dimon? Featuring Barbara Hindman, robosigner for JP Morgan Chase, there are hundreds of thousands of these nasty things, signed by her & her coworkers, filed in land records across America! See how she signs, under the veil of MERS, for many financial institutions? See how she is masquerading as an agent of the grantor when she is really employed by the grantee? See how she’s just robosigning papers which effectuates the transfer of hundreds of thousands of dollars from any-entity-at-all to JP Morgan Chase?

1. assignment1.pdf
2. assignment2.pdf
3. assignment3.pdf
4. assignment4.pdf
5. assignment5.pdf

If five examples aren’t enough, head over to LINK – ForeclosureHamlet.org to check out twenty more…

Remember, this is an employee of JPMorgan Chase robosigning papers while masquerading as an agent of the grantor (Multiple defunct financial institutions) when she is really employed by the grantee. (JPMorgan Chase)

For more on Barbara and others just like her, see my Guide to Looking Up Public Records for Fraud below.

The Guide was written over a year ago but the information is still relevant.

4closureFraud

May Jamie Dimon Get His Wish

Posted by Karl Denninger

Dimon Fumbles For His Protective Plate

Posted by Karl Denninger

In a Message to Democrats, Wall St. Sends Cash to GOP

If the Democratic Party has a stronghold on Wall Street, it is JPMorgan Chase [JPM  37.81    -0.49  (-1.28%)   ] .

Its chief executive, Jamie Dimon, is a friend of President Obama’s from Chicago, a frequent White House guest and a big Democratic donor. Its vice chairman, William M. Daley, a former Clinton administration cabinet official and Obama transition adviser, comes from Chicago’s Democratic dynasty.

But this year Chase’s political action committee is sending the Democrats a pointed message. While it has contributed to some individual Democrats and state organizations, it has rebuffed solicitations from the national Democratic House and Senate campaign committees. Instead, it gave $30,000 to their Republican counterparts.

The shift reflects the hard political edge to the industry’s campaign to thwart Mr. Obama’s proposals for tighter financial regulations.

Just two years after Mr. Obama helped his party pull in record Wall Street contributions — $89 million from the securities and investment business, according to the nonpartisan Center for Responsive Politics — some of his biggest supporters, like Mr. Dimon, have become the industry’s chief lobbyists against his regulatory agenda.

Republicans are rushing to capitalize on what they call Wall Street’s “buyer’s remorse” with the Democrats. And industry executives and lobbyists are warning Democrats that if Mr. Obama keeps attacking Wall Street “fat cats,” they may fight back by withholding their cash.

“If the president doesn’t become a little more balanced and centrist in his approach, then he will likely lose that support,” said Kelly S. King, the chairman and chief executive of BB&T [BBT  27.46    -0.05  (-0.18%)   ] . Mr. King is a board member of the Financial Services Roundtable, which lobbies for the biggest banks, and last month he helped represent the industry at a private dinner at the Treasury Department.

“I understand the public outcry,” he continued. “We have a 17 percent real unemployment rate, people are hurting, and they want to see punishment. But the political rhetoric just incites more animosity and gets people riled up.”

A spokesman for JPMorgan Chase declined to comment on its political action committee’s contributions or relations with the Democrats. But many Wall Street lobbyists and executives said they, too, were rethinking their giving.

“The expectation in Washington is that ‘We can kick you around, and you are still going to give us money,’ ” said a top official at a major Wall Street firm, speaking on the condition of anonymity for fear of alienating the White House. “We are not going to play that game anymore.”

Wall Street fund-raisers for the Democrats say they are feeling under attack from all sides. The president is lashing out at their “arrogance and greed.” Republican friends are saying “I told you so.” And contributors are wishing they had their money back.

“I am a big fan of the president,” said Thomas R. Nides, a prominent Democrat who is also a Morgan Stanley [MS  27.04    -0.22  (-0.81%)   ] executive and chairman of a major Wall Street trade group, the Securities and Financial Markets Association. “But even if you are a big fan, when you are the piñata at the party, it doesn’t really feel good.”

Roger C. Altman, a former Clinton administration Treasury official who founded the Wall Street boutique Evercore Partners, called the Wall Street backlash against Mr. Obama “a constant topic of conversation.” Many bankers, he said, failed to appreciate the “white hot anger” at Wall Street for the financial crisis. (Mr. Altman said he personally supported “the substance” of the president’s recent proposals, though he questioned their feasibility and declined to comment at all on what he called “the rhetoric.”)

Mr. Obama’s fight with Wall Street began last year with his proposals for greater oversight of compensation and a consumer financial protection commission. It escalated with verbal attacks this year on what he called Wall Street’s “obscene bonuses.” And it reached a new level in his calls for policies Wall Street finds even more infuriating: a “financial crisis responsibility” tax aimed only at the biggest banks, and a restriction on “proprietary trading” that banks do with their own money for their own profit.

“If the president wanted to turn every Democrat on Wall Street into a Republican,” one industry lobbyist said, “he is doing everything right.”

Though Wall Street has long been a major source of Democratic campaign money (alongside Hollywood and Silicon Valley), Mr. Obama built unusually direct ties to his contributors there. He is the first president since Richard M. Nixon whose campaign relied solely on private donations, not public financing.

Wall Street lobbyists say the financial industry’s big Democratic donors help ensure that their arguments reach the ears of the president and Congress. White House visitors’ logs show dozens of meetings with big Wall Street fund-raisers, including Gary D. Cohn, a president of Goldman Sachs; Mr. Dimon of JPMorgan Chase; and Robert Wolf, the chief of the American division of the Swiss bank UBS, who has also played golf, had lunch and watched July 4 fireworks with the president.

Lobbyists say they routinely brief top executives on policy talking points before they meet with the president or others in the administration. Mr. Wolf, in particular, also serves on the Presidential Economic Recovery Advisory Board led by the former Federal Reserve Chairman Paul A. Volcker.

Mr. Wolf was the only Wall Street executive on the panel and became the board’s leading opponent of what became known as the Volcker rule against so-called proprietary trading, according to participants. Such trading did nothing to cause the crisis, Mr. Wolf argued, as the industry lobbyists do now. (The panel concluded that the crisis established a precedent for government rescue that could enable big banks to speculate for their own gain while taxpayers took the biggest risks.)

Mr. Wolf and Mr. Dimon, who was in Washington last week for meetings on Capitol Hill and lunch with the president, have both pressed the industry’s arguments against other proposed regulations and the bank tax as well — saying the rules could cramp needed lending and send business abroad, according to lobbyists.

Both men are said to remain personally supportive of the president. But UBS’s political action committee has shifted its contributions, according to the Center for Responsive Politics. After dividing its money evenly between the parties for 2008, it has given about 56 percent to Republicans this cycle.

Most of its biggest contributions, of $10,000 each, went to five Republican opponents of Mr. Obama’s regulatory proposals, including Senator Richard C. Shelby of Alabama, the ranking minority member of the Banking Committee.

The Democratic campaign committees declined to comment on Wall Street money. But their Republican rivals are actively courting it.

Senator John Cornyn of Texas, chairman of the National Republican Senatorial Committee, said he visited New York about twice a month to try to tap into Wall Street’s “buyers’ remorse.”

“I just don’t know how long you can expect people to contribute money to a political party whose main plank of their platform is to punish you,” Mr. Cornyn said.