FedUpUSA

Archive for the ‘Jamie Dimon’ Category

I’m getting rather defensive up here.

The squeeze is starting folks, although you certainly wouldn’t know it from the move in the stock market yesterday.  That move was all driven by the financials, with JP Morgan leading when they “broke embargo” with their mid-afternoon announcement that preempted The Fed.

Incidentally, doesn’t anyone think that’s a bit odd?  Jamie Dimon basically shoving Bernanke down on his knees and unzipping in front of him?  And the banks, incidentally, knew the results before we did, which begs the other question — why are they permitted to trade when market-moving news will be in their possession before the rest of the market has it?

You don’t think they were out in the market buying futures and such in the few hours before the press release blitz started, do you?  Why of course they were.  But not only would proving insider trading be difficult the SEC was too busy watching porn to care.

Now, however, the fun begins.  See, the TNX moved up strongly — the 10 year yield.  This in turn will force The Fed to sit on its bond holdings to maturity, lest they take a market loss (and given their thin capitalization that would bankrupt The Fed instantly!), which in turn ties Bernanke’s hands to a large degree.

I know many will argue that The Fed can always “print more”, but that’s not how it works.  This is a negative feedback situation and triggering a run out of the long end of the bond curve isn’t so much a problem for The Fed as it is for the Federal Government’s financing and deficit numbers.

Take a look at the FVX (5yr Treasury Yield) and you see a materially-more-frightening thing.  Yields have backed up from 0.7% to 0.97%.  Sounds trivial.  It’s not — it’s a huge move, close to 40% on yield since the end of January!

This matters because the Federal Government’s deficit spending in February is what has been driving the “improving” economic numbers, just as it has been for the last three years.  This is a pincer move; while yields have to normalize if and when they start to move in this direction that move will also choke off federal deficit spending capacity.

The Depression featured this sort of attempt at “repression” by The Fed and government and it was unsuccessful.  It looked successful for a while, but eventually the math caught up with them and we slumped back into the morass.  Our “exit” was war; we blew up all of our industrial competitor’s output capacity and by doing so rejiggered demand.  That’s a rather bleak way of looking at what was “death by all forms” for the common man, but from an economic perspective that’s what happened.  But “war as a solution” since that time hasn’t “worked” (and in fact can’t) since small-ball wars run into the broken-window fallacy; you can’t “win” by breaking windows as the economic damage from a war exceeds the benefit.  For war to be a “winning” strategy you have to literally flatten your economic competitors so that even with the economic damage you wind up with a net benefit.

Such a conflict in the modern era has a high risk of turning nuclear and then everyone loses.

In the next few days the market is likely to trade on euphoria from the financial sector, but I don’t buy it at all.  Repression destroyed net interest margin in gross earnings terms irrespective of the spread and makes earning a profit much more difficult.  Most of Europe is in recession now and that’s a huge market.  The ECB has no room to maneuver and further QE by The Fed will declare that the so-called “recovery” is false.

Bernanke, Obama and Congress have swam into the jaws of the shark and now the trick is to try to get back out before the teeth clamp down on all of us.  The problem is that extrication in one area will produce undesirable moves in another.  If the Federal Government pulls back on deficit spending then the economy softens materially, unemployment goes back up and with a falling labor participation rate tax receipts collapse, adding to the problem.  If The Fed pulls liquidity then interest rates go up, the deficit goes up, Congress finds itself up against the debt ceiling again in short order and a pullback on deficit spending will become inevitable.  If The Fed engages in aggressive acts to try to prevent the yield curve from backing up on them then oil will likely skyrocket, gas prices will go through $5 and we all know what comes next.  Finally, the corner we’ve painted ourselves into has occurred into a cyclical profit cycle peak.

Finally, the parade of pumpers on CNBC and elsewhere that are all on their knees before Bernanke performing obscene acts of thanks is nauseating — and historically, is almost always wrong.  Anyone remember Mozilo in his gaudy suits and ties on CNBC just before it all went to crap in the mortgage market?  I sure do, and yet a large number of people bought into his BS and wound up broke when Countrywide detonated shortly thereafter.

Meh.  Yeah, the market is up some 11% this year thus far.

It’s certainly possible that the can-kicking will continue to work in some form or fashion, but eventually when you’re playing with the spinning plates on sticks you put one too many up there and they all come down.  The election season is a prime time for mistakes of this sort as well, as despite the so-called “common logic” that “they’ll never let it happen during the election” the fact of the matter is that elections tie hands as the scrutiny level goes up a lot and the temptation to press into excess to try to jigger the election, when you’re the Federal Government and close to a quarter of the economy, is just too great to resist.  2008 is just one of many examples — 2000 was another when “happy days were here again” and we all know what happened in 2000, right?

Finally, last night the Shanghai index collapsed in the last bit of trade when China said it was not going to back off on halting property speculation.  The move was huge — about 4% straight down right at the end of the session, and it drew almost no notice in the media here and no reaction came through in our markets either.

This may look like a beautiful dawn but that thing over on the horizon is in fact a rolling wall cloud.

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