Archive for the ‘JPMorgan Chase’ Category
Why should I believe anything the government tells me?
Why should I obey the law, other than because I’m scared of the guns the government can point at me?
Why should I build or expand a business when anyone who has government favor can come steal anything — or everything — I build, and there isn’t jack and crap I can do about it as they won’t be prosecuted or punished in any way? In fact, they’ll be rewarded!
If you want to know how a nation dies without being conquered by war, pestilence or famine, this is how. The good, honest, industrious people simply say “screw you” and refuse to effort to move the economy and nation forward.
We are there folks, and these two stories explain why.
Government investigators have found that JPMorgan Chase devised “manipulative schemes” that transformed “money-losing power plants into powerful profit centers,” and that one of its most senior executives gave “false and misleading statements” under oath.
The findings appear in a confidential government document, reviewed by The New York Times, that was sent to the bank in March, warning of a potential crackdown by the regulator of the nation’s energy markets.
The possible action comes amid showdowns with other agencies. One of the bank’s chief regulators, the Office of the Comptroller of the Currency, is weighing new enforcement actions against JPMorgan over the way the bank collected credit card debt and its possible failure to alert authorities to suspicions about Bernard L. Madoff, according to people who were not authorized to discuss the cases publicly.
A confidential government document? Why should any document of this sort be confidential when it bears on conduct that a regulated institution has taken toward the public?
There’s part of your problem right there. This isn’t a single incident or issue either; it claims a pattern of conduct as do the other “showdowns.” Nor is this limited to JP Morgan — there is a long litany of financial institutions coming under “scrutiny” for various illegal and unethical acts and yet what’s missing is prosecutions.
President Obama’s nominee for Commerce secretary was embroiled in a massive bank failure more than a decade ago, in a collapse that cost depositors and federal insurers millions of dollars.
The 2001 collapse of Superior Bank FSB now appears likely to re-emerge, more than a decade later, as Commerce nominee Penny Pritzker prepares for a confirmation hearing and Republicans already draw attention to the bank implosion.
Tangled? Like Hell.
This was an all-on scandal and cost the FDIC over $300 million. Those who were over deposit limits were screwed out of $10 million they have yet to recover, and probably never will recover. The bank had insufficient if not outright missing risk controls with subprime auto and home lending.
Being a bad businessperson though isn’t an exercise of privilege — that’s just being stupid.
But being able to cut in line before depositors is another matter, and the Prizkers did.
The FDIC “defended” their decision, but again we’re back to the same problem we had with GM and Chrysler, where the rule of law is changed ex-post-facto to benefit wealthy and powerful people and screw the ordinary citizen.
Until this crap stops my entrepreneurial efforts are going to remain on the shelf, and I suspect I’m not alone in this regard.
Bill Still is a guest on the Day Trade Show. Some very wise words of caution regarding a gold standard. The large banking institutions are starting to push a ‘gold-backed currency.’ Everyone from the IMF to the BIS to the World Bank is starting to suggest that this is what will be implemented when fiat money printing no longer kicks the can. One has to ask the obvious question: Why would the same banking institutions who have successfully monopolized fiat currency want this if it would, as purported, put the money power back in the hands of the people or in any way prevent them from a total monopoly yet again.
The short answer is: it won’t. The banks control the gold as much, if not more so, than they do fiat currency. The whole point is to try to push you, JoeCitizen into ‘trusting’ that this is a much more fair method. Do not be fooled. It’s time that we learnt our lessons from history. Remember, we went off the gold standard not because it was too restrictive for the bankers, we went off the gold standard because people were losing faith in it. The bankers had manipulated it so much, that no one believed it was real anymore. And it wasn’t. It is time to STOP trusting what these money changers suggest!
And he’s slipping the noose over the witnesses’s heads.
He’s going after the bank corruption! Could this be the REAL reason he decided to retire? If anyone has the power to finally stop the corruption in our banking and financial system, it is Carl Levin. Now that he does not have to worry about being re-elected, he doesn’t have to worry about the standing protocol in Washington DC, which is never to upset the apple cart.
To Senator Levin: THROW THE APPLE CART OFF THE CLIFF!
Watch live now on C-Span – Permanent Subcommittee On Investigations Hearing
If you missed it live, here is the archived video.
If you think Too-Big-To-Jail Bankers shouldn’t be too big to jail, please contact Senator Levin and tell him it’s past time to prosecute these criminals!
The Senate Permanent Subcommittee on Investigations has issued a report on the “London Whale” trades and JP Morgan detailing what it titles “A case history of derivatives risks and abuses.”
I could go through the entire report (and have read it) and detail each and every point of abuse and intentional obfuscation, but it’s not necessary to do so.
The key point take from this report, and the hearing that will be held today, is singular:
The conduct detailed therein is a criminal federal offense. So says Sarbanes-Oxley, a law passed after myriad false statements made by corporate executives in the 1990s left investors with big losses and the only retribution available was through civil suit for various alleged torts, including the collapse of both Worldcom and Enron.
Congress responded with a law that requires the CEO of a public company to certify that the financial reports issued by the company be truthful in all material respects and imposes criminal penalties for false statements.
This report, and the hearing to be held today, leave me with only one question: Where are the damned indictments and why should I or anyone else obey the law if our government will not prosecute behavior that it facially and clearly documents has breached these requirements?
Let me remind those in Congress and elsewhere who are commenting on this, including Cramer right now on CNBS claiming that there was “nothing criminal” — and are in doing so willfully ignoring SarbBox, which makes such conduct explicit crimes:
When there is no justice available through the courts there comes a point where the people will resolve the problem. It will be far messier and much less fair, but at its core it happens because those who are charged with meting out justice have refused to do so.
When that happens, and it will, I will charge the outcome against every media pundit who is claiming that there were “no crimes” along with every politician who has echoed that sentiment rather than demanding immediate and vigorous prosecution.
I was thinking about titling this post “Fire Jamie Dimon.” I changed my mind because this article is much, much bigger than Mr. Dimon. This is really an article about the current climate of fraud, negligence and incompetence that is accepted as the new normal. Dimon and JP Morgan Chase are just the larger-than-life faces of the profound problems that are not getting fixed. JP Morgan is the nation’s biggest bank; so, for the sake of simplicity, I just want to use JP Morgan and its CEO, Jamie Dimon, to illustrate what is really stopping the economy from getting better. This is the 8,000 pound elephant in the room that nobody wants to even acknowledge.
Look no further than this past year. There are big examples that come to mind that should have brought some criminal charges against bank personnel, or at least been grounds to fire Mr. Dimon. Most recently, JP Morgan and Credit Suisse paid nearly $417 million (combined) to settle civil fraud charges by the Securities and Exchange Commission (SEC). Reuters recently reported, “JPMorgan will pay $296.9 million, while Credit Suisse will pay $120 million in a separate case, with the money going to harmed investors, the U.S. Securities and Exchange Commission said. Both settlements addressed alleged negligence or other wrongdoing in the packaging and sale of risky residential mortgage-backed securities . . .” Of course, both JP Morgan and Credit Suisse didn’t admit guilt, and no individuals were charged criminally. The Reuters story went on to say, “On a conference call with reporters, Robert Khuzami (SEC enforcement chief) said it is hard to bring cases against individuals over ‘structured’ financial transactions because different people work on different aspects, making it hard to pin blame.” (Click here for the complete Reuters story.) It was the same story in 2011. According to Reuters, “JPMorgan had in June 2011 agreed to pay $153.6 million to settle a separate SEC fraud case over its sale of mortgage securities to investors, also without admitting wrongdoing.” Anybody see a pattern here for JP Morgan or government prosecutors?
Hey, you know what else makes it “hard to pin blame”? Lots of cash donated to both parties by banks like JP Morgan. So much cash that the boss will come down hard on prosecutors who bring charges. One thousand financial elites were successfully prosecuted in the wake of the S&L crisis 20 years ago. It was 70 times smaller than the 2008 financial meltdown that was caused by greedy bankers. The “$296.9 million” paid by JP Morgan didn’t even come with an apology, let alone criminal charges for individuals. This certainly didn’t fix anything, but it did let bankers and Jamie Dimon off the hook–once again. Is this the business plan that Jamie Dimon condones?
Remember the $2 billion “London Whale” trading loss Mr. Dimon apologized for back in May just before shareholders approved a $23 million pay package for him? That $2 billion loss turned into more than $6 billion. That’s triple the original amount Dimon himself announced! He missed by more than $4 billion! Did he mean to mislead or is he just incompetent? Was Dimon negligent as a CEO for allowing these kinds of losses? Now, JP Morgan is suing its own former employees involved in the scandal, and JP Morgan will not comment on the lawsuit. A recent New York Times story reported, “Since announcing the problem in May, JPMorgan has worked to reassure skittish investors. The bank has broadly reshuffled its management ranks and united some of its business operations.” (Click here for the complete NYT story.) Shouldn’t Mr. Dimon be “reshuffled”? I mean, just before a big payday, he told shareholders the loss would be $2 billion when, months later, it turned into more than $6 billion. Why didn’t Dimon know about this? Where was his supervision? This is one of the nation’s top bankers, and he doesn’t know if a loss is $2 billion or $6 billion?
What about the LIBOR (London Inter-bank Offered Rate) interest rate rigging scandal that erupted earlier this year? Once again, JP Morgan is involved. I wrote about this back in July and said, “The Libor interest rate rigging scandal is being called the biggest financial fraud in history. Libor is a key interest rate that is used globally to set as much as $800 trillion in transactions. It is used to set interest rates for things such as credit cards, student loans, mortgages, corporate bonds and hundreds of trillions of dollars in derivatives.” (Click here for the complete post.) In August, the Huffington Post reported, “Pretty much everybody in the world with subpoena power has hit JPMorgan Chase with requests for information in the Libor-rigging scandal. . . . JPMorgan also said it was the subject of a large and growing number of lawsuits coming out of the Libor mess. State and local governments, for example, are suing banks for keeping Libor too low, hurting the value of interest-rate swaps they bought to protect against rising rates.” (Click here for the complete Huffington Post story.) Again, Dimon does not know what is going on in his own bank, or is this part of the business model that he condones?
All the above mentioned stories happened in just the last year or so. The thing they all have in common is that Jamie Dimon was and still is–in charge. When the captain of a ship keeps running aground and the ship owners keep patching the hull, when is it more practical to replace the captain? Hasn’t Dimon run the bank aground on several occasions? Aren’t the other banking executives crashing their boats into the rocks? Don’t get me wrong, I think Mr. Dimon should be fired, but that’s not going to happen. The mainstream media will not criticize Dimon or any the CEO of a big bank despite their dismal track records. If any reporter did, I think they would be fired. The public accepts this behavior, and our own government officials enable the fraud, negligence and incompetence to go unprosecuted and unpunished in the banking industry. The economy will never truly recover against this kind of financial backdrop.
Greg Hunter – USA Watchdog
What is really interesting is that the legal complaint filed by Schneiderman talks about sloppy procedures for loan selection, but still does not get to the real fun, namely multiple pledges of loans for different RMBS. And you can be sure that Schneiderman does not really want to go that far because it might force him to ask the same question about the other, far larger issuers of RMBS.
Remember, the whole point of the Robo-signing settlement is not consumer protection, but rather fraud. The key question: Who’s got the note? If you don’t have to deliver the note into an RMBS trust, then the door is wide open for securities fraud.
What’s being talked about here is the NY lawsuit against JPM (really Bear Stearns, but now JPM since they bought it) for securities fraud.
I have long maintained (since this crap begain to become public in 2007 and 2008) that the 900lb Gorilla in the room was going to come about when someone managed to bring the following argument before a Judge in a foreclosure action:
Your Honor, defendant moves that the plaintiff be required to show a full and complete accounting of all activity of the subject claimed note, including but not limited to:
- Where the actual funds came from to fund the loan he entered into, and whether they ever actually existed or were fabricated out of thin air.
- The chain of custody of the note he signed, including the consideration paid for its negotiation each time it was negotiated, and that it was pledged and negotiated exactly once into one trust, and that this occurred in a lawful manner on or prior to the closing date of said trust.
- All financial events at a line-item level of detail, identifying each payee and payor along with each event from the date of origination to the averred default being sued under, including not only payments made and alleged payments missed along with penalties and interest but alsoany and all swaps collected upon or other transactions that acted as insurance or in any other way mitigated the plaintiff’s or any other party at interest’s damages.
The intent here is quite simple — not only is there a judicial interest in guaranteeing that the person who is standing before the judge is really the assignee of the note (or his lawful agent) and there is only one of them out there (who is the one standing before the bar) in addition you can only collect on a loss via lawsuit or other payment once!
If you get into a car accident and your auto insurance pays your $20,000 in damage you cannot then sue the person who hit you, as you were made whole and you can only collect once. In point of fact the insurance company will almost-certainly force you to sign over your right to sue to them before they pay you,but if they don’t you still can’t sue the person who hit you as you have no economic harm as you were already paid!
Recovery by lawsuit, including foreclosure, requires economic harm. If there was no economic harm there is no foul and your judgment, which you may well be entitled to, is for $0.00. Further, if the person who actually suffered the harm isn’t the one in court he can’t recover anything because the wrong person is suing and only a real party at interest with economic harm can sue.
So if the bondholder was made whole via a credit default swap or any other act, including rescission, his claim on you is extinguished. The person who sold him the swap may have a legal claim via lawsuit or the person who was forced to buy back the bogus loan may have a right of recovery but he cannot foreclose unless he obtained possession of the defaulted instrument through that process of payment and if he does then he had better be the person standing in the courtroom before the judge.
This is really basic stuff here folks — you don’t get sue because you’re “butt-hurt” by someone’s acts; you can only sue to recover actual economic injury,whether your requested remedy is foreclosure or simple money damages.
Chris is onto this but this rabbit hole goes a lot further than many people think it does.
If — and this is a big if — we can get just one honest judge to hear these arguments and force that accounting to take place in his courtroom then the game is up.