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Archive for the ‘JPMorgan Chase’ Category

JP Morgan’s press release highlighted unexpected losses in its CIO division. As per the headlines on Bloomberg, JPM will post an $800 million loss in its corporate division in Q2 on write-downs from synthetic credit derivatives held in its CIO division. JPM also says that it expects $4.2 billion in ‘extra legal losses beyond reserves.’  JPM went on to say that it will need $971 million of extra collateral in the event of a one-notch downgrade and will need $1.7 billion in extra collateral in the event of a two-notch downgrade.

During the conference call Jamie Dimon indicated that this was a ‘mark-t0-market’ loss, which he blamed on ‘hedging.’  It’s not understood by this writer precisely how this could be a loss attributable to hedging, considering that the practice of hedging is to offset risk, in which case, a loss on one side of the position would result in a gain in the other side.  Perhaps Dimon doesn’t understand hedging….or perhaps he’s just full of crap.

Regardless, the market isn’t taking this loss as trivial and Dimon’s revelation seems to be effecting more than just JPMorgan’s stock price, which is down more than 5%.  As of this writing, the S & P futures are down over 10 points, the Dow futures down more than 80 points.
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On April 5, 2012, JPMorganChase commodity executive Blythe Masters appeared on CNBC, and she was questioned whether the bank is manipulating metals markets?

Watch the interview here.

Masters’ response was,

“There’s been a tremendous amount of speculation, particularly in the blogosphere, on this topic,” she told CNBC. “I think the challenge is it represents a misunderstanding of the nature of our business. … Our business is a client-driven business where we execute on behalf of clients to achieve their financial and risk-management objectives. … We have offsetting positions. We have no stake in whether prices rise or decline.”

So Blythe Masters would have us ALL believe that J.P. Morgue’s 76 Trillion derivatives position – illustrated below – is ALL CLIENT DRIVEN:

source:  Office of the Comptroller of the Currency [OCC]

The Undoing of Blythe Masters and J.P. Morgan Chase

Perhaps Ms. Masters is unfamiliar with [or conveniently forgets, perhaps?] the manner in which the OCC gathers and presents data, namely, they gather and publish data submitted by the banks themselves in submissions known as “Call Reports ”.

Here is what the OCC tells us about “end users” or clients [or clients who want to be identified, perhaps?] for derivatives, namely, THAT THERE ARE VIRUALLY NONE:

Source:  Office of the Comptroller of the Currency

You Cannot Have it Both Ways Blythe

This is EXTREMELY INDICTING.  The head of J.P. Morgue’s derivatives nightmare is telling the world that their business is “customer driven” and on the other hand – the OCC – whom J.P. Morgue reports to – is telling us there are NO CUSTOMERS [or none that want to be identified] for these hundreds of TRILLIONS of derivatives products?

The reality is that Blythe Masters is telling a partial truth – in that J.P. Morgue’s trading is customer driven; and partially misdirection in that Masters refuses to acknowledge that J.P. Morgue’s client “IS” THE Treasury [specifically, the Exchange Stabilization Fund, or, ESF] of the United States of America.

It’s appropriate – with this being Easter – that Blythe Masters would lay-such-an-egg in the mainstream press.  Appropriately, it has landed squarely on her own face.

Rob Kirby for Gold Seek

This ought to be over about now.

Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. (JPM)accounts in London, according to an e-mail sent by a firm executive.

Edith O’Brien, a treasurer for the firm, said in an e-mail sent the afternoon of Oct. 28, three days before the company collapsed, that the transfer of the funds was “Per JC’s direct instructions,” according to a copy of a memo drafted by congressional investigators and obtained by Bloomberg News.

Where’s the indictment?

Corzine is entitled to the presumption of innocence but the victims of this apparent scheme are entitled to justice.  Where is it?  Six months into this we now have prima-facie evidence that Corzine ordered a transfer from customer segregated funds to meet a margin call against the firm’s proprietary trading.

If there’s an argument that this sort of transfer would be lawful I’d love to see it.

More to the point, if this sort of transfer is lawful then no person in this country can ever trade anything in a brokerage again until it is rendered unlawful and assurances are available that this conduct will result in long prison sentences and personal liability.

If you do then you are a rube, as your funds are simply there for the purpose of (legally) stealing them when, not if your brokerage finds itself underwater.

There’s a further problem:

Barry Zubrow, JPMorgan’s chief risk officer, called Corzine to seek assurances that the funds belonged to MF Global and not customers. JPMorgan drafted a letter to be signed by O’Brien to ensure that MF Global was complying with rules requiring customers’ collateral to be segregated. The letter was never returned to JPMorgan, the memo said.

So JP Morgan suspected the funds were stolen and drafted a letter demanding a written assurance they were not.  They never got that assurance, which means they knew the funds were impaired.

This in turn means they effectively received stolen property and thus have destroyed any argument they might have in “good faith” reception of the funds, which in turn means that all of those funds must be immediately clawed back.

We’re six months into this folks, and the customers of MFer Global still don’t have their money.  But now we have not just the belief that the company knowingly took customer funds to satisfy a margin call on their proprietary positions, we have evidence they did so.

And we further have hard evidence that JP Morgan knew the funds were taken from customer segregated accounts and were not MF Global’s to disburse.

If we do not see indictments and the clawback of those funds in the immediate future every American will have no choice but to consider the federal government to be nothing more than a bunch of felonious thugs — from the Office of the President on down.

In the latest edition of Nobody Committed Any Crimes™* we have JP Morgan/Chase!

JPMorgan Chase & Co. took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years, current and former employees say.

“We did not verify a single one” of the affidavits attesting to the amounts Chase was seeking to collect, says Howard Hardin, who oversaw a team handling tens of thousands of Chase debt files in San Antonio. “We were told [by superiors] ‘We’re in a hurry. Go ahead and sign them.’”

Oh look!  Robosigning!

And worse, because the allegation is that Chase sold off delinquent debts to collectors knowing that they were unverified.

Worse, allegations have been made that documents were deliberately destroyed — documents that would have evidenced payments or judgment-based extinguishment!

Documents weren’t simply misplaced: Chase shredded incoming correspondence such as records of borrower payments and counter-judgments extinguishing debts, Almonte alleged in her wrongful termination suit.

If true, that’s essentially identical to what was alleged before the FCIC when it came to Citi’s practices in underwriting home mortgages — knowingly selling garbage on while intentionally failing to disclose the truth about what is being sold.

The obvious questions are:

When are we going to see actual justice in this country?  When are the people who have been wrongfully sued for monies they don’t actually owe going to be compensated — and not by the government either, by the people who committed the wrongs? When are criminal penalties for false swearing going to be enforced?

And finally, when will politicians get off their knees and stop performing obscene acts on these very same banksters, instead demanding that justice be done — both sitting politicians and candidates?

* Just kidding on the TM — but maybe I should register it….

Hmmm… look what the cat dragged in….

Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.

….

It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America’s best kept secrets. Please do not allow this to turn into another Enron.

All in the open folks, submitted to the CFTC and therefore certainly “fair game”, although it is also only fair to note that it is impossible from the information given to document and prove up whether the person doing the submitting is an actual JP Morgan employee.

In fact, it might be a hoax.

But the only way to know will for regulators to look and exposition of the facts to occur.  Anyone care to bet on either of those things happening?

Perhaps the Goldman resignation letter via OpEd page will get some legs and lead to real benefit.

Perhaps.

How would you feel if someone told you that one of the largest banks on Wall Street makes more money whenever the number of Americans on food stamps goes up?  Unfortunately, this is something that is actually true.  In the United States today, one out of every seven Americans is on food stamps.  In fact, the number of Americans on food stamps has increased by a whopping 14 million since Barack Obama entered the White House.  All of this makes JP Morgan very happy, because JP Morgan has been making money by the boatload on food stamps.  Right now, JP Morgan Chase issues food stamp debit cards in 26 U.S. states and the District of Columbia.  The division of JP Morgan Chase that issues these debit cards made an eye-popping 5.47 billion dollars in net revenue during 2010.  JP Morgan is paid per customer, so when the number of Americans on food stamps goes up, they make more money.  But doesn’t this give JP Morgan an incentive to try to keep the number of Americans on food stamps as high as possible?  Of course it does.  JP Morgan is interested in making money as rapidly as possible. If JP Morgan can get more Americans enrolled in the food stamp program and keep them enrolled in it for as long as possible, that is good for business.

And the Obama administration is certainly doing what it can to help out.  Even though a whopping 46 million Americans are now on food stamps, the Obama administration plans to give out large amounts of money to organizations that are able figure out ways to get even more people enrolled in the program….

Despite the historic rise in food stamp use, however, the Obama Administration believes not enough people are receiving food stamps who should be and is offering $75,000 grants to groups who devise “effective strategies” to “increase program participation” among those who have yet to sign up.

In fact, U.S. Agriculture Secretary Tom Vilsack says that if we can get even more Americans enrolled in the food stamp program, that will be a great way to “stimulate the economy“.

Of course JP Morgan just loves all of this.  The more people they have in the system the better.

Christopher Paton, the managing director of JP Morgan’s “Treasury Solutions” business, made the following statement about the “food stamp business” that his firm is engaged in during an interview with Bloomberg Television….

“This business is a very important business to JPMorgan. It’s an important business in terms of its size and scale…Right now, volumes have gone through the roof in the past couple of years. The good news, from JPMorgan’s perspective, is the infrastructure that we built has been able to cope with that increase in volume.”

You can see more of the interview with Paton in the video posted below….

As the interview above noted, more than 40 percent of all food stamp recipients in the United States actually have a job.

This is an exciting “growth area” for JP Morgan.  As the middle class continues to decline, the number of “the working poor” in America is exploding.

Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.  This trend is perfect for JP Morgan because it means that the number of low income workers that are eligible for food stamps is going to keep increasing.

And what makes all of this even sadder is that JP Morgan has outsourced many of the customer service jobs for its food stamp program to India.

Yes, you read that correctly.

When Americans that can’t find a decent job need help with their food stamps there is a good chance that they will be talking to a customer service representative sitting in India.

Isn’t that crazy?

When ABC News confronted JP Morgan about this, JP Morgan would not tell ABC which states have customer service calls sent to India and which states have them handled inside the United States….

JP Morgan is the only one today still operating public-assistance call centers overseas. The company refused to say which states had calls routed to India and which ones had calls stay domestically. That decision, the company said, was often left up to the individual states.

But JP Morgan doesn’t just handle food stamps.  JP Morgan also issues child support debit cards in 15 states and unemployment insurance debit cards in 7 states.

Of course JP Morgan is not the only big bank involved in this kind of business.  Several others are also making money in massive quantities on the backs of the poor.

The following example comes from a Huffington Post article….

Shawana Busby does not seem like the sort of customer who would be at the center of a major bank’s business plan. Out of work for much of the last three years, she depends upon a $264-a-week unemployment check from the state of South Carolina. But the state has contracted with Bank of America to administer its unemployment benefits, and Busby has frequently found herself incurring bank fees to get her money.

To withdraw her benefits, Busby, 33, uses a Bank of America prepaid debit card on which the state deposits her funds. She could visit a Bank of America ATM free of charge. But this small community in the state’s rural center, her hometown, does not have a Bank of America branch. Neither do the surrounding towns where she drops off her kids at school and attends church.

She could drive north to Columbia, the state capital, and use a Bank of America ATM there. But that entails a 50 mile drive, cutting into her gas budget. So Busby visits the ATMs in her area and begrudgingly accepts the fees, which reach as high as five dollars per transaction. She estimates that she has paid at least $350 in fees to tap her unemployment benefits.

There is something about all of this that just seems very, very wrong.

When we have good jobs, the big banks hit us with outrageous bank fees and they try to get us enslaved to credit card debt.

When we are down on our luck and become dependent on the government, the big banks still find ways of making money at our expense.

Why do the banksters always seem to win and we always seem to lose?

The Economic Collapse