Most observers are missing the point. When CEO Jamie Dimon announced that JPMorgan Chase had incurred at least $2 billion in losses from risky, unsecured, derivatives-types trading, it uncovered the scandal of our time once and for all.
The Chase disaster gives us a much-needed glimpse into our corrupt political system, its Wall Street paymasters, and the media voices that allow people like Dimon to escape scrutiny.
The JPMorgan Chase story is also the story behind the financial crisis that has thrown millions of people out of work. It's the story behind our ever-growing wealth inequity. It's the story behind Washington's inability to prosecute criminal bankers, regulate reckless ones, and propose the economic solutions the rest of us urgently need.
Predictably, the pundits who aid and abet people like Jamie Dimon are dismissing this story's importance, pointing out that $2 billion (it could become much more) pales against the $19 billion in profit Chase reported last year.
But it was potentially $2 billion earned through crime. And more importantly, this story isn't just about Chase's errors and crimes. It's much bigger than that.
Besides, $19 billion in a single year? That's a big part of the story, too.
The Case Against Chase, its CEO, and its accomplices is too big to cover all at once. Here are the aspects of this under-reported story we plan to address in the days and weeks to come.
Depending on the day and the measurement used, JPMorgan Chase is now the largest or second-largest bank in the world. Its Japan operation alone has been cited by that nation's regulators as a systemic risk because of its size.
If Chase began to collapse because of risky betting, the government would be forced to step in again.
Jamie Dimon knows that. It's a lot easier to gamble when you know somebody else will be forced to bail you out if you lose too much.
Chase, like the other mega-banks, has systematically engaged in criminal activity for years. At the same time, it has used its vast wealth to corrupt our political and regulatory systems. And it has been aided and abetted by willing collaborators in the media, every step of the way. It gave up nearly three quarters of a billion dollars in settlements and surrendered fees to settle one case alone?that of bribery and corruption in Jefferson County, Alabama.
Chase has paid out billions to settle charges that include perjury and forgery (in its systemic foreclosure fraud and abuse), investor fraud, and sale of unregistered securities. And these charges were for actions that took place while Jamie Dimon was the CEO.
The first of Dimon's executives have offered their resignations in this latest scandal. But investigations of everyone from Lucky Luciano onward have focused on the boss, not just the underlings. Laws like the Securities Act and Sarbanes-Oxley provide strict legal guidelines for corporate CEOs and their staff. There's strong evidence to suggest those laws have been stretched to the breaking point?and beyond.
We may someday look back at Jamie Dimon's increasingly shrill cries of persecution as a cry for help or a plea to be caught. He has not only fought the regulation of Wall Street banks, he's used extreme language to characterize criticisms of bank activities as a) mean, b) an attack on all forms of business, and c) bigotry that is no different from racism.
Dimon has used his visibility?and his lavish public relations budget?to obtain highly flattering profiles of himself in major U.S. publications. And he's used that public platform for, among other things, arguing for unwise ideas in public policy areas where he has no expertise. Most of those ideas involve forcing the American people to suffer additional financial hardship in order to pay for the damage caused by Dimon and his colleagues.
Just last week Dimon was arguing for the "Simpson/Bowles plan" authored by two private individuals, which would impose the same kind of austerity on the United States as that which is currently wreaking economic and poetical havoc on Europe.
If nothing else, Dimon is consistent: He can't respond to reality any more effectively in the policy arena than he can in the banking sector.
Dimon argues against regulation by saying that bankers are moral and sophisticated enough to manage their businesses without oversight. But he's been making those arguments to a nation that's standing in the wreckage his colleagues left behind the last time they were allowed to play with trillions without adult supervision.
And he has somehow managed to argue simultaneously that no other bankers are as smart as he is, and that nevertheless they should be unregulated because guys like him are so smart. That doesn't make sense.
Despite Dimon's illogic and the criminal track record of his organization, he has been flattered, quoted, and profiled in major news publications at roughly the same frequency as Lindsay Lohan has been in entertainment mags, and for the same reason: He makes good copy if you don't dig too deeply.
The day before the scandal broke, in fact, Dimon punked CBS host David Gregory on Meet the Press by pontificating on political and other matters in a pre-taped interview, knowing that this story was about to break the next day. We won't knock Dimon for not breaking the story (there are rules about handling information at a publicly traded company, although Dimon never seems to have cared much about them before).
But it was an embarrassment to Gregory just the same.
The flackery didn't start after this story broke. The supposedly 'hardball' coverage of this '"error" typically amounted to little more than the kind of damage control Dimon and his PR team were no doubt hoping they'd get. The incident was described as an "embarrassment," a "mistake," an "error."
Few news outlets discussed the size of JPMorgan Chase and other too-big-to-fail banks, which continued to grow even after the passage of a financial reform law. They failed to discuss what would happen if the bank got into serious trouble.
And they glided lightly over the fact that crimes may have been committed. When they did, they were quick to characterize this scandal as the work of overzealous or crooked underlings.
That's what they said in Alabama, too.
The Influence Peddlers
Banks have paid Washington lobbyists $50-60 million per year for the last few years?and they've gotten their money's worth.
Real financial reform was hamstrung under Dodd/Frank by behind-the-scenes wheeling and dealing. Even that bill's modest reforms are being undercut by Republicans from Mitt Romney downward, who are determined to avoid even the pretense of regulating the nation's reckless and criminal bank enterprises.
The White House had yet to indict a single banker for the events leading up to the financial crisis, although billions have been paid out it settlement fees for criminal activity.
When you look at it in context, $150-200 million over three years is one of the best investments Wall Street has ever made.
The Federal Reserve rescues failed bank executives?often breaking its own rules to do it?and yet cites the same rules when it refuses to help other businesses, or individual consumers, in ways that would do much more to restore the economy. No wonder: The Fed's board includes many of the same bankers who broke the economy ... including Jamie Dimon.
Intransigent pro-bank regulators refuse to carry out their own agencies' mandates if it would discommode Wall Street. And Administration officials meet routinely with double-dealing bankers like Lloyd Blankfein from Goldman Sachs, according to visitor logs, while rarely laying eyes on foreclosed homeowners or other ordinary citizens.
Some of the bank executives they meet with are their own colleagues. There are so many people moving from Wall Street jobs to high government positions?and back again?that our country's center of economic power now resides somewhere on the Amtrak route between New York and Washington. (I'm guessing Metropark, NJ.)
Some people have called for reasonable steps in the wake of this scandal: Tighten banking regulations. Strengthen the Volcker rule. Restoring Glass-Steagall. Force Jamie Dimon to resign from the board of the New York Fed.
Each of these moves would be a start?but they would only be a start. But the story of Jamie Dimon and JPMorgan Chase illustrates a far deeper, far more systemic problem. It highlights the broken and corrupt matrix of relationships between rich (and often lawbreaking) bankers, politicians and regulators in Washington, and supplicating figures in the national media.
This is an opportunity to explain what's wrong with our system and pursue ways of fixing it. Let's seize the moment now?before it's too late and they break the economy again.
No matter how hard the rest of us try to get into the 21st Century, the folks in the republican party keep trying to take us back.
"Mississippi state Rep. Bubba Carpenter (R) said that it?s OK for women to have coat hanger abortions because it?s for a greater good.
A video obtained by Rachel Maddow?s blog captures Carpenter saying he is proud of Mississippi?s attempts to outlaw abortion outright, despite the fact that the Supreme Court has ruled abortions legal in the United States.
And what about women who will perform self-induced abortions because they cannot afford to go out of state to get the procedure? ?Hey,? he says, ?you have to have moral values?:
It?s going to be challenged, of course, in the Supreme Court and all ? but literally, we stopped abortion in the state of Mississippi, legally, without having to? Roe vs. Wade. So we?ve done that. I was proud of it. The governor signed it into law. And of course, there you have the other side. They?re like, ?Well, the poor pitiful women that can?t afford to go out of state are just going to start doing them at home with a coat hanger. That?s what we?ve learned over and over and over.?
But hey, you have to have moral values. You have to start somewhere, and that?s what we?ve decided to do. This became law and the governor signed it, and I think for one time, we were first in the nation in the state of Mississippi." [Source]
Yes, because nothing says "moral values" like watching some poor woman die from an infection because of a back alley abortion procedure. Bubba, (that's his real name) you are a dope!
Those republicans are no joke. And now we are finding out that it was under the frst GOP governor from that state since reconstruction that an innocent man lost his life thanks to a state sanctioned killing.
"He was the spitting image of the killer, had the same first name and was near the scene of the crime at the fateful hour: Carlos DeLuna paid the ultimate price and was executed in place of someone else in Texas in 1989, a report out Tuesday found.
Even "all the relatives of both Carloses mistook them," and DeLuna was sentenced to death and executed based only on eyewitness accounts despite a range of signs he was not a guilty man, said law professor James Liebman.Liebman and five of his students at Columbia School of Law spent almost five years poring over details of a case that he says is "emblematic" of legal system failure.
DeLuna, 27, was put to death after "a very incomplete investigation. No question that the investigation is a failure," Liebman said.The report's authors found "numerous missteps, missed clues and missed opportunities that let authorities prosecute Carlos DeLuna for the crime of murder, despite evidence not only that he did not commit the crime but that another individual, Carlos Hernandez, did," the 780-page investigation found." [Source]
Oh well, what does it matter if we kill an innocent person to make a larger point? That's just life in the republican's America.
Finally, I am glad that our conservative friend, John Derbyshire, found work.
I suppose that he is feeling a bit more relieved these days. It must have been hard to be a closet racist all of these years. As we get deeper into the summer I am sure tat more of his conservative friends will take their sheets and come out of the closet as well.
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Oh look, another "conscience act" - crowd-sourced oppression rebranded as "freedom."[...]
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"What, me worry?": Jpmorganchase's
Jamie "The Gambler" Dimon
"This is the week of the third annual Deficit Fest, the event sponsored by Wall Street billionaire Peter G. Peterson. At this event, many of the people most responsible for the current downturn come together to tell us why we should be worried about the deficit at a time when 25 million people are unemployed, underemployed or have given up looking for work altogether and millions face the prospect of losing their homes."
-- economist Dean Baker, in
"Deficit reduction: The Great Distraction"
I suppose it's a little unfair to Jpmorganchase genius Jamie Dimon to link him with the above taunt by Dean Baker at the people who brought us the Wall Street meltdown when Jamie D's company generally kept its distance from the immediately precipitating housing bubble. On the other hand, as a symbol -- and indeed leading spokesperson -- for the "don't mess with the banksters" mentality, he still seems to me fair game.
Good news today for Jamie D. Even as Jpmorganchase has begun shedding directly involved players in the $2 billion trading "oops," and even though the poor fellow had to listen to a bunch of nattering shareholders whine about the lost $2 billion at today's annual meeting in Tampa, but in the end, as reported by Bloomberg Businessweek --
Dimon survives votes on pay, chairmanship
By TAMARA LUSH and PALLAVI GOGOI
The CEO of JPMorgan Chase survived a shareholder push Tuesday to strip him of the title of chairman of the board, five days after he disclosed a $2 billion trading loss by the bank.
CEO Jamie Dimon also won a shareholder endorsement of his pay package from last year, which totaled $23 million, according to an Associated Press analysis of regulatory filings.
Dimon, unusually subdued, told shareholders at the JPMorgan annual meeting that the company's mistakes were "self-inflicted." Speaking with reporters later, he added: "The buck always stops with me."
Most of the shareholder ballots were cast in the weeks before Dimon revealed the trading loss.
His pay package passed with 91 percent of the vote. The vote to strip him of the chairman's title won only 40 percent support. The bank did not announce separate results from before and after the loss was revealed. . . .
In the years leading up to JPMorgan Chase?s $2 billion trading loss, risk managers and some senior investment bankers raised concerns that the bank was making increasingly large investments involving complex trades that were hard to understand. But even as the size of the bets climbed steadily, these former employees say, their concerns about the dangers were ignored or dismissed.
An increased appetite for such trades had the approval of the upper echelons of the bank, including Jamie Dimon, the chief executive, current and former employees said.
Initially, this led to sharply higher investing profits, but they said it also contributed to the bank?s lowering its guard.
?There was a lopsided situation, between really risky positions and relatively weaker risk managers,? said a former trader with the chief investment office, the JPMorgan unit that suffered the recent loss. The trader and other former employees spoke on the condition of anonymity because of the nature of the investigations into the trading losses. . . .
Top investment bank executives raised concerns about the growing size and complexity of the bets held by the bank?s chief investment office as early as 2007, according to interviews with half a dozen current and former bank officials. Within the investment office, led by Ina Drew, who resigned on Monday, the bets were directed by the head of the Europe trading desk in London, Achilles Macris.
Mr. Macris, who is also expected to resign, failed to heed concerns as early as 2009 from the unit?s own internal risk officer, said current and former members of the chief investment office. Mr. Macris and Ms. Drew were not available for comment. . . ..
Sirens had gone off after a series of erratic trading sessions in late March resulted in big gains one day, followed by even bigger losses the next on the London trading desk of the bank?s chief investment office. Mr. Dimon was convinced by Ms. Drew and her team that the turbulence was ?manageable,? executives said. Nor did anyone on the operating committee, of which Ms. Drew is a member, question her conclusion ? in fact the full operating committee wasn?t told of the scope of the problem till early last week, just days before Mr. Dimon went public.
The alarm bells were silenced in early April, but days after first-quarter earnings were reported on April 13, the erratic trading pattern continued, except this time there were few gains to offset the losses, and the red ink was flowing faster by the day.
Mr. Dimon convened a second round of checks, which soon concluded there was a ticking time bomb, but by then it was too late, a situation made worse as traders actually increased their bets instead of shrinking them, resulting in a loss that now totals more than $2 billion and threatens a management team that until now could seemingly do no wrong. . . .
Hoping for Knockout Punch, CIA Sends JP Morgan Execs to Infiltrate Al-Qaeda
Terror Org Posts Huge Losses
WASHINGTON (The Borowitz Report) ? In a covert mission designed to destroy what remains of al-Qaeda, the CIA has been infiltrating the terror network with executives from JP Morgan Chase, the banking giant.
The mission, which the intelligence agency had hoped to keep secret, came to light this week when al-Qaeda dismissed two of its top officials who it said were responsible for ?unacceptably speculative? betting of the terror net?s funds on credit default swaps.
Across the intelligence community, the dismissals caught the attention of analysts, who thought such risky behavior seemed out of character for al-Qaeda.
?The first thing I thought was, this sounds more like the work of JP Morgan,? one analyst said, speaking on condition of anonymity. ?Al-Qaeda has a reputation for being madmen, but even for them these investments were crazy.?
Pressed about the covert mission, CIA Director David Petraeus confirmed today that it had been a resounding success, telling reporters, ?If you?re serious about putting someone out of business, there?s no one better than these JP Morgan guys. One of them can do more damage than a thousand drone strikes.?
But Gen. Petraeus may have spoken too soon, as the official al-Qaeda website today claimed that the terror organization was on the brink of getting a ?major financial bailout package? from a consortium of state sponsors of terrorism such as Iran and North Korea.
?Al-Qaeda is too big to fail,? the website said.
Of course they did. For starters, let's recognize that the insiders and experts who drooled over Dimon and thought he was a genius at risk were either drunk from his parties or complete idiots. His former chief investment officer who was supposed to be another risk expert was called a "trader at heart" which means she loved risk. Putting a "trader at heart" in charge of risk is asking for...
I know this isn't the kind of thing we normally cover at C&L, but I thought it was something everyone should see. This is just plain crazy. To allow these kids with multiple concussions to keep playing sports is like playing Russian roulette. The article doesn't mention that the effect of concussions is cumulative?you don't "bounce back." The parents who allow them to play again are derelict in their duty, and so are the schools for assuming that kind of liability on behalf of the already-stressed players.
More importantly, these head injuries are not just a personal problem. They will place a lifelong and costly strain on medical resources, and make it very difficult for these children to be productive adults:
Outwardly, they seem like any other teens, wearing tight, low-rise jeans, black eyeliner, and fluorescent nail polish. But at an age when most kids are obsessing over the newest Twilight movie or who's going to the prom, Casey and her friends commiserate about migraines, memory loss, and problems keeping up in school. They can't tolerate the lights and noise of amusement parks, dances, or movies.
"It's overwhelming. An entire life changed," said Allison Kasacavage, a freshman at Downingtown East High School, sounding wearier than most 15-year-olds. She said she had suffered five concussions, three from soccer, starting at age 12.
After getting elbowed in the head, knocked unconscious, and taking too many headers and colliding with another girl in three separate games over 18 months, "I knew I was done with soccer," she said. "I couldn't go back."
The issue of chronic head injuries for big-name, highly paid pro football and hockey players has been in the headlines recently, punctuated by worries of a link to this month's suicide of former NFL superstar Junior Seau. But what several experts have described as a public-health crisis among young female athletes has been flying under the radar.
According to a study of high school soccer players in the Journal of Athletic Training, girls sustained reported concussions 68 percent more often than boys did. Girls soccer trailed only football when it came to the total number of concussions among young athletes, according to the American Journal of Sports Medicine.
As experts labor to understand the reasons for this, they are alarmed at what they see as lax or inadequate rules and poor judgment in letting girls like Casey and her friends back on the field so soon after a serious head injury.
"It was shocking in this day and age to see that kids are playing with overt symptoms after multiple concussions and recent blows to the head," said Philip Schatz, a professor at St. Joseph's University and an expert in head injuries who learned of the cluster of cases in Downingtown after it was reported last week on NBC's Rock Center With Brian Williams.
Schatz noted that most school soccer programs have concussion protocols that require athletes to leave a game, take off a week or longer, and get an independent medical evaluation. Thirty-three states, including New Jersey, have laws mandating concussion education for coaches, but that doesn't always apply to travel and rec programs.
"If you were talking about adults and mild heart attacks, only one would require a complete change in lifestyle," Schatz said. "Here we are subjecting our children to multiple traumatic brain injuries and not changing their behavior."
There is no reason for a $2 billion bet on anything. There is no reason outside of trying to prove something or trying to make something like a bigger commission. This is so pure. It is so Wall Street. Byron Dorgan says we need to do 3 things to fix this country: Restore Glass-Steagall Act
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Despite a petition with over 44,000 signatures, as well as recommendations by NGOs, legal experts, and congressmen, the Office of the United States Trade Representative still refuses to release the text of the TransPacific Partnership.[...]
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Depositors withdrew nearly $1 billion (U.S.) from Greek banks Monday. [...]
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The poll showed that relatively few voters consider same-sex marriage their top issue amid continued economic uncertainty, and more than half said it would make no difference in their choice for president. But among those who said Mr. Obama?s position would influence their vote, more said they would be less likely to vote for him as a result; in a close race, even a small shift in swing states could be costly. – Obama?s Switch on Same-Sex Marriage Stirs Skepticism
NO IDEOLOGICAL COMPASS and no economic message since before the 2010 midterms has come back to bite Pres. Obama, giving Mitt Romney a strong showing according to multiple polling snapshots of the presidential race today.
A larger stimulus would have been more effective, while illustrating Pres. Obama had a progressive economic plan, with a strong message in 2010 to take on Tea Party austerity at least showing he had a clearly stated economic vision throughout his first term, instead of the series of reactions to Republicans that it has come to represent.
Simpson-Bowles did absolutely nothing for Pres. Obama except to show that he was farming his economic plan out to a bipartisan commission. But even then he couldn’t make a decision on the group’s decisions, letting them die a slow death, except with infotainment talking heads who love it. Making matters more confusing, Pres. Obama also floated a grand bargain on entitlement “reform,” yet another reaction to Republicans digging in their heels, which Speaker Boehner promised today to do again. Pres. Obama’s populist Kansas speech was met with glorious praise by partisans, but financial word salads and budgetary bromides without force of action mean squat, especially when they’re nakedly political in the first place.
It has all had a cumulative effect and is the single biggest challenge in Obama facing off with Romney, who will not be intimidated on economics, his strong suit, whether you agree with his theories or not.
All the polling out today incorporates the gay marriage equality issue, but come November people will be voting on economics, unless an unforeseen national security matter rears up, then it’s Obama’s advantage all the way.
The snapshot in time polling, starting with the New York Times/CBS, should not surprise anyone, though I’m more interested in the USA Today/Gallup poll.
Though an overwhelming 71% rate economic conditions as poor, a 58% majority predict they will be good a year from now. While those surveyed are inclined to say they are worse off financially than a year ago, nearly two-thirds say they think they’ll be better off this time next year.
[...] Since becoming the presumptive Republican nominee, Romney’s favorable-unfavorable rating has jumped to 50%-41%, his best ever and in the same neighborhood as Obama’s 52%-46% standing. The former Massachusetts governor gets stronger ratings than the president when it comes to handling the economy, the issue likely to drive the campaign.
In the poll, 55% say the economy would get better over the next four years if Romney was elected, compared with 46% who say it would improve if Obama was re-elected. Twenty-seven percent say the economy would get worse in a Romney first term, compared with 37% who say that of an Obama second term.
There’s nothing that will convince me the marriage equality statement of Pres. Obama’s last week will factor in with voters who are seriously considering him in the first place. Though it is telling that the Times poll shows such a whopping number of people, 67% to 24% believing it was politically motivated, which points to a character issue about Barack Obama that has been seen throughout his political rise.
Mitt Romney’s character issue on political expediency and convenience, as well as on 1% economic largess, has been documented, as have been his statements proving he’ll say absolutely anything to win and actually has on a number of occasions.
The Obama camp, through Stephanie Cutter, is saying the Times/CBS polling sampling is untrustworthy, though she used the word “biased” when speaking with Chuck Todd on MSNBC.
In the ABC/Wash Post poll, 54% of women approve of his stance, while men weigh in at 37%. Independents are favorable of his stance, 49-43, though some independents are strongly against, but I’d bet they’re also conservatives who hate the notion of marriage equality. Some people will never evolve to the point of accepting it’s a civil rights issue.
In the USA/Gallup poll, understanding we’re talking about a snapshot of today, Republicans have taken the lead in the fight to control Congress, 50%-44%.
Another sign of restlessness with Pres. Obama comes at the very end, revealing the same challenges he had in 2008.
Meanwhile, one in five Democrats and Democratic-leaning independents say they would have preferred a nominee other than Obama, who didn’t face a primary challenge. They include one in four white voters.
That number, 25%, of white Democratic-leaning independents who say they’d prefer another nominee is a problem, because they could choose to stay home, along with the tiny minority of religious conservative African Americans, who oppose his marriage equality stance, even though it doesn’t change DOMA at all.
Women are listening to Mitt Romney on economics, because that’s the issue that will drive most votes.
Throughout Pres. Obama’s first term, he has had no economic message at all, opting instead for a reactionary strategy to Republican proposals, which now is met by Mitt Romney’s relentless repetition that he’s been successful, he has, knows how to create jobs, been there and destroyed some on the way, and Obama doesn’t know what he’s doing, with the success of the auto bailout proving otherwise. Unfortunately, Pres. Obama’s continual rightward shift benefits Republicans across the board.
It’s impossible to over emphasize the damage done by Pres. Obama’s lack of economic message to his own reelection efforts.
However, there’s still no evidence yet Mitt Romney has the political talent to beat an incumbent president, which is a very difficult thing to do.
Mitt Romney is dead wrong on economics, but he’s strong and sure in his messaging, something Pres. Obama has never been. There was another guy who Democrats didn’t think had a prayer to win the presidency and he was a strong and wrong as Romney, winning two terms. George W. Bush endorsed Mitt Romney today.