"The recent trading losses at JPMorgan Chase & Co. and scandals over money laundering at HSBC Holdings Plc and Standard Chartered Plc have prompted even financial-industry insiders to ask whether these complex global organizations are too big to manage."
"The bigger these subsidized institutions become, the more likely they are to receive government support in times of distress. Implicit subsidies increase as the systemic importance of a bank rises, creating more incentive for management to talk up the social value of their bank becoming even larger.
"All of this is really about privatizing the benefits when things go well and socializing the costs when things go poorly. No one has found measurable economies of scale or scope for banks with more than $100 billion in total assets, yet four of the Big Six have balance sheets exceeding $1 trillion. Global megabanks have become a huge, nontransparent and dangerous government-subsidy program"
See the article below:
The insiders are now split on the wisdom of having the big six banks potentially threaten the financial stability of the entire global economy.
More on the NY State Attorney General suit against the private equity firms
And the Bain Capital Connection?
What will be the triggers for the rest of the year and the consequences in global and US finance?
Well there are several. Let's list a few first and the go back after for the detail.
1. 70% of the trades on Wall Street are by computer. Computer glitches, real or manipulated, can set off a panic and that can make valuations and pricing difficult if not impossible, including gold, silver and stocks.
2. The Greek default could result in currency debasement. This would have a domino effect in the west. If not Greece then if Spain asks for a postponement of its austerity programs. Both could trigger in a month or two if not Greecians will riot like never seen before- and the riot mentality will spread to other countries.
3. The rising price of fuel and food is what actually set off the "Arab Spring" riots. Egypt is at that point again. The most dangerous point for a country as far as bloody revolution is concerned is when seeming gains are followed by severe setbacks.
It was fuel prices and food price increases which set off the Arab spring and it will be rising food and fuel prices that will do it again. Note the price of food and fuel is controlled by the banks seeking profit and having captured the market in these essential needs of life. How close are they to more increases?
Governments around the world subsidize fuel and food prices already to avoid revolution. These two plus arms purchases are what they spend their money on.
4. April is the deadline when the US government receipts from taxation come in. If lower than anticipated then expect the US credit rating to drop and interest rates to drop below zero etc., and perhaps a run on US securities and perhaps bonds as well.
5. December 31st. This the "cliff" deadline which I have written about in other places on this site. Up for action are the tax breaks for the rich, taxes on the middle class, cuts for the military, so-called entitlements, medicare and social security and other bread and butter items.
No telling what will happen. Uncertainty can really trigger ancillary events, most of which will be unpleasant.
But what should the average citizen do about the above situations? Stay tuned.
JP Morgan and other banks lower the mortgage interest rates amid fear of a double dip recession due to budget and austerity cuts.
Five more triggers set to fizzle or ignite in the next six days on wall street, th
e banks and JP Morgan--one pundits view.
We will throw these into the mix and get back our analysis tomorrow.
What are the solutions to al this that are being discussed?
Should we be buying gold, go on the gold standard as Ron Paul suggests, allow currency collaspe and start over again, or impeach congress, end fractional banking and wall street gambling on margin, end buying stock on margin-end the Federal Reserve.
In this video these ideas are being tossed around and then come back and I will give my suggested solutions.
Which big banks are going back to client centered services and moving away from the investment banking model and is this a big change or just cosmetic?
France to insitute a 75% tax bracket. Is the US next?
But what should the average citizen do about the above situations? Stay tuned.
Should we be buying gold, go on the gold standard as Ron Paul suggests, allow currency collaspe and start over again, or impeach congress, end fractional banking and wall street gambling on argin, end buying stock buyng on margin on margin-end the Federal Reserve.
Here are some ideas being tossed around and then come back and I will give my suggested solutions/
My predictions as to what will happen and then the details to follow.
First the European situation
Well where are we in the never-ending European Debt Crisis and what is likely to happen?
First, there is a clear anti-Merkel trend. Socialists have won elections or gained strength in France, possibilty Holland, in Italy, now it looks Spain is rebelling against austerity as well.
Second, the European Central banks while offering unlimited funds may find that nobody wants those funds with the condtions now attached and the fact of the matter is that more debt cannot cure existing debt.
If that happens what will happen? The possiblilities and outcomes
1. Rolling default. Country after country may opt out of the zone or threaten to do so-getting concessions on the austerity plans-- which it is clear stiffle growth.
The Germans would lose. Yes the Germans would lose because they sell many if not most of their products to the PIIGs. Inflation would occur
and the creditor nations would lose and take the haircut, even if the zone fell apart. After all the Greeks reason, austerity and default start to look alike except default regains Greek soververgnity and that looks good to Greeks and the other nations right now.
2. Expect a planned default- with reverberations in the United States as well. That is why President Obama is promising an increase in exports. He plans to let the US currency float thereby increasing exports. He has to to put some American's back to work. A cheap dollar helps.
3. Meantime the Chinese and the Russians see this coming as well and are talking now about creating trade and currency aggreements between themselves which would insulate them from the dollar and its collaspe.
They are even talking commodity trades not based on currency but a form of barter. And that could work, and if it does, other nations could start to immulate it--trouble for the west.
US regulars are going after the big banks for money laundering.
"Regulators, led by the Office of the Comptroller of the Currency, are close to taking action against JPMorgan Chase for insufficient safeguards, the officials said. The agency is also scrutinizing several other Wall Street giants, including Bank of America."
New report out on audit of the Federal Reserve. US banks, foreign banks got 16 trillion in US dollars in virtually free money.
"The lending suites that were set up for months and years, beyond the initial crisis point, were focused on how to keep banks profitable, not just how to keep them alive. The banks were able to access emergency lending facilities, or change themselves into bank holding companies overnight, to borrow at next to nothing, and if they chose, lend back to the government at a tidy profit. You didn’t have to think at all to make money. And you didn’t have to worry about that toxic balance sheet, because the government was going to help you grow your way out of it. They will also facilitate mergers to help decimate your competition. The money that the banks borrowed for nothing could have just as easily gone to underwater homeowners. There’s nothing special about the banks except that they know the Fed policymakers personally.” David Dayen, firedoglake.com"
The one year annivesary of Occupy Wall Street is tomorrow 9/17/12. Will it invigorate the movement or will it be a big party and then fizzle? Humm,.
The money laundering probe zeroes in on a specific unit.
Lehman brothers sues
Cyber attack against two major banks-JP and BofA
Details about how the new Volcker rule might be implemented
Suspension in effect on power trades for JP
If 5.6 billion was lost by JP Morgan, whose money was that shareholders or depositors?
Several countries announce limits on high speed trading? What does it mean?
How QE3 is helping the big banks
How has the 25 billion dollar settlement with the banks gone?
How homeowners even if they get a principal reduction the banks are telling folks that they will get hit with a big tax bill on the reducted amount of principal.
"Under current law, a principal reduction like this would be exempted from tax liability. However, that law, the Mortgage Forgiveness Debt Relief Act, expires at the end of the year, and after that, any mortgage debt forgiveness provided to a borrower will count as gross income for tax purposes, potentially costing millions of families several billion dollars."
"In the above case, the borrower would be required to pay taxes on the entire $177,000 amount forgiven by the bank, as if it were earned income. And that’s money that struggling homeowners simply don’t have."
The JP Morgan Food Stamp Empire
"But there may be one more reason the food stamp industrial complex continues to balloon: because wealthy corporate interests have been filling the campaign coffers of politicians who control the program’s trajectory. Prior to the 2002 EBT implementation mandate, JP Morgan’s political donations to members of the House and Senate agriculture committees were modest. But since 2002, they’ve been on a steady climb upward, rising from $82,302 to $332,930 in just the span of eight years. Adding to the unseemliness is the fact that three senators and six representatives who are agriculture committee members had, as of 2010, investments in JP Morgan; one senator, meanwhile, had money invested in Xerox. And in March 2012, the White House disclosed that President Obama has money in a JPMorgan Chase private client asset management checking account."
New York Attorney General files suit against JP Morgan
Will taxing the rich solve the deficit problem. In short who has enough money to solve our monetary and budget problems. Let's give the gross figures and then go to the detail and really have a look at things.
First some gross numbers then tomorrow the detail about how it would go.
Wall street up against billions in law suits. What is the summary and the latest?
Are arrests eminent at JP Moran based on taped telephone conversations?
What is the current risk profile at Morgan Chase?
10/13/12 JP Morgan record quarterly profits. Is the bank out of the woods? Humm, the financially savvy would ask a single question--show us the collaterial for the balance sheet profits. That is the question.
Barrons says that profit is not necessarily real.
Turning a Corner
posted a record quarterly profit, and CEO Jamie Dimon said housing "has turned the corner." But ZeroHedge noted the results included big one-time items; it said net interest margin dropped to a new record low; and quarterly nonperforming loans rose by the most in years. The bank lost at least $449 million on an earlier wrong-way credit derivative trade by the "London whale," bringing total losses from that to more than $6.2 billion. Dimon didn't comment on a Wall Street Journal report that the bank's chief financial officer would leave his post."
Wall Street hits a four year low for a daily loss. Major companies report revenue reductions
Will the laws suit against JP Morgan and the banks make any difference?
Some say no.
To quote from the article about this and previous cases against wall street.
"In virtually every case, these suits have been settled out of court on terms favorable to the banks. The charged institutions agreed to pay fines—amounting to a fraction of the revenues they amassed from their fraudulent activities—in return for getting off without an admission of wrongdoing. In effect, the banks have been allowed to charge off fines for illegal activities as part of the cost of doing business.
There is every indication that the suit filed by Schneiderman will follow the same pattern. It is, once again, a civil, not a criminal, suit, and no individual is named as a defendant."
JP Morgan and other banks to pay fines in the mortgage and derivatives scandals?
The World Shadow Banking System-How it Works.
Who is buying up foreclosed homes-you guessed-Wall Street-those who caused the home crisis, now move in to take advange of the depressed prices. This was planned?
What is the real story of hedging vs. gambling at JP Morgan?
JP Morgan and UK to settle law suit?
What are the issues in the fiscal Cliff? Video
JP Morgan to ask employees to pay fines and settlement?
Credit Union to sue JP Morgan? Yep.
JP Morgan being sued over the "London Whale" and the lawyers get rich.
The Feds are suing JP Morgan over WAMU Mortgages
Banks win against homeowners. Apparently
Spending cuts already made which everyone is ignoring.
The best collection of pundits on the internet
Senate Republican Leader is vowing on more tax increases meaning corporate tax exemptions. So where is the 1 trillion Obama didn't get in the last deal is to come from-the middle class? Bad news here.
Spelling out how Banks and the finance sector use debt as a means of controlling all of society.
How the debt ceiling talks will really go? One pundits view.
AIG back again for more of our money? Yep. Maybe.
AIG backs down, declines to join lawsuit.
So what kind of Senator will Elizabeth Warren will be.
And what is the consumer protection ageny Elizabeth Warren inspired doing now that it is up and running?
Over 400 sources on this story-Obama cabinet choices and JP Morgan foreclosure settlement
New Report on American's Health vs. the rest of the world
Obama's choice for Treasury secretary a disaster? Bank lawsuit settlements another massive sell out to the banks by the administration? These folks say yes.
Matt Taibbi on the bailout and the bank lawsuit settlements-video
Below scroll down to "Multi-Billion Settlement Over Foreclosure Fraud
Right wing reaction to the Lew nomination:
Bernie Sanders to oppose Lew nomination:
Why does the government irrespective of who is president contantly defers and sells out to the banks?
See my other blogs on this first on this site "The Obama Report", and the piece entitled The Banks, the Federal Reserve, Government and Politics"
These will give you some background. Tomorrow I go into detail on this question.
Why the public despises wall street.
Meantime: The Best Political News sites in the country.
Criticism of the the Bank Settlement deal continue:
Are US banks solvent? What is their exposure to derivatives?
Everything you would want to know about the banking industry-Report from the Federal Office of the Comtroller of the Currency.
And below it is a beautiful chart detailing graphically what a trillion dollars looks like.
And it includes how much derivative exposure each of the major US banks have. And note most are insolvent on paper.
Jamie Dimon of JP Morgan to have his bonus cut and to be blamed for the London Whale losses? Maybe.
Who will get cut in the sequestor spending cuts and by how much?
The White House list of cuts:
The end of the middle class in America?
How banks and hedge funds are buying up foreclosed homes they brought into bankruputcy themselves. Part of a plan?
An interesting conversation audio about the economic situation in the United States
The sad fact in the United States is what is happening to the working poor of this country. Here are some of the facts.
Jamie Dimon CEO of JP Morgan has his pay cut in half. What does it mean?
Do the banks run the federal government? Apparently? One pundits view.
JP Morgan and bilions in drug money laundering?
Jamie Dimon views of Federal Financial Regulations-Video
Jamie Dimon pay cut?
How the banks dominate the Federal Government and Society.
How the banks and corporations created the beginnings of a new debtor prison society?
"After months of an impending “ debtpocalypse,” the dreaded “debt ceiling,” and the “fiscal cliff,” Americans remain preoccupied with debt, public and private. Austerity is what we’re promised for our sins. Millions are drowning, or have already drowned, in a sea of debt -- mortgages gone bad , student loans that may never be paid off, spiraling credit card bills, car loans, payday loans, and a menagerie of new-fangled financial mechanisms cooked up by the country’s “financial engineers” to milk what’s left of the American standard of living."
Will Financial Regulation Under Dodd-Frank help JP Morgan? Yes, some say.
New share holder proposal a thrreat to JP Morgan and all the big banks.
3/2/13 Occupy Wall Street files suit against every agency that was charged with regulating wall street.
"The lawsuit was filed by attorney, Akshat Tewary, who has been active in Occupy the SEC since its inception. (Read the full lawsuit here.)
Proprietary trading is, at its core, benign sounding jargon for an essential cog in Wall Street’s institutionalized wealth transfer mechanism. Wall Street banks take in insured deposits on which they pay a tiny amount of interest, then use those depositor funds to speculate for the house after leveraging up the bets to obscene ratios. Frequently, they use their insider information to make sure the house wins."
Jamie Dimon to blame for JP Morgan's huge loss
In Senate Hearing JP Morgan Chase and banks are questioned in devastating questioning-videos below
But what does it all mean"?
It means that the banks are virtually bankrupt and have been hiding it.
It means that the stockholders will likely sue and bring down some of the banks.
It means that consumers can sue now for fraud and corruption.
It means that the so-called regulators can now be called on the carpet.
It means that the auditors of these banks will be called into question.
It means that the Comptroller of the Currency (Treasury department) will be called on the carpet as the major regulator of the banks.
It means that pressure now builds for Obama to speak out, in the face of his own 540k investments in JP Morgan and might have to divest those holdings.
It means that London as the center of the derivative mess will be exposed as selling the same mortage 400 times over and over again.
It means that the quardrillion dollar derivative bubble might be bursting.
It means that foreclosures might get additional finance infusions.
It may mean that banks might be forced to make more domestic loans and stop gambling with our money. That will help with recovery.
The JP Morgan Kerfluffle continues.
Full Senate Committe Report on JP Morgan Investigation.
Over 25 Articles on the JP Morgan Scandal
Freddie Mac The US Tax Based Mortgage Lender suing a dozen US banks
Eight regulatory agencies investigating JP Morgan. Board member defections?
More lawsuits. Specific agencies which are suing JP Morgan
Can your bank account be raided and your money taken? This fellow thinks so. Here why.
More on Cyprus and now Canada
The Canadians and the ECM will now do what was done in Cyprus. See quote below on Canada from their Economic Plan published this March on pages 144-5.
"The Government proposes to implement a "bail-in" regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants."
"Bank liabilities" here refers to consumer deposits- yours and my bank accounts. The tax-papers (us) don't pay but the depositors (us) do pay, not the rich. So we do not pay from one pocket but we do pay from the other pocket. Thanks.
Obama budget offers up cuts in Social Security and maybe Medicare too to republicans in his new budget.
Sequester Cuts: What are they?
Banks not living up to settlement terms.
4/9/13 Who is Amy Goodman?
Jamie Dimon on the way out?
Boom or no boom the banks are in trouble-WSJ
Seven Financial Facts That Will Blow Your Mind:
1.Costs of Dying, How Big the Big Banks Are, Homeownership. Who is Broke and More.
2. Social Security and what you need know about who is getting screwed.
Stock holders set to dethorone JP Morgan Chief?
New GAO report on what the 2008 bail out really cost. Astounding.
"But as mentioned above, a one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act covered an even broader time period and revealed even more bailout loans.
According to the GAO audit, $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010. The following list of firms and the amount of money that they received was taken directly from page 131 of the GAO audit report....
Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
"All Other Borrowers" - $2.639 trillion
This report was made available to all the members of Congress, but most of them have been totally silent about it. One of the only members of Congress that has said something has been U.S. Senator Bernie Sanders."
Add to the above the fact that the banks are currently also getting 85 billion dollars a month from the Federal Reserve. What is going on.
Ex JP Morgan Employees Indicted.
JP Morgan to face 800 million dollar fine?
JP Morgan faces new suit over publishing customers social security numbers
JP Morgan to pay out largest settlement in history.
What you need to know about credit card debt.
JP Morgan to abandon pawnshops and payday lender loans?
"According to The Journal, the bank is internally reviewing its commercial lending clients, which may result in the bank ending some of those relationships. These businesses, which include pawn shops, payday lenders, check cashers and certain car dealerships, pose a greater risk of fraud or money laundering, the report said--all of which could take a further toll on JPMorgan's already tarnished reputation."
Really? Those business take advantage of the poor often charging them a thousand per cent interest. The big banks have been behind such operations for years.
10/11/13 JP Morgan to report huge loss and Jamie Diamond to give up one of his roles at the bank?
JP Morgan to admit blame in London Whale Scandal
Bernie Sanders appointed to the Budget Conference Committee.
Should Individuals be held responsible for 2008 Scandal?
All Things JP Morgan in the news this week. Mounting Woes.
What is the real financial impact of the 13b settlement?
Russell Brand Speaks Out Against the 1 percent.
JP Morgan Chase to pay out 4.5 billion to institutional investors for fraud.
The question here is how can the bank pay out billions of dollars in this and other legal cases and still be solvent?
1. Articles usually exclude the "net" that is how much money JP Morgan made on those fraudlent deals. The best estimate over the three years is that the sums involved represent only about half of the profits made.
2. Even the second half of those profits were in fact paid out reinsurance funds collected from Fannie Mae, The US treasury bailout funds, the Federal Reserve and depositor monies.
In other words the bank didn't even lose the other half of its profits. It made money on a recession which it deliberately, in my view, helped to cause. JP, of course, knew the crash was coming and had a plan not only to help it happen, but to profit from it and is still profiting from it, buying up depressed properties at bargain basement prices.
3. None of these folks are being held criminally liable here. Why not?
4. Why only three years? These banks are STILL using depositor money doing the same deals, especially with equally phony derivatives.
5. The question is whether these banks are solvent. Ask any one of them the simple question: What is the collateral for your balance sheet assertions? There is none, except for phony stock prices, phony derivative values, stupendous free money from the Fed (85 billion a month) and reinsurance schemes which will, again, leave the bill for tax payers to pay.
This will be 2008 all over again, only worse.
Hope not. But these bankers didn't learn a thing and are now busy trying to undermine the watered down, Dodd-Frank bill.
The highest priced stock on the market today is STUPIDITY and is owned by most of these big banks.
Investors want a piece of Fannie and Freddie Mae. What does it mean?
Truth-Telling on US Banks
Why JP Morgan was fined a small amount and what it knew about the bad loans and when they knew it.