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Jamie Dimon “I Wouldn’t Panic About What I’m About To Say..."
Reports Bloomberg: "JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said some municipalities will need to renegotiate their debt and that hundreds of them may “not make it.” “I wouldn’t panic about what I’m about to say,” he said today at a U.S. Chamber of Commerce event in Washington. “You’re going to see some municipalities not make it. I don’t think it’s going to shatter America, I just think it’s a part of the credit cycle." Precisely: and it is precisely the part that JP Morgan comes in and offers sale leaseback offers to said munis, and other ingenious financial solutions that see munis selling their assets to the bank which after the Fed, has the biggest balance sheet, and can thus offer to engage in some even more creative asset-liability mismatch. Also explains why unlike Meredith, Jamie will not only not be asked to come in and testify to congress over his abrasive observations of an insolvent American reality, but will be lauded as a hero as he will provide funding to buy insolvent municipalities a year or two of time, which upon expiration will see Jamie end up with even more assets formerly belong to taxpayers, but by then everyone in the current District of Corruption cadre will be long gone with their part of the spoils. And so the "credit cycle" turns.
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Mr. Milton Waddams' comment: Priceless. **MASTERCARD**
(Even blog comments can be co-opted by corporate sponsorship).
this is all about jefferson county, alabama....
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSnn.A.FX0bM
he actually said....
"It's not going to be thousands," he said. "It's going to be maybe a hundred. It's going to be a small number" out of roughly 14,000 municipalities.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/03/30/bloomberg1376-LIVS2H6VDKI901-6S6QL034HO6FSTIU587MASAM5M.DTL#ixzz1I7LnwDUK
not sure why anyone gives a shit what he says anyway, the guy didn't even know that he sold credit default swaps
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSnn.A.FX0bM
Jamie: Some win, some lose: Too bad about you. The corruption knows no boundaries. Tabbi’s Jefferson County brings it all back to mind. Here’s an excerpt about those who control the rules, the money and the game…. The good news: ZH has their number…
On Jefferson County by Matt Taibbi | 04.01.10
My new article, “Looting Main Street,” is out on newsstands in Rolling Stone. It’s about Jefferson County, Alabama, and how a group of Wall Street banks (in particular JP Morgan Chase) ran the Birmingham area into the ground with predatory interest rate swap deals.
If you’ve heard of the financial scandal in Greece, JeffCo is sort of an earlier version of that, though slightly different. As Christopher “Kit” Taylor, the former chairman of the Municipal Securities Rulemaking Board, put it to me: “[The banks] basically took what they were doing in places like Jefferson County and exported it overseas.”
The broad story with municipal debt is that the incentives got out of whack for the banks, just like they had in the mortgage market, where commissions for doing safe, 30-year fixed loans fell to the point where they weren’t much of a moneymaker for brokers. And just as brokers reacted to the problem of low commissions by urging home-buyers into pricier variable-rate mortgages that inevitably had to be refinanced a few years down the line — bringing more fees to lenders, in a process called “churning’ — banks reacted to the low profit margins for normal, safe, long-term fixed municipal bonds by urging counties into riskier deals. They sold counties like Jefferson County on variable-rate and auction-rate bonds, and when the issuers’ debt service got too high, the banks pushed them into interest rate swaps to lower their variable-rate payments. This was just another form of “churning,” only on a much bigger scale: you hooked towns and cities and counties and school systems on risky bond issues, then got them to come back down the road and enter into interest rate swaps to refinance their ballooning debt structure.
The really sordid part of the Jefferson County story is how the banks funneled millions of dollars to buddies of the County Commissioner, who in turn bribed the local pols to sign off on the crappy swap deals. In the case of former Commissioner Larry Langford, a local greaseball named Bill Blount who had been paid millions in “consulting” fees by the banks was literally following Langford around with a charge card, picking up the tab for things like watches and Zegna suits. We get a rare look into this process in JeffCo, where the SEC published transcripts of taped conversations involving JP Morgan bankers talking about how much money it would take to grease guys like Blount. “Just tell us how much,” we hear former JP Morgan executive Charles LeCroy saying.
The financial transactions in Jefferson County are a little complicated, but once you fight through that you can see that this is basically an old-school organized crime story, with contractors buying off politicians to stick taxpayers with inflated bills for public “services.” The only difference is the scale of the ripoff and the complexity of the thing contracted for. Although there have been over 20 indictments in Jefferson County, the criminal prosecutions haven’t reached up to the banks yet, and part of that is because it’s so difficult to explain the crime to juries. The federal prosecutor who put Langford away for 15 years, George Martin, explained to me that even during that trial, he had to shy away from the details of the swap agreements in order to keep juries focused on the bribery. “I had to try to keep it simple as much as possible,” he said…
http://trueslant.com/matttaibbi/2010/04/01/on-jefferson-county/
whats that creepy Senator from Alabama have to say about this !!
I would recommend you panic.
ZH should start a non profit online bank.
The bank takes deposits but gives out no loans. (in other words an online vault).
You get no interest on your deposits (not like you get any in a savings account anyway these days).
For every dollar parked in the bank, you take 10+ dollars out of the system.
As people park their dollars in the Non Profit, it becomes a bank run all all the traditional banks. Money gets sucked out of the system. Traditional banks fail (idiots shouldn't have leveraged my savings account).
I get piece of mind knowing that my FRN's are 100% backed.
It wouldn't hurt the system unless it spread like wildfire across the Internet. But then again if the normal sheep feel threatened that the FDIC won't cover their deposits they would flee to the ZH bank.
Love to hear the thoughts, thanks guys this is a great community- Any way we can stick it to JPM even in infinitesimal amounts is A OK with me.
Senor Anderson,
nice idea but I think it matters not.
Banks nor the Treasury need your "money" any longer. Fiat is digitally created and assigned as needed for all PD's and TBTF. They no longer need take your money or loan your money. That only matters in a closed loop monetary system. We are now in an infinite money system where money dies on one side in falling housing / CRE prices, unpaid mortgages, over valued assets, and these are offset by creation of new "money" at a press of the button on the other side of the ledger (nearly free of interest) that can be used by the PD's / TBTF's to buy assets, trade, be shown as capital.
It wouldn't take down the system, but it would most def. get their attention. EBT'ing money into the ZH Commmunity bank would be a great form of protest. It is far easier than driving to washington to stand outside in the rain and have no effect. This has an immediate effect on the banks balance sheets at the end of the day.
It would be a great way to empower the people to flip the bird to the banks anyday they want. Remember, we are in a world where there is a 1% reserve on your CD's and savings.
I guess you could call it a popular balancing of power. If you print money- we will take it out of the system just as fast.
What you describe (Non-profit banks) is already being done in North Dakota. They are the model of what the other states should be doing.
They "Keep" their citizens cash in their state and communities.
Incidentaly, their unemployment rate is, for the most part, at around 5%.
Take a moment and look at this interactive map.
http://hosted.ap.org/specials/interactives/_national/stress_index/
People are moving there in droves for this reason.
Very friendly corporate atmosphere.
That guy has stones the size of Plymouth Rock. What a fuckstain.
Meridith was summoned to Washington to appear before Congress for that statement.
and from Larry Summers pal and business partner Nouriel Roubini there was this from Bloomberg earlier this month
Roubini's Firm Sees $100 Billion of Muni-Bond Defaults, Less Than Whitneyhttp://www.bloomberg.com/news/2011-03-02/roubini-firm-sees-100-billion-o... To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net
So JPM is preparing to buy munis for pennies on the dollar, after which the fed will buy them up at full price? Sounds bullish to me.
Warren Buffet and Peter Schiff on muni-bonds. http://www.youtube.com/watch?v=OgnDp1pLZ8k
I believe the complete quote was something like-
You’re going to see some municipalities not make it. I don’t think it’s going to shatter America, I just think it’s a part of the credit cycle. AND WE AT JP MORGAN INTEND TO CONTINUE DELIVERING EXCEPTIONAL VALUE TO OUR SHAREHOLDERS BY SHORTING THESE MUNICIPALITIES ALL THE WAY TO THE BANKRUPTCY COURT STEPS."
Visualization Exercise:
See bullets penetrating the Third Eye of Bankster Bosses.
I see it!
nice.
He's late to the Party. Meredith Whitney said this about one year ago.
We don't know what pain is yet.....consumers are still spending what they don't have instead of saving every penny they have.....
Too bad...so sad...but it takes time for bad habits to die out.
Napoleon Bonaparte, 1815
The new normal
Short the shorts who shorts the shorts
"Bah Bah" the sheeple say. "Buy GE stock. Bahbahbaaaah...."
Flammable 'assets' can quickly become 'liabilities'...especially with no fire department to speak of.
Interesting that he actually uses the word "shatter". Freudian slip?
Dear love, couldst thou and I with fate conspire
to grasp this sorry scheme of things entire,
would we not shatter it to bits
and then remould it nearer to the hearts desire?
TPOG
Jamie Dimon must end up in orange drab jumpsuit...or justice not served.
I'd prefer Tar & Feathers at the end of a railride to a gallows, but what can I say, I'm old fashioned.
i thought that - once the bankers were able to seize 90% of the nations homes, businesses, farms, city monuments, and state parks - they would be satisfied and would then turn the inflation machine back on.
but now i'm starting to think there's no limit to Wall Street's lust for money and power. could they pass some kind of law whereby the bankers get to take the children of debtors and keep them as sex slaves? JPM keeps the little boys - GS keeps the little girls?
where and when does this end ??
i am starting to get mad.
“You’re going to see some municipalities not make it. I don’t think it’s going to shatter America, I just think it’s a part of the credit cycle."
-- Jamie Dimon
How about some really large banks not making it? Would that be part of the credit cycle? Would that shatter America?
i would like to hear hugh hendry's analysis.
Breaking News
Ex-Banc of America Muni Derivatives Trader Pleads Guilty
Bond Buyer | Mar 30
WASHINGTON — A former municipal derivatives trading desk manager at Banc of America Securities LLC has pleaded guilty to one criminal count of falsifying bank records in connection with a conspiracy to rig bids and engage in other anticompetitive activities regarding investment agreements and other finance contracts in the muni market.
This investigation went on for a long time. I've heard that the first conspirator to roll over is the only one to get any consideration in the prosecution. Not what this says: "a conspiracy to rig bids . . . " . How many parties to a conspiracy? Who were the bidders offering investment vehicles for muni bond proceeds? $50M $100M ? Hint: big boys . . . the biggest. How can you rig bids if not everyone is playing? There are currently a number of class actions suits around this, the Justice Dept having established the facts. It will be fund to see watch the dance--not that anything could adversely affect GS or JPM financially or legally of course.
RICO, RICO, RICO!
Sorry about the typos -- "Not this" should be "Note this" and more no doubt.
NP Jamie and Lloyd have bought EDS (Ethics Default Swaps) to protect against their own indiscretions.
Ok, this is as good of a place as any to slightly threadjack. I'm probably late to the party, but just discovered the Zeitgeist films: http://www.zeitgeistmovie.com/
I watched the "Moving Forward" and the "Addendum" movies; both scathing of the current montetary system in place. I would appreciate my fellow ZH'ers (CD, your always appreciated in my book) to chime in.
Go watch inside job instead, it will teach you a million times more than Zeitgeist.
JPM has the expertise consultant for asset liquidation. Chubais
http://www.reuters.com/article/2008/09/26/jpmorgan-chubais-appointment-idUSLP18050820080926
MOSCOW, Sept 26 | Fri Sep 26, 2008 12:01am EDT
MOSCOW, Sept 26 (Reuters) - Global banking giant JPMorgan Chase & Co (JPM.N) has named Russian economic reformer Anatoly Chubais, one of the least popular figures among the Russian public, to its international advisory board, it said on Friday.
He will be the first Russian ever to join the exclusive group of consultants to the bank, sitting alongside former U.S. Secretary of State Henry Kissinger and Xi-Qing Gao, the chief executive of China's $200 billion sovereign wealth fund.
"It is a great honor that a person with such unique experience as Anatoly Chubais will share with our firm his views and analyses of the ways we invest," JP Morgan Chase Chairman Jamie Dimon said in a Russian language statement.
Chubais is held chiefly responsible for the breakneck privatisation of Soviet assets in the 1990s, which saw major industries sold off at bargain prices.
The scheme, orchestrated under Chubais' tenure as deputy prime minister, created the oligarchy, a clique of super wealthy businessmen who came to represent the vast gulf between rich and poor in post-Soviet Russia.
"I know that along with other politicians, government and private figures, rights defenders and journalists, I am on the assassination list of 'enemies of the people,'" Chubais wrote in a statement protesting the acquittal.
When Russia threw those people like Chubais out of their country those phuckers came to the U.S.
http://www.historyorb.com/russia/conservative_coup.shtml
That's why we are where we are...................
Tyler thanks for connecting the dots, I totally forgot about the leaseback option. In fact I didn't think that someone would want to do that. But if Diamond is saying this, it's because of two reasons. One, drumming up business via the Chamber of Commerce. And two beating the bush and trying to start the process of default alot earlier. Out of the 14,000 or so municipalities he said about 100 will default. What he really is saying that the rest of the defaults (in the thousands) will be a special default where he or a few other banks will use leaseback options and other things to take over the municipalities assets but still allow them to use them. And how they pay the rent/lease with an option to buy or not buy will be through the federal govt. and the IRS taking the money directly from tax receipts and/or money to the state and then the state takes it out of the local municipality so that their is no way for them to default on this deal.
Here's another thing to consider also, can you imagine the sweetheart deals that Diamond and others will get from the municipalities by taking much of their burden off of them.
http://en.wikipedia.org/wiki/Leaseback
Time for a new Max Keiser campaign :
Crash the entire Bankstering system -
Dont pay mortgages, credit card bills, loans, or taxes.com
Just a thought ?
Mate, that's gonna happen regardless. Just wait till this enormous credit crunch comes, unemployment will go to 25% and payments will cease! What everyone needs to get absolutely clear in their minds is that we are witnessing the down slope off the bumpy plateau of cheap credit. It will be destruction of demand and destruction of standard of living for the next 30-50 years! Make no mistake, the fastest way out of this is to burn the entire system to the ground, hang the guilty, and let enterprising people take the reigns. If someone knows of a better way, I'm all ears?!
Jamie Dimon said some municipalities will need to renegotiate their debt and that hundreds of them may “not make it.”
Are we really at the point in today's society where some bankster can state the obvious, and people would panic?
Oh yeah. Turning on "American Idol". Don't let reality penetrate the sheeple's coat of arms - apathy and ignorance.
Well at least those assets will be depreciating by half each year after the dollar dies. It will be like owning all the high-rises in the Gheto, nothin to brag about. I reckon China's got a little surprise for the Morgue and Goldhungry Sachs. China will lock then out of most foreign trade across the globe...just wait, you'll see!
Now let me get this straight. As an example, Jimmy wants to buy Ohare Field from the City of Chicago for a bargain price, then lease it back to the city for a guaranteed profit. He will finance the deal with near 0 interest money borrowed from the Fed and in the unlikely event the deal goes south, not to worry, every one knows JPM is TBTF.
Apparently some intern got around to reading Ms. Whitney's report, and explained to Jaime what was in it.
Jaimie [what the #k kind of name is that anyway?] has a list, because the house of Dimon is on the winning side of
all those failing interest swaps sold to places like the Erie Pa Board of Education. With those defaults will come some marks...teeny 'lil bugbites on the ass of Morgan
Municipalities should merge, creating a mega-municipality. Then get a bank charter. What do you mean too disparate? Do you mean like an entity with a mortgage origination desk, a deposit taking desk, a CDS desk, a trade finance desk, a commodity trading desk, a Food Stamp desk, a bond underwriting desk, a proprietary trading desk, and a "trust fund" desk that receives daily bequeathing from Uncle Ben (take that two ways)?
The cities, while in dire straits, are in no worse condition than the TBTF banks back in 2008. "Somehow" the banks all made it and are now so wildly profitable that they can pay record bonuses the sum total of which exceeds the GDP of half the world's nations.
Let's add up all the undeserved bonuses paid since 2000 (since the "profitable deals", where bonuses were paid on the implied NPV, eventually went bad and required taxpayer funds to correct), and see how much that might help some struggling municipalities cover their nut. Seems fair, right Jamie? Of course, such a plan would bankrupt the municipalities of the Hamptons, but such a small price is worth it, no?
It is an indication of weak moral fiber to wish ill upon another human being. My moral fiber is frayed beyond the point of recovery.
Save a cow ,Eat a Fat Fucking Banker,if you are ever starving.You know,...all that lobster and caviar they eat should make them tastier than some old smelly moose.
How sickening. They know they need to default, and rather than let them go down this rightful road, they will try to 'sucker' into them paying more fraud off with real assets, for a few percentage points off, and as ZH describes beautifully, before the rug comes out anyways.
Truly sad, because of all the munis, some will 'buy it'.
Default and Glass-Steagall, the two best friends of all munis. JD 'Absolute Power and Lame Associates' is more like the guy that pretends to be your friend and steals everything when you aren't looking.