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SEC Investigating JPM, Magnetar Deal
ProPublica reports that the Securities and Exchange Commission is investigating whether JPMorgan Chase allowed a hedge fund to improperly select assets for a $1.1 billion deal backed by subprime mortgages, according to people familiar with the probe. Goldman Deja vu. Settlement due next? Or will money diverted from gold shorts to pay for legal fees mean the short squeeze onslaught in paper PM shorts is about to begin? Stay tuned to find out.
From Propublica:
SEC Investigating Deal Between JPMorgan and Hedge Fund Magnetar
The Securities and Exchange Commission is investigating whether JPMorgan Chase allowed a hedge fund to improperly select assets for a $1.1 billion deal backed by subprime mortgages, according to people familiar with the probe.
Called "Squared" and completed in May 2007, the deal was a collateralized debt obligation, or CDO, made up of pieces of other CDOs. The hedge fund, Magnetar Capital, based in Evanston, Ill., purchased the riskiest slice of Squared as part of a strategy to bet against the mortgage market.
As we reported in April [1], together with Chicago Public Radio’s This American Life [2] and NPR's Planet Money [3],
Magnetar often purchased the riskiest portion of CDOs, enabling the
banks to complete the deals. Magnetar also frequently bet against those
same CDOs, using side bets. Magnetar's purchases ultimately spawned at
least $40 billion worth of risky CDOs in 2006 and 2007.
While Magnetar bought the riskiest slices, the CDOs were created and
marketed by investment banks. In the case of Squared, the SEC is
examining whether JPMorgan adequately disclosed to the investors it
marketed Squared to that Magnetar had a role in picking the securities
that went into the deal while also betting against segments of the deal.
The 294-page Squared prospectus [4],
which was created by JPMorgan, has generic language warning that some
investors and the CDO manager might have investments that conflict with
the interests of other holders of the CDO. (Read the prospectus [4].)
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I mustn't be up on what the "Magnetar Deal" is...
it was probably yet another incredibly skanky way to fleece investors.....transfer wealth to jamie.
I see, it's to do with the mortgage mess.
Falcon, yes indeed, mortgage mess. It is quite a story. I live near Evanston and read the article in ProPublica.com...or org but it details this Magna-retard story about this adrenaline junkie who started to buy anything with high yeilds and low on the food chain tranches of these mortgages...in 2007! I was in the industry helping these jack-fucks with a gun to my head but 2007 was late in the game. Way late. So, why was he buying all this shit- many people scratched their heads. It turns out he bought all this shit, bet against it, made a fortune going against it, but his "investment" went south. It was worth $982MM but he sold it to the last bag holder around...Mizuho Bank of Japan. He sold it for 500MM....1/2 price! yah! but 9 months later they write it all off as a bad bad bad investment. Meanwhile, magnatard(that is astronomy term for the last seconds of a dying star) but they made out well....selling the low level junk to Mizuho before they write it totally off...what marooons! ah-ha!
look it up on propublica...they lay it out beautifully.
Thank you. The entire system is riddled with maggots.
Jeesh, it's the guy with the dorky helmet in X-Men. Do I have to explain everything around here?
do you mean my hero, magneto ?
http://img261.imageshack.us/img261/8481/magnetoas9.gif
CDO deal in which Magnetar (a hedge fund) agreed to buy the equity in the deal if other banks would sell the higher rated tranches. Magnetar then bought CDS protection against their equity and made multiples on the CDS compared to what they put in to purchase the equity.
Many feel that the deal would not have happened unless Magnetar structured and agreed to purchase the deal. Effectively, it helped make the crisis worse.
Check out propublica's article and the accompanying NPR story. They covered it very nicely. A handful of journalists doing what the supposed experts at SEC can't.
Check out propublica's article and the accompanying NPR story. They covered it very nicely. A handful of journalists doing what the supposed experts at SEC can't.
Propubicla is funded by who?
NPR is a joke.
Both be elitist propaganda machines.
Nuff said.
I understand what they're biases are. Still excellent work on Magnatar.
listen to the "This American Life" story on it. Lengthy but entertaining piece. (link above)
At this point only suckers have any money with JPM and Wells Fargo (and all others to a lesser extent).
Those who lose their savings whenever a bank collapses get hat they deserve. Yes, even 85-year old grandmas. We shouldn't feel sorry for the sheeple.
YEP! No mercy for the fukin sheeple for whats comin to them soon, NONE!
and the hits just keep on comin'
What did JPM do, hack the SEC's porno account or somethin??
Nope.
JPM responded to a request for documents by actually sending some documents to the SEC, forcing the porno addicted SEC idiot savants to actually do some work.
This lawsuit will teach JPM that is doesn't pay to play by the rules.
Maybe, just this once, those porno addicted SEC idiot savants will take those guns out of their pants and hold them to the banker's heads for a change. Now, that's change I can...oh, never mind.
Actually it's the other way around. Those bankers are holding their "guns" to the heads of the SEC staffers. More specifically, the banker's "guns" are being held near the mouth area of the SEC staffers.
Polly want a cracker?
BSD's? I am forced to conclude that sec "members" are small.
Of course. Then again everyone who did not give until it hurts to the incumbents will be investigated now.
They'll settle, fees will go up on checking, and the SEC gets another $100 million trophy press conference. That should be good for S&P 1350.
aww cute, the kids at the SEC are out playing detective again. i just don't have the heart to tell them its all make believe and they can't actually convict anybody of anything. hopefully they won't stay out too late playing, this porn isn't gonna watch itself.
those meddling kids!
I heard that various SEC staffers attended the staff Halloween party dressed up as......yup, what else but trannies. Stick with what you know, right?
Quick answer...YES!
Repeat of Goldman w/ ABACUS. What will happen? Nothing (major).
Oh well, nice try defenders of what is right. Try again next time :/
And finally, the markets roll over to red....bravo, idiot pumpmonkeys!
What happened...the 3 indices are red now by 0.05%...this was not part of the arrangement.
Shocking...they had the election eve 100 point DOW pump all set and stabilized, until everything suddenly rolled over red. This crap is going to get nuked from orbit soon.
One can only hope...this levitating act is getting old.
Mmmmm yeaaaaaaaaaaa...
Somebody has the pre-announcement info and the movement this afternoon and overnight will tell the tale. Same old story.
LOL Yeaaa, I'm gunna' need you to come in on Saturday...
Wow I thought this was already slipped under the rug. So how much will JPM have to kick up to make this go away? SEC must need more money to get more porn.
Isn't Magnetar a Rahm Emaunel shin dig.
oooooohhhhh, Jamie must be shaking, oh yeah
Jamie needs to wear Depends daily over his silver shorts.
Do you have a collection of old Sci-Fi movie posters or somethin'?
Fraud can score some pretty nice digs:
http://www.chicagohomemag.com/Chicago-Home/September-October-2008/Well-M...
JFC.... Check out the photo gallery:
http://www.chicagohomemag.com/Chicago-Home/September-October-2008/Well-M...
I once had a client with a 12,000 sq foot house. It was a mini whitehouse, custom built with 2 Million worth of A/V gear the 40G aquarium , matching Mercedes, Olympic size pool, down to 250 purses etc et al. All paid for in cash. One small problem. That cash came from the payroll taxes she withheld from her temp employees plus her half of the SS and other related taxes.
Normally these things are settled with a IRS agent visiting, a deal is cut via an accountant who specializes in tax disputes and everyone goes their unhappy way.
Not this time. Turns out the US Attorney drove by the house and went slightly insane. Spending Payroll taxes for personal consumption is a crime. Client went to the Federal Pen for 5 Years, exit date 2013. You know the worst thing about it? She was making enough to pay for it out of after tax profits if she waited 3-4 years, but she had to have it right then . To top it off she had done this before for 5 years in the 90s and got off with a offer and compromise. Then she went right back to doing it again.
Sometimes it's not the house itself, it's the way the house got built. It's almost always sleazy.
That's what I tell myself every time I drive by one of those mausoleums. Makes me feel better to think they got their money by thievery and deception. Just human nature.
Fraud isn't illegal when JPM does it. Ask Jefferson County.
Got reamed on that sewer deal...
Sam Spade to Joel Cairo:
"When you're slapped, you'll take it and like it..."
The PDS are about to setoff some financial nukes in the indecies
in the next hour to flex some muscle and show they do not like disturbance in the force
I sure hope bernanke pays up the extortion money on time. [/sarcasm]
Some bag on CNBS reporting inflows into stocks about to piss himself
Do I detect a pattern? Blatant fraud and of course a fine then it all goes away. Election bullshit to make it look like Obama is getting tough on wallstreet.
LOL, Obama can dream on, his credibility is in the shitter I dont care if he personally delivered gold coins to all americans the 'election hype' is over and baked into 1,300 DOW points since Sept and its only pissed people off more.
You will have noticed in his interview with Jon Stewart, as part of his accomplishments, Obama said "we stabilized the stock market"...
Using these dramatic waterfall charts when the "fall" represents 1% of the share value is not warranted.
Will JPM Crash the Market on this Probe? They are too Big to Fail. What is wrong with those SEC chumps anyway?
Bad car loans, credit card arrears, defaulted REFIs, soured mortgages, yes, even muni tax defaults - mix well - package in Credit Default Obligors, Mix with other various debt instruments of dubious value and call them Collateralized Debt Obligations (CDOs), mix well with other CDOs, segregate by "slice & dice" and 'sell' the 'new' packages of CDOs to the unwary, except the worst of the worst in which 'Magnetar' (an empty front) assumes ownership and promptly bets that they fail! Load. Mix. Wash, rinse, repeat... Laugh all the way to Georgetown, Grand Cayman. Kick back and relax.
JPMs Teflon Fraudster Man
Jaime D settles for $200 million of stock holder's money and admits no wrong doing...
Except for the parts he sub contracted to Lloyd... "Shit is now stickin' to you Lloyd..."
Jamie Says: "Nothin' to see here, rabble, saps and suckers... As your new Secretary of the US Treasury... move along..."
I'm sure those contributions to Rahm haven't gone un-rewarded.
Don't worry it's the SEC doing the investigating, they'll probably only have to do twenty hour of community service
Wasn't there another fund that was being looked at as doing the same thing last year? This is becoming a farce, our whole economy is starting to open up to the world as a big ponzi scheme that the top people get the money and the bottom of the pyramid got the worthless paper.
Updated DOW chart:
http://stockmarket618.wordpress.com
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