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William Black on JP Morgan and the Failure to Regulate Wall Street Fraud
William Black on JP Morgan and the Failure to Regulate Wall Street Fraud
Courtesy of Jesse's Cafe Americain
"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident...And yet none of this conduct has been punished in any significant way."
~ Charles Ferguson, Inside Job
"I know that my retirement will make no difference in its [my newspaper's] cardinal principles, that it will always fight for progress and reform, never tolerate injustice or corruption, always fight demagogues of all parties, never belong to any party, always oppose privileged classes and public plunderers, never lack sympathy with the poor, always remain devoted to the public welfare, never be satisfied with merely printing news, always be drastically independent, never be afraid to attack wrong, whether by predatory plutocracy or predatory poverty."
~ Joseph Pulitzer
"We are not left to conjecture how the moneyed power, thus organized and with such a weapon in its hands, would be likely to use it. The distress and alarm which pervaded and agitated the whole country when the Bank of the United States waged war upon the people in order to compel them to submit to its demands can not yet be forgotten.
The ruthless and unsparing temper with which whole cities and communities were oppressed, individuals impoverished and ruined, and a scene of cheerful prosperity suddenly changed into one of gloom and despondency ought to be indelibly impressed on the memory of the people of the United States. If such was its power in a time of peace, what would it not have been in a season of war, with an enemy at your doors?
No nation but the freemen of the United States could have come out victorious from such a contest; yet, if you had not conquered, the Government would have passed from the hands of the many to the hands of the few, and this organized money power from its secret conclave would have dictated the choice of your highest officers and compelled you to make peace or war, as best suited their own wishes. The forms of your Government might for a time have remained, but its living spirit would have departed from it."
~ Andrew Jackson
Here are two pieces by William K. Black on JPMorgan and the rampant and ongoing fraud and speculation on Wall Street. It tells the backstory of the subversion of the democratic process and how it is being rationalized by the corporate media.
A colleague and I were remarking the other day at the effectiveness of the Wall Street machine to spin the media, both at MF Global and JPM most recently. William K. Black strikes to the heart of it.
If you can do nothing else, if you do not have the means or the vocation for speaking out, you can at least offer some moral support and encouragement to those who do, and help to pass the message along to others.
JPMorgan's Addiction To Gambling on Derivatives
By William K. BlackJPMorgan’s flacks and apologists have, unintentionally, exposed the fact that their cover story – hedging gone bad – is false. JPMorgan runs the world’s largest gambling operation in financial derivatives. The New York Times reported the key facts, but not the analytics, in an article entitled “Discord at Key JPMorgan Unit is Faulted in Loss.” The analytics suggest that the latest JPMorgan cover story – it was JPMorgan’s “Achilles the heel” (based in the UK) who caused the loss – is misleading.
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The thrust of the story is that in the beginning JPMorgan’s Chief Investment Office (CIO) was run by a fair princess (Ina Drew) and all was fabulous. Sadly, Ms. Drew contracted Lyme’s Disease and was unable to ensure peace and prosperity in her land. The evil Achilles Macris, based in the UK, became disloyal and mean. He made massive, bad purchases of financial derivatives that caused major losses. CIO senior officers based in the U.S. (and women to boot) tried to warn Achilles but he screamed at them and refused to listen and learn. The just king, Jamie Dimon, did not act promptly to save his kingdom from loss because of his great confidence in Princess Drew.
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The personal story of Achilles acting like a heel makes compelling journalism, but it obscures rather than clarifies the analysis as to why JPMorgan poses a clear and present danger to the global economy.
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We need to begin with context. It was toxic financial derivatives (not) backed by fraudulent liar’s loan mortgages (“green slime”) that drove the U.S. crisis. Paul Volcker urged the administration and Congress to bar any entity that received federal deposit insurance from investing in financial derivatives. The Dodd-Frank Act did so in a provision called “the Volcker rule.” Treasury Secretary Geithner and Federal Reserve Chairman Bernanke, who exist to serve the interests of CEOs of the largest banks, oppose the Volcker rule. Jamie Dimon leads the banking industry’s opposition to the Volcker rule.
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Dimon has a three-part strategy: stall the Volcker rule, gut its effectiveness by creating a massive loophole, and get the rule repealed by a future Congress. The loophole takes advantage of the fact that the Volcker rule was not intended to prevent banks from using derivatives to create (true) hedges. The current draft of the rule, however, renders the rule useless because it allows banks to call non-hedges “hedges” – it adopts a standard I call “hedginess.” A systemically dangerous institution (SDI) like JPMorgan has vast amounts of financial derivatives and it can (and does) call any speculative bet it takes in financial derivatives a “hedge.”
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The NYT article demonstrates that JPMorgan is speculating, not hedging, and that the current draft of the Volcker rule would render us defenseless against the next financial crisis. The article misses these analytics and presents a misleading portrayal of the purportedly good years of CIO under Princess Drew. It turns out that CIO’s profits and losses come from the same practice – gambling on massive amounts of financial derivatives – not hedging. The NYT misses this key analytical point...
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Read the rest here at The Big Picture.
Additionally below is an interview that William K. Black has done with Lauren Lyster at Russia Today.
As always, one does not find this type of insightful discussion at the mainstream media which tends to present fake arguments and discussion between paid consultants and flacks from the major parties, both of whom are obtaining record amounts of money from corporations. The latest estimates are that Obama and Romney will gather in $1.5 Billion in campaign 'donations' for this November.
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Liars and Lying
The credit crisis is bad in 2008. It is much, much worst today. Why? Because the same psychopathic Wall Street criminals, who caused the credit crisis, remain in charge of the economy, the political process through campaign contributions and lobbying—and by supporting politicians who do Wall Street’s bidding, once they retire from public life.
Those steeped in falsehoods 24/7/365—that is, Washington, D.C. politicians and Wall Street banksters. Who accept fraudulent behavior as a way of life, soon become inveterate, pathological liars. These deceivers rationalize their dishonesty with the idea, “the American people cannot handle the truth, so I am doing them a service by protecting them.”
Compulsive liars soon begin lying to themselves and therefore, cannot distinguish truth from fiction. Corrupt government and business leaders who cannot tell truth from untruths are ineffective leaders, incapable of solving America’s pressing problems. They blame everyone but themselves when their policies, strategies and actions invariably go wrong and therefore, never learn from their mistakes.
Only honest men and women are worthy of leadership positions in society, especially in government and business. America, place honest men and women in charge, who look out for your welfare, rather than smart scoundrels.
"Compulsive liars soon begin lying to themselves and therefore, cannot distinguish truth from fiction."
Robert Ringer called this type of thing his 'Tend To Theory.' That is, after a while, people tend to start believing their own bullshit.
"I knew we had him when he believed in his own lies." Eisenhower speaking of Hitler's inevitable defeat. I did take note "SEC celebrates lack of wrongdoing at Lehman" today. Pathetic excuse for a government if you ask me. Do they even want to win?
They're all in on it.
After 3 1/2 years the SEC couldn't find a damn thing to recommend after the Lehman ponzi investigation. What a disgusting waste of time and tax money.
http://www.bloomberg.com/news/2012-05-24/sec-staff-said-to-end-lehman-probe-without-recommending-action.html
With all the repo window-dressing bullshit they pulled for sooooo long, the blind keystone coppers came up empty-handed.
Hold on....I'm working on my surprised face and I don't want it to go all MacCaulay Culkin.
It's amazing that they couldn't find any evidence of the Lehman ponzi at midgetgangbang.com .
I'm in love with Lauren Lyster.
I too want to know her intimately.
"Many inexperienced observers, naive bank analysts, clueless fund managers, and deceptive news anchors fail to ask the basic question of how the USTBond market can continue with 0% when supply is an annual flood of $1.5 trillion in new debt while the demand is vanishing from the absent foreign creditors."
-Jim Willie
Stay out of hot tubs William K. Black!
"The IRSwap setbacks were the underlying cause of the JPM losses. The giant bank does not want attention given to this derivative tool which controls the bond market in a devious artificial manner."
-Jim Willie
http://news.goldseek.com/GoldenJackass/1337803200.php
And more!
indirect corporate welfare.
http://covert.ias3.com/expose/
William Black is a Keynesian so he is just as culpable for this shit.
He is a total keynesian
We're way beyond economic theory, Sir.
This isn't about Keynes... this is about Krime.
someone made an equally disparaging and uninformed remark about dr.michael hudson the other day. this new article rebutting krugmans' new book should help clarify. austerity, even ron paul austerity, would double fuck us now
http://michael-hudson.com/?p=1486
although keynesian practice is just about using government to spend on fiscal an monetary.
the idea of governance , while anethma to independantly minded people, is still required.
the idea that when things get 'too bad', and people go beyond a tipping point where they are starving and lose the tools and know how to kickstart back their economic productivity does rationalize some measure of 'borrowing' by way of inflation .
there are circumstances where the government is justified in stealing money by printing it. theft by its very nature is tied to those that are stolen from.
and if you are stealing from the bankers, who themselves are thieves, then you can be said to be rightfully stealing what was once yours, and secreted away from you by deciept , theft, or connivance.
and by 'yours' i mean society's and by that i mean, what the common and decent men who WORK together and are willing to share on some level of common purpose in living together loving together , agreeing to accept personal responsibilty-restraint and failure--- individually (law) , and dying together.
the problem with the anarcho-libertarian is that he or she just doens't accept that society does exist indepedently of the 'government'. it does exist in people desires to work together. and this community purpose can an usually does turn into ugly authoritarian points during revolutions in the governance strucutre in poliitcal history. that said----
there is something called society but it is always moving, never tidy, and it is a collective aggregate of what everyone wants or doesn't want it to be.
Not everything is so simple. and neither is keynesianism. after all , it is just another 'ism'.
and if you are stealing from the bankers, who themselves are thieves, then you can be said to be rightfully stealing what was once yours, and secreted away from you by deciept , theft, or connivance.
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Very dangerous slope.
Bankers are US citizens who happen to be bankers.
US citizens are thiefs, robbers of the most efficient sort.
Legitimatizing theft because it was yours before is a destructive admission for US citizens as they've thieved so much.
Check how US citizens deal with this problem: they simply aim at eradicating every person with a legitimate claim.
Do you want to openly expose yourself to such treatment at the hands of top league US citizen robbers?
Pick accordingly.
Confirmed u have no idea what a banker is so STHFU
Very dangerous indeed; shall we expect a change in the whining about Taiwan ?
Maybe the British US Citizenist Citizens will take back Hong Kong !
Maybe Tibet could once again be independant.
I don't have to tell you things are bad. Everybody knows things are bad. It's a depression. Everybody's out of work or scared of losing their job. The dollar buys a nickel's worth, banks are going bust, shopkeepers keep a gun under the counter. Punks are running wild in the street and there's nobody anywhere who seems to know what to do, and there's no end to it. We know the air is unfit to breathe and our food is unfit to eat, and we sit watching our TV's while some local newscaster tells us that today we had fifteen homicides and sixty-three violent crimes, as if that's the way it's supposed to be. We know things are bad - worse than bad. They're crazy. It's like everything everywhere is going crazy, so we don't go out anymore. We sit in the house, and slowly the world we are living in is getting smaller, and all we say is, 'Please, at least leave us alone in our living rooms. Let me have my toaster and my TV and my steel-belted radials and I won't say anything. Just leave us alone.
Isn't true Keynesianism "prime" cause I know no better. I said in high school and I will say it again " piss in the pump to prime it, then gather water".
I thought this was well thought out. While there may be some points of contention on the finer details, I think what you wrote accurately represents the thoughts (when they dare to have them) of most Citizens.
At any rate Keyneses' theories and perscriptions have been so perverted that those calling what is happening here and now Keynesianism are either ill-informed or idiots parrotting their thought leaders.
The same cast of ignorance that describes the prevailing status quo as socialism.
That position is a misrepresentation of the anarcho-Libertarian position on society. It would be more genuine to first study their positions before characterizing it as some impersonal wilderness, BTW how is socialism working out for society and people's working together? Must be good for the bankruptcy business though?
And Keynesianism is not about being too simple or complicated. Its about it being a proven, deeply flawed economic theory that harms society.
That position is a misrepresentation of the anarcho-Libertarian position on society. It would be more genuine to first study their positions before characterizing it as some impersonal wilderness,
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Sure, sure. Very cogent.
stfu
Dear Mr 8472,
In the west we first gain wealth and that then allows us to influence power.
In the east you achieve power and then your corruption makes you wealthy.
I dont mind your Sino-Centric posts/insults but please dont try to moralise that your side of the world is any better than ours as it subtracts from the validity of your arguments.
Yours Sincerely
Ignatius Trebitsch Lincoln.
P.S. Lin Biao survived the crash and has been living in my loft these past 30 years....
<<In the east you achieve power and then your corruption makes you wealthy.>>
Why is the history of the Fed any different that what you claim "the east" does?