Posts Tagged ‘JP Morgan Chase’

The passing scene – August 6, 2015

August 6, 2015

I may add links during the day.  Feel free to use the comment thread for general and off-topic comments.

The Suicide of the American Left by John Michael Greer for The Archdruid Report.

John Michael Greer recalled a time when there were Democrats who fought for the interests of famers and factory workers against financial speculators, and Republicans who fought against foreign military intervention and excessive government power.   Now both parties are pro-corporations and pro-government power.

Hillary Clinton is an example of what’s wrong with liberals and progressives, Greer wrote.  She thinks that all she has to do to be elected President is talk about how bad the Republicans are.

Dear NYT: When the GOP Is Your Assignment Editor, You Miss Real Stories by Mike the Mad Biologist.

Seriously, what has happened to the NYT? by Joseph Cannon for Cannonfire.

HIllary Clinton

HIllary Clinton

While there is much in Hillary Clinton’s record to criticize, the Washington press corps does not focus on these things.  Instead it subjects her to a constant stream of attacks based on falsehoods, trivialities or, at best, controversies that involve grey areas.

My explanation is that all the legitimate grounds for attacking Hillary Clinton apply at least as much and probably more to her Republican opponents.  The only reasons for singling her out are bogus ones.  That applies to Barack Obama as well.

Donald Trump Is a Serious Candidate by Jeet Heer of The New Republic.

Koch Brothers Declare War on Donald Trump by Shannon Argueta for Addicting Info.

Donald Trump talked politics with Bill Clinton weeks before launching 2016 bid by Robert Costa and Anne Gearan for The Washington Post.  [Hat tip to Unqualified Offerings]

It’s hard for the other Republican candidates to oppose Donald Trump because he is just like them or at least just like they pretend to be, only more so.  I can see why Hillary Clinton would rather run against him than against Jeb Bush.

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The nine billion dollar whistleblower

November 8, 2014

A year ago, the U.S. Department of Justice announced a $9 billion settlement with JP Morgan Chase to settle a case of securities fraud.

The $9 billion was the price paid for not going to trail, and not hearing the testimony of whistleblower Alayne Fleischmann, which was a bargain, because the market value of the bank’s stock rose by more than that amount when the settlement was announced.

Fleischmann was a deal maker for JP Morgan Chase who warned her superiors back in 2008 that the bank would be guilty of securities fraud if it sold risky mortgage-backed securities based on false  information.

She was brushed off and lost her job.  She contacted the Securities and Exchange Commission, Department of Justice and other authorities and also was brushed off.   But she is determined to bring out the facts anyway, despite the legal risk of violating a confidentiality agreement and the certainty of being blacklisted from working on Wall Street.

“The assumption they made is that I won’t blow up my life to do it,” she said.  “But they’re wrong about that.”  Matt Taibbi told her story in the current Rolling Stone.

LINKS

The $9 Billion Witness: Meet JP Morgan Chase’s Worst Nightmare by Matt Taibbi for Rolling Stone.

Matt Taibbi and Bank Whistleblower on How JP Morgan Chase Helped Wreck the Economy, Avoid Prosecution, the full Democracy Now broadcast with transcript.

A predatory business model based on lawbreaking

August 28, 2014

Predatory local governments are emerging in the USA, which get a large part of their revenues from fines and confiscations.   The law allows confiscation of property used in drug crime even if the property is not owned by the criminal and nobody has been convicted of a crime.  Other local governments make a practice extracting money from poor and vulnerable people for trivial offenses.  Evidently Ferguson, Missouri, is one of them.

They have a parallel in predatory corporations.   Credit card issuers, for example, get more profit from fees and penalties than they do from straight interest, event though interest rates are high.  The problem with this, as with predatory law enforcement, is that it is impossible to do this on a mass basis, and still follow due process of law.  If this was done, the courts would be overwhelmed.

The law says that if somebody owes you money, you have to get a judgement from a judge before you have the right to collect.  Before you get a judgment, you have to let your debtor know you’re going to court so they can present their side of the case.

If credit card companies and debt collection agencies actually did that, courts would be overwhelmed.   So they usually don’t.

The.Divide.Matt.TaibbiMatt Taibbi described the process in a chapter in his book, The Divide: American Injustice in the Age of the Wealth Gap.  It is a counterpoint to his chapter on mass arrests of young black men on New York City, another high-volume business that would overwhelm the courts if police and prosecutors followed the law.

Most credit card companies, after a certain point, sell their bad debts to collection agencies for a few cents on the dollar.  The debt includes not only accumulated interest, but fees and penalties for late payment, and an extra penalty payment to the collection agency for its trouble.  But this only works if the collection agency can keep its expenses down.

Commonly collection agncies use “gutter service”.  Or they mail a postcard to an old address than may or may not be valid.  The going rate for process servers is $4 a notice, so they can’t be expected to put in much effort to track down the person.

It doesn’t matter to them if the notice is properly served or not.  If the debtor doesn’t appear in court, the creditor gets a default judgment.  Once the judgment is served, the collection agency has free rein to attach the person’s wages, seize their property and so on.

Taibbi’s chapter on credit card debt told a remarkable story about JP Morgan Chase’s sale of 23,000 court judgments to collection agencies.  A debt in which a court judgment already has been made is more valuable than just an IOU.  All the owner of the judgment has to do is to find you, and then collect.

The problem was that a lot of alleged judgments that weren’t valid—the judgment had been made, but later reversed, or the decision was pending, or, in a couple of cases, the court had ruled in favor of the debtor.  It’s Chase’s duty to have responsible bank officers check the documents and sign notarized statements that all is in order, but this wasn’t done.  Chase assigned hourly employees as “robo-signers” and they were later notarized by people who hadn’t witnessed the signing.

A compliance officer named Linda Almonte fired when she called this to management’s attention.  She was ignored when she called the problem to the attention of the SEC.   The judgments were sold to a company called DebtOne and went to courts all over the USA to be executed.

Only one judge, Philip Straniere of the Richmond County (NY) Civil Court on Staten Island (a Republican, by the way) bothered to look at the papers to make sure they were in order.   He vacated the 133 judgments, not because he was aware of any of the basic problems, but simply because the paperwork was so sloppy that it was impossible to tell whether they were valid or not.

Taibbi wrote that there are three ways a credit card collection case can turn out.   (1)  The debtor doesn’t respond, and the judgment is executed.  (2)  The debt admits the debt and pays it.  (3)  The debtor challenges the debt, in which case the collection agency usually backs off.  It is rate that the collection agency has the documentation to prove its case, or that the case is worth going to court to win.

I think credit card companies should cease promiscuously distributing credit cards to everyone and his dog (credit cards have been issued to dogs) and restrict them to borrowers who are solvent and good credit risks.  But if they’re not willing to do this, they should write off minor credit card losses as a cost of doing business.

Why don’t they do that?  Because the biggest profits to credit card companies come not from interest, but from fees and penalties.  A poor credit risk may generate more profit than a good credit risk.  Even if the debt is sold in the end for a few cents on the dollar, it will have generated a lot of profit in the meantime.

It is common to speak of abuse of government power and abuse of corporate power as if they were two different kinds of things.  Not so.  Abuse of government power for monetary gain, and abuse of corporate power backed by government, are two examples of the same thing.

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Corporations don’t commit crimes

January 31, 2014

No, corporations do not commit crimes.  Corporate executives commit crimes.  There is a difference.

The U.S. Department of Justice charged JP Morgan Chase with various crimes, including fraudulent sale of mortgage-backed securities, covering up losses, rigging electricity prices and aiding and abetting Bernie Madoff’s Ponzi scheme.  Last September Attorney General Eric Holder announced a settlement of the case, in which JP Morgan Chase agreed to pay nearly $20 billion in fines.

The company responded by laying off 7,500 employees and freezing the pay of employees below the executive level.  But now the board of directors raised the pay of CEO Jamie Dimon, who had ultimate responsibility for the illegal actions, from $11.5 million a year to $20 million.

As Matt Taibbi of Rolling Stone pointed out in a recent post on his web log.

Eric Holder and Barack Obama … decided last year to make a big show of punishing JP Morgan Chase as a symbol of bank corruption, then forgot to punish the actual persons who oversaw the bank’s misdeeds.  This is a little like reining in a school bully by halving his school’s budget.  It doesn’t work.  Crimes are committed by people, and justice has to target people, too.  Otherwise the whole thing is a joke.

But from the board of directors’ point of view, the fine is less than the $25 billion in TARP funds that Dimon got from the federal government when the company was on the verge of collapse.

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Click on Jamie Dimon’s Raise Proves U.S. Regulatory Strategy Is a Joke for the whole article by Matt Taibbi for Rolling Stone.

Click on JP Morgan Chase, Penance and Fines for an account of JP Morgan Chase’s misdeeds by Christopher Brauchli for Huffington Post.

Click on Dimon Does Davos, and His Board Gives Him a Raise for more by Bill Black.