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Institutional Investors Love Sleazy Bankers

8:42 am in Banksters by masaccio

Institutional Investors Defend the Bridge for Jamie Dimon

Jamie Dimon easily beat back a non-binding shareholders proposal to split the jobs of Chairman and CEO at JPMorgan Chase, winning 68% of the vote. Institutional investors own over 73% of the stock of JPM. That means that many if not most mutual fund managers and plenty of pension fund managers and endowment managers voted to keep in office a man who has presided over a string of law-skirting but money-making operations. JPMorgan’s list of offenses, described here, have earned the bank tens of billions at the cost of only billions in fines, penalties and put-backs from bad mortgages. And the bank estimates that there is more coming, maybe $6 billion more than it has set aside in reserves. JPM’s earnings are up, boosted by release of some $1.5 billion from reserves, but with a bit of luck, the hit will come later, now that Dimon is safe.

Mutual fund managers and other money managers think that the only important thing is the bottom line, and it’s a fact that ignoring the law delivers truckloads of money to the bottom line. That’s especially true for banks that are too big to prosecute. Eventually law enforcement shows up, in the form of bank fetishists like Lannie Breuer and his faint-hearted boss, Eric Holder, but what can they do? A minor fine, requiring the bank to give up some of its gains? An unpleasant press release? Maybe a grilling before some mild Senators, more impressed by the possibility of a campaign contribution than any interest in locking up wrong-doers?

I particularly like the coverage in the Washington Post, under the title, How Washington Humbled JP Morgan Chase Chief Jamie Dimon, in which we learn that Washington didn’t humble Dimon at all. Legal troubles, like those reported by Senator Carl Levin of the Senate Permanent Subcommittee on Investigations, are irrelevant to Dimon, who wasn’t at the hearing to take any of the responsibility for the London Whale Trade losses or misstatements.

And I just love the coverage given to the Capo di tutti Capi by Andrew Ross Sorkin and Steven Davidoff in the New York Times Dealbook blog. To read their praise of JPM and its Great Man, you’d never know that the bank might have side-stepped a few legal rules on its way to being the Greatest Bank Ever! They were aided in their efforts by the lobbying of such privileged rich white old men as Warren Buffett, Rupert Murdoch, Michael Bloomberg, and Hank Paulson.

I don’t know how much difference it made,though. For money managers, the only important issue is earnings. For that you need a top banker who is utterly indifferent to legal matters, willing to ignore the Weapons of Mass Destruction Proliferators Sanctions Regulations and the Iranian Transactions Regulations. And you need a Chairman/CEO who can fast talk his way out of trouble, like Dimon with his Fortress Balance Sheet and his presidential cuff-links. Isn’t it wonderful that people’s retirement is in part dependent of the ability of Jamie Dimon and his sleazy bank to make money?

But the real message these institutional investors and the privileged white rich old menare sending is that Dimon is their guy, and that politicians and regulators should do as he says. Right now, Dimon wants to defeat Brown-Vitter, which would force JPM to raise equity. Higher equity reduces the amount of money Dimon and his lieutenants can borrow, and it’s borrowing that increases the amount they can gamble for their profit and the taxpayers’ loss. That might mean lower compensation for the banksters. Gasp! But the win restores any political strength Dimon may have lost, and increases his ability to stop Brown-Vitter. That hurts everybody by leaving the mega-banks with their Obama/Holder/Breuer/Congressional approved status as Too Big To Fail.

Thanks a lot, institutional investors. We salute your willingness to subordinate basic law-abiding competence to sleazy money-grubbing. How very 21st Century of you.

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Bankers in their own Little Bubble

5:47 am in Corporate Corruption by masaccio

Good idea, needs updating.

The American Banker led a panel discussion of some of its members, allowing them to demonstrate once again their ignorance of their own situation. US Bankcorp CEO Richard Davis says that the big problem facing Geithner’s successor is “helping the industry handle international regulations”, lest they “overwhelm U.S. banks, or make them scale back their operations.” He isn’t saying what “operations” will have to be scaled back, probably because he doesn’t want to admit that 99.9% of us would be happy to see them scale back their money laundering, their overpriced derivatives, their fraudulent foreclosures and their participation in proprietary trading. But that is clearly the part of the business he intends to keep doing.

Davis also reiterated the frequent industry warning that regulation will make it too costly for banks to do business with many customers.

“Banking services will become less and less available to more and more people. And we’re not threatening, we’re not being mean, we’re not trying to make a point. But now you have credit risk and all those other risks” to worry about, he said. “That next scream you’ll hear from Congress a couple of years forward will be wondering where the banks are.”

So, those terrible international regulations will restrict lending to small business. Amazing how regulations directed at money-laundering, overpriced derivatives, thuggish proprietary trading and fraudulent foreclosures will result in reduced lending, the only thing most of us think is the business of banks. And of course all banks face the same rules, so Davis shouldn’t worry that US banks will lose out in international competition.

More whimpering:

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The Democratic Platform’s Nonsense on Banks

11:46 am in Financial Crisis by masaccio

Photo by Redwin Law via Flickr


The Democratic Platform seems to have missed the central point of the banking mess: the Obama administration did not investigate the disaster, and didn’t indict anyone for the crimes that led to the Great Crash. In fact, the administration specifically refused to follow up on criminal referrals from the Financial Crisis Inquiry Commission regarding one of the Goldman Sachs mortgage deals, saying as it always does, that it stinks, but isn’t a crime.

The Platform admits that

For too long, we’ve had a financial system that stacked the deck against ordinary Americans. Banks on Wall Street played by different rules than businesses on Main Street and community banks. Without strong enough regulations, families were enticed, and sometimes tricked, into buying homes they couldn’t afford. Banks and investors were allowed to package and sell risky mortgages. Huge reckless bets were made with other people’s money on the line. That behavior not only nearly destroyed the financial system, it cost our economy millions of jobs, hurt middle class and poor families, and left taxpayers holding the bill.

Then we find out the solution offered by the party in power:

The path to restoring middle class security is through the basic values that made our country great. We are a nation that says anyone can make it if you try – no matter who you are, where you come from, or what you look like. We know that America is strongest when everybody has a seat at the table and when the same rules apply to everyone, from Main Street to Wall Street.

The only reason the banks were allowed to play by different rules is that the Obama administration mulishly refused to enforce the law against them. There is no doubt that the law was broken, over and over. But the candy-ass prosecutors at the Justice Department won’t act, and the craven time-servers at the SEC are so worried about their careers that they fall all over themselves in admiration of the thugs who stole all the money and kept it, while millions of Americans lost their life savings and their houses.

The platform ignores the reality that the bankers got away with theft, wire fraud, bank fraud, loan fraud, securities fraud, and commodities fraud. There are two causes for this, both the responsibility of the President and Democrats in the legislature. First, the President hired a bunch of known bank sympathizers and fellow travelers to head up every part of the financial sector. At the head of the list are Attorney General Holder and Treasury Secretary Geithner. Holder hired a slew of white collar defense lawyers from Covington and Burling, and he and they will all return to their civilian jobs with their hands unsoiled by something so ugly as criminal prosecutions of their former and future clients. Geithner is a product of the inbred financial sector, a man unable to conceptualize the possibility that any of his trainers was a common thief.

Second, the investigative arm of every financial regulator is full of time-servers. The first responsibility of every incoming administration is to get rid of the moles left from the prior administration, the wreckers, the foot-draggers, the bureaucratic sludge, the people waiting their turn at the revolving door. Obama failed to do that, and he failed to instruct the head of agencies to do it either.

The platform asserts that Dodd-Frank is a common sense solution to the problem, and will prevent future problems. Nonsense. The agencies have been so thoroughly captured by the financial sector that they can’t even get their regulations into effect. The biggest banks are much bigger than they were, and even more dangerous.

The platform says that Democrats are “… holding Wall Street accountable, bringing new transparency to financial markets, and ending taxpayer-funded bank bailouts and the era of “too big to fail” and by “… by requiring them to provide relief for homeowners still struggling to pay their mortgages and to change practices that took advantage of homeowners.

So holding people accountable means a) we told the banks not to do that again, and b) we asked banks to help some of the people damaged by the banks get a few bucks out of the stolen hundreds of billions.

That is not the rule of law applicable to all. That is just a load of garbage dumped on our heads as if to say: you people get what you deserve.

Obama Fails to Meet Emotional Needs Of Bankers

7:08 pm in Financial Crisis by masaccio

Bankster Scrooge McDuck wonders where his White House invitation may be, while insisting on anonymity. (photo: dreamagicjp via Flickr)

Once again President Obama has failed to meet the needs of his constituents. This time, it’s the bankers he has failed.

On the mental list of slights and outrages that just about every major figure on Wall Street is believed to keep on President Barack Obama, add this one: When he met recently with a group of CEO’s at Blair House there was no representative from any of the six biggest banks in America.

Not one!

“If they don’t hate us anymore, why weren’t any of us there?” a senior executive at one of the Big Six banks said recently in trying to explain his hostility toward the president.

Maybe because he knew the only thing you want to talk about is you and your needs? Maybe because you have produced nothing for the rest of the country except loss and misery? Maybe because the President is embarrassed that he can’t afford that special shower that throws money directly onto your bare skin?

It’s all personal with these weepy people:

“You have to understand, it is very personal. He raised money from us,” one executive at a top six bank said. “Then he started calling us bad people. So forgive us for not wanting to buy him a drink after getting punched in the eye.”

We outsiders think it doesn’t count as a punch in the eye when Obama signs off on that tax gift in direct violation of his pledge to the rest of us, refuses to consider prosecutions for your crimes, rejects controls on your outrageous bonuses paid out of direct taxpayer transfers, agrees to wimpy regulation of your thieving industry, and appoints your drinking buddies to be his personal economic advisers. We like action. Your feelings are hurt by some words.

You Wall Streeters think Obama and the lackeys you sent to run the economy are ignorant putzes:

“You go down to the White House now and sit down to talk with members of the inner circle and the issue is no longer so much hostility as it is sheer incomprehension,” said one senior private equity executive. “You wind up talking about things they are not at all interested in and are generally outside their area of competence.”

So you admit that Geithner and Summers and the rest of that crowd are incompetent. That’s exactly what we all think, maybe for different reasons. I hope it means Obama has figured out that you are a bunch of crooks. That hope gets a tiny boost from this:

A senior Wall Street lobbyist explained his feelings this way: “This president came into office in the midst of an economic crisis and started off by demonizing insurance companies and then going after Wall Street banks. Never did he try to bring together CEOs and say, ‘We are in this together, we are Team America and we are going to go out and get things done.’ That’s the power you have as president. Instead this White House pushed people away and they did it consciously and they are still doing it.”

This is a perfect example of narcissism. I bet it never dawned on this arrogant jerk that from the far right of the political spectrum to the far left, and from the least to the most politically alert citizen, there is one area of absolute agreement: Team America was held hostage by Team Banker, Team Banker paid a corrupt congress and a compliant administration to salvage it from its gambling losses and theft, and Team America’s underwater homeowners, savers, retirees and workers were sold into serfdom to protect the wealth of Team Banker.

This time the President got it right: nobody can stomach you or your pestilential business. You got the money. You won’t get the love.