JPMorgan: If This Is a Financial Fortress, Run For the Bunkers | Education June 6, 2012 | Like this article? Join our email list: Stay up to date with the latest headlines via email. The U.S. Senate Banking Committee spent over two hours on Wednesday proving to the American people that any shred of confidence they might still have in our financial markets is misplaced. Thomas Curry, head of the Office of the Comptroller of the Currency (OCC) since April 9 of this year, did confirm one important detail during the hearing: the reckless derivative trading at JPMorgan’s London office occurred in a unit of the national bank (not the broker-dealer), using insured deposits of bank customers, while 65 of the OCC’s examiners sat in offices of JPMorgan in New York, where they are permanently stationed. The OCC oversees all national banks, including those deemed systemically important. The U.S. Elizabeth Friedrich, a member of Occupy the SEC, offered the following insight into these dangerous conflicts of interest:
Nervous Cypriots hit cash machines 16 March 2013 Lines formed at many ATMs as people scrambled to pull their money out after word that the 10 billion euro (£8.6bn) rescue package Cyprus agreed with its euro area partners and the International Monetary Fund included one-off levy on deposit, an unprecedented step in the eurozone crisis. The levy is expected to raise 5.8 billion euro. European officials said people with less than 100,000 euro in their accounts will have to pay a one-time tax of 6.75%, those owning more money will lose 9.9%. Cypriot bank officials said that depositors can access all their money except the amount set by the levy. But that hardly assuaged people who continued to withdraw cash from ATMs until the machines ran out, unsure what or how much would be taxed. The country's co-operative banks also shut their doors after depositors scurried in hopes of protecting their savings.
US Debt Ceiling Visualized: Stacked in $100 dollar bills @ $16.394 Trillion Dollars $122,100,000,000,000. - US unfunded liabilities by Dec 31, 2012. Abovet you can see the pillar of cold hard $100 bills that dwarfs the WTC & Empire State Building - both at one point world's tallest buildings. If you look carefully you can see the Statue of Liberty. The 122.1 Trillion dollar super-skyscraper wall is the amount of money the U.S. Government knows it does not have to fully fund the Medicare, Medicare Prescription Drug Program, Social Security, Military and civil servant pensions. The unfunded liability is calculated on current tax and funding inputs, and future demographic shifts in US Population. Note: On the above 122.1T image the size of the bases of the money stacks are $10 billion, and 400 stories @ $4 trillion "It is incumbent on every generation to pay its own debts as it goes. "This is when you need to remember that when a nation's economy collapses, the wealth of the nation doesn't disappear, it only changes hands." Everyone needs to see this.
JPMorgan made some $5bn on Friday using accounting magic called DVA With all the talk about JPMorgan's losses out of the CIO's office, nobody is discussing the money the firm made on Friday due to the accounting magic called DVA. After all, CIO's positions were (at least in principle) meant to act as an offset to this earnings volatility. As an example the chart below shows the price action for JPM's newly minted bond (issued just last month). With roughly $12bn of this bond outstanding, JPMorgan will record a gain of some $350MM based on Friday's price move just for this bond. SoberLook.com
Can the Internet Replace Big Banks? Douglas Rushkoff, a media theorist, author, and documentarian. The ideas in this piece are built on the arguments of his new book, Present Shock: When Everything Happens Now. We've seen digital technology disintermediate everything from record companies to university curriculum. Yet banking has remained rather immune to all this disruption. Sure, ATMs and online banking may threaten the bank teller's union, but central banking's monopoly over money has hardly budged. However, the rapidly changing digital economy is about to give banks a run for their money. In short, banks can continue to write loans to their communities, but only if they also help these communities invest in themselves, as well. For centuries, banks have enjoyed the exclusive privilege to put money into the world. In order to preserve their own wealth, the aristocracy made local currencies illegal and forced everyone to borrow their money at interest. So what are banks to do? Image via iStock, MHJ
Revealed – the capitalist network that runs the world By Debora Mackenzie and Andy Coghlan AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). “Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. The Zurich team can. The work, to be published in PLoS One, revealed a core of 1318 companies with interlocking ownerships (see image). 1. (Data: PLoS One) economics
Regression to the Mean, JPMorgan Edition By James Kwak I haven’t been writing about the JPMorgan debacle because, well, everyone else is writing about it. One theme that has stuck out for me, however, has been everyone’s reflexive surprise that this could happen at JPMorgan, supposedly the best and most competent of the big banks. “Highly intelligent women tend to marry men who are less intelligent than they are.” No. The performance of anyone doing anything will exhibit regression to the mean. The more disturbing thing isn’t that commentators fell for this statistical red herring. “I wouldn’t call it ‘more aggressive,’ I would call it ‘better,’” Dimon told analysts yesterday. People don’t suddenly go from being good to bad overnight. “Inside JPMorgan, leadership is stunned by the situation, according to two senior executives,” also as reported by Bloomberg. It’s another thing if the bank didn’t realize it was taking on risks of this magnitude.
The Biggest Price-Fixing Scandal Ever | Politics News Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything. You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. That was bad enough, but now Libor may have a twin brother. The Scam Wall Street Learned From the Mafia Why? The bad news didn't stop with swaps and interest rates. "You name it," says Frenk.
On The Trail Of Dubai's Stolen Gold: A Robbed Client Breaks The Silence, And A Fascinating Detail Emerges On Christmas Day, 2015, we told our readers the fascinating tale about the Turkish-Iranian gold smuggling ring - perhaps the biggest and most brazen in history, one which lasted for years, which saw billions in gold transported out of Turkey and into Iran to allow Tehran to circumvent the western financial sanctions using gold as a medium for bater, and which was all made possible thanks to the tiny Emirate of Dubai. What made this particular instance of gold smuggling especially memorable is that it reached to the very political top in both Turkey, and Iran, and Dubai. Here, for those who missed it the first time, is the letter that Gold.A.E.'s stunned clients received in late December: Dear Client A group of minority shareholders of GOLD HOLDING suspected that there were questionable financial transactions being undertaken in Gold AE DMCC ("the Company"). But was Gold Holding involved in the smuggling of billions in gold out of Turkey and into Iran?
Who Wants Big Banks By James Kwak Thirty years ago, Merton Miller, one of the giants of modern finance, was at a banking conference when a banker said he couldn’t raise more capital by selling stock because that would be too expensive: his stock was selling for only 50 percent of book value. Merton responded, “Book values have nothing to do with the cost of equity capital. That’s just the market’s way of saying: We gave those guys a dollar, and they managed to turn it into 50 cents. Now that’s what a growing number of sophisticated investors are saying about today’s banking behemoths, especially JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley. A brief aside: Book value refers to the amount that shareholders have historically invested in a firm, plus profits that have not been paid out to them as dividends. But now people who matter (that is, people with real money) are also saying the banks should be broken up—because then they would be worth more to their shareholders.
Germany's Bundesbank reveals plan to bring gold reserves home | Europe FRANKFURT— Germany’s Bundesbank plans to bring home some of its gold reserves stored in the United States’ and French central banks, bowing to government pressure to unwind a Cold War-era ploy that secured the national treasure. Germany amassed gold reserves in the post-war era thanks to rapid economic expansion that saw growing exports to the United States, where its dollar claims were turned into gold under the Bretton Woods agreement that Germany joined in 1952. As the Cold War set in, Germany kept its gold reserves put, keeping them out of reach of the Soviet empire. But government officials have grown uneasy about the storage set-up and have called for the Bundesbank to inspect the bars. The Bundesbank now wants to change the arrangement too, even though it has said it does not see a need to count the bars or check their gold content itself and considers written assurances from the other central banks as sufficient. "To hold gold as a central bank creates confidence," Mr Thiele said.
16 things germans do better: • Football • Beer… Michael Crimmins: Why Hasn’t Jamie Dimon Been Fired by His Board Yet? By Michael Crimmins, who has worked on risk management and Sarbanes Oxley compliance for major banks JP Morgan’s jawdropping revelations in its Friday earnings call don’t seem to be attracting the attention they deserve. The market may have shrugged off the size of the losses and the corporate governance modifications plans, but the announcement opens the door wide for the next phase of this scandal. The first stunner, that JP Morgan was restating the first quarter financials, should have caused a deafening ringing of alarm bells. Add in the magnitude of the restatement which increased the CIO losses by a massive 90% over the previously reported losses and you’d expect to see further panic. But the real cause for alarm is the reason for the restatement. That Stone Age policy has been extinct for a generation at every financial institution that signs a SOX internal controls certification. Which leads to the second underreported stunner. Which leads us to the clawback issue.
Two bombshell documents that Citigroup's lawyers try to suppress, describing in detail the rule of the first 1% "Are they real?" That's the question people usually ask when they hear for the first time of the "Citigroup Plutonomy Memos." The sad truth is: Yes, they are real, and instead of being discussed on mainstream media outlets all over America and beyond, Citigroup was surprisingly successful so far in suppressing these memos, using their lawyers to issue takedown-notices whenever these memos were being made available for download on the internet. So what are we talking about? So Citigroup did their duty and published two explosive memos, which should have become mainstream news, but eventually did not. Screenshot: The second memo is dated March 5, 2006 (18 pages) and is titled: "Revisiting Plutonomy: The Rich Getting Richer" A few years ago, two copies of these memos were leaked and were published on the internet. Examples of the reports deleted from "scribd.com" after Citigroup demanded their takedown (here and here): Little of this note should tally with conventional thinking. Quote: Quote: