The village of highly-touted JP Morgan is just a scam!
Here’s how this so-called regulation fraud ‘wholesale’ is itself a big fraud.
The first thing you need to know about JPMorgan Chase is expected to deal with $ 13 billion with the Ministry of Justice – addressing a number of civil suits related to the fraudulent sale of mortgage – backed securities is that it is not a matter of $13 billion. $4 billion of this amount, more than 30 per cent, has been announced almost a month ago as the conclusion of a trial between JPMorgan and the federal housing financing agency.
Attorney general Eric Holder, eager to stand on a podium and give a very large settlement, simply folded the FHFA colony in the Department of Justice. Why the news editors who have already reported on the settlement of the FHFA would leave the use of the Department of Justice again in its title figure is completely beyond me. They are not obliged to make P.R. from the Ministry of Justice for them. We are not saying the Miami Heat beat the San Antonio Spurs 200-98, but 100 of these points came from a previous game.
So, let’s talk about this settlement of $9 billion. Even this number of title does not really reflect the actual penalty of the bottom line of JPMorgan Chase. Nearly half of the figure comes in the form of « mortgage relief », which an independent monitor (and which is therefore independent on a monitor chosen by the Bank?) has four years to distribute. No matter what time extend you the time horizon of a penalty, you are reducing its real value. And in this case, there isn’t much of value here as a first step.
The Bank has put $1.2 billion of the $4 billion in first-lien major reductions for owners of a House that faced with foreclosure. $300 million goes to the second extinction of privileges, as the home equity credit line. Another $300 million are destined for the principal forbearance, where the owner still has the money but lets you skip a few immediate payments. $2 billion would go toward reducing the rate of refinancing or interest or even write new mortgages for moderate borrowers (it is a penalty, writing of mortgages which pay the bank interest?), and the balance towards the fight against blight provisions such as bulldozing of houses or by purchasing properties where the Bank has delayed foreclosure.
Almost none of this represents a real penalty for the Bank. Each year, it conducts procedures for combating blight in its normal course of business. Principal forbearance has minuscule cost in the long term. Second privileges which generally cannot be recovered are worthless to a Bank, and it is difficult to say it « cost » anything to extinguish. The Bank is even credited to write main on loans held by mortgage-backed securities investors, pay fine them with the money of others (the others being in this case the very investors that they have defrauded!). And all measures to help homeowners struggling actually help JPMorgan Chase in the long term, because it is logical financial to modify loans rather than ban them. It is good to align financial incentives properly to force the Bank to help homeowners now rather than kicked out of their homes. But a penalty for a fault, it’s less than meets the eye, any account made maybe 10 cents per dollar of the bottom line of JPMorgan. Which hold and you get a $5.4 billion deal.
As a side note, major reductions will actually hurt homeowners more help, unless Congress extends debt forgiveness Relief Act mortgage. If not, all major reductions of this kind will be taxable income for the owner. Poor people who need major write-downs to save their home were usually the bags of money lying around to pay off the tax bills that they do not think they would get. Exemptions from difficulties for owners who cannot pay the tax requires significant tax planning, the functional equivalent of bankruptcy to the IRS. It will be a nightmare for owners who get blessed with this « gift ».
It is positive that the $5.4 billion deal stops at JPMorgan Chase to try to RAID the FDIC to pay penalties arising out of misconduct at Washington Mutual, the Bank having failed, which they bought in 2008 (JPMorgan claims, against all evidence, that when they bought the assets, they did not assume legal responsibility) of the assets. But the Bank can still try to take money from the receivership of the FDIC which has liquidated the WAMU as payment in a separate regulation, a matter of $4.5 billion from institutional investors, also on the fraudulent sale of mortgage-backed securities. So JPMorgan has not ceased to strive for the FDIC to repay its debts, they just changed the debts in the mixture of public sanctions to private forests. Given that the FDIC brings its funds from assessments on banks, this reflects the JPMorgan trying to get competitors to pay its fines.
Meanwhile, almost the entire agreement, save a penalty of $2 billion to the Office of the U.S. Attorney in Sacramento to settle a civil lawsuit is tax deductible as a business expense. Assuming a rate of 38% for deductions (as does JPMorgan) to $7 billion in business expenses, it strikes an another $2.66 billion excluding the actual cost for JPMorgan Chase. A settlement of $13 billion vaunted winds being closer to $2.74 billion. It is less than what BP and GlaxoSmithKline paid in their establishments of the Ministry of Justice.
Of course, as my colleague Alex Pareene pointed out weeks ago, it is impossible for the punishment to fit the crime here, in monetary terms. If you calculate the real harm done through fraud in the market of housing and the impact on the overall economy, JP Morgan and his colleagues banks would need money they could scrounge ever upwards. The prison sentences for those who power and conduct could create at least a way of deterrence for the future, but while criminal cases are not closed by this regulation, I take all bets on whether they will come never embodied. JPMorgan is in fact cooperating with criminal casesagainst its former traders, the equivalent to having O.J. Simpson actually collaborate with the police to find the real killer. You do not cooperate with a transnational criminal enterpriseyou disassemble it.
The statement of facts accompanying the colony – when JPMorgan recognizes that they and their subsidiaries sold mortgage-backed securities while knowing mortgages supporting the links do not meet underwriting standards, they promised to investors – would have been nice to know before the Bank settled securities mortgage claims from investors last week. In fact, you could see the long delay to finalize the regulation also deliberately facilitated by JPMorgan, so the statement of facts could not be used against them in other cases.
Hotel, considered a model for future cases of Ministry of Justice against the banks, is believed to be evidence of the impact of the vaunted financial fraud task force put in place early last year. Let’s go back to when this working group was created.
Liberal activists wanted banks to pay for the hundreds of billions of their foreclosure fraud through massive cuts offences actually reset the housing market and rid the owners of their mortgages « underwater ». Instead, the Government settled for $25 billion with five banks (Note: this number is inflated, too) and in the bargain, created this working group. At the time, I have journalists and other activists have said that the task force would strike at the heart of the problem, fraud in the packaging and sale of mortgage-backed securities. The responsibility attached to this fraud, the story went, was much higher than for the robo-signing scandal or other abuses of the owners. Law enforcement could « create a larger table, » create the conditions for forcing gains much more important by the banks.
How it works? Robust high end air numbers from a public relations perspective, but I have already indicated how they do not reflect the reality. in fact, the $1.2 billion in major reductions first-lien is less than the obligation of JPMorgan Chase under the old village of foreclosure fraud. Almost two years in the Working Group, there is no more than the table. No one has seen the inside of a prison cell; no criminal summons have even been issued. And penalties are not shaking JPMorgan Chase or any other Bank at their base. Indeed, in this case, people who might be hurt more are the owners of a House.
Beyond it is clear that, far from giving compensation for illegal seizures getting the resources needed to continue the ‘real’ fraud was a bait and switch. The same premise was wrong; You indemnify a series of crimes to get to the other, prosecute you wherever possible. This idea of a « new aggression » of the Ministry of Justice to pursue the big banks is hokum. Gifts can be sneakier and more well hidden, but they are still corporate gifts. And accountability is still far from being found.
United States provide new cases of fraud of the Bank at the beginning of 2014
Educate! Criminal justice and Prisons , of the economy and finance , Government
By David Ingram and Aruna Visnawatha, http://www.Reuters.com
December 12, 2013
* Staff note: while the colony of JP Morgan Chase sounded great, it was actually just a slap on the hand and gave rise to no personal liability. These upcoming cases allow to organize and push for true justice.* *.
U.S. Justice Department plans to make cases of mortgage fraud against several financial institutions at the beginning of 2014, using as a model the case ended last month at JPMorgan Chase & settlement of $13 billion of the Commander, United States Attorney general Eric Holder said Wednesday.
In an interview with Reuters, the holder would not say that companies or how much threatened legal action, but said the Justice Department has been in contact with them and it was hard to say whether the talks would lead to colony.
« We have a number of investigations that come to a head at the same time, » he said. « It is my hope that the next round of these cases will be filed shortly after the new year. »
JPMorgan, the largest U.S. Bank, agreed the month last paying $13 billion to end a series of government investigations into its marketing and sale of mortgage-backed securities.
That regulation included a penalty of $2 billion to resolve claims of civil fraud by the Department of Justice as well as a recognition of JPMorgan’s problems in the securities it sold in the run-up to the financial crisis.
It also included $4 billion in aid to consumers and did not cover a criminal investigation into the conduct.
Holder, said that the Government would seek similar elements in any future resolution.
« These four things I think understand what we think of as a model for the resolution of these issues because they are encouraged, » he said.
Cases come from a working group of Government the Obama administration, created in early 2012 to probe the packaging and sale of shoddy housing loans. At the time, the Department sent subpoenas to more than a dozen financial institutions and warned of action.
Other institutions including Bank of America Corp. , Citigroup Inc. and Goldman Sachs Group Inc.. revealed related investigations and is subject to future prosecution.
Bank of America is already challenging an action for justice the Department of Justice filed earlier this year in its mortgage-backed securities, but is expected to more cases.
In October, he reveals that the staff at the office of an American lawyer intended to recommend a civil suit against Bank of America affiliates on mortgage-backed securities. The Bank also said the staff in the Office of the Attorney general of New York, which is part of the task force, to recommend action against Merrill Lynch, acquired by the Bank in 2008.
Citigroup in November said that it continues to respond to the subpoenas and other requests for information about its mortgage-backed securities from the authorities, including the civil division of the Department of Justice.
Goldman Sachs in its latest quarterly report, said a future receivable of the task force could lead to a « significant increase » of the liabilities of the company. He said that he continues to receive requests for information from members of the group.
Another bank, Credit Switzerland, facing one of the first prosecutions arising from the task force, filed by the Attorney general of New York Eric Schneiderman last November.
Representatives of Bank of America, Citigroup, Goldman and Credit Switzerland declined to comment or did not immediately respond to requests for comment.
Holder said he was meeting with the head of the task force and its leaders on a weekly basis, including Tuesday of this week.
Direct rule by Wall Street starts with Detroit
» » The bankers would be entitled to exercise the property outright from the city. »
A black Agenda Radio by Glen Ford Editor comment
Below: a video of solidarity to occupy Wall Street
Two elements in the news this week graphics highlighted the global reality of our times: Wall Street is every day his dictatorial grip on the political and economic life of the United States tightening. The U.S. State and the economy are in restructuring tirelessly to further consolidate the rule of the financial capital. In the urban centres largely black nation, the oligarchy intends to rule directly, without the drawback of significant elections and other trappings of democracy.
Detroitprouve the point. This week, a judge begins a bankruptcy of the trial court that will decide if the local company dictator Kevyn Orr, Chief Financial Officer of emergency imposed by the State to protect the interests of Wall Street, will be essentially allowed to sell assets from Detroit to a UK Bank to pay the debts of the city of banks American. The pensions of workers in the city can also be flushed in the process of.
The Council of the city of Detroit this week voted unanimously against the agreement, but it’s probably not relevant, given that the emergency Manager law has stripped of any power to elected representatives of Detroit. Democracy is dead in Detroit, as in all the cities largely black of Michigan, each of which is now run by a corporate dictator. The majority of the African-American citizens of Michigan have right to vote nor do the blacks in South Africa under apartheid.
«In the urban centres largely black nation, the oligarchy intends to pronounce directly. »
This new political system was carefully designed to the specifications of Wall Street. Revenues of the city of Detroit casino and income taxes will go directly through the Barclays Bank accounts. And if, for some reason, the emergency Manager loses legal control of the city, then Barclays would be allowed to declare Detroit in default and to begin seizing its assets for liquidation – in other words, bankers would be entitled to exercise the property outright from the city. Detroit will then serve as a model for the rest of urban America.
This week, the Department of Justice of United States concluded an agreement with JP Morgan Chase, the largest bank of the country in terms of assets, whose President and Chief Executive, Jamie Dimon, is also a good friend of president Obama. The regulation asks $9 billion in fines and sets aside $4 billion in relief for homeowners who have been victims of practices of mortgage-backed securities from banks. Person, of course, can go to jail or even face criminal charges for the multitude of crimes committed by officials of JP Morgan high – crimes which would be considered as racketeering offenses were the authors are not part of a ruling class that is immune to prosecution. Jamie Dimon, business criminal Godfather of JP Morgan, has the privilege of negotiating with the U.S. Attorney general on the size of the fine that his bank will pay. Dimon himself, of course, will not pay a penny, despite its role by throwing millions out of work and costs the global economy many trillions of dollars. His class has emerged from the crisis, they have created stronger than ever: too big to fail, too big to jail, large more enough to gobble up Detroit, bigger than the right to vote of citizens of the United States – especially black citizens – which can be cancelled when democracy gets in the way Wall Street. All power to the bankers!
Black agenda radio, I’m Glen Ford. On the web, go to BlackAgendaReport.com.
BAR Glen Ford editor can be contacted at Glen.Ford@BlackAgendaReport.com.
Video: Occupy Wall Street shows solidarity with Detroit