big banks 2013
Let's address two tragedies today.
The first is how Jamie Dimon & Co. and all the guilty big banks get away with murder.
The second is something I want to share with you because 50 years ago today, President John Fitzgerald Kennedy was assassinated. It isn't a conspiracy theory about who did it, but a likely theory about what happened and the conspiracy to cover that up.To continue reading, please click here...
Sorry CNBC, but the $13 Billion JPMorgan Fine Was No Shakedown
This week, the financial media has been up in arms about the record $13 billion fine levied on JPMorgan Chase & Co. (NYSE: JPM) for its connection with mortgage-backed securities.
While some voices have called for Chief Executive Officer (CEO) Jamie Dimon's departure from the bank, defendants have stated that JPM was a victim of government pressures to purchase Washington Mutual and Bear Stearns in 2008. Both acquired companies were responsible for 80% of the liabilities within this settlement.The scary thing is, that monster fine is just a tiny hint of what's been going wrong with Wall Street...
Here's Proof a New Glass-Steagall Act Could Rein in the Big Banks
The Too-Big-to-Fail banks have a notorious track record of avoiding, evading or eliminating nearly all of Washington's attempts to bring them to heel.
So skeptics can be forgiven for thinking that the recently proposed new Glass-Steagall Act won't change anything on Wall Street.
As the moniker "Too-Big-to Fail" implies, such banks are not easy to push around.
"No bank will ever get out of a profitable line of business, unless they're forced to, or there's a huge loss that threatens the perception of the banks' risk management, or some scandal forces a mea culpa and an exit," said Money Morning Capital Wave Strategist Shah Gilani, who as a former hedge fund trader understands how Wall Street thinks.
Yet the Too-Big-to-Fail banks have recently pulled back in one area - physical commodities trading - as a result of regulatory pressure from several directions.
The Big Banks On Trial, Again
You want to know why the entire global financial system almost collapsed in 2008?
There seems to be a simple answer. Not encouraging, but simple: The European Commission is exploring the possibility that there was a conspiracy among 13 of the world's major banks that colluded to keep the entire house of cards a secret.
In a press release Monday the European Commission announced it sent a "statement of objections" to Bank of America Merrill Lynch (BAC), Barclays (BARC), Bear Stearns , BNP Paribas (BNP), Citigroup (C), Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), HSBC (HBC), JP Morgan (JPM), Morgan Stanley (MS), Royal Bank of Scotland (RBS), UBS (UBS) as well as the International Swaps and Derivatives Association (ISDA) and data service provider Markit.
This statement of objections is a formal step in EU investigations that charges the banks, the dealers' association, and the swaps pricing agent and index controller of "colluding to prevent exchanges from entering the credit derivatives business between 2006 and 2009."
The companies are then expected to answer the charges.
"If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can issue a decision prohibiting the conduct and impose a fine of up to 10% of a company's annual worldwide turnover."
Part of the antitrust behavior of the accused, besides controlling pricing of derivatives to their exclusive benefit, would likely address their complicity in veiling the entire market to deflect fears of counterparty exposure, concentration of risks and leverage in the financial system.
Behind the Veil: Where the Elite Meet
It's Enough to Make Your Blood Boil
Here are two items that will upset you...
First, back in February, Attorney General Eric Holder christened the unofficial official doctrine of "Too Big to Jail."
He told Congress, "The size of some of these institutions [TBTF banks] becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute - if we do bring a criminal charge - it will have a negative impact on the national economy, perhaps even the world economy."
Of course, it was only the christening of another neat little name.
Check Out Who's Hiding $32 Trillion in Offshore Accounts
More than two million emails that shed light on the biggest tax dodge in history - trillions of dollars hidden in offshore accounts - have been uncovered by the British newspaper The Guardian and the Washington, D.C.-based International Consortium of Investigative Journalists (ICIJ).
Some $32 trillion has been hidden in small island banking hubs which host a bevy of trust funds, shell corporations and other tax havens, the Tax Justice Network estimates.
This money is to the financial world what the Higgs boson and dark matter are to particle physics: It's tough to prove it's there, but the universe doesn't make much sense without it. It's just a matter of connecting the money to the people hiding it.
That's been a tall order... until now.
A Simple, Scary Way to Neuter Goldman Sachs and Friends
TBTF is the acronym for "too big to fail."
It's the crazy notion that certain banks are so large and systematically important (which really means so threatening to financial systems) that they must be kept alive by the government, because their failure would wreak havoc on the economy.
How will they be saved from their own greed? And how will we be saved from their greed so we can kneel at their altars another day?
Central banks and governments, who are not as powerful as central banks, will backstop them with printed paper and taxpayer blood. That's how they'll be saved, grow bigger, and one day rule the world.
Oh, that already happened... never mind
There is No Such Thing as a "Safe" Big Bank
Thank goodness we have the FDIC and the Federal Reserve and Congressmen and women.
Thank goodness they're willing to tap the captive citizenry for as much cash as they need to back the Fed and the FDIC to safeguard our big, beautiful banks from... themselves.
Only, there's a problem.
Big bank "safety" is only a myth.
The Next Bank Meltdown Won't Be an "Accident"
Big banks turned in a pretty stellar first quarter. All but one beat profits expectations. But as I told you last week, I'm now out of these stocks completely.
Do you want the truth about what shape banks are in right now? Sure you can handle it?
I'm sorry; I can't tell you the truth.
Regulators can't tell you the truth.
And the Federal Reserve won't tell you the truth.
No one can tell you the truth. That's because banks don't tell the truth. And neither does the Federal Reserve.
Why It's Time to Sell Too-Big-to-Fail Banks
I'm not buying any bank stocks here. I don't own any at present. And if I did, I'd either sell them or at least hedge them.
It's not that they're doing poorly. They're not. Bank stocks have been strong because they've been making record profits. It's been a good ride if you're a Too Big To Fail bank or a shareholder.
But, being the cautious trader I am, I'm inclined to take profits when I have them in hand. That's why I'm out of the banks. I've banked my gains and turned cautious.
Citigroup beat analysts' expectations and finished up yesterday-even though the Dow took a big tumble.
Wells Fargo and JPMorgan Chase didn't do badly last week, in terms of their earnings and profit numbers either, but investors were disappointed.
But here's why I'm cautious...