So Jpmorganchase is paying Jamie Dimon $20M for 2013? My offer would have been minimum wage for 52 40-hour weeks

Says Cornelius Hurley, director of Boston University's Center for Finance, Law and Policy: "It doesn’t reconcile for JPMorgan to be paying out billions in fines while its C.E.O.’s compensation nearly doubled. You usually get fired for that, not rewarded."

by Ken

I suppose it's none of my beeswax that Jamie Dimon's compensation for last year was hiked to $20 million from the previous year's $11.5 million despite what the NYT calls in its headline a "rough year" for his company, Jpmorganchase ("Big Raise for JPMorgan's Dimon Despite a Rough Year"). After all, I don't have so much as a credit card with Jpmorganchase.

Oh, I used to have a couple of Chase credit cards, but they canceled the last one despite my never having had so much as a late payment, because I had a large amount of credit-card debit that I was paying off from my mother's -- and then my -- attempts to keep her going in her later years. (For the record, Chase had continued to shower me with balance-transfer offers. And not that long after my card was canceled. it too was paid off.) Oh wait, I do sort-of-have one Chase card: one that was my mother's, that we had her OK having my name added to so I could manage the account. I told them at the time that I didn't want a card, that I just wanted to get the account paid off, which I did. But they insisted on sending me a card, and they've kept sending me cards and reminders to activate them.

So I have no personal stake in the affairs of Jpmorganchase beyond a fervent hope that, say, the top 50 executives soon die such agonizing deaths as to make them wish they had never been born. And so it's probably neither here nor there that my solution to the question of compensating would be to make out time sheets for the 52 weeks of 2013 and have his compensation set at minimum wage according to whichever state his employment is chartered in -- I'm guessing NYS. (There would really be no trouble reconstructing those time sheets after the fact. I would be prepared to concede that he worked 40 hours each of those weeks, even though I'm not absolutely sure he could provide documentation, and since he's an executive he wouldn't be entitled to overtime anyway, right?)

As the NYT's Peter Eavis reports, the amount of the package approved by the company "will further inflame the debate over the accountability of senior bank executives," especially "after 12 months in which JPMorgan suffered several bruising legal setbacks, including a record $13 billion settlement with the Justice Department over soured mortgage securities."

suffered several bruising legal setbacks, including a record $13 billion settlement with the Justice Department over soured mortgage securities.

In justifying the $20 million package, which includes $18.5 million of JPMorgan stock as well as a base salary of $1.5 million, the board said that JPMorgan had advanced in many ways under Mr. Dimon. And to many on Wall Street, as well as some other long-serving chief executives, Mr. Dimon wholly deserves the raise. "I think he’s worth more than that," Warren E. Buffett, the chief executive of Berkshire Hathaway, said. "Over all, I think the shareholders of JPMorgan and the American people should be happy that Jamie Dimon has been running the bank over this period."

Other senior executives at the bank also got lush compensation packages. But it is unlikely that many JPMorgan employees will be receiving an increase anywhere near the size of Mr. Dimon’s.

When JPMorgan emerged from the financial crisis of 2008 stronger than most of its peers, Mr. Dimon was widely viewed in Washington and on Wall Street as a shrewd manager of risks. But after a large trading loss in 2012, known as the London Whale debacle, questions arose about the effectiveness of JPMorgan’s management. At the same time, Mr. Dimon’s combative manner was increasingly viewed as a liability for the bank at time when it needed to make peace with regulators.

After the trading loss, the bank’s legal problems only escalated. Along with the $13 billion settlement with the Justice Department, JPMorgan last year paid out a large sum to settle allegations that some of its traders manipulated energy prices, and, most recently, federal prosecutors investigating the Ponzi scheme of Bernard L. Madoff extracted $1.7 billion from JPMorgan for failing to alert authorities to suspicions relating to Mr. Madoff’s business.

I'm relieved to see that I'm not the only ones whose eyebrows were raised by our Jamie's compensation coup.

Given the breadth of the legal onslaught, JPMorgan’s critics contend that the board should not have increased Mr. Dimon’s pay. "If there was ever a time to take a wait-and-see attitude and pay him what they paid last year, this is it," Cornelius K. Hurley, a professor at the Boston University School of Law, said. "This is a thumb in the eye of regulators and a thumb in the eye for the public."

Indeed, Mr. Dimon’s raise was opposed by a vocal minority of JPMorgan’s board who favored keeping Mr. Dimon’s pay roughly flat with 2012. But Joseph Evangelisti, a spokesman for the bank, denied that the discussions were heated. "That’s simply not true," he said. But when asked, Mr. Evangelisti did not make a member of the board available for an interview.

But hey, if Warren Buffett says Jamie's compensation package is A-OK, who am I to say no? Or even to jump on the bandwagon of spoilsports who see this development as yet another reason why a single person shouldn't hold the positions of both CEO and board chairman. Those Danny Downers seem to think that possibly such a person holds undue sway over the board.

Some banking experts say they think that the board’s approval of Mr. Dimon’s raise shows the need to remove him from his position as chairman of the board, leaving him with just the chief executive role. The bank’s shareholders overwhelmingly voted down such a move last year. Even so, those experts contend that removing Mr. Dimon from the chairman’s seat would have made the board more independent — and less likely to have given him an $8.5 million raise. "This is why you need to split the chairman and the C.E.O. roles," Paul Miller, a bank analyst at FBR Capital Markets, said. "I don’t think anyone is worth this money."

But Mr. Buffett, a JPMorgan shareholder, said he was not convinced that the roles had to be split. It is far more important, he said, that a board pick the right person to head a company. "The determining factor of whether the board is doing its job is whether they have the right C.E.O.," he said. "That trumps everything else."

Still, it seems that within not just Jpmorganchase but within much of the banking profession our Jamie is still aces.

JPMorgan says that it has taken substantial steps to beef up its controls to prevent future lapses. Several senior executives connected to the London Whale affair have left the bank, a sign that top employees do pay for serious mistakes. And despite the large payouts to government authorities last year, JPMorgan’s underlying businesses are performing well and its shareholders are earning strong returns.

JPMorgan’s supporters also assert that its biggest fines were related to shoddy mortgage practices that did not occur under Mr. Dimon’s watch. The board noted on Friday in the filing that the practices occurred at Washington Mutual and Bear Stearns, which JPMorgan bought in the heat of the financial crisis. But a significant portion of the $13 billion settlement was related to JPMorgan’s own practices. And some banking experts still say they think Mr. Dimon bears some responsibility for the penalties stemming from Washington Mutual and Bear Stearns — because, they say, he was keen to acquire both firms, even with their potential for future mortgage losses. "They bought those firms on Jamie Dimon’s watch," Mr. Hurley said.

JPMorgan still faces several government investigations, including one into whether the bank’s hiring practices in China were a form of bribery. These investigations could make life difficult for the bank and Mr. Dimon in the coming months.

Still, right now, it is hard to see what will weaken Mr. Dimon’s standing. As long as the bank’s profits continue to roll in and its share price stays elevated, he is likely to have the strong support of shareholders. "If you manage a business that size, you can do a lot of things that are very helpful to the economy, but you cannot do everything perfectly," Mr. Buffett said.

"But outside of Wall Street," reporter Eavis notes, "the pay package may be viewed differently." He concludes with another quote from Boston University School of Law's Cornelius Hurley, professor of the practice of banking law:

It doesn’t reconcile for JPMorgan to be paying out billions in fines while its C.E.O.’s compensation nearly doubled. You usually get fired for that, not rewarded.

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Catching up with Lee Camp: Lee and Negin Farsad have the nerve to try to deliver a petition to Jpmorganchase CEO Jamie Dimon

This is the amazing Lee Camp's Moment of Clarity #159.

by Ken

Okay, the petition in question suggests that CEO Dimon resign, but I thought that in the land of the free it was okay to deliver a petition. What our Jamie would have done with the thing would of course have been up to him. (I'm guessing he wouldn't have called an emergency board meeting to tender his resignation.) But when crazy people show up in your lobby to deliver a petition, isn't the American thing -- as well as the right thing -- to do to, you know, relieve them of the damned petition? If only to get them the hell out of your lobby?

I don't think I've updated you on Lee's piercingly hilarious doings since February, when I passed on an assortment of news Lee had shared, including that he was about to tape a comedy album. (That post followed close upon a January post I still love just for the quintessentially Lee title: " 'I thought one of the gifts of comedy was supposed to be the ability to tell the fucking truth' (Lee Camp).")

Well, the album is out now, and there's a whole bunch of other stuff to check out on his website, leecamp.net. In an e-mail sent out to his mailing list yesterday, Lee urged:

Check out my new live comedy album Pepper Spray the Tears Away as well as my new book and e-book Moment of Clarity. You can get them and see/hear samples at iTunes, Amazon, SmashWords, Barnes & Noble, and LeeCamp.net.

There are five recent video clips, including MOC #159 above:

* "Me on The Point with Cenk Uygur"

* MOC #158, "The Euro Was DESIGNED to Fail!"

Okay, the title of this video might be a bit misleading. The euro wasn't designed to fail. Instead, it was designed to do what many of us view as failure. It was designed to fuck the average workers 12 ways to Sunday, and right now the fuckfest is in full stride. . . .

* MOC #157, "In Defense of Bad Words"

Fu-u-u-u-u-u-uck. There, I said it. I said a curse word. I hope you got through it okay. If you're listening to the censored version of this, then you just had to sit through a long, piercing bleep. It was probably far more fucking annoying than the simple word "fuck." . . .

* MOC #156, "America Is Too Fat, Skinny & Free!"

The United States of America has the most obese people in the world. We also have the most anorexic people. That's mind-blowing. We are literally the land of the thin and home of the fat. That's like being the land of the free and home of a police state. Well . . . .

Then there's a link for both the new comedy album, Pepper Spray the Tears Away, and the Moment of Clarity book and e-book, with links for free samples.


If you know Lee's work, and haven't been keeping up, then all you need is the links. If you don't know Lee's work, then you're in for a real treat.

As I always point out, if you read a transcript of any of Lee's pieces, or read one of his actual writings, you think you're dealing with the most articulate -- as well as bluntest and funniest -- of political deconstructors. Which he is. But when you see him perform his stuff, in his unrelentingly high-voltage, take-no-prisoners mode, you get another whole perspective. And yet the material is still every bit as smart as you thought it was in written-down form.

Either way, enjoy, and consider signing up as a member, to help make it financially possible for Lee to continue his uncompromisingly comic subversion.

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Jim DeMint, Tea Party Be Damned, Can't Recognize That Jamie Dimon Is A Dangerous Part Of A Parasitic Elite America Needs To Be Protected From

Even Rand Paul (R-KY) thought self-styled chief Senate teabagger Jim DeMint (R-SC) was a little offbase with his snivelling suggestion that JPMorgan CEO Jamie Dimon should "guide" Congress when it writes banking regulations. "Probably not the best thing in the world," offered Paul dryly. I might add that though it doesn't measure up to the massive bribes taken by other friends of Dimon like John McCain ($36,531,885), John Kerry ($20,045,202), Chuck Schumer ($18,760,091), Joe Lieberman ($10,967,241) and Miss McConnell ($6,887,747), DeMint has accepted $2,925,367 in bribes from the banksters over the overly long course of his career as a federal lawmaker. The only senator on the Banking Committee with the guts to stand up to Dimon today was Oregon progressive Jeff Merkley. But just before Dimon got sworn in to testify in front of the committee, Bernie Sanders (I-VT) released the detailed findings on Dimon and other Fed board members whose banks and businesses benefited from Fed actions. Over $4 trillion in near zero-interest Federal Reserve loans and other financial assistance went to the banks and businesses of at least 18 current and former Federal Reserve regional bank directors in the aftermath of the 2008 financial collapse. "This [GAO] report reveals the inherent conflicts of interest that exist at the Federal Reserve. At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks. These conflicts must end," Sanders said. I guess that's why Elizabeth Warren has been demanding that Dimon resign from the board of the Fed.

Tea party favorite Sen. Jim DeMint (R-SC) on Wednesday asked JPMorgan CEO Jamie Dimon, who recently announced that his company had lost at least $2 billion in the derivative market, to “guide” Congress in creating friendly banking regulations.

I'm certain it's just a coincidence, but today, over at Tyler Durden's place, just when Dimon was celebrating a reunion with some of the many senators he's bought up, economist Charles Hugh Smith was offering his insights into parasitic elites and their ability to persuade Congress to allow them to not pay any taxes. He answered the question, "Do the Parasitic Elite Pay Any Taxes?"

The parasitic financial Elite don't do any "work" in the sense of something beneficial for society, as no voluntary payment for their services exists.

If a parasite's entire income is leeched from the productive, then isn't their entire income a tax on those creating value? In this sense, the share of the parasite's income which is carved off by the Central State as tax revenues is a secondary tax: the parasite's entire income is a tax on the economy.

This distinction between legitimate wealth derived from value creation (think Steve Jobs/computer industry) and parasitic wealth skimmed from the productive (think Mitt Romney/investment banker) is the heart of Correspondent James B.'s insightful inquiry into the question: can the parasitic Elite be said to pay taxes at all, given that their income is itself a tax on legitimate wealth creation?

...If we understand the difference between parasitic wealth and real value/wealth creation, we can properly align the tax structure to reality: the tax on authentic wealth creation should be low, to encourage wealth creation and the employment (broad-based wealth creation) generated by legitimate value creation.

We must also understand that the Central State now protects and enables parasitic skimming as the primary function of the nation's financial system. Thus the entire financial system is parasitic on the wealth of the nation.

Financial parasitic incomes should be taxed at 99%. If Mitt Romney reshuffles assets created by others and skims $100 million, 99% of that parasitic wealth should be returned to the nation via taxes. The parasite still gets to keep $1 million, more than enough to live well but not enough to buy the presidency, the Congress and the regulatory machinery of the Central State.

All those who claim the Mitt Romney/investment bankers are "creating wealth" are either terribly confused about value creation and capitalism, or they are lackeys/ apologists of the parasitic Elite.

Iceland, you'll recall, defaulted on the kinds of bankster interest payments that are causing so much pain and suffering among real people in Greece, Spain, Portugal, Wisconsin, Ireland, Britain and other countries that are allowing the German and Wall Street Austerity agenda to destroy the middle class and drive teh working poor into destitution. And Iceland threw some of those banksters-- and the politicians that enabled them-- into prison. How's that working out for them? Really well, as a matter of fact. It's not quite the second anniversary of this column by Paul Krugman and he's trumpetting the astounding success they've had by telling the Germans to shove their Austerity where the sun don't shine.

Iceland is, of course, one of the great economic disaster stories of all time. An economy that produced a decent standard of living for its people was in effect hijacked by a combination of free-market ideology and crony capitalism; one of the papers (pdf) at the conference I just attended in Luxembourg shows that the benefits of the financial bubble went overwhelmingly to a small minority at the top of the income distribution.

And in the process of building short-lived financial empires, a handful of operators built up enormous debts that their fellow citizens are now expected to repay.

But there’s an odd coda to the story. Unlike other disaster economies around the European periphery-- economies that are trying to rehabilitate themselves through austerity and deflation-- Iceland built up so much debt and found itself in such dire straits that orthodoxy was out of the question. Instead, Iceland devalued its currency massively and imposed capital controls.

And a strange thing has happened: although Iceland is generally considered to have experienced the worst financial crisis in history, its punishment has actually been substantially less than that of other nations.

...The moral of the story seems to be that if you’re going to have a crisis, it’s better to have a really, really bad one. Otherwise, you’ll end up taking the advice of people who assure you that even more suffering will cure what ails you.

Yesterday he was writing that although "GDP is still below previous peak... I think one could argue, much more so than in say America, that a significant part of that peak involved a Ponzi financial sector that isn’t coming back [and]... Iceland’s heterodoxy was yielding a surprisingly not-so-terrible post-crisis outcome."


UPDATE: Bernie Sanders



Would you like to help make sure Bernie gets back into the Senate? At least he recognizes that Wall Street regulates Congress instead of Congress regulating Wall Street. Here's where you can help Bernie be reelected.

So alarms were sounding inside Jpmorganchase about the trading that led to the $2 billion loss? Who could have known?

"What, me worry?": Jpmorganchase's
Jamie "The Gambler" Dimon

"This is the week of the third annual Deficit Fest, the event sponsored by Wall Street billionaire Peter G. Peterson. At this event, many of the people most responsible for the current downturn come together to tell us why we should be worried about the deficit at a time when 25 million people are unemployed, underemployed or have given up looking for work altogether and millions face the prospect of losing their homes."

-- economist Dean Baker, in
"Deficit reduction: The Great Distraction"

by Ken

I suppose it's a little unfair to Jpmorganchase genius Jamie Dimon to link him with the above taunt by Dean Baker at the people who brought us the Wall Street meltdown when Jamie D's company generally kept its distance from the immediately precipitating housing bubble. On the other hand, as a symbol -- and indeed leading spokesperson -- for the "don't mess with the banksters" mentality, he still seems to me fair game.

Good news today for Jamie D. Even as Jpmorganchase has begun shedding directly involved players in the $2 billion trading "oops," and even though the poor fellow had to listen to a bunch of nattering shareholders whine about the lost $2 billion at today's annual meeting in Tampa, in the end, as reported by Bloomberg Businessweek --

Dimon survives votes on pay, chairmanship

By TAMARA LUSH and PALLAVI GOGOI

TAMPA, FLA.

The CEO of JPMorgan Chase survived a shareholder push Tuesday to strip him of the title of chairman of the board, five days after he disclosed a $2 billion trading loss by the bank.

CEO Jamie Dimon also won a shareholder endorsement of his pay package from last year, which totaled $23 million, according to an Associated Press analysis of regulatory filings.

Dimon, unusually subdued, told shareholders at the JPMorgan annual meeting that the company's mistakes were "self-inflicted." Speaking with reporters later, he added: "The buck always stops with me."

Most of the shareholder ballots were cast in the weeks before Dimon revealed the trading loss.

His pay package passed with 91 percent of the vote. The vote to strip him of the chairman's title won only 40 percent support. The bank did not announce separate results from before and after the loss was revealed. . . .

The funny thing is that the news today is filled with interesting takes on that lost $2 billion, like the news, per the Washington Post's Jia Lynn Yang and Sari Horwitz, "The Justice Department has initiated a criminal probe into the $2 billion trading loss at JPMorgan Chase, according to a law enforcement source familiar with the situation."

Or there's my favorite, as reported by the New York Times's Jessica Silver-Greenberg and Nelson D. Schwartz on the Deal Book blog: "Red Flags Said to Go Unheeded by Bosses at JPMorgan":

In the years leading up to JPMorgan Chase’s $2 billion trading loss, risk managers and some senior investment bankers raised concerns that the bank was making increasingly large investments involving complex trades that were hard to understand. But even as the size of the bets climbed steadily, these former employees say, their concerns about the dangers were ignored or dismissed.

An increased appetite for such trades had the approval of the upper echelons of the bank, including Jamie Dimon, the chief executive, current and former employees said.

Initially, this led to sharply higher investing profits, but they said it also contributed to the bank’s lowering its guard.

“There was a lopsided situation, between really risky positions and relatively weaker risk managers,” said a former trader with the chief investment office, the JPMorgan unit that suffered the recent loss. The trader and other former employees spoke on the condition of anonymity because of the nature of the investigations into the trading losses. . . .

Top investment bank executives raised concerns about the growing size and complexity of the bets held by the bank’s chief investment office as early as 2007, according to interviews with half a dozen current and former bank officials. Within the investment office, led by Ina Drew, who resigned on Monday, the bets were directed by the head of the Europe trading desk in London, Achilles Macris.

Mr. Macris, who is also expected to resign, failed to heed concerns as early as 2009 from the unit’s own internal risk officer, said current and former members of the chief investment office. Mr. Macris and Ms. Drew were not available for comment. . . ..

Sirens had gone off after a series of erratic trading sessions in late March resulted in big gains one day, followed by even bigger losses the next on the London trading desk of the bank’s chief investment office. Mr. Dimon was convinced by Ms. Drew and her team that the turbulence was “manageable,” executives said. Nor did anyone on the operating committee, of which Ms. Drew is a member, question her conclusion — in fact the full operating committee wasn’t told of the scope of the problem till early last week, just days before Mr. Dimon went public.

The alarm bells were silenced in early April, but days after first-quarter earnings were reported on April 13, the erratic trading pattern continued, except this time there were few gains to offset the losses, and the red ink was flowing faster by the day.

Mr. Dimon convened a second round of checks, which soon concluded there was a ticking time bomb, but by then it was too late, a situation made worse as traders actually increased their bets instead of shrinking them, resulting in a loss that now totals more than $2 billion and threatens a management team that until now could seemingly do no wrong. . . .

I'm sure everyone will be relieved to know that Jpmorganchase has "appointed a former chief financial officer, Mike Cavanagh, to head up the task of fixing what went wrong." Mr. Cavanagh, the NYT scribes tell us, is "one of the most respected senior executives at the bank," who "has been a loyal lieutenant of Mr. Dimon since before he took over JPMorgan Chase and has been discussed as a possible successor."

I'll let you crack your own funny about that.


SPEAKING OF CRACKING FUNNY,
HERE'S ANDY BOROWITZ'S TAKE

Hoping for Knockout Punch, CIA Sends JP Morgan Execs to Infiltrate Al-Qaeda
Terror Org Posts Huge Losses

WASHINGTON (The Borowitz Report) – In a covert mission designed to destroy what remains of al-Qaeda, the CIA has been infiltrating the terror network with executives from JP Morgan Chase, the banking giant.

The mission, which the intelligence agency had hoped to keep secret, came to light this week when al-Qaeda dismissed two of its top officials who it said were responsible for “unacceptably speculative” betting of the terror net’s funds on credit default swaps.

Across the intelligence community, the dismissals caught the attention of analysts, who thought such risky behavior seemed out of character for al-Qaeda.

“The first thing I thought was, this sounds more like the work of JP Morgan,” one analyst said, speaking on condition of anonymity. “Al-Qaeda has a reputation for being madmen, but even for them these investments were crazy.”

Pressed about the covert mission, CIA Director David Petraeus confirmed today that it had been a resounding success, telling reporters, “If you’re serious about putting someone out of business, there’s no one better than these JP Morgan guys. One of them can do more damage than a thousand drone strikes.”

But Gen. Petraeus may have spoken too soon, as the official al-Qaeda website today claimed that the terror organization was on the brink of getting a “major financial bailout package” from a consortium of state sponsors of terrorism such as Iran and North Korea.

“Al-Qaeda is too big to fail,” the website said.

My favorite line, of course, comes from the analyst who says, "on condition of anonymity": "The first thing I thought was, this sounds more like the work of JP Morgan. Al-Qaeda has a reputation for being madmen, but even for them these investments were crazy.”

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"We've just seen an object demonstration of why Wall Street does, in fact, need to be regulated. Thank you, Mr. Dimon" (Paul Krugman)

(Thanks to C. Jerry Kutner Jr. on Bright Lights After Dark film-comment blog)

One of the characters in the classic 1939 film "Stagecoach" is a banker named Gatewood who lectures his captive audience on the evils of big government, especially bank regulation -- "As if we bankers don't know how to run our own banks!" he exclaims. As the film progresses, we learn that Gatewood is in fact skipping town with a satchel full of embezzled cash.

As far as we know, Jamie Dimon, the chairman and C.E.O. of JPMorgan Chase, isn't planning anything similar. He has, however, been fond of giving Gatewood-like speeches about how he and his colleagues know what they're doing, and don't need the government looking over their shoulders. So there's a large heap of poetic justice -- and a major policy lesson -- in JPMorgan's shock announcement that it somehow managed to lose $2 billion in a failed bit of financial wheeling-dealing.

-- Paul Krugman, in his NYT column today,
"Why We Regulate"

by Ken

I've already had my say on the subject of listening to bizniz elites on the subjct of bizniz regulation, namely "As the JPMorganchase mess reminds us, the health of the economy is too important to allow the bizniz elites to have any say in overseeing it." Since we Americansprize our tradition of free speech, we really can't just say to them: "You'll keep your damn yap shut if you know what's good for you." We could try saying, "You'll keep your damn yap shut if you give a damn about what's good for the country," but I wouldn't hold my breath on that one. I think the best we can do is enforce a strict policy of not paying them no never mind when they feel the need to regurgitate some of their alleged wisdom.

Today Paul Krugman is making a slightly narrower point: "[W]hat JPMorgan has just demonstrated is that even supposedly smart bankers must be sharply limited in the kinds of risk they're allowed to take on." This isn't quite the same as saying that anyone who pays the slightest attention to any economic policy urgings of elite biznizpeople, based on their supposed expertise, is a damned fool, because while they unquestionably have expertise, they never share that. What they bring to bear in their public utterances about economic policy is a mandate they believe comes both from God and from their fiduciary responsibility to lie, cheat, and steal whenever they sincerely believe it is necessary for them to do so in order to make an extra buck. (The funny part is that sometimes they not only don't make a buck, they lose a couple of billion of them. Who's the joke on now?)

Nevertheless, I'm happy to accept our Paul's view as far as it goes. He's careful to remind us that it isn't the government's business that biznizpeople are blunder-prone.

[T]hey make money-losing mistakes all the time. That in itself is no reason for the government to get involved. But banks are special, because the risks they take are borne, in large part, by taxpayers and the economy as a whole.

What's so special, you may ask, about banks? Glad you asked.

Because history tells us that banking is and always has been subject to occasional destructive "panics," which can wreak havoc with the economy as a whole. Current right-wing mythology has it that bad banking is always the result of government intervention, whether from the Federal Reserve or meddling liberals in Congress. In fact, however, Gilded Age America -- a land with minimal government and no Fed -- was subject to panics roughly once every six years. And some of these panics inflicted major economic losses.

So what can be done? In the 1930s, after the mother of all banking panics, we arrived at a workable solution, involving both guarantees and oversight. On one side, the scope for panic was limited via government-backed deposit insurance; on the other, banks were subject to regulations intended to keep them from abusing the privileged status they derived from deposit insurance, which is in effect a government guarantee of their debts. Most notably, banks with government-guaranteed deposits weren't allowed to engage in the often risky speculation characteristic of investment banks like Lehman Brothers.

This system gave us half a century of relative financial stability. Eventually, however, the lessons of history were forgotten. New forms of banking without government guarantees proliferated, while both conventional and newfangled banks were allowed to take on ever-greater risks. Sure enough, we eventually suffered the 21st-century version of a Gilded Age banking panic, with terrible consequences.

It's clear, then, that we need to restore the sorts of safeguards that gave us a couple of generations without major banking panics. It's clear, that is, to everyone except bankers and the politicians they bankroll -- for now that they have been bailed out, the bankers would of course like to go back to business as usual. Did I mention that Wall Street is giving vast sums to Mitt Romney, who has promised to repeal recent financial reforms?

Enter Mr. Dimon. JPMorgan, to its -- and his -- credit, managed to avoid many of the bad investments that brought other banks to their knees. This apparent demonstration of prudence has made Mr. Dimon the point man in Wall Street's fight to delay, water down and/or repeal financial reform. He has been particularly vocal in his opposition to the so-called Volcker Rule, which would prevent banks with government-guaranteed deposits from engaging in "proprietary trading," basically speculating with depositors' money. Just trust us, the JPMorgan chief has in effect been saying; everything's under control.

Apparently not.

"The key point," says our Paul, "is not that the bet went bad; it is that institutions playing a key role in the financial system have no business making such bets, least of all when those institutions are backed by taxpayer guarantees."

Fair enough. But maybe we wouldn't be in this mess if everybody had had the sense to pay no attention when Jamie D was mouthing off about the evils of gummint regulation.

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cashing Chase check at Chase bank
An Auburn man tries to cash a check at his own bank and winds up in jail. Yet, the KING 5 Investigators have learned the check in question was issued by the very bank that claimed it was a forgery.

by Ken

If you haven't watched the clip, here's the basic story:

Chase Gets Man Thrown In Jail For Fraudulent Check. Except The Check Is Legit.


By Ben Popken on July 7, 2011 10:00 AM

Ikenna, a 28-year old construction worker, went to deposit a $8,463.21 Chase cashier's check at his local Chase branch, only for the teller to decide that neither he nor his check looked right and he got tossed in jail for forgery, KING5 reports. The next day, a Friday the bank realized its mistake and left a message with the detective. But it was her day off, so he spent the entire weekend in jail.

By the time he got out, he had been fired from his job for not showing up to work. His car had been towed as well. It ended up getting sold off at auction because he couldn't afford to get it out of the pound. He had been relying on that cashier's check for his money but it was taken as evidence and by the time he got it back it was auctioned off.

All this while the cashier's check had been issued by the very bank he was trying to cash it at.

Chase didn't even apologize, not even after a year. A lawyer volunteered to help write a strongly-worded letter requesting damages. After trying hard to get a response, they sent KING 5 a two-sentence reply: "We received the letter and are reviewing the situation. We'll be reaching out to the customer."

A number of comments on the KING5.com webpage

If your bankster is putting the screws to you, don't assume there's nothing you can do

So you've found Superman's Fortress of Solitude, and think you're hot stuff, eh? Piece of cake! Now try finding the people at your credit-card issuer who can help you work out a reasonable payment arrangement! Not so cocky now, eh?

by Ken

THE LONG AND THE SHORT OF IT,
WITH EMPHASIS ON THE "SHORT"

If you've got a problem with your credit-card payments, you've probably heard that you should talk to your credit-card issuer to see if some relief can be worked out, and you've very likely tried that, and even had yourself bounced up to the magical "supervisor" level, only to be told, "Sorry, you're screwed." It's even possible to get this as an official reply, as the media people who've interviewed my friend Peter did when they contacted JP Morgan Chase for comment on his story. Sorry, nothing more we can do, except maybe by jacking his interest rate up from 4 to 19 percent.

However, if you're a Chase cardholder -- and very likely the same thing applies to holders of other credit cards, but we're talking specifically about Chase for the moment -- you may encounter a "supervisor" who will tell you, if you're persistent and/or lucky enough, or perhaps if you hit the correct level of sunspot activity (revealing, or not revealing, this information is apparently totally at the discretion of the "supervisor"), that there is another option.

Chase has a unit apparently more closely guarded than Superman's Fortress of Solitude, called Chase Proactive Solutions, which is known to be reachable, or at any rate has been known to be reachable (it could be this is one of those deals where they change the numbers every week, and you've gotta know a guy who knows a guy to get the new one) at the following numbers:

1-800-404-6220
1-877-890-2941

And remember, you didn't hear this from us. We don't know nuttin'. In all likelikhood, you don't remember where you got da numbers. Probly it was from, uh, Louie. Yeah, that's it, Louie toldja.

When we last heard from my friend Peter, he and his wife Gail were fighting for their lives trying to push back againt their credit-card company, JP Morgan Chase, which had suddenly and unilaterally decided to raise the monthly minimum payment on their three Chase credit cards by some two and a half times.

There was a lot of debt, but they were handling it, if just barely. And the debt hadn't come from binge-spending. It had come as part of the price of getting their son Justin through college. IN fact, the debt had been accumulated in what strikes me as actually rather prudent fashion, given the urgency of the need (you get only one shot at your kid's education -- do you skimp on it?) and the care with which the money had been parked at the exceedingly modest interest rates (Gail is pretty finnicky about such matters) that the banksters were begging us, their good customers, to take advantage of.

Hey, remember, it was their idea to offer those rates for the life of the loan! And now with all the defaults they're experiencing on credit-card debt, and with new regulations on how they can hassle customers scheduled to take effect, well, sometime in the future (how nice it was for them that they were given this handy grace period to get the dirty work out of the way!), they've had the bright idea of putting the screws even to customers who show no signs of defaulting.

Peter and Gail never missed a payment, and were paying in fact somewhat above the minimum. Until Chase announced that it was going to more than double the minimum payments, presumably with a view to either getting its money back quicker or driving them into default, where there would be other ways for the bank to make money, like renegotiating the loans at five times the interest rate.

Peter has been trying to make it clear that while of course he's fighting for himself and his family, he's also fighting for some principles here -- starting with the principle that they can't just do that, can they? From a legal standpoint, it's not clear whether they can or they can't; there are arguments both ways. From a practical standpoint, I guess they can do whatever they can get away with doing.

As I mentioned in my first piece on the subject, I have a personal stake here. Peter and Gail are two of my oldest friends. The day Justin was born, while Gail was doing the heavy lifting, I was with Peter. I've watched Justin grow up. In my admittedly biased opinion he's a remarkable kid. At the moment he's interested in brain research, and I expect him to do valuable work.

Tara Lynn Wagner, a reporter for our local cable news channel NY1, has done an update to her previous report. (The video clip is there along with a transcript, but the clip isn't embeddable.) Picking up the story more or less where I've left off:

Searching the Internet for answers, Meyer found whole blogs filled with posts from thousands of other Chase cardholders with similar circumstances. He read about and contacted the company's hardship division, which offered to lower his minimum payment but raise his interest rate from 4 percent to 19 percent.

Eventually, he came across two phone numbers that he says put him in touch with Chase Proactive Solutions. Within 20 minutes, the operator lowered his minimum payments and his interest rate and lifted a massive weight off his shoulders.

A spokesperson for Chase Card Services confirmed the existence of Chase Proactive Solutions, describing it as a specific unit designed to help customers who are experiencing financial hardship and "require a deeper discussion to identify the most appropriate solution."

In an email to NY1, the spokesperson again stated "We advise our customers who may need this consideration to contact Chase using the phone number on the back of their card to ensure their call receives the proper response."

However, Meyer maintains he was never told about this unit in any of his previous phone calls.

"Trust me, they don't give you anything. It's like trying to find the correct door in order to get in," he says.

Chase refused to verify the phone numbers Meyer used are the direct lines to this specific unit, but when NY1 called and asked if Chase Proactive Solutions had been reached, the operators confirmed it.

The numbers are 1-800-404-6220 and 1-877-890-2941.

They may not offer the same solution for everyone, but Meyer feels everyone should at least be able to find the same door.

And remember, if anyone asks where you got the numbers, Louie toldja.


UPDATE: AND WHAT ABOUT THE

INSURANCE COMPANY CROOKS?

A friend asked this question this morning-- "If someone dies because an insurance company knowingly breaks a contract in bad faith for their treatment, why isn't this considered manslaughter?" We've talked about health insurance rescission policies before and we saw how even a lock-step corporate shill for the Insurance CEOs like Texas Republican Joe Barton was repulsed by these savages. So why no special CEO fire squads? Or at least prison terms? -- Howie

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Updating my report on my friend Peter's descent into Chase's version of Bankster Hell

by Ken

My friends Peter and Gail, you may recall, received a post card from Chase notifying them that the minimum payment on their credit card balances, which they locked in at low promotional rates as part of their way of getting their son through college, from 2 to 5 percent.

Yesterday WNBC-TV reporter Lynda Baquero also interviewed Peter, and her report includes this piece of information, bits of which may already be unfortunately known to you:

Turns out, he's not alone. According to Credit.com, 19% of credit card holders have seen their interest rates go up in the last couple of months. About 14% have had their credit limits lowered, and 12% have been told their minimum payments are rising.

John Ulzheimer, of Credit.com, says for one thing: credit card issuers are "hemorrhaging money" and feel the need to bring in more cash. But these changes are also in advance of the Credit Cardholders Bill of Rights, which will restrict future policy changes by credit card issuers. That law won't take effect though, until February 2010

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UPDATE: Howie Gets Pissed Off At Ken's Report On Our Friend Peter's Descent Into Chase's Version Of Bankster Hell-- And Suggests A Solution Society Should Consider

You know all those hundreds of billions of dollars of ours that Bush and then Obama decided to give the failed banksters-- who finance both political parties-- that they then went and used in every way, including bonuses for themselves, except how it was meant (loosening consumer and business credit)? I'm sure you do. And in that case, it wouldn't have surprised you to have read in today's Washington Post that they are also skirting the law by raising interest rates and fees 7 months before the new regulations they fought go into effect.

Chase, for instance, will raise the minimum payment required of some of its customers from 2 percent to 5 percent of the statement balance starting in August. Chase and Discover have increased the maximum fee charged for transferring a balance to the card to 5 percent of the amount, up from 3 and 4 percent, respectively. Bank of America last month raised the transaction fee for balance transfers and cash advances from 3 to 4 percent. Card issuers including Bank of America and Citi also continue to cut limits and hike up rates, which they have been doing with more frequency since January.

I just finished reading Dave Neiwert's incredible new book The Eliminationists, which talks about how so very American it has been to talk about-- and act upon-- eliminating American Indians, African-Americans, Jewish-Americans, gay and lesbian Americans, liberal-Americanss, communist-Americans, Hispanic-Americans, Chinese-Americans, Japanese-Americans... How come it would sound so very, very un-American to talk about eliminating bankster-Americans?

The flurry of activity, which the banks say is necessary to shore up their revenue losses, has irked members of Congress, who passed a new credit card law, which was signed by President Obama in May. The law, among other things, would prevent card companies from raising rates on existing balances unless the borrower was at least 60 days late and would require the original rate to be restored if payments are received on time for six months. The law would also require banks to get customers' permission before allowing them to go over their limits, for which they would have to pay a fee.

Yesterday, Sen. Charles E. Schumer (D-N.Y.) once again requested that the Federal Reserve invoke its emergency powers to place a limit on interest rate hikes.

"This is what many of us feared about a law that didn't take effect right away," Schumer said. "It was never going to take this long for the credit card companies to get ready for the new reforms. Instead, issuers are using the delay in the effective date to wring more dollars out of their customers. It is against the spirit of the law, and it is just plain wrong."

21st-Century Banking, I: A U.S. banking behemoth dusts itself off from the fine mess it got itself into and forges on into the, er, 21st-ish century

This would be the famous bankers, um, Mr. Morgan
at left and Mr. Chase at right?

by Ken

For decades now my friend Terry has had all sorts of accounts in a bank that has evolved into, at last check, J. P. Morgan Chase Laurel and Hardy -- if I recall correctly, Morgan is the hapless skinny one and Chase the chubby one who's always saying, "Here's another fine mess you've gotten us into."

Now, by "all sorts of accounts" I mean business as well as personal ones. Other family members of hers have had accounts there too. So you'd figure, boy, when they see her coming, they roll out the red carpet. That, after all, is the personal banking relationship that's at the heart of our banking system.

Oh wait, I think I'm thinking of some other banking system. LIke the one former New York Knicks forward and U.S. Sen. Bill Bradley has talked and written about, remembering growing up in Crystal City, Missouri, where his father ran a bank and considered it a basic part of his job to know all his customers, and thereby be in a position to evaluate their creditworthiness when it came to making decisions about loans. It wasn't just his reputation on the line when he approved a loan, it was the bank's money -- and at the same time it was important to approve the loans that represented good risks, since that after all is how the bank made money.

In point of fact, for years now all Terry has gotten when she walks into her branch of whatever the damned bank happens to be called at that moment is indifference, ignorance, rotten advice, and fiscal mayhem. She seems to spend most of her banking time trying to figure out how exactly the bank folk have screwed things up now, in order to try to explain it to them.

She realizes, of course, that the people she deals with at the bank know next to nothing about their business, the idea of "training" apparently having been abandoned as cost-ineffective around the time men walked on the moon. What's more, their fancy high-tech phones don't seem to connect them to anyone who knows any more about the business.

You'll be glad to learn, however, that JPMCLH has gotten the message of the economic meltdown, and is poised to come roaring back from the punishment it has recently absorbed. I think even that mean Barney Frank will be impressed, and will agree that somebody's earned a whopping bonus when he hears about JPMCLH's latest banking innovation.

Last week, Terry reports, she went into JPMCLH with her usual modest hope of fighting her way through to some minor but necessary banking accomplishment and found all the boys and girls there filled with a new spirit. Not to do banking business, exactly, or at any rate not as such. No, they were all eager to establish their new relationship with the people who came in the bank, who might once have been called "customers" or "clients" (or "patsies"?). One and all, they stressed to her that she was a guest of the bank.

The folks at JPMCLH may not have seen the housing bubble, or seen the meltdown that might ensue when it burst, but you can't say they don't have a firm grasp now on the basics of their business. Yessiree, now that they have all those guests coming in their buildings, presumably they can look forward to all of them bringing bottles of wine, or boxes with cake, or maybe candy and flowers.

Another fine mess, or just the same old one?

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