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Posts tagged ‘J.P. Morgan’

Money laundering: JP Morgan in the frame for Venezuelan drugs link

From the Slog  larest article :

Those slightly dense British politicians convinced that American attacks on our banks involved in drug-money laundering were motivated by envy may be in for a few jolts in the next few weeks, I hear. The first of these comes in the shape of US regulators being on the verge of filing such charges against that most un-British of banks (save for the presence of Tony Blair) JP Morgan.

While the extent of the inquiry taking place into JPM is for the moment vague, I’m told the liabilities could be gigantic. Morgan has already gone public to say it expects ‘heightened scrutiny’ of its compliance with laundry regulations. But I understad that, in turn, the Office of the Comptroller of the………………………..

full article at source:  http://hat4uk.wordpress.com/2012/09/15/money-laundering-jp-morgan-in-the-frame-for-venezuelan-drugs-link/

Keiser Report: Where Money Goes To Die

In this episode, Max Keiser and co-host Stacy Herbert discuss the Irish government being so terribly ‘embarrassed’ that they hired two dirty bankers to ‘clean up’ their financial system, all the while reminding David Cameron over in ‘Grim Britain’ of the ‘dreadful backgrounds’ of Bob Diamond, Jamie Dimon and their ilk. In the second half of the show, Max talks to Wolf Richter of the Testosteronepit.com about the wine bubbles and where money goes to die

U.S. Bond Market, The Greatest Hoax Ever Perpetrated on Mankind

By: Rob_Kirby

A few years ago, when J.P. Morgan grew their derivatives  book by 12  Trillion in one quarter[Q3/07] – I did some  back of the napkin math – and figured out how many 5 and 10 year bonds the  Morgue would have necessarily had to transact on their swaps alone – if they  are hedged.  The bonds required to hedge the growth in Morgan’s Swap book were 1.4 billion more in one day than what was mathematically available to the entire domestic bond market for a whole quarter?

Put simply, interest  rate swaps create more settlement demand for bonds than the U.S. issues.

This is why U.S.  bonds “appear” to be “scarce” – which the bought-and-paid-for mainstream  financial press explains to us is “a flight to quality”.  Better stated, it’s a “FORCED FLIGHT [or  sleight, perhaps?] TO FRAUD”.

Assertions that netting “explains” this incongruity are a NON-STARTER.   Netting generally occurs at day’s end – the math simply does not even  work intra-day.

Further  Evidence of Gross Malfeasance in the U.S. Bond Market

Back in 2008, at the height of the financial  crisis, folks are reminded how the Fed and U.S. Treasury were unsuccessful in  finding a financial institution to either acquire or merge with Morgan Stanley.  Unfortunately, Morgan Stanley’s financial  condition has continued to deteriorate:

Analysis: How Morgan Stanley sank to junk pricing

REUTERS | June 1, 2012 at 5:45 pm |

(Reuters) – The bond markets are treating Morgan Stanley like a  junk-rated company, and the investment bank’s higher borrowing costs could  already be putting it at a disadvantage even before an expected ratings  downgrade this month.

Bond rating agency Moody’s Investors Service has said it may cut  Morgan Stanley by at least two notches in June, to just two or three steps  above junk status. Many investors see such a cut as all but certain

full article at source: http://www.marketoracle.co.uk/Article35164.html

Could JP Morgan be sued by Stockholders for Creative Mortgage Putback Accounting?

English: CEO of JP Morgan

English: CEO of JP Morgan (Photo credit: Wikipedia)

I was on Max Keiser’s show yesterday talking about JP Morgan’s triple-digit billion mortgage repurchase litigation problem that they refuse to accurately reflect on their financial statements. A problem that is now compounded by the fact their regulator, the SEC, has told them they want to sue Jamie Dimon’s bank for securities violations or bring an enforcement action against them, which could validate some of the RMBS fraud claims in the eyes of New York judges overseeing the $120 billion in litigation. What I didn’t realize was how much of a blatant accounting cover up this mortgage repurchase issue is –one that some analysts think could led to a massive accounting fraud suit against JP Morgan and their auditor PricewatershouseCoopers.

In a May 18th newsletter by Robert Christensen a senior advisor to Chicago-based financial forensics Natoma Partners he writes, “What I have found is that the reserves required for repurchase of loans that did not meet the reps & warranties have been consistently and massively underestimated

full article at source: http://www.teribuhl.com/

what is a credit default swap ?and why we should be trembling right now!

Allow me to teach you what a credit default swap is and why it’s so important to what is happening to the economy today.

Virgle Kent borrows $50 from me. I want to get insurance on his debt in case he goes broke. I go to Roissy and say, “Hey, Virgle Kent owes me $50. Can you insure that debt?”

“I’ll insure it if you pay me $4 a year,” Roissy says.

“Done!”

Roissy is betting that VK will pay me back, especially since he did his homework by looking at VK’s credit rating and saw it was superb. Roissy wrote me a credit default swap, an unregulated derivative invented in 1995 by JP Morgan.

Unfortunately Roissy has some problems with his business, and he no longer even has $50 to pay me in case VK goes broke. The premiums I gave him are long gone. Credit agencies notice this and tell Roissy to find some cash or his credit rating goes down. Roissy is fucked because if his credit rating goes down then he won’t be able to raise cash at good rates to keep his business open (today’s large businesses need a constant flow of credit to maintain operations). Sure enough his rating gets killed and Roissy goes bankrupt.

Now I’m in trouble. The debt I had on my books that was insured is now uninsured. The agencies look at my books and see I have this exposed debt and they downgrade my ass. I have no choice but to enter bankruptcy as well. But I happened to be knee deep in the CDS game too. I wrote a ton of them for Arjewtino, insuring the debt owed to him by other parties. When I go down it puts pressure on him. Like dominoes we fall.

In the carnage it turned out that the ratings we used to judge each other’s debt worthiness was bogus from the start. Essentially we all gambled like we would at a blackjack table, but we did it while drunk. And blind.

The insurance company AIG wrote $78 billion worth of swaps.

Ivy League MBA’s turned the CDS into an even more insidious device. In ways that I will not begin to understand, swaps were used not just to insure against debt but to speculate if companies would fail or not. It turned out that while VK only owed me $50, there were swaps written worth $500 between parties that VK didn’t even know about! The swaps became a means to make money instead of a simple insurance policy. This was enabled by a government run by politicians whose treasure chests were stocked full of kind donations from the big bankers. They did not hesitate to look the other way.

A lot of swaps were written by banks and businesses that are now very sick from making bad bets and possibly outright fraud in the housing boom. (Who would have thought that giving no money down / no-doc loans was a bad idea?)

Here’s the bad news:

…there are $45 trillion of credit default swaps out there. A default on a mere 10% would cause an economic disaster. Unfortunately, it’s guaranteed to happen.

Actually that was the good news. Here’s the real bad news:

The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars. How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want.

The quote up top was said by Henry Paulson

 

ANGLO Irish Bank could be wound up in three or four years

By Laura Noonan

Monday August 29 2011

ANGLO Irish Bank‘s management believe the nationalised lender could be wound
up in as little as three or four years, the Irish Independent has learnt.

The news comes days after its chief executive, Mike Aynsley, revealed that up
to €4bn in capital could be handed back to the State when Anglo pulls the
shutters down for the final time.

The collapsed lender is due to be wound down over a 10-year period, but
management now believe that the final phase of Anglo’s life could be
significantly shorter.

Successful bidders have been identified for
Anglo’s $9.5bn (€6.5bn) US loan book and newswire Bloomberg reports that Wells Fargo, JP Morgan and Lone Star Funds will buy the loans for
80pc of their face value by the end
of October.

That will leave Anglo with just €16bn of its own loans, plus about €2bn of
loans from Irish Nationwide, meaning the bank is no longer “systemically
important”.

source:http://www.independent.ie/business/irish/anglo-could-be-wound-up-within-three-or-four-years-2860185.html

Comment :

What the people of Ireland want to know is how soon we can
expect to see the gangsters who destroyed our country be brought to trial. Why
are we still employing over 1000 people at the ridiculous salaries they were
getting in the so called boom years. Why are we still paying pensions to the
same directors and top managers who are refusing to help the Gardai with their
enquires??

Big Banks Will Pay for Optimism Driven Reduction of Reserves

By Reggie Middleton

from www.Boombustblog.com

As those that follow me know, I have been bearish on US banks since 2007. That bearish outlook resulted in massive returns ensuing years, just to have nearly half of it returned due to rampant shenanigans and outright fraud. Needless to say, it pissed me off – but it did much more than that. It created a re-bubble before the bubble that was bursting had a chance to fully deflate. As a result, what we have now is one big mess that is getting messier by the minute.

On Friday, July 16th, 2010 I posted “After a Careful Review of JP Morgan’s Earnings Release, I Must Ask – “What the Hell Are Those Boys Over at JP Morgan Thinking????”. The impetus of such was that this bank that all seem to be in awe of was taking a big risk in order to pad accounting earnings for a quarter or two. Below is an excerpt of my thoughts:

Trust me, the collateral behind many more mortgages will continue to depreciate materially as government giveaways and bubble blowing for housing fade!

The delinquency and NPA levels drifted down a bit, but they are still at very high levels. Charge-offs came down but the reduction in provisions has been quite disproportionate bringing down the allowance for loan losses. In 2Q10, the gross charge- offs declined 26.6% (q-o-q) to $6.2 billion (annualized charge off rate – 3.55%) from $8.4 billion in 1Q10 (annualized charge off rate – 4.74%). But the provisions for loan losses were slashed down 51.7% (q-o-q) to $3.4 billion (annualized rate – 1.9%) against $7.0 billion (annualized rate – 3.9%) in 1Q10. Consequently, the allowance for loan losses declined 6.2% (q-o-q) from $35.8 billion from $38.2 billion in 1Q10. Non performing loans and NPAs declined 5.1% (q-o-q) and 4.5% (q-o-q) respectively. Thus, the NPLs and NPAs as % of allowance for loan losses expanded to 45.1% and 50.7%, respectively from 44.6% and 49.8% in 1Q10. Delinquency rates, although moderated a bit, are still at high levels. Credit card – 30+ day delinquency rate was 4.96% and the real estate – 30+ day delinquency rate was 6.88%. The 30+ days delinquency rate for WaMu’s credit impaired portfolio was 27.91%.

read this great article at source: http://boombustblog.com/BoomBustBlog/As-Earnings-Season-is-Here-I-Reiterate-My-Warning-That-Big-Banks-Will-Pay-for-Optimism-Driven-Reduction-of-Reserves.html

comment:

Again  a great article from Reggie!

It would be no harm if you are in the markets to take out
some insurance as I myself have done over the last month so I am not that
worried where the market goes from here as I win each way  and the news at the moment is there is likely
to be lots of volatility in the coming weeks.

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