Global Economic Intersection
Advertisement
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

JP Morgan: 13 is an Unlucky Number

admin by admin
October 20, 2013
in Uncategorized
0
0
SHARES
16
VIEWS
Share on FacebookShare on Twitter

Updated:  3:35 AM EDT 23 October 2013

Econintersect:  Reuters reported Saturday evening (19 October 2013) that a source has informed them the U.S. Justice Department has reached a tentative agreement with JP Morgan Chase (NYSE:JPM) for a fine to settle complaints resulting from a government investigation of bad mortgages the bank sold to investors in 2008 and prior years.  Recently the figure of $11 billion had been rumored as a possible settlement, although initially it was mentioned that the government had floated the idea of $20 billion.  The latest report from Reuters says the number agreed to is $13 billion.

banker-ball-and-chain-260x190

According to Reuters no one at JP Morgan or the DoJ would agree to make a comment.

One significant aspect of the deal: It is reported that the settlement does not release JP Morgan or any individuals from potential criminal prosecution related to the mortgages, their securitization or sales to investors.

The Reuters source indicates that JP Morgan will agree to cooperate with investigations into the possible criminal activities of individuals in the bank’s activities related to mortgages.

It is reported that the criminal liablity had been a major sticking point in the negotiations.

Reuters mentions a second source:

Another source close to the discussions characterized a deal as likely, but cautioned that parts of the agreement are still being hammered out, and the settlement could conceivably fall apart.

One of the items still in negotiation is a statement of facts, according to Reuters.

The negotiations are complicated because some of the alleged fraud was inherited by JP Morgan when they took over Bear Stearns and Washington Mutual in 2008.

Another complication is that other agencies may (or may not) be involved in the settlement, including the Federal Housing Finance Agency, the National Credit Union Administration, the state of New York and others who have similar lawsuits against JP Morgan. Reuters had reported Friday that a deal with the FHFA for $4 billion was in the works. This may now be part of the $13 billion.

An article in The Washington Post said:

The stakes are high for both sides. Pulling off a record settlement would be a significant accomplishment for Holder. The Justice Department has levied multimillion-dollar fines against big banks, including HSBC and Barclays, but to lawmakers and consumer advocates, those penalties are tantamount to a slap on the wrist.

Thomas Gorman, a securities lawyer at Dorsey & Whitney, was quoted in the WaPo:

“Resolving the mortgage cases for $13 billion is a major win for the DOJ, particularly since the deal only applies to the civil case. It also brings to account a major Wall Street player for the market crisis, something enforcement officials and the public have been looking for.”

Several others have provided comments to Econintersect.

William K. Black, University of Missouri Kansas City:

[T]he Department of Justice (DOJ) and Holder are stalwarts who have demonstrated their toughness and JPMorgan is a model corporate citizen.

After that bit of sarcasm Black added:

WaMu was one of the world’s largest criminal enterprises specializing in making fraudulent liar’s loans and then selling the fraudulent loans to the secondary market through fraudulent “reps and warranties.”  These frauds destroyed WaMu.

And he concluded with:

The hidden story remains the dearth of criminal referrals from the regulatory agencies and the resultant lack of expertise in the FBI/AUSAs about the relevant industries.

Note: Black will be posting a full discussion of this affair and GEI will share that with readers, either as a full repost or as an item on the daily list “What We Read Today“.

Yves Smith, Naked Capitalism:

The problem is this is a settlement that appears to have not been adequately investigated, save for the FHFA’s putback charges, the biggest single item ($4 billion out of the $13 billion). Forget the $4 billion in borrower relief; the other mortgage settlements show those to be close to worthless. So absent serious investigations, it’s hard to say definitely the settlement is inadequate. But the odds massively favor that.

Yves has posted a full discussion of the situation at Naked Capitalism.

Steve Keen, economics professor, Australia:

[The reported settlement is] insufficient.  It’s only half a year’s profit for the firm. They should lose at least a year’s, or more.  And the incomes of people at the top should suffer more than the firm’s–a two year or more loss of personal income should occur.

Keen added:

The Savings and Loans crisis, which was far smaller, resulted in hundreds of criminal prosecutions. The Subprime should have as well–simply for fraud if for nothing else since NINJA loans alone were clearly fraudulent in design. Bill Black should be consulted on this.

Joseph M. Firestone, Ph.D., Managing Director and CEO of Knowledge Management Consortium International:

This settlement is another slap on the wrist. What the Government should have tried to cover is the face value of losses suffered by the victims of the fraud as well as punitive damages. The value of the losses suffered was in the trillions of dollars. Looked at from this point of view the size of this settlement is insulting, and another case illustrating that two systems of law exist in power: one for the wealthy and powerful; another for the rest of us.

Larry Doyle, DM Income Advisors LLC:

Transparency remains the great disinfectant. Fines are little more than blankets that obscure meaningful justice from being dispensed and misdirect that justice from those who engaged in and profited from the activities in question.  The costs of not properly dispensing justice are an ongoing degradation in the rule of law and an erosion of trust and confidence in free market capitalism.  We need a full accounting of all that transpired if we hope to advance as a nation.

Other comments will be added to this article as they are received.

Update 3:35 AM EDT 23 October 2013:

Late comments were received from two more analysts.  They were too long to fit at the end of this article and were each published on GEI Opinion as Op Eds:

  • Comment on the Historic JP Morgan Settlement by Elliott Morss
  • Thoughts About the JP Morgan Case by Marshall Auerback

Two other discussions worth reading are by Peter Eavis and Ben Protess and Felix Salmon.

And one of the best tweets came from Josh Brown:

JP-Morgan-tweet-Josh-Brown

John Lounsbury

Sources:

  • JPMorgan in tentative $13 billion deal with U.S. Justice Department: source (Aruna Viswanatha, Reuters, 19 October 2013)
  • JPMorgan in $4 billion deal with U.S. housing agency (Aruna Viswanatha and David Henry, Reuters, 18 October 2013)
  • JPMorgan agrees to tentative $13 billion settlement with U.S. over bad mortgages ( Sari Horwitz and Danielle Douglas, The Washington Post, 19 October 2013)
  • So How Big a Deal is the Pending “$13 Billion” JP Morgan Settlement?
    (Yves Smith, Naked Capitalsim)
    Previous Post

    What We Read Today 20 October 2013

    Next Post

    Infographic of the Day: The Myth of the Successful Money Manager

    Related Posts

    Hong Kong Securities Watchdog Hires Crypto Personnel For Sector Supervision
    Business

    Hong Kong Securities Watchdog Hires Crypto Personnel For Sector Supervision

    by John Wanguba
    February 6, 2023
    Hindenburg Bet Against India's Adani Baffled Rival U.S. Short Sellers
    Business

    Hindenburg Bet Against India’s Adani Baffled Rival U.S. Short Sellers

    by John Wanguba
    February 6, 2023
    Volvo Prepares EV Blitz In Biggest Product Revamp Under Geely
    Business

    Volvo Prepares EV Blitz In Biggest Product Revamp Under Geely

    by John Wanguba
    February 6, 2023
    Luxury Rehab Center Comes Up Offering ‘Crypto Addiction’ Therapy
    Business

    Luxury Rehab Center Comes Up Offering ‘Crypto Addiction’ Therapy

    by John Wanguba
    February 6, 2023
    Alphabet Disappointed On Sales As Ad Revenue Plunged After Pandemic Run-Up
    Business

    Alphabet Disappointed On Sales As Ad Revenue Plunged After Pandemic Run-Up

    by John Wanguba
    February 6, 2023
    Next Post

    Infographic of the Day: The Myth of the Successful Money Manager

    Leave a Reply Cancel reply

    Your email address will not be published. Required fields are marked *

    Browse by Category

    • Business
    • Econ Intersect News
    • Economics
    • Finance
    • Politics
    • Uncategorized

    Browse by Tags

    adoption altcoins banking banks Binance Bitcoin Bitcoin adoption Bitcoin market Bitcoin mining blockchain BTC business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe finance FTX inflation investment market analysis markets Metaverse mining NFT nonfungible tokens oil market price analysis recession regulation Russia technology Tesla the UK the US Twitter

    Archives

    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • March 2020
    • February 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    • December 2016
    • November 2016
    • October 2016
    • September 2016
    • August 2016
    • July 2016
    • June 2016
    • May 2016
    • April 2016
    • March 2016
    • February 2016
    • January 2016
    • December 2015
    • November 2015
    • October 2015
    • September 2015
    • August 2015
    • July 2015
    • June 2015
    • May 2015
    • April 2015
    • March 2015
    • February 2015
    • January 2015
    • December 2014
    • November 2014
    • October 2014
    • September 2014
    • August 2014
    • July 2014
    • June 2014
    • May 2014
    • April 2014
    • March 2014
    • February 2014
    • January 2014
    • December 2013
    • November 2013
    • October 2013
    • September 2013
    • August 2013
    • July 2013
    • June 2013
    • May 2013
    • April 2013
    • March 2013
    • February 2013
    • January 2013
    • December 2012
    • November 2012
    • October 2012
    • September 2012
    • August 2012
    • July 2012
    • June 2012
    • May 2012
    • April 2012
    • March 2012
    • February 2012
    • January 2012
    • December 2011
    • November 2011
    • October 2011
    • September 2011
    • August 2011
    • July 2011
    • June 2011
    • May 2011
    • April 2011
    • March 2011
    • February 2011
    • January 2011
    • December 2010
    • August 2010
    • August 2009

    Categories

    • Business
    • Econ Intersect News
    • Economics
    • Finance
    • Politics
    • Uncategorized
    Global Economic Intersection

    After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

    Categories

    • Business
    • Econ Intersect News
    • Economics
    • Finance
    • Politics
    • Uncategorized

    Recent Posts

    • Hong Kong Securities Watchdog Hires Crypto Personnel For Sector Supervision
    • Hindenburg Bet Against India’s Adani Baffled Rival U.S. Short Sellers
    • Volvo Prepares EV Blitz In Biggest Product Revamp Under Geely

    © Copyright 2021 EconIntersect - Economic news, analysis and opinion.

    No Result
    View All Result
    • Home
    • Contact Us
    • Bitcoin Robot
      • Bitcoin Profit
      • Bitcoin Code
      • Quantum AI
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitIQ
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Era
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • British Bitcoin Profit
      • Bitcoin Trader
    • Bitcoin Reddit

    © Copyright 2021 EconIntersect - Economic news, analysis and opinion.

    en English
    ar Arabicbg Bulgarianda Danishnl Dutchen Englishfi Finnishfr Frenchde Germanel Greekit Italianja Japaneselv Latvianno Norwegianpl Polishpt Portuguesero Romanianes Spanishsv Swedish