The Truth About JP Morgan’s $2 Billion Loss

Global Research via
Washingon's Blog

Chase's blue swastika

Before we can understand what’s really going on with JP Morgan’s loss (which will probably end up being a lot more than $2 billion), we need a little background.

JP Morgan:

Is the world’s largest publicly-traded company
Is the largest bank in the U.S. ... the biggest of the too big to fail banks which are killing the American economy
Is the largest derivatives dealer in the world (and see this), and derivatives are inherently destabilizing for the economy
Essentially wrote the faux “reform” legislation for derivatives, which did nothing to decrease risk, and killed any chance of real reform
Is the creator of credit default swaps – which caused the 2008 financial crisis, and is the asset class which blew up and caused the loss
Has had large potential exposures to credit default swap losses for years
Has replaced the chief investment officer who made the risky bets with a trader who worked at Long Term Capital Management ... which committed suicide by making risky bets
Went completely insolvent in the 1980s
... and again in 2007  ( and was saved both times by the government at taxpayer expense)
Heads – with Goldman Sachs – the Treasury Borrowing Advisory Committee, which helps set government financial policy
Has a reputation of being the most risk-averse of the big Wall Street players
Was kept alive by a huge government bailout ... but used the money to invest in India and other projects which won’t really help Americans
Has made a killing by kicking companies (and see this) and governments (and here) when they are down, engaging in various types of fraud (update), allegedly manipulating the silver market, and profiting on misery by acting as the largest processor of food stamps in America
In addition, JPM’s CEO Jamie Dimon:

Is a Class A Director of the Federal Reserve Bank of New York, which is the chief bank regulator for Wall Street (including JPM).  Indeed, Dimon served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and was used by the Fed as a clearing bank for the Fed’s emergency lending programs. In 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns.  At the time, Dimon persuaded the Fed to provide JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. He also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank
Has a reputation of being the “golden boy” and smartest guy on Wall Street
Has been the chief spokesman and advocate for deregulation of banks, and has lectured, scolded and cajoled everyone who has questioned his banking practices
Jokes about a new financial crisis happening “every five to seven years”
What Does It Mean?
Pundits and consumers alike are reacting to JP Morgan’s loss like a startled herd of sheep.

Elizabeth Warren Sells Out To AIPAC Already

MJ Rosenberg

Anyone who doubts the iron grip AIPAC has on US politicians should check out Democratic Senate candidate Elizabeth Warren’s position on Israel. It sounds just like every other Senate candidate’s (probably because it almost surely was written by an AIPAC staffer). 

Israel
Since its founding more than 60 years ago, Israel and the United States have been steadfast, trusted, and reliable allies. I unequivocally support the right of a Jewish, democratic state of Israel to exist, safe and secure. I believe that it is a moral imperative to support and defend its existence.

For generations, the United States and Israel have shared a commitment to a stable, secure, and peaceful Middle East. But our alliance runs far deeper: it is a natural partnership resting on our mutual commitment to democracy and freedom and on our shared values. Both our countries have been sustained by our commitment to liberty, pluralism, and the rule of law. These values transcend time, and they are the basis of our unbreakable bond.
As a United States Senator, I will work to ensure Israel’s security and success.  I believe Israel must maintain a qualitative military edge and defensible borders. The United States must continue to ensure that Israel can defend itself from terrorist organizations and hostile states, including Iran, Hamas, Hezbollah, and others. I also believe firmly that a two-state solution is in the interest of Israel and the United States. Lasting peace, however, requires negotiations between the parties themselves, and although the United States can and should aid in this process, we cannot dictate the terms. Unilateral actions, such as the Palestinians’ membership efforts before the United Nations, are unhelpful, and I would support vetoing a membership application.

Same garbage. Not an iota of difference between this and anything AIPAC or the Israeli Ministry of Foreign Affairs puts out.

And then there is Iran:

Iran

Iran is a significant threat to the United States and our allies.  Iran is pursuing nuclear weapons, it is an active state sponsor of terrorism, and its leaders have consistently challenged Israel’s right to exist. Iran’s pursuit of nuclear weapons is unacceptable because a nuclear Iran would be a threat to the United States, our allies, the region, and the world. The United States must take the necessary steps to prevent Iran from acquiring a nuclear weapon. I support strong sanctions against Iran and believe that the United States must also continue to take a leadership role in pushing other countries to implement strong sanctions as well. Iran must not have an escape hatch.

No need for elaboration. Warren believes very little of this, just like President Obama does not believe his hawkish line on Israel or Al Franken believes his. (I choose Franken not because he is any more in thrall to AIPAC than his fellow Democrats in the Senate — the House Dems are worse — but because one might expect him to be a little more honest)
This is what they do to keep the AIPAC funders happy.
American democracy!

Of the people, by the people, and for AIPAC.

Joe Lieberman, and liberal hero Elizabeth Warren, peddle propaganda on Iran

MondoWeiss
Alex Kane

Danny Ayalon (left), the deputy foreign minister of Israel, with
Senator Joseph Lieberman and Henry Kissinger

Two more examples of the relentless, and successful, misinformation campaign about Iran's nuclear program were seen over the weekend. The principal component of this campaign has been to get people to believe that Iran has a nuclear weapon or is close to obtaining one and poses an imminent threat to Israel and the United States.

The culprits: Joseph Lieberman, the Connecticut senator with neoconservative foreign policy views, and progressive darling Elizabeth Warren, who is running for a Senate seat in Massachusetts.

Lieberman's contribution was the more prominent. Appearing on Fox News Sunday, Lieberman was asked what he thought about reports that Iran claims to have "reverse-engineered" the US drone they captured last year. His response (emphasis mine):

Look, it was not good for the U.S. when the drone went down in Iran, and not good when the Iranians grabbed it. I don't have confidence at this point that they are really able to make a copy of it. It's a very sophisticated piece of machinery and has served our national security well, including I would guess being used to look all over Iran; particularly, at areas where we have reason to believe that they are working on a nuclear weapon.

The New York Times quoted Lieberman in a piece on Iran's drone claims, but the paper of record didn't bother to question Lieberman's falsehood about Iran "working on a nuclear weapon."

Warren, the liberal hero who swallows the AIPAC line on foreign policy (as Max Blumenthal showed), was also asked about Iran yesterday by the blogger who runs the site "Vast Left-Wing Conspiracy" (h/t Glenn Greenwald). Here's the blogger's account of the chance encounter with Warren:

Yesterday morning, I was in line outside a Somerville, MA breakfast joint, and who should come around introducing herself to the queued patrons but Democratic U.S. Senate candidate, Elizabeth Warren?

When she worked her way to where I was standing, I asked about her hawkish policies toward Iran, which are described thusly on her website...

I asked why her stand is that Iran is pursuing nuclear weapons, when even the Obama administration admits there is no evidence Iran is building nuclear bombs or has decided it wants to.

Warren said she thinks the data says they are working on nuclear weapons.
I repeated that, no, even the administration says there's no evidence of that.
She said she'd look into it, saying it's important that political statements not to add fuel to the fire

The big lie here, as the blogger above noted, is that Iran already has a nuclear weapon, or is working on one. From Leon Panetta to US intelligence to Israeli intelligence, everyone agrees that Iran does not have a nuclear weapon--nor are they on the cusp of developing one.

The fact that Warren, the subject of a large and favorable profile in The Nation recently, peddles the lie about Iran is more troubling. Lieberman's propaganda is, at this point, expected.

But the last time there was little partisan debate over a war, with the Democratic Party aiding and abetting the push to invade Iraq, the US destroyed a country that still lives with the searing consequences. Warren, who calls for getting out of Afghanistan as quickly as possible, should remember that, or be tarred with the brush of having helped push another disastrous war in the Middle East.

Scott Brown calls on Harvard to cancel ‘one state’ conference

Boston Globe
Noah Bierman

Elizabeth Warren is being chastised by Scott Brown for teaching at Harvard.

Republican US Senator Scott Brown is calling on Harvard’s Kennedy School of Government to cancel a conference on a “one-state solution” to the Israeli-Palestinian conflict.

“I want to condemn in the strongest possible terms Harvard’s sponsorship of a conference exploring a ‘one-state solution’ to the Israel-Palestinian conflict,” he said in a statement. “This is dangerous thinking that gives comfort to Israel’s enemies who view the ‘one-state solution’ as a euphemism for eliminating Israel as a Jewish state. Harvard may have a right to do this, but that doesn’t make it right to do it. The University should cancel this conference.”

The Globe reported this morning that the conference has drawn criticism from the Anti-Defamation league, which said it has dangerous implications for Israel. The ADL has not called on Harvard to cancel the conference, but has instead asked Harvard President Drew Faust to denounce its theme.

Continue reading below

The conference organizer, Ahmed Moor, a first-year student, told the Globe that the conference is intended to discuss ways that all residents of the region enjoy human rights. The Kennedy School told the Globe that the conference is student organized, but received modest funding from the school’s student government and the event’s website will use the school’s name and logo.

Brown, facing a reelection challenge from Elizabeth Warren, has made the Democrat’s ties to Harvard University a centerpiece in his strategy to label her an out-of-touch elitist. Warren teaches at Harvard Law School.

Brown even made a reference to elitism in his in his statement attacking the conference.
“Academic elites need to understand that their ideas have real world consequences well beyond the comforts of the ivory tower, and the last thing Israel needs is Harvard legitimizing a terribly misguided idea,” he said.

Warren’s campaign, in a statement, would not say whether she agrees with calls to denounce or cancel the conference.

“Elizabeth was unaware of this conference, but she is a strong supporter of the steadfast relationship between Israel and the United States, and she firmly believes in a two-state solution,” spokeswoman Alethea Harney said.

Coincidentally, Brown will be hosting students from the Kennedy School’s Institute of Politics at his Boston office on Monday. A flier from the school advertises “a private off-the-record meeting and discussion with study group students on the new dynamics shaping 2012 politics in the wake of 2010’s historic wave election.”

New York Attorney General Kicked Off Government Group Leading Foreclosure Probe

Huffington Post
Shahien Nasiripour

WASHINGTON -- New York Attorney General Eric Schneiderman on Tuesday was kicked off the committee leading the 50-state task force charged with probing foreclosure abuses and negotiating a possible settlement agreement with the nation's five largest mortgage firms, according to an email reviewed by The Huffington Post.

Schneiderman was one of roughly a dozen state attorneys general leading the talks with the five companies, alongside representatives of the U.S. Department of Justice, the Department of Housing and Urban Development and other federal agencies. The government launched the negotiations in the spring after widespread reports of foreclosure irregularities, such as so-called "robo-signing" and illegal home seizures, emerged.

But state prosecutors and federal officials are pressing to complete a proposed settlement with the five companies even though they've initiated only a limited investigation that hasn't examined the full extent of the alleged wrongdoing, The Huffington Post reported last month. Elizabeth Warren, who until recently was a senior adviser to President Barack Obama and Treasury Secretary Timothy Geithner, told a congressional panel last month that government agencies may not have sufficiently investigated claims that borrowers' homes were illegally seized.

Schneiderman, a Democrat who's in his first term as New York's top law enforcer, has been among a group of state legal officers who has also questioned the desire for a speedy resolution. He's leading his own investigation into mortgage improprieties, subpoenaing documents from the nation's largest financial institutions and reviewing court records for possible illegal home repossessions.

The Obama administration officials -- in particular, Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan -- have publicly stated on numerous occasions that they want a quick resolution to the 50-state mortgage probe.

Sources said attorneys general like Schneiderman, along with the top legal officers from Massachusetts, Delaware and Nevada, among others, were complicating that goal by questioning the plan to scuttle the state and federal investigations in exchange for a settlement.

These attorneys general have said they're reluctant to sign on to an agreement that effectively kills their ongoing investigations or prevents new ones from being launched. Beau Biden, Delaware's top law enforcer, remains on the states' executive committee.

In a statement of support for Schneiderman, Biden said that the "events leading up to the mortgage crisis must be fully investigated, including origination and securitization practices, before any broad immunity is granted."

"The American people deserve an investigation," he added.

Top Obama administration officials recently reached out to Schneiderman and his allies, effectively requesting he get in line, people familiar with the discussions said. The New York Times editorial board on Tuesday declared that Schneiderman "should stand his ground in not supporting the deal."

"The administration says that a settlement would quickly deliver much needed relief to hard-pressed borrowers, but it’s doubtful it would provide redress on a par with the banks’ wrongdoing or borrowers’ needs," the board wrote.

The email announcing Schneiderman's dismissal from the states' executive committee was sent just after noon to more than 50 people by Patrick Madigan, a top lawyer in the Iowa Attorney General's Office. It read: "Effective immediately, the New York Attorney General’s Office has been removed from the Executive Committee of the Robosigning multistate."

This month, Schneiderman accused Bank of New York Mellon, the 11th-largest U.S. bank by assets, of "repeated fraud and illegality" when it came to its actions as a trustee for various mortgage securities, and he accused Bank of America of fabricating missing documents when foreclosing on some homeowners who defaulted on their mortgages.

Bank of America's stock price is down more than 55 percent over the past six months. Investors haven't seen a closing price as low as Tuesday's -- $6.30 per share -- since March 2009.