Wall Street is furious

[James A. Donald]

On 2013-10-21 15:42, Jim Bell wrote:
> See
> http://www.newsmax.com/newswidget/jpmorgan-dimon-obama-settlement/2013/10/20/id/532044?promo_code=F492-1&utm_source=Test_Newsmax_Feed&utm_medium=nmwidget&utm_campaign=widgetphase1
> <http:///>
>
> "Sunday's New York Post page one headline about JPMorgan's fine screamed
> "Uncle Scam" with the sub headline "U.S. Robs Bank of $13B."
>
> Wall Street went into a tizzy this weekend with the news that one of the
> nation's biggest banks agreed to fork over to the federal government $13
> billion in fines related to its mortgage securities business.**
>
> The Post quoted bank analyst Dick Bove of Rafferty Capital as saying the
> deal "is a basic and fundamental attack on capitalism."
>
> "It is possible that the government is taking away the property of the
> JPMorgan shareholders without the shareholders having committed any
> crime or having any say in the expropriation of these funds," *Bove told
> the New York Post.*
> <http://nypost.com/2013/10/19/jpmorgan-in-tentative-13b-deal-with-us-justice-dept/>
>
> The deal, *announced Saturday*
> <http://www.moneynews.com/Companies/JPMorgan-FHFA-mortgage-settle/2013/10/20/id/532018>,
> settles civil penalties with the U.S. Justice Department, but doesn't
> stop any potential criminal prosecution. The Federal Housing Finance
> Agency sued JPMorgan and 17 other banks for faulty mortgage bonds two
> years ago.
>
> Wall Street insiders were furious about the deal, noting that 80 percent
> of the mortgages being probed were actually acquired from the failing
> banks Washington Mutual and Bear Stearns. JPMorgan reportedly took over
> the risky portfolio at the request of the U.S. government in the wake of
> the 2008-09 financial meltdown.


What went wrong is that all the banks were cuddling up to the regulators 
and telling the regulators what they wanted to hear, and in particular 
and especially, Washington Mutual was doing so.

Jim Bell's denial of disservice program is the opposite of cuddling up 
to the regulators.   Banks that cuddle will be punished, but banks that 
fail to cuddle will be punished more, thus he is unlikely to get support 
for denial of disservice, unless he disguises it as some sort of public 
good program to ensure that black rapists and muggers get off.

Here is a bit of background on the illegal acts committed by Washington 
Mutual, and how JP Morgan wound up with responsibility for these illegal 
acts.  I don't know what happened with Bear Sterns.

The law required equal outcomes for blacks, hispanics, and whites.

The law also required that the banks only lend to people with income and 
savings.  However, banks that followed that law, for example the Bank of 
Beverly Hills got in trouble because they were violating the equal 
outcomes law.

To make the regulators happy, Washington Mutual lied that its customers 
had income and savings.  All the banks lied, some more than others.  The 
bigger the lies, the happier the regulators.  The biggest liars, and the 
most blessed by the regulators, were Washington Mutual and Countrywide.

In 2005 November, all the lies blew up horribly in people's faces. 
However, from 2005 to 2008, the government required a big game of 
pretend and extend, in which everyone pretended the lies were true.

And, as part of the pretense that the lies were true, even though the 
shit had already hit the fan, JP Morgan was forced to buy Washington 
Mutual even though everyone knew that Washington Mutual was a stinking 
pile of toxic assets.

JP Morgan is now being punished for the lies told by Washington Mutual.