JP Morgan’s fraud

DN! has a segment up on a whistleblower from JPMorgan that exposes their knowing of the fraud being perpetuated upon investors and leading to the housing collapse.  I am so grateful Ms. Fleischmann has come forward…brave woman.

Matt Taibbi’s article here.

I have to say that my own experience with Chase was a positive one, albeit paying high interest.  I had a credit card with them, and when the fit hit the shan, they took what I offered them.  They had to have known at that point (2005) that the financial house of cards was beginning to collapse.  I believe this is the reason they were willing to work with me.  And, truly, they got the entire amount of goods that I charged, but not the excessive 25% (?) interest they were looking for.

There is not a day that goes by that I don’t think about my house and mourn the loss.  Now someone lives there that paid $57k for an $85k house.  People who take advantage of another’s troubles are despicable. And when I hear of how JP Morgan and the others have paid fines to the government as compensation for what they did, I have to ask…where is my house?  Where is the compensation?  Why do people get to buy $85k houses for $57K, when the mortgage company refused to work with me?  What is fair about that scenario?

I used to listen to the City of Angels soundtrack on my Pioneer stereo while cleaning or sewing or on the computer…the wonderful sounds would fill the room.  But the CD got broken during the move when I lost my house…a symbol of what was happening.  I’ve only now been able to listen to the soundtrack again, as listening to puts me back in my house–it brings tears to my eyes while also uplifting (I’ve always loved this soundtrack).

So here we have these crooks, enabled by the Reagan and Clinton administration’s relaxation of the rules put in place after the Great Depression, getting away with fraud.  They got away with it.  Nobody served jail time for knowingly stealing from people.  See…you only serve time if you’re a petty criminal who steals from the banks,…

And this isn’t even including the huge banking fees for people who were overdrawn on their accounts…where someone could be charged $25 a pop for unknowingly bouncing a check.  My mother, in her muddled thinking after Alzheimer’s set in, was racking up fees and had no clue how she was doing it.   It used to be that people robbed banks…now banks rob people.

The timeline of chipping away at Glass-Steagall, with Reagan and Clinton enabling them:

1980’s: Commercial acquires investment, and vice versa

In the 1980’s and 1990’s, commercial banks increasingly traded in over-the-counter derivatives, such as interest rate swaps. Moreover, during the Reagan and Bush administrations, the FDIC and OCC approved a number of mergers between commercial banks and securities firms:

  • 1982: The OCC allowed Citibank to offer a collective investment trust, essentially re-issuing Saxon’s directive.
  • 1982: The FDIC issued a policy statement allowing state-chartered, non-Federal Reserve banks to affiliate with securities firms, even if they had FDIC insurance.
  • 1983: The Federal Reserve authorized Bank of America to buy Charles Schwab, then the nation’s largest brokerage firm.
  • 1987: The Federal Reserve allowed Bankers Trust, Citigroup and JPMorgan to trade mortgage-backed securities, muni bonds and commercial paper.

1999: Gramm-Leach-Bliley

After numerous attempts to repeal Glass-Steagall spanning the Bush and Clinton administrations, President Clinton signed the Gramm-Leach-Bliley Act that repealed the provisions preventing banks from affiliating with security firms. Though the line between commercial and investment banking was already blurring, the passage of Gramm-Leach-Bliley accelerated the pace.

Commercial banks traded in increasingly risky and complex securities, continuing to buy and sell mortgages, collateralized debt obligations and other derivatives. Because of the instruments’ complexity and institutions’ vulnerable positions, many banks faced stark losses during the 2008 financial crisis. Commercial institutions received emergency loans from the Federal Reserve, and investment banks Goldman Sachs and Morgan Stanley were actually designated as bank entities so they could take advantage of those loans. The vulnerability of commercial banks, revealed by the crisis, has resurrected the debate over Glass-Steagall.

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In the comments, we have the usual “pushing loans through for poor people that couldn’t afford them”…but fails to acknowledge those of us that had homes and were doing just fine, until property taxes doubled, heating costs doubled, and our wages did not keep pace–they were stagnated.  How is it we could afford our homes for six, seven, eight years and suddenly not be able to afford them anymore??  It doesn’t make sense.

Here is an article on JP Morgan hiring an exec from Countrywide to oversee compensation…for the victims of the fraud…

Finding out that the person running it for JPMorgan Chase is a person whose conduct in the run-up to financial crisis was allegedly so egregious that she somehow managed to be one of the only people actually named in a case brought by the Department of Justice goes beyond irony,” he continued. “It speaks volumes to the banks’ true intent and lack of concern for homeowners when addressing the harm that they caused during the foreclosure crisis

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Word.

As I was watching the DN segment, it popped into my head that I didn’t recall any Senate or House members having financial difficulties during this time.  How come?  How did they escape being caught in the investment whirlpool?   Mighty suspicious….especially when you see the lack of prosecuting the banksters…

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