Send a Tweet
Most Popular Choices
Poll Analyses
Share on Facebook 6 Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 10/22/13

Why JPMorgan Chase Doesn't Deserve Your Sympathy

By       (Page 2 of 2 pages) Become a premium member to see this article and all articles as one long page. (View How Many People Read This)   No comments
Author 77715
Message Richard Eskow
Become a Fan
  (15 fans)

The total volume of MBS and related securities for which Chase and its subsidiaries were being sued comes to $120 billion. This proposed settlement amount of $13 billion comes to slightly more than 10% of that amount -- hardly extravagant for securities which were misleadingly packaged and presented as AAA, but which turned out to be junk.

The FHFA sued Chase over $33 billion in fraudulently package securities. In that case the bank reportedly defrauded the government, rather than consumers -- the same government which Jamie Dimon feels spends too much money, and whose spending for vital social services Dimon tries to cut as a member of Fix the Debt.

$13 billion is less than two-fifths of the amount addressed in the FHFA lawsuit.

For perspective, JPMorgan Chase's total volume mortgage-backed securities for just one year, 2008, was more than $119 billion (according to the bank's Annual Report). We still don't know how much fraud this settlement is intended to address.

The bank is paying more than a fine or restitution.

The payments being made in this case constitute much more than simple restitution for harms done. Settlements should also include a punitive amount, and should be high enough to act as a deterrent against future fraud.

What's more -- and this may be even more important -- the New York Times reports that the government initially demanded that the bank "plead guilty to a criminal charge" as part of the settlement. That demand appears to have been dropped, a concession which certainly must have cost the bank financially. And the criminal investigation currently being pursued in California involves wrongdoing by Chase itself, not Bear Stearns or Washington Mutual.

A guilty plea would involve serious reputational harm to Chase and would have additional legal implications in terms of oversight, governance, and regulatory involvement. Some of the $13 billion, therefore, is being paid in return for dropping the demand for a guilty plea -- and whatever it cost them, Chase clearly thought it was worth it.

This is a deal Chase wanted.

Which gets us to our final point: This deal was not hammered out in a back room in some dusty courthouse, as the suspects sweated under the glare of naked light bulbs. It came about because Jamie Dimon called Attorney General Eric Holder four hours before the Justice Department was going to announce new civil charges against his bank -- we wonder how he got wind of that, exactly? -- and said he would prefer to come to a mutual agreement.

In other words, this deal was struck by a bank executive who still enjoys extraordinary access to top government officials. In fairness, it should also be noted that this tentative settlement seems to reflect a new and more aggressive posture toward Wall Street on the part of those same officials. That's a good thing. But the agreement which resulted is, almost certainly, the best one Dimon could've gotten under the circumstances.

The world is filled with people who deserve your sympathy: 22 million Americans unemployed or underemployed in the wake of Wall Street's financial crisis. Millions of Americans who lost their homes to foreclosure, many of them illegally. Millions of other Americans whose homes are underwater. Retirees whose pension plans are under political assault, with no thought to the bankers the defrauded those plans.

If you want to feel sorry for anyone, feel sorry for them. JP Morgan Chase is doing just fine, thank you very much.

Next Page  1  |  2

(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).

 

Must Read 2   Supported 2   Interesting 1  
Rate It | View Ratings

Richard Eskow Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

How to Fix the Fed: Dismiss Dimon, Boot the Bankers, and Can the Corporations

The Top 12 Political Fallacies of 2012

What America Would Look Like If Libertarians Got Their Way

Pawn: The Real George Zimmerman Story

"His Own Man's" Man: Jeb Bush and the Return of Wolfowitz

"F" The Bureaucracy! The White House Can Help Homeowners Right Now

To View Comments or Join the Conversation: