The Banking Crisis and the Settlement

[CountDeMoney]

I do know that if there is a case to made a US attorney would be bringing and making that case.  There is no reticence in the US attorneys offices to bring white collar cases; to the contrary, here in Manhattan they are a priority, with dedicated teams of attorneys compromising some of their best people.

No US attorney in his right mind is going to bring charges against his future employers.

[The Minsky Moment]

2) The settlement was reviewed by a judge.  And approved.

Shocking!

Sadly it isn't shocking that a journalist would make a "mistake" that obvious.

[The Minsky Moment]

No US attorney in his right mind is going to bring charges against his future employers.

Of course they would.  It's priming the market.  By being very aggressive, the USA/AUSAs create a need and a market for attorneys to advise big companies on how to handle to big, high stakes investigations.  And who better (and more credible) to give that advice than the man or woman who literally wrote the book on how those investigations are prosecuted.

A USA/AUSA who sits around risks losing profile in the market.

[Berkut]

It's good to know that after all was said and done, there was no wrong doing at all, the system worked as designed, and no changes needed to be made, or needs to be made. And certainly nobody should have been held responsible for anything, because it turns out that the system actually is doing exactly what it ought to do.

Nothing to see here, move right along. Go back to arguing over Obamacare, please.

[The Minsky Moment]

It's good to know that after all was said and done, there was no wrong doing at all, the system worked as designed, and no changes needed to be made, or needs to be made.

Well yes, if you believe Matt Taibbi, there was no wrong doing.  Because according to Matt Taibbi, everyone from the Attorney General of the United States down to a fresh new lawyer at the SEC, and everyone from Jamie Damon down to the entry level compliance officer, with the singular exception of a brave "pale blue-eyed" former employee with "striking skills", is a liar, knave and crook engaged in a massive conspiracy and cover-up.  And because that is plainly asinine, the whole thing must be crock and nothing went wrong after all.

Of course back in the real world, the mis-marketing of a $900 million securities issuance - of which the losses Mr. Taibbi does not bother to inform us - lead to a $9 billion fine.  So in the real world it certainly looks like there was a lot of wrong doing and the government investigated and punished the wrong doers.  In Taibbiland, the truth is still out there and only his "tall, thin quick-witted" hero has the answers (along with Tom Cruise and whoever else played a Grisham hero); in the real world the government made JPM sign a statement admitting wrong-doing which is almost unheard of in a civil case.  That JPMC signed a statement of wrong-doing would suggest to me that there might have been wrong-doing, but perhaps you know something we don't. 

Or perhaps like Matt, you think the 10 pages is too short a statement.  Then again if it were 200 pages, Matt would complain it was too long and the fact were being buried behind lots of words that it would take even a dedicated law student too long to read. There are all sorts of con jobs in this world, even journalistic ones.

[Ideologue]

His name was Denzel Washington.  That's so racist, man.

[Admiral Yi]

Of course they would.  It's priming the market.  By being very aggressive, the USA/AUSAs create a need and a market for attorneys to advise big companies on how to handle to big, high stakes investigations.  And who better (and more credible) to give that advice than the man or woman who literally wrote the book on how those investigations are prosecuted.

A USA/AUSA who sits around risks losing profile in the market.

Bro, this is the closest I've ever seen to you losing your shit.

[Martinus]

Well, I also get testy when people want to jail my friends.

[citizen k]

Well, I also get testy when people want to jail my friends.

[The Minsky Moment]

Well, I also get testy when people want to jail my friends.

I only wish had one of those huge RMBS cases . . .   

It could very well be that the JPM settlement was a crappy deal.  If you wanted to investigate it, you could look into how much paper JPM sold, and what the losses actually were.  You could get into the details and figure out what the legal claims and defenses were and handicap the likely results.  That might not be so exciting but it would be informative.

What we get instead is the bad side of gonzo journalism, a kind of reporting that leaves us less informed than when we began.

[The Minsky Moment]

There is another unmentioned aspect here which is a lot of the really bad stuff happened at Bear Stearns.  So then why is JPM the one paying?  Because Bear Stearns doesn't exist anymore, JPM bought bear *after* Bear did the bad stuff with mortgage securitizations.

And what were the circumstances under which JPM purchased Bear?  Well at the time there was a massive financial crisis breaking out and the Treasury and the NY Fed basically went to JPM and said -hey we would really appreciate you taking over the mess so that the entire financial system doesn't collapse

(then they changed their minds and let Lehman fail . . .)

So you could look it a couple ways.  You could say tough for JPM they bought a bad apple and now they have to eat it, even if their motives were not so evil.  Or you could say no good deed goes unpunished.

Either way at least on the Bear side, it is a little difficult for me to get up high moral dudgeon against JPM for those losses.

[Berkut]

Doesn't seem like you get in a high moral dungeon, or a low moral dungeon, over anything or anyone having to do with the uber rich doing their bit to become uber richier.

[CountDeMoney]

Doesn't seem like you get in a high moral dungeon, or a low moral dungeon, over anything or anyone having to do with the uber rich doing their bit to become uber richier.

With every opportunity of doing it again.  And again.  And again.

[alfred russel]

Doesn't seem like you get in a high moral dungeon, or a low moral dungeon, over anything or anyone having to do with the uber rich doing their bit to become uber richier.

Responding to the Bear Stearns side that MM was referencing, you had this sequence of events:

1. Bear Stearns is on the precipice of collapse.
2. The federal reserve believes the collapse will cause an economic crisis. In a series of meetings into the small hours of the night, it entices JPM to take over Bear Stearns to prevent its collapse.
3. Years later, under pressure to hold people accountable, the government pursues massive penalties against JPM for misdeeds done by Bear Stearns, as JPM is its successor institution.

The JPM - Bear Stearns transaction was not the first time the federal reserve used private companies to help stem systematic risk related to a financial failure. It doesn't take a rocket scientist to see that the next time the problem comes up, the federal reserve may find that private partners are difficult to locate.

[Admiral Yi]

However the particular series of transactions referenced in the article appear not to have involved Bear Sterns.