Shorter Jamie Dimon: “I am not a psychopath”

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As business professor Clive Boddy describes it, banksters like Jamie Dimon succeed–and cause great catastrophe–because they are able to exploit the chaos of today’s business environment while ignoring the consequences of their ruthlessness.

Boddy says psychopaths take advantage of the “relative chaotic nature of the modern corporation,” including “rapid change, constant renewal” and high turnover of “key personnel.” Such circumstances allow them to ascend through a combination of “charm” and “charisma,” which makes “their behaviour invisible” and “makes them appear normal and even to be ideal leaders.”

[snip]

They “largely caused the crisis” because their “single- minded pursuit of their own self-enrichment and self- aggrandizement to the exclusion of all other considerations has led to an abandonment of the old-fashioned concept of noblesse oblige, equality, fairness, or of any real notion of corporate social responsibility.”

Boddy doesn’t name names, but the type of personality he describes is recognizable to all from the financial crisis.

He says the unnamed “they” seem “to be unaffected” by the corporate collapses they cause. These psychopaths “present themselves as glibly unbothered by the chaos around them, unconcerned about those who have lost their jobs, savings and investments, and as lacking any regrets about what they have done.

Meanwhile, a Reuters article offers a possible explanation for how millions of MF Global funds disappeared: because its clearing firm, JP Morgan Chase, dawdled while clearing hundreds of millions of dollars in securities MF Global sold to Goldman Sachs as an effort to stay afloat.

MF Global unloaded hundreds of millions of dollars’ worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co , one of the sources said.

The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltd filed for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase.

[snip]

JPMorgan has fought aggressively in bankruptcy court to protect its interests, and received a lien on some of MF Global’s assets in exchange for granting the firm $8 million to fund its bankruptcy costs. The lien puts JPMorgan’s interests ahead of MF Global customers who have not yet received an estimated $900 million worth of money from their accounts, which remain frozen as regulators search for missing funds.

As it turns out, a week before JPMC was stalling on clearing MF Global’s sales, Jamie Dimon sent out an email to JPMC employees boasting about the firm’s expansion at a time of strife for the industry.

“2011 was another year of challenges, both for JPMorgan Chase and for countries around the world,” Dimon wrote in a year-end e-mail to staff. “There is a lot of frustration out there and more than a little hostility toward our industry.”

[snip]

JPMorgan hired 16,000 people in the U.S. in 2011, Dimon said in the letter, expanding its total workforce to more than 260,000 in a year when financial companies announced more than 200,000 job cuts and protests against Wall Street firms spread worldwide. The New York-based lender is adding about 175 branches a year in the U.S., he said.

“In the face of challenges, JPMorgan Chase is doing its part,” Dimon wrote. “We have not shrunk back.”

I tell you, indefinite detention looks better and better for Jamie Dimon.

Predicting a New Paradigm

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In my seven plus years of blogging, I’ve never done year-end reviews or predictions and I don’t intend to start now.

But I do want to point to two pieces taking stock of this moment in history–the AJE piece on the decline of the American empire above (the transcript is here), and Juan Cole’s piece declaring the end to US hyperpower.

The AJE piece is generalized and describes a decline in both our economic and military hegemony. And while Cole includes this generalized framework,

The end of the Cold War, which had stretched from 1946 to 1991, had left the political elites of the United States and Western Europe without a bogeyman or security threat on which they could run for office and through which they could funnel resources to the military-industrial complex that largely pays for their political campaigns. With Russia in steep decline in the 1990s and China still run as a small, cautious power, the US emerged as what the French called a Hyperpower, the sole superpower. US hawks were impatient that Bill Clinton seemed not to realize that he had complete freedom of movement for a brief window of time. It was the new US status of hyperpower that allowed the G. W. Bush administration to respond to the September 11 terrorist attacks by launching two major wars and a host of smaller struggles, all against targets in the Muslim world.

As of 2011, the age of the US hyperpower is passing, along with the possibilities for American wars of choice, i.e., wars of aggression.

He situates it, not surprisingly, in the Middle East.

Some years are pivotal and serve to mark off eras of history. 2011 saw the end of American hyperpower, and it announced the end of a decade of US-Muslim conflict that began with 2001. It saw the killing of Usama Bin Laden, the virtual rolling up of al-Qaeda, the repudiation of al-Qaeda’s methods by the masses of the Arab world, and the US military withdrawal from Iraq. The upheavals of the Arab Spring and subsequent elections have led to Muslim fundamentalist parties being drawn into parliamentary politics on a Westminster model, rather than remaining sect-like corporate groups outside the body politic.

While I’m not certain that, fifty years from today, 2011–and specifically our withdrawal from Iraq–will mark the end of our hyperpower or empire (we might measure that date from the financial crisis in 2008; there might be some more spectacular loss in the future that will have that symbolism; or it could be something else entirely), I do generally agree that we’re at the twilight of the American mode of power that has dominated since the end of World War II.

I think that’s why predictions looking forward will be so hard to get right. Partly because there’s no telling how Americans–both those who run our domestic and foreign policy, and those average citizens facing a future without the self-importance derived from the country’s dominance–will react as this new state of affairs becomes evident. At both levels, we could just get a whole lot more violent.

But also because, as Tom Englehardt says in the AJE piece, I don’t think we’re seeing a simple matter of imperial succession, as happened when England passed the baton of world hegemon to us.

I don’t think it’s like the US is going down and you’re gonna get a Chinese empire rising. I think you’ve got a planet in crisis and we’re just barely beginning to feel it.

Rather, I think we’re going to see a new paradigm, one that not only robs average Americans of the arrogance of being the “best,” but also robs many around the world of their traditional means of understanding the world.

So while it may be interesting to think about President Obama dealing with a Republican Senate or President Mitt dealing with Speaker Pelosi, while it may be interesting to predict how many TBTF banks will fail over the next year, even while it may be interesting to start thinking about what Europe will look like after the Euro zone ends, I think all those exercises might be end up showing far too little imagination about what the future holds.

As I’ve said before, it’s fairly clear that 2011–like 1968 and 1989–was a year of great historical importance. But I’m not sure if we can even conceive of just how important it might be or why.

Fuck You To Jamie Dimon & His Plaintive Wail For The 1%

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Pardon me for the Taibbi like insolence, but this is just fucking amazing. While most Americans are struggling to stay alive, employed, and their families fed and in their homes, much less celebrate a decent Christmas, the 1% Masters Of The Universe have gotten together for a group bitchfest of elitist assholes:

Jamie Dimon, the highest-paid chief executive officer among the heads of the six biggest U.S. banks, turned a question at an investors’ conference in New York this month into an occasion to defend wealth.

“Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” the JPMorgan Chase & Co. (JPM) CEO told an audience member who asked about hostility toward bankers. “Sometimes there’s a bad apple, yet we denigrate the whole.”

Dimon, 55, whose 2010 compensation was $23 million, joined billionaires including hedge-fund manager John Paulson and Home Depot Inc. (HD) co-founder Bernard Marcus in using speeches, open letters and television appearances to defend themselves and the richest 1 percent of the population targeted by Occupy Wall Street demonstrators.

Uh, fuck you Jamie Dimon and to the plaintive wail of the skimming, raping moneychangers.

Oh, and in case you had any question on what side of the 1%/99% divide Barack Obama and his Administration are on, yet another answer was given today with the announcement of their proposed selection for the critical “independent” seat on the Federal Deposit Insurance Corporation (FDIC):

The Obama administration is considering nominating Jeremiah Norton, an executive director for JPMorgan Chase’s investment bank, to sit on the FDIC’s board of directors.

Who is Jeremiah Norton? Well, as this quote states, he executive director of the investment banking shop and one of Obama’s buddy, Jamie Dimon’s, right hand men. Oh, and before that, Norton was former Goldman Sachs honcho Henry Paulson’s right hand man in the Bush Treasury Department and assisted Paulson in getting Goldman Sachs a backdoor bailout through AIG.

And, remember, if Barack Obama has to replace Turbo Tax Timmeh Geithner, Jamie Dimon is near the top of the list of replacements thought to be on the White House’s list.

So, while OWS is out protesting and the majority of citizens are falling deeper in despair and many losing their homes and hopes, and Barack Obama duplicitously coos about feeling the pain of the 99%, this is what is going on where the rubber meets the actual road.

PS: Digby has pounded Dimon on this as well if you want more searing criticism.

Normalizing the Disenfranchisement of African Americans

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I’ve been one of the first people to note that the Emergency Financial Manager laws have disproportionately affected MI’s African Americans. Note what I wasn’t arguing: that Governors Snyder and Granholm imposed EFMs because the cities in question were predominantly black. But it is, in fact, the case that the EFM law is affecting African Americans disproportionately, and with Detroit as Rick Snyder’s bullseye, affecting far too many of MI’s African Americans.

Nevertheless, the Free Press decided to turn that observation into a straw man.

Brian Dickerson: What’s really driving state takeovers: It ain’t race

[snip]

Benton Harbor, Ecorse, Flint and Pontiac have something much more important in common: They’re all shrinking— hemorrhaging taxpayers, homeowners, employers at an alarming rate.

And in each case, African Americans are rushing for the exits just as fast, and in some cases faster, than their white, Latino and Asian neighbors.

The numbers in the accompanying chart tell the story succinctly: In the decade between the U.S. census counts in 2000 and 2010, Benton Harbor and Pontiac both lost more 10% of their residents. Ecorse and Flint lost more than 15%, and Detroit, the city currently atop the state treasurer’s critical list, lost 25%.

Now, the argument is a bit odd, not least because it looks at the last 10 years of population trends to explain an EFM law that goes back over twenty years (though the cities that have been in and out of EFM status, including Flint and Ecorse, have been losing population throughout that period).

More telling, though, is that Dickerson didn’t consider why Wayne County, which also has a deficit and also shrank over 10% in the last decade, hasn’t been seized (though people have started gunning for Wayne County, too). While the answer is obvious–not least, that the law pertains to municipalities–it reveals a lot of the underlying logic that got MI to embrace EFM laws.

It’s not just that both Democrats and Republicans chose to make cities sink or swim on their own decades ago; given the segregation and history of white flight, that decision did have racial implications. It’s also that the state relies relatively more on property taxes than other states, and relatively less on income taxes (particularly for a state that doesn’t have another big source of funding, like oil revenues). Those decisions have made the exodus of MI’s residents–both black and white–particularly devastating for cities. And all that’s before you factor in things like predatory lending which further exacerbated the problems of communities with large African American populations.

The underlying issue here is MI’s shrinking population, which itself is largely a response to globalization, to the gutting of the manufacturing that once thrived in these cities. But we as a state can choose to deal with it as a state, or we can choose to let the cities rot while putting stimulus money into newer areas. And while the decision to do the latter may not be motivated primarily out of racism, it is having the undeniable affect of taking away a disproportionate amount of African Americans’ self-governance.

49% of Michigan’s African Americans to Lose Their Right to Self-Governance

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And now, as a break from all the shitty national news, I wanted to update you on shitty news from my home front.

Governor Snyder is about to start the process of appointing an Emergency Financial Manager for Detroit (though note, they’re not just “Financial” Mangers anymore).

Detroit Mayor Dave Bing, members of Detroit City Council and representatives from the city’s labor and religious communities will hold a news conference at 5 p.m. today to address the city’s financial crisis and the possibility of a financial review by the state.

Bing and the City Council have refused to initiate such a review. The 30-day review process would allow state officials to examine the city’s finances and any proposals from the city as to how it will eliminate some of its debt.

Bing and Michigan Gov. Rick Snyder had a conversation Wednesday, and Snyder informed the mayor he intended to start the emergency manager process beginning with the review.

As I have noted before, one of the most troubling aspects of MI’s very troubling EFM law is the way it arises out of and exacerbates MI’s history of segregation. Effectively, in the 1980s, Democrats and Republicans decided that rather than addressing the effects of globalization on our state regionally–across our many segregated cities and suburbs–the heavily African American cities would be on their own (Ecorse, which is 40% African American, is the one real exception to the general rule that the cities that have been in and out of EFM status are majority African American). And even though the racism in the state isn’t as bad as it once was, the legacy of that go-it-alone approach means the cities that will be targeted for EFM status remain predominantly African American.

Over 82% of Detroit’s 713,777 residents are African American (close to 7% are Latinos). 42% of all of MI’s 1,403,477 African Americans live in Detroit.

In fact, as Eclectablog and I calculated today, 49% of MI’s African Americans will soon be living in a city the elected government of which has been replaced by the state.

Almost half the African Americans in the state.

The intent of this EFM law may not be to take away the right of local self-governance from one particular race of people. But we’re getting very close to the point where it will have done so for the majority of African Americans in MI.

Government Establishes Task Force to Combat HAMP Scams, But Not Foreclosure Scams

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Treasury, SIGTARP, and the Consumer FInancial Protection Board just formed a task force to fight HAMP fraud.

Mind you, they’re not aiming to fight the fraud servicers engage in–that is, using HAMP as a way to get force homeowners to stop paying their mortgages and then using that “default” as a means to tack on fees and ultimately foreclose.

Nope, our government is going to fight other fraudsters.

SIGTARP, the CFPB, and Treasury investigate mortgage modification schemes, among other things, in which companies charge struggling homeowners a fee in exchange for false promises of lowering the homeowner’s mortgage debt or payments through HAMP, a foreclosure prevention program funded by the Troubled Asset Relief Program (TARP) and administered by the U.S. Department of the Treasury.

omeowners struggling to make their mortgage payments should beware of con artists and scams that promise to save their homes and lower their mortgage debt or payments.
If you are struggling to pay your mortgage and are seeking a mortgage modification, keep the following tips in mind:

  • You can apply to the federal Home Affordable Modification Program (HAMP) on your own or with free help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD).  Applying to the program is always FREE.  For more information on how to apply, call the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (1-888-995-4673) or visit www.MakingHomeAffordable.gov.
  • Only your mortgage servicer has discretion to grant a loan modification.  Therefore, no third party can guarantee or pre-approve your HAMP mortgage modification application.
  • Beware of anyone seeking to charge you in advance for mortgage modification services – in most cases, charging fees in advance for a mortgage modification is illegal.
  • Paying a third party to assist with your HAMP application does not improve your likelihood of receiving a mortgage modification.  Accordingly, beware of individuals or companies that ask you for payment and tout success rates or claim to be “experts” in HAMP.
  • If an individual or company claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government in correspondence or on the Web, you should check the connection by calling the Homeowner’s HOPE™ Hotline.
  • Beware of individuals or companies that offer money-back guarantees.
  • Beware of individuals or companies that advise you as a homeowner to stop making your mortgage payments or to not contact your mortgage servicer.

Financially troubled homeowners can avoid scams by working with a HUD-approved housing counselor to understand their options and to apply for assistance.  Assistance from HUD-approved housing counselors is free, and homeowners can reach them by calling the Homeowner’s HOPE™ Hotline at 1-888-995-HOPE (1-888-995-4673) or by visiting www.MakingHomeAffordable.gov.

Meanwhile, the government is trying to settle with servers for their fraud.

I’m not angry that the government is trying to protect struggling homeowners. But they’ve badly misjudged where the biggest threat lies.

Geithner’s Duplicitous Efforts to Reinforce the Oligarchy

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Bloomberg’s blockbuster story–showing that the Fed was dumping $7.77 trillion into the same banks that Treasury was claiming were solvent to qualify them for TARP–shows a number of different things. It focuses on the $13 billion in profits the banks made off of massive secret loans from the Fed.

The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show.

More importantly, IMO, the Bloomberg piece also shows how Ben Bernanke, TurboTax Timmeh Geithner, and Hank Paulson used secrecy to get DC’s bureaucracy–both Congress and Executive Branch officials–to push through his preferred plan to prop up the TBTF banks.

They did this in two ways: first, by keeping details of the Fed’s massive lending secret from the people implementing TARP.

The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view.

The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak.

This meant the Fed could hide the fact that the six biggest banks were basically insolvent, and should have been wound down rather than propped up with a strings-free TARP.

The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. Read more →

Two MI Counties File Class Action Suit against MERS and Banks for Being Tax Cheats

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Two MI County Registers of Deeds–Curtis Hertel of Ingham (Lansing’s county) and Nancy Hutchins of Branch–have filed a class action suit against MERS, seeking the taxes the banks should have been paying to counties and the state every time they transfer property, plus penalties.

Plaintiffs are seeking money and punitive damages, tax penalties, costs, and attorney fees in the return of unpaid taxes, interest and penalties to Plaintiffs as class representatives of the 83 counties of the State of Michigan.

In addition to MERS, BoA, Chase, Wells Fargo, and Citi, the suit cites parts of the state’s biggest foreclosure mills, eTITLE, 1st Choice Title, and Attorney’s Title and Fannie Mae. The suit argues that the defendants had a duty to record the real value of property transferred in the state, and by failing to do so, they cheated counties out of the taxes on those property transfers.

Defendants, as grantors, makers, executors, issuers and deliverers of deeds or instruments conveying an interest in real property under MCL 207.507, had a DUTY to declare the true value of the property and full consideration given/received on the face of each and every property transfer documents in Exhibit 2, as well as all those other similar filings made by Defendants; or in the alternative Defendants had a DUTY to attach an affidavit to the deeds and instruments stating the true value of the property. Defendants had these same DUTIES with regard to all those other deeds and instruments filed by them in all 83 counties of the State of Michigan over the last 15 years.

Defendants made, executed, issued and/or delivered for recording with the Registers of Deeds in all 83 counties in Michigan, assignments and other real property transfer documents transferring all or part of an interest in real property without stating the actual and true value of the property on the face of the instrument; and without alternatively attaching an affidavit stating the true value of the property interest being transferred. MCL 207.504/MCL207.525(2).

As a direct consequence of Defendants’ failure to properly make, execute, issue, and/or deliver real property transfer deeds, assignments, and other documents recorded in the 83 counties of the State of Michigan transferring property and security interests, neither County nor State Real Estate Transfer Taxes have been paid on thousands of real property transfers filed by/for Defendants across the counties of the State of Michigan as required by law.

When Hutchins filed a similar suit covering just Branch County–a rural county with a population of 45,000–in August, she estimated the county had lost $100,000 in the last 5-10 years. Even in Ingham County alone, with its population of over 250,000, that number is going to be much higher. Add in the state taxes, and the money will start to add up.

But the principle will be even more important: the banks have been cheating counties and states with this MERS scheme. It’s time they finally paid taxes like the rest of us.

Drowning Government in Antibiotic Tainted Chinese Honey

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Marion Nestle describes that the USDA is cutting back on basic research.

This decision, Neuman reports, “reflects a cold-blooded assessment of the economic usefulness”—translation: lack of political clout in the affected industry—of the 500 or so reports issued by the National Agriculture Statistics Service each year.

I was struck, in particular, by this report on the cutting block.

Annual Bee and Honey Report – Eliminate

Which I believe is this report:

This file contains the annual report of the number of colonies producing honey, yield per colony, honey production, average price, price by color class and value; honey stocks by state and U.S.

Why, at a time when people are struggling to understand colony collapse, would the government eliminate a report on how many colonies are producing honey? This is like eliminating a report on how many canaries die in coal mines just to make sure people don’t become worried about imminent explosions.

Read more →

As the Next Phase of the Crash Accelerates, Watch for More Looting

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The earth avoided getting hit by an asteroid last night. Then today, FEMA tested its catastrophic communications system, only to discover some problems. In my own case, the warning signal started skipping, dadadadadadada, sounding like a machine gun, before it switched my jazz to a bad disco station. Outside, there are whistling high winds blowing through the dark afternoon and a threat of snow.

All of which feels appropriate as a set of clowns arrive in the state and prepare to debate over whether they were right to say MI’s major industry–and my state–should go bankrupt.

Jefferson County, AL just did go bankrupt. Finally.

Which sort of feels like the preview to the collapse of Europe. Here’s Brad DeLong:

Time to Spread Foam on the Runway: The Federal Reserve Needs to Act Now to Firewall Off the Eurocrisis

I have been complaining for some time now that Reinhart and Rogoff think that the time is always 1931 and that we are always Austria–that the great fiscal crisis is about to erupt and send us lurching down toward Great Depression II. Well, right now guess what? The time is 1931, and we are Austria.

And he quotes Paul Krugman.

This is the way the euro ends.

Not with a bang but with bunga-bunga.

Seriously, with Italian 10-years now well above 7 percent, we’re now in territory where all the vicious circles get into gear — and European leaders seem like deer caught in the headlights.

[snip]

I still find it hard to believe that the euro will fail; but it seems equally hard to believe that Europe will do what’s needed to avoid that failure. Irresistible force, meet immovable object — and watch the explosion.

The crash is starting to accelerate again.

With that in mind, it’s worth reading this Misha Glenny piece.

Capricious, unreliable and ideologically driven were some of the more printable epithets hurled at George Papandreou in his final week as Greek prime minister. We should look at the motives of his detractors before taking such critiques at face value. While engaged in titanic political struggles at home and abroad, he has been quietly trying to tackle one of the most intractable root causes of the Greek tragedy – crime and corruption.

As the new Greek government struggles to convince Europe of its resolve to cut the country’s bloated public sector, it also has to decide whether to face down the real domestic threat to Greece’s stability: the network of oligarch families who control large parts of the Greek business, the financial sector, the media and, indeed, politicians.

[snip]

The oligarchs have responded in two ways. First, they have accelerated their habitual practice of exporting cash. In the last year, the London property market alone has reported a surge of Greek money.

Second, they have mobilised hysterical media outlets which they own in order to denounce and undermine Mr Papandreou at every opportunity, aware he is the least pliable among Greece’s political elite.

Their aim is clear – they are waiting to pounce on the state assets which, under the various bail-out plans, the Greek government must privatise.

I’ve long suspected this crisis has been regarded by some–if not planned–as a means to accomplish in developed nations what their fellow Oligarchs in developing nations used to pull off via geography: the wholesale looting of their countries. And with it, dismantling the social contract on which modern democracy has depended.

Who needs democracy when you can force more austerity onto a country to shield the banks? Who needs democracy when you can add city after city to the ranks of those led by Emergency Financial Managers.

Yeah, the Occupiers have inspired some real fear among the looters. Small-d democracy won some battles last night in Maine and Ohio. But that’s not enough, without real vigilance, to stop the looters.