* Jobless claims drop in latest week
* Euro zone to keep financing Greece until gov't formed
* Cisco falls as forecast misses view
* Dow up 0.2 pct, S&P up 0.3 pct, Nasdaq down 0.04 pct
By Edward Krudy
NEW YORK, May 10 (Reuters) - U.S. stock index futures fell
sharply on Thursday evening as JPMorgan Chase & Co stunned
investors with news that its chief investment office had
incurred "significant mark-to-market losses" that it said could
"easily get worse."
JPMorgan's stock fell nearly 7 percent to $38.05 in
after-hours trading and dragged down shares across the entire
banking sector. Its executives called an extraordinary
conference call with analysts at 5 p.m. EDT where Chief
Executive Jamie Dimon said "egregious" mistakes had been made.
The news from JPMorgan comes at a difficult juncture for the
stock market as investors wrestle with heightened concerns about
Europe's debt crisis and signs are emerging that the U.S.
economic recovery may be starting to slow.
"When there's uncertainty, investors' first reaction is to
sell," said Michael Sheldon, chief market strategist at RDM
Financial in Westport, Connecticut. "This is not the kind of
news you expect from a high-quality management team and a
well-run bank."
S&P 500 futures fell 11.6 points and were below fair
value, a formula that evaluates pricing by taking into account
interest rates, dividends and time to expiration of the
contract. Nasdaq 100 futures fell 16.75 points.
If there is nothing to reassure investors between now and
the start of trade on Friday the weakness in likely to spill
over into the cash market.
Shares of JPMorgan's peers fell sharply after hours on the
news. Bank of America stock fell 2.9 percent to $7.48
and Goldman Sachs dropped 2.5 percent to $103.65, while
Citigroup lost 3.9 percent to $29.45.
The Chief Investment Office is the arm of the bank that
JPMorgan has said it uses to make broad bets to hedge its
portfolios of individual holdings, such as loans to
speculative-grade companies.
BIG SHOCK AFTER A TEPID DAY
The news came after a lackluster day for stocks. The Dow and
the S&P 500 eked out a modest gain as investors had dipped back
into the market after a weak stretch, but a disappointing
outlook from Cisco Systems capped gains.
Cisco Systems Inc lost 10.5 percent to $16.81, its
biggest percentage drop since February 2011, making it the
heaviest drag on the market. The network equipment maker
forecast profits below Wall Street's estimates, sparking
concerns about technology spending.
In a positive development, euro-zone officials said the
bloc's countries are prepared to keep financing Greece until the
country forms a new government.
The Dow's modest rise broke a six-day losing streak for the
blue-chip average. But the S&P 500 could not hold enough gains
to close above its April low. Still, the S&P has rebounded after
falling to a two-month low near 1,340 on Wednesday.
"You are seeing traders and investors come into some of
these very oversold sectors and buying on the dips. Then
suddenly, the people who are scared decide to start selling into
it," said Paul Mendelsohn, chief investment strategist at
Windham Financial Services in Charlotte, Vermont.
"That is what you are seeing today. You are seeing the
see-saw between people who are coming in, and adding positions
slowly, and people who are saying, 'The world is coming to an
end. I want out.'"
On Thursday, the Dow Jones industrial average rose
19.98 points, or 0.16 percent, to close at 12,855.04. The
Standard & Poor's 500 Index added 3.41 points, or 0.25
percent, to end at 1,357.99. But the Nasdaq Composite Index
fell 1.07 points, or 0.04 percent, to close at 2,933.64.
The latest uncertainty surrounding Greece and the euro
zone's sovereign debt crisis helped spark a drop in the S&P 500
in five of the past seven sessions, sending the benchmark index
down 4 percent. While the region's difficulties persisted with
the political gridlock in Greece, investors used the market's
declines as a buying opportunity.
The CBOE VIX Volatility Index, used as a measure of
investor anxiety, fell 6.2 percent to 18.83. This week, the VIX
closed above 20 for the first time in a month in a sign of
growing caution.
The number of Americans applying for jobless benefits fell
last week, but from an upwardly revised figure from the previous
week. The report follows last month's nonfarm payrolls report,
which showed weak employment growth in April.
Signs of softness in the U.S. economy recently have led some
investors to err on the side of caution and cut back on sectors
exposed to the vicissitudes of the economic cycle.
The Standard & Poor's 500 could fall 5 percent to 7 percent
from its April high, and see "several months" of choppy trading,
said Citigroup's chief U.S. equity strategist Tobias Levkovich.
"I don't see that as unreasonable," he said. "The solutions
to some of these things are not imminent. People forgot them and
got a little bit too excited."
On the plus side, News Corp rose after its profit
beat expectations late Wednesday and it announced a $5 billion
stock buyback. Its stock climbed 4.9 percent to $20.32.
With 449 of the S&P 500 companies reporting results through
Thursday morning, 66.4 percent exceeded estimates, according to
Thomson Reuters data, compared with more than 80 percent at the
start of earnings season.
Volume was 6.75 billion shares on the New York Stock
Exchange, the Nasdaq and the NYSE Amex, just above the 50-day
moving average of 6.65 billion.
On the NYSE, more than three shares rose for every two that
fell, while for the Nasdaq, about seven stocks advanced for
every five that fell.
Showing posts with label Chase Manhattan. Show all posts
Showing posts with label Chase Manhattan. Show all posts
Thursday, May 10, 2012
Surprising JPMorgan loss hits stock market late
Wednesday, January 25, 2012
My Pal Jamie Dimon interview by Maria Bartiromo
Bartiromo: JPMorgan's Jamie Dimon sees housing at bottom
This year kicked off with some improving economic data on jobs, on retail spending and even a rally in the stock market. So does the good news suggest the economic recovery is finally taking hold and 2012 will be a positive new day for job seekers? For some answers, I caught up with Jamie Dimon, who heads the USA's largest bank with $2.2 trillion in assets and operations in more than 60 countries. In a series of interviews during his firm's health care conference last week, the CEO of JPMorgan Chase was optimistic and said the troubled housing market has bottomed. He pointed to innovation in health care as a testament to America's strength and heft. Our interview follows, edited for clarity and length.
Scott Eells, Bloomberg News
Jamie Dimon, chief executive officer of JPMorgan Chase, says Europe is his biggest worry.
Q: You have a great vantage point in deciphering where we are in this recovery, with a huge consumer banking and capital markets business. How does the economy look in 2012?
COLUMN: Bartiromo: Toys R Us CEO looks abroad
COLUMN: U.S. Chamber of Commerce CEO looks to energy for job growth
A: Barring a disaster out of Europe, I do see a fairly broad, growing economy. The economy is in a mild recovery, which is strengthening. Corporations are in outstanding financial shape. They're earning money. They've got plenty of capital, plenty of wherewithal. Middle-market companies, of which most are private companies with sales of between $20 million and $2 billion, they are in fabulous financial shape and have good margins. They have a lot of capital and liquidity. We see small businesses in better shape. But we are not seeing a huge formation of small businesses yet.
Q: Where is the loan growth?
A: In two months, as of September, we've seen small-business loans up 70%, middle-market loans up 18%. And, hopefully, confidence, which is the secret sauce, will come back, too.
Q: What are you most worried about?
A: Europe. It's the biggest fly in the ointment.
Q: Do you think the European Central Bank and the leaders there have responded to the crisis in the right way?
A: The ECB changed what could be collateral for the European banks, which is important. They made what a bank can use as collateral much wider, and they put unlimited use of three-year lending. It was a huge move, much bigger than the market reaction we saw. It's possible that this one thing has removed all funding issues for the big European banks. It gives them breathing room and can help support asset prices in the meantime. The European banks are still being forced to raise capital and by that, they still have to sell assets. They're being forced to sell assets to raise even more capital at precisely the wrong time. It's not a massive amount, but you're starting to see assets for sale, loans for sale. It's tough. You can't do a good job for shareholders raising capital with huge discounts for some assets.
Q: Are there opportunities for JPMorgan in all of this? Do you look at that situation and say you want to be a buyer of certain assets? How do you buy in that environment?
A: We want to be good citizens there. We've cut back exposures there, but we've kept all the client business going, a great risk to ourselves. But we think it's very important that we'd be doing business in Italy 50 years from now, but we're trying to be very careful on that. In the meantime, there are certain assets we're looking at. There are certain businesses we're looking at.
Q: What about housing in the U.S.?
A: We have seen the worst. We are at the bottom. We may hug along the bottom for a while, but we are at the bottom. People think housing is terrible, but the early indicators tell you a lot about where it will be in 18 months or so. Supply and demand are rapidly coming in balance. Renting is now more expensive than buying in half of America. We're adding 3 million Americans a year. In the next 10 years, we have 30 million more Americans. Those 30 million Americans are going to need 15 million homes, or something like that. Household formation has gone so low. You had kids move back home — and, yes, by the way, it doesn't work for them, either. And household formation we think will have to go close to a million and a half. Once it goes to (that), housing construction will probably have to go up to a million and a half. Two million jobs, and all this shadow inventory stuff will be getting better, not worse. And it's the rate of change which is important, not the absolute level.
It's still terrible, by the way. But we think it's going to get better over time. And then hopefully, maybe, we'll have some rational policies around housing which will make it better. So housing is near the bottom. Once you see employment start to grow 300,000, 400,000, 500,000 a month, you better buy that house you want really soon because it'll change in price right away.
Q: Is there a plan that you would envision to get some of that 90% mortgage origination away from the government-run Fannie Mae and Freddie Mac and instead coming from the private sector?
A: Yes. Almost everything being originated today is being sold to Fannie and Freddie. There's a certain amount of jumbo mortgages which the banks originally keep for themselves. You can design a mortgage system that is different without a Fannie and Freddie, but there are principles you have to have, to have a good system. If the government wants to do social policy, it should not be done in a quasi-public company. If you have a mortgage guarantee company which is done by the U.S. government, it should be guaranteed by the originators, i.e., the shareholder. You can set up a system that the government's not involved at all, but you have to transition there over 10 or 15 years because Fannie and Freddie are so big. Mortgages will cost a little bit more, but it actually may be a healthier system. So you could do either one. I just hope people who are responsible for this sit down and do it very thoughtfully.
Q: The Federal Reserve is conducting new so-called stress tests. We will learn the results in March. JPMorgan has submitted a plan to handle potential stress. How will your firm come out on this?
A: There's a very good thing about the stress test. I don't agree with all of it. But I agree with stress tests. You should be able to look at a JPMorgan and say, "Can you handle massive stress?" But the stress here is 13% unemployment, home prices down 20%, equity markets down 50%, a catastrophe in the markets and a catastrophe in Europe. And, yes, we can handle all that and be well above the 5% tier-one capital required. I'm hoping what it shows is that American banks — there may be an exception or two — are extremely well capitalized and can handle extreme stress, and maybe one day we'll just take this issue off the table. I also believe, by the way, they can prove the point I've been making, that at one point we'll get into too much capital because we're going to have to hold on to more capital than this number. That's too much, and maybe this helps prove that.
Q: Shareholders of JPMorgan saw their stock fall in 2011 (down 20%, including dividends). How will you return value to shareholders? Will you raise your dividend after the stress-test results come out?
A: That's a board-level decision, but when we raised it the last time, back to $1 a share, we did tell the world that the intent is that every year we will look at it and hopefully give shareholders a little bit more.
Q: Are interest rates going to go up in 2012?
A: Rates are going to go up. The faster things improve, the sooner you get higher rates. So the first part of higher rates is a good thing. Going back to a normal (yield) curve would be a great thing if this was accompanied by growth and not high inflation. There's some people who are afraid you're going to have too much inflation when this all turns around. That's a legitimate concern, too.
Q: What is it going to take to get jobs created in this country again?
A: You're starting to see it already, and a little of that becomes self-sustaining. Because if you got a job, you might buy a new car. You might buy a house. People get married, they have babies. That creates more demand. So we have a very broad-based economy, a very strong America. It'll recover. It always has. Even after the worst of the worst. I'm going back to after the Civil War, after World War II, after we had the malaise in the '70s, it recovered each time. And I'm not sure you can always point out the one thing that made it recover other than just the good old American spirit that we all like to work and we all want to grow and we all want to expand. Right now we seem a little overly depressed.
Q: What do you want to say to the Occupy Wall Street protesters who are upset about the income gap and upset about the banks making money while they feel that they're not making any money?
A: When people complain, I always try to listen to where the legitimate complaints are. So here's what's legitimate. There's more income inequality in America than some years ago. I think that that's not a good thing. That's generally true. The second is, if you look at the institutions of America, not just banks, and if you look at Washington and Wall Street, we let them down. That's true, too. Once you go beyond that, you start to become indiscriminate. You should be asking, "What will you do to fix it and change it?" Whether it's better regulations, better laws, progressive taxation. We should all try to do our part.
Q: You have talked a lot about demonizing of the industry in recent years. Would the pressure on banks be alleviated under a different administration, and will you support President Obama this year in the November election?
A: What I would hope for: that there is no so-called pressure in the industry. That we had rational collaboration about how to build a great country with great rules and regulations that allow business to thrive. If business doesn't thrive, it hurts America. We need improved relations, more collaboration, more thought and more consistency as we go about trying to make sure we have the best country in the world. Not scapegoating and finger-pointing. I haven't decided what I'm doing in terms of who to support. Yes, I'm still a Democrat, but I find it very hard to listen to at least the left part of that party right now, and I don't know what I'm going to do yet.
Bartiromo is anchor of CNBC's Closing Bell and anchor and managing editor of the nationally syndicated Wall Street Journal Report with Maria Bartiromo. Follow her on Twitter @mariabartiromo. To see previous columns, go to bartiromo.usatoday.com.
For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.
Thursday, December 29, 2011
One Week to Go - 15 times at Bat
I need to have my appeal filed by next Tuesday, Jan 5, 2012
This will be the 15th time the court will be able to give me my day in court, my right to be heard. The facts are undeniable, and the law is settled, yet no court has given me 'my day in court'.
March 2003 Bankruptcy Court denies hearing
August 2003 District Court affirms lower court
June 2005 9th Circuit rules for bank
August 2005 9th Circuit denies reconsideration
November 2005 United States Supreme Court denies review
April 2006 United States Supreme Court denies reconsideration after BAP reversal of court.
April 2007 Bankruptcy Court Motion for hearing denied
August 2008 District Court affirms Bankruptcy Court
May 2009 9th Cir denies my petition for mandamus (order)
June 2009 9th Circuit denies appeal
August 2009 9th Circuit denies reconsideration
January 2010 Supreme Court denies review
January 2011 Bankruptcy Court dismisses Motion for Hearing
May 2011 Petition for Mandamus to Court
June 2011 Appeal to 9th Circuit
This will be the 15th time the court will be able to give me my day in court, my right to be heard. The facts are undeniable, and the law is settled, yet no court has given me 'my day in court'.
March 2003 Bankruptcy Court denies hearing
August 2003 District Court affirms lower court
June 2005 9th Circuit rules for bank
August 2005 9th Circuit denies reconsideration
November 2005 United States Supreme Court denies review
April 2006 United States Supreme Court denies reconsideration after BAP reversal of court.
April 2007 Bankruptcy Court Motion for hearing denied
August 2008 District Court affirms Bankruptcy Court
May 2009 9th Cir denies my petition for mandamus (order)
June 2009 9th Circuit denies appeal
August 2009 9th Circuit denies reconsideration
January 2010 Supreme Court denies review
January 2011 Bankruptcy Court dismisses Motion for Hearing
May 2011 Petition for Mandamus to Court
June 2011 Appeal to 9th Circuit
Friday, December 2, 2011
An Open Letter to California Attorney General Kamala Harris
December 2, 2011
Attorney General Kamala Harris:
I read an article on Fox News that indicated the Iowa Attorney General, Tom Miller, will attempt to convince you to sign on with his compromise with Wall Street banks, and their perfidious service agents. I strongly urge you to reject this compromise and here is why.
For over nine years I have attempted to gain a judicial hearing to expose the undeniable violation of law committed by Chase Manhattan and their service agent Ocwen Federal Bank FSB. Two complete trips to the United States Supreme Court have yielded zero results. The latest legal challenge to obtain this hearing is at the 9th Circuit Court of Appeal 11-60039 Ozenne v Chase Manhattan.
Something has happened in our country, and money influences politics to the highest levels, and now the banks want to put this behind them. Well fine, go to court and let Ozenne state his claim and let the chips fall. I have written Jamie Dimon several times, , as well as all of my political leaders, all to no avail, although Elizabeth Warren gave me some useful suggestions, and in 2004, I wrote newly elected Governor Arnold Schwarzenegger who raised my allegations about Ocwen with the Office of Thrift Supervision. Ocwen simply lied in their response to OTS.
It's time someone challenged these banks, because I have lived in a twilight zone where the powerful can break the law with impunity, and a average citizen cannot gain a hearing to raise his grievances. The keystone principle upon which our country is based; the rule of law.
My case has been in our courts for almost a decade, and if past results are an indicator, when briefing is complete in February 2012, it may take another 18 months just to see if I get my hearing! I need the law enforced. The issues is my case -- violation of the automatic stay -- are settled law, and the facts undeniable, yet I am stymied at every turn.
Please take note of my case, when discussing why California should not participate in this agreement. It can be followed at this web blog www.banksters.us
Good Luck Attorney General Harris
Gary Ozenne
firesprinklers@gmail.com
7351 Piute Creek Drive.
Corona, CA 92881
951-227-5009
Attorney General Kamala Harris:
I read an article on Fox News that indicated the Iowa Attorney General, Tom Miller, will attempt to convince you to sign on with his compromise with Wall Street banks, and their perfidious service agents. I strongly urge you to reject this compromise and here is why.
For over nine years I have attempted to gain a judicial hearing to expose the undeniable violation of law committed by Chase Manhattan and their service agent Ocwen Federal Bank FSB. Two complete trips to the United States Supreme Court have yielded zero results. The latest legal challenge to obtain this hearing is at the 9th Circuit Court of Appeal 11-60039 Ozenne v Chase Manhattan.
Something has happened in our country, and money influences politics to the highest levels, and now the banks want to put this behind them. Well fine, go to court and let Ozenne state his claim and let the chips fall. I have written Jamie Dimon several times, , as well as all of my political leaders, all to no avail, although Elizabeth Warren gave me some useful suggestions, and in 2004, I wrote newly elected Governor Arnold Schwarzenegger who raised my allegations about Ocwen with the Office of Thrift Supervision. Ocwen simply lied in their response to OTS.
It's time someone challenged these banks, because I have lived in a twilight zone where the powerful can break the law with impunity, and a average citizen cannot gain a hearing to raise his grievances. The keystone principle upon which our country is based; the rule of law.
My case has been in our courts for almost a decade, and if past results are an indicator, when briefing is complete in February 2012, it may take another 18 months just to see if I get my hearing! I need the law enforced. The issues is my case -- violation of the automatic stay -- are settled law, and the facts undeniable, yet I am stymied at every turn.
Please take note of my case, when discussing why California should not participate in this agreement. It can be followed at this web blog www.banksters.us
Good Luck Attorney General Harris
Gary Ozenne
firesprinklers@gmail.com
7351 Piute Creek Drive.
Corona, CA 92881
951-227-5009
Wednesday, November 9, 2011
Why am I being Ignored by the court system ?
October 18, 2011
As I work on my latest appeal to the court to give me a hearing to show my proof of the violation of law by the Wall Street Banker and their perfidious service agent; Ocwen Federal Bank FSB,I am encouraged by the Occupy Wall Street movement.
Since I will be filing this latest appeal electronically I can now utilize hot links to the prior pleadings and decisions in my informal opening brief. While linking to the 9 years of appeals I am amazed that I have been unable to gain a court hearing. Twelve separate opportunities for just one Judge to say 'give him a hearing, determine the facts, and apply the law'.
It is unbelievable to me that an American citizen can suffer the loss of his home and business by the violation of law by a Wall Street Bank and their agent, and these same banks have kept it out of court,
Of course that is the only way the banks prevail, by keeping me out of court, since my proof of their violation is undeniable.
The latest appeal is to the 9th Circuit Court of Appeals, challenging the lower bankruptcy courts ability to not follow their own precedential law, which ruled I must be given a hearing.
The bankruptcy judge that refused my hearing, is now a part of the appeals panel, that denied my latest request for a hearing, although not a part of the three judge panel that decided my case.
The OWS protests have struck a nerve with me. This is not the America I want.
A lot of other American citizens agree with me. The mortgage meltdown simply exposed the unbridled greed of Wall Street. That greed filtered down to the loan brokers and lenders.
The players in the Wall Street Casino, bet that US residential real estate would continue to rise. Of course, they did not bet the house, they bet our houses, then sold it, quickly to the world.
Ruthless? you bet they are. When I couldn't refinance my home of 26 years, because of their violation of law - changing the title - instead of fixing their 'mistake', they doubled down their bet, and sold it again, and when that real estate investor had me evicted, the banks cleaned up the title for the buyer of my home.
I have been fighting ever since.
www.banksters.us
As I work on my latest appeal to the court to give me a hearing to show my proof of the violation of law by the Wall Street Banker and their perfidious service agent; Ocwen Federal Bank FSB,I am encouraged by the Occupy Wall Street movement.
Since I will be filing this latest appeal electronically I can now utilize hot links to the prior pleadings and decisions in my informal opening brief. While linking to the 9 years of appeals I am amazed that I have been unable to gain a court hearing. Twelve separate opportunities for just one Judge to say 'give him a hearing, determine the facts, and apply the law'.
It is unbelievable to me that an American citizen can suffer the loss of his home and business by the violation of law by a Wall Street Bank and their agent, and these same banks have kept it out of court,
Of course that is the only way the banks prevail, by keeping me out of court, since my proof of their violation is undeniable.
The latest appeal is to the 9th Circuit Court of Appeals, challenging the lower bankruptcy courts ability to not follow their own precedential law, which ruled I must be given a hearing.
The bankruptcy judge that refused my hearing, is now a part of the appeals panel, that denied my latest request for a hearing, although not a part of the three judge panel that decided my case.
The OWS protests have struck a nerve with me. This is not the America I want.
A lot of other American citizens agree with me. The mortgage meltdown simply exposed the unbridled greed of Wall Street. That greed filtered down to the loan brokers and lenders.
The players in the Wall Street Casino, bet that US residential real estate would continue to rise. Of course, they did not bet the house, they bet our houses, then sold it, quickly to the world.
Ruthless? you bet they are. When I couldn't refinance my home of 26 years, because of their violation of law - changing the title - instead of fixing their 'mistake', they doubled down their bet, and sold it again, and when that real estate investor had me evicted, the banks cleaned up the title for the buyer of my home.
I have been fighting ever since.
www.banksters.us
Thursday, September 29, 2011
Words from 1940 about September 2011 Wall Street Protests
Is Michael Moore channeling Winston Churchill ?
Monday, September 26, 2011
Court Seeks Information - Briefing on Hold
On September 22, 2011 the United States Court of Appeals for the 9th Circuit ordered an explanation of my income from PaRR (FEMA contractor), and former employer, Sun Boss, in considering my petition to proceed in forma pauperis (without fees). I responded electronically the following day September 23, 2011 and now I wait for further order from the court, and continue to work on the pro-se downloadable outline for an informal opening brief for my case, 11-60039
Tuesday, September 20, 2011
Go Get them Eric
The Man Who May Bring the Banksters to Justice (If They Don't Break His Knees First)
React
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New York State Attorney General Eric Schneiderman may go down in history as the most important public official in reforming the corrupt financial system that caused the great Financial Crisis of 2008 and holding the perps responsible -- if he can hold out against pressure from Wall Street, the Federal Reserve, and the Obama administration to give Wall Street a "Get Out of Jail Free" card.
Eric Schneiderman has played a key role in the investigation of foreclosure fraud and robo-signing by 50 state attorneys general against JP Morgan Chase, Bank of America, Wells Fargo, Citigroup, and Ally Bank. Reportedly, most of of the attorneys general -- with the support of the Obama administration -- are advocating a $20 billion settlement with the banks (less than a year's worth of Wall Street's bonus pool) in exchange for broad immunity from future investigations and prosecutions, not only of illegal foreclosures but of a wide range of fraudulent activity in connection with mortgage securitization over the past decade.
Schneiderman -- who would arguably be the single most important attorney general in making a global "Get Out of Jail Free" card stick -- has been objecting for months to a settlement which barred future litigation. "The attorney general remains concerned about any attempt at a global settlement that would shut down ongoing investigations of wrongdoing related to the mortgage crisis," said Schneiderman's spokesman.
Or as Matt Taibbi put it more tartly in a Rolling Stone blog,
The idea behind this federally-guided 'settlement' is to concentrate and centralize the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and stuff the details into a titanium canister before shooting it into deep space.
According to last week's New York Times, Schneiderman has come under heavy pressure not just from the banks and the Federal Reserve, but from the Obama administration to drop his opposition to a wide-ranging settlement.
According to the Times, bank officials recently discussed asking Obama's Secretary of Housing and Urban Development Shaun Donovan for help in changing Schneiderman's mind about the global settlement. Donovan has contacted Schneiderman directly to convince him to back down, while he and other members of the Obama administration have been contacting Schneiderman's allies. (You can bet top administration officials wouldn't be doing this without the ok from their boss, President Obama. It couldn't, by any chance, have any relationship to a recent meeting in the White Green Room between President Obama and two dozen Wall Street executives, organized by the Democratic National Committee, to win back the allegiance of one of his most vital sources of campaign cash? )
A few days after the Times disclosed the Obama administration's campaign to intimidate Schneiderman, he was kicked off the executive committee of the 50 attorneys general negotiating the bank settlement, and accused by its chairman of "working to actively undermine" the settlement.
As attorney general for the state where Wall Street is located -- with the power to continue to investigate and prosecute financial crimes -- a global settlement with the other 49 attorneys general isn't worth that much to the banks without Schneiderman's buy-in. Or as Matt Taibbi quoted the immortal words of Al Pacino as Tony Montana in Scarface, "How do I know you're the last cop I'm gonna have to grease?"
As New York State's top law enforcement official, Schneiderman wields a powerful weapon in the state's Martin Act of 1921 which has been called "the legal equivalent of King Arthur's Excalibur" and the "legal equivalent of a weapon of mass destruction" when aimed at securities fraud. Unlike Federal securities law, it doesn't require proof of criminal intent to defraud--which is often difficult to prove--only that a defrauding act was committed. Courts have held that "fraud" under the Martin Act "includes all deceitful practices contrary to the plain rules of common honesty and all acts tending to deceive or mislead the public, whether or not the product of scienter or intent to defraud". As described in Legal Affairs Magazine,
The purpose of the Martin Act is to arm the New York attorney general to combat financial fraud. It empowers him to subpoena any document he wants from anyone doing business in the state; to keep an investigation totally secret or to make it totally public; and to choose between filing civil or criminal charges... Combined, the act's powers exceed those given any regulator in any other state.
Unlike the federal government under President Obama, which hasn't prosecuted a single top financial executive, Schneiderman seems intent on using the formidable weapons of his office to investigate possible financial crimes. According to The New York Times,
The New York attorney general has requested information and documents... from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses. Officials in Eric T. Schneiderman's office have also requested meetings with representatives of Bank of America, Goldman Sachs and Morgan Stanley... The inquiry appears to be quite broad, with the attorney general's requests for information covering many aspects of the banks' loan pooling operations. They bundled thousands of home loans into securities that were then sold to investors such as pension funds, mutual funds and insurance companies.
Maybe there's no relationship to Schneiderman's investigation, but last week Goldman Sachs Chairman Lloyd ("I'm doing God's work") Blankfein hired a private criminal defense attorney with his own funds.
Schneiderman also recently used the Martin Act to intervene in court to block a settlement between Bank of America (the new owner of Countrywide bank, one of the biggest issues of "liar" loans during the housing boom) and Bank of New York Mellon, which would have released the banks from liability for a broad range of securities law violations, accusing Mellon Bank of "repeated fraud and illegality" and B of A of fabricating missing documents and "aiding and abetting" Mellon Bank's breach of fiduciary duty. Schneiderman warned that the settlement might interfere with his ability to investigate future claims against B of A, Countrywide, and Mellon.
Schneiderman's actions so angered Kathryn Wilde, a member of the board of the New York Federal Reserve Bank, whose job it is to regulate banks in the public interest, that Ms. Wilde confronted Schneiderman as he was leaving a memorial service for former New York Governor Hugh Carey. Ms. Wilde said to The New York Times that she told Schneiderman,
It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street (emphasis added) -- love 'em or hate 'em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible."
As Matt Taibbi commented,
This.. is coming... from the person on the Fed board who is supposedly representing the public! This quote leads one to wonder just what Wylde would consider 'indefensible,' given that stealing is pretty much the worst thing that a bank can do -- and these banks just finished the longest and most orgiastic campaign of stealing in the history of money. Is Wylde waiting for Goldman and Citi to blow up a skyscraper? Dump dioxin into an orphanage?
The bank regulator's quote is reminiscent of George W. Bush's comment to a crowd of big money donors: "Some call you the elite. I call you my base."
With the Federal Reserve, Wall Street's biggest banks, and the Obama administration all pressuring Schneiderman to back off, you can be sure private investigators are looking into every nook and cranny of his personal life since he threw a spitball in kindergarten when the teacher wasn't looking. His personal and professional life had better be above reproach -- let's hope that unlike his predecessor Eliot Spitzer, who also tried to take on Wall Street, he never consorted with hookers or been involved with any other personal scandals. Morever, a Democratic president has the power to threaten a Democratic Attorney General's political future, to try to block him from higher office, and even to encourage a well-financed primary challenge to his reelection.
It takes steel cojones to stand up for the public interest against a united assault by some of the most powerful forces in the world, including Wall Street's biggest banks, the Federal Reserve, and the President of the United States. For those who would like to see the banksters brought to justice for crashing the economy while lining their own pockets -- and perhaps make a future generation of banksters think twice before doing the same thing again -- let's hope Schneiderman has the requisite assets.
In the meantime, you can email Eric Schneiderman and let him know that you've got his back and support him standing firm in continuing to investigate financial wrongdoing and resisting handing Wall Street a "Get Out of Jail Free" card, by clicking here.
It takes steel cojones to stand up for the public interest against a united assault by some of the most powerful forces in the world, including Wall Street's biggest banks, the Federal Reserve, and the President of the United States. For those who would like to see the banksters brought to justice for crashing the economy while lining their own pockets -- and perhaps make a future generation of banksters think twice before doing the same thing again -- let's hope Schneiderman has the requisite assets.
In the meantime, you can email Eric Schneiderman and let him know that you've got his back and support him standing firm in continuing to investigate financial wrongdoing and resisting handing Wall Street a "Get Out of Jail Free" card, by clicking here.
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