JP Morgan, Not Satisfied with Profitable WaMu Acquisition, Sues FDIC to Extract More
If you are Jamie Dimon, a good deal is apparently never good enough.
Read more...Category Archives: Real estate
Big Banks About to Start Booking Second Mortgage Losses They Can No Longer Extend and Pretend Away
Reuters has a new article, Insight: A new wave of U.S. mortgage trouble threatens, which is simultaneously informative and frustrating. It is informative in that it provides some good detail but it is frustrating in that it depicts a long-standing problem aided and abetted by regulators as new.
Read more...How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme — Again
Over the last year and a half, Wall Street hedge funds and private equity firms have quietly amassed an unprecedented rental empire, snapping up Queen Anne Victorians in Atlanta, brick-faced bungalows in Chicago, Spanish revivals in Phoenix
Read more...Bob Goodwin: Why Code is Law
Several bellwether software initiatives have gone off the rails over the last five years. I am going to focus on one, because I learned about it on Naked Capitalism, and is where I first saw the expression “Code is Law”. I hope when history is written, this example will stand out on how the anarchist nerds that we call software engineers inadvertently started to hijack public institutions.
Read more...Judge Rakoff Blasts Breuer, Prosecution of Companies Rather than Individuals in Bar Speech
Absent sitting on the Supreme Court, it is difficult for a single judge to effect much change. Yet Jed Rakoff, in sending the SEC back to the woodshed in two separate cases over its failure to get factual admissions, meaning admissions of misconduct, on civil settlements of SEC cases, singlehandedly embarrassed the SEC and the Department of Justice into seeking these statements (for instance, numerous media reports indicate that the Administration wants that sort of confession as part of its pending settlement with JP Morgan).
Rakoff threw down another gauntlet in a New York Bar Association speech on Tuesday.
Read more...Richard Alford: On Grading the Bernanke Fed
We are certain to hear more and more appraisals of Bernake’s tenure as Fed chairman as he approaches the end of his term. But will they use good benchmarks? We suggest measuring his performance against his claims for the Fed’s objectives and what he said the central bank could accomplish. Not surprisingly, we find that he came up short.
Read more...Bill Black: The U.S. Attorney Who Prosecutes JP Morgan Will Be Its First Witness
The lead investigator in the Federal prosecution against JP Morgan has said he doesn’t think it makes sense for banks to have made bad loans.
Read more...Markets Enter Blowoff
You know something is going wrong when the heads of the largest fund manager in the world and the largest bond management firm simultanously scream ”bubble”.
Read more...We Discuss the JP Morgan “Settlement” on Democracy Now
I was glad to get the chance to discuss the misnamed JP Morgan settlement on Democracy Now yesterday. It’s misnamed because it’s not a single settlement, but a series of settlements, mainly if not entirely FHFA and state actions, bundled together, plus fines. Plus as you will see soon that’s far from the only way it’s been misreported!
Read more...Gretchen Morgenson on Bill Moyers: Ignore Those Crocodile Tears for JP Morgan
Yves here. Gretchen Morgenson gives an accessible presentation of why no one should feel sorry for the fact that JP Morgan is set to pay a roughly $13 billion settlement of a raft of mortgage-related liability. And she also dispatches the myth that the Department of Justice took a tough stance.
Read more...Bill Black: The New York Times Publishes the Most Ironic Sentence of the Crisis
Yves here. I enjoyed this piece by Bill Black because 1. Anyone who tries to pretend the Administration is serious about prosecuting bank-related fraud needs to be named and shamed and 2. I like the device of using a single sentence as the basis for a post.
Read more...Mirabile Dictu! Bank of America Found Guilty of Fraud for “Hustle” Mortgage Lending Program
Don’t get too excited.
Read more...The Ridiculous “Jamie Dimon as Victim” Meme on the Pending JP Morgan Mortgage Settlement
Nothing like having a credulous, leak-dependent media to carry your messages.
Read more...Bill Black: Arnold Kling’s Cunning Hairdresser Theory of the Financial Crisis
Yves here. I have to confess that I love this title. It serves as a reminder that the meme that lenders in the crisis were somehow victimized by borrowers is a lame defense of rank incompetence or worse. The basic rule of lending is that all you have is downside from a credit perspective. The borrower is never going to perform better than the terms of the agreement, and he may well do worse. Any competent lender knows that borrowers can be overly optimistic, naive, unlucky, or downright crooked. Lenders therefore need to take prudent measures to protect themselves from these well-known borrower foibles, the most important being not lending to obvious bad risks, and adding enough margin to your cost of borrowing to cover debtor bad luck and your own miscalculation. So to have a huge explosion of borrower defaults, including a meaningful swathe of subprime borrowers defaulting in the first 90 days, is proof not of massive borrower chicanery, but massive lender incompetence or corruption (as in presuming they could dump the dodgy loan on the next fool in the securitization pipeline).
Read more...Ilargi: Gordon Gecko Moved To London To Finish Where He Left Off
Last week I saw a headline in the Daily Telegraph that got me thinking. It encapsulates a lot of what poses as philosophy in our world today, as a valid way of thinking and a relevant approach to all the crises we live through simultaneously at the moment. One which, when you look longer and closer, appears at least at first glance to lack all philosophical value – since it doesn’t actually weigh any pros and cons -, and turns out to be a rehash of a hodge-podge of the very failed old theories that have led us into our crises.
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