Banks Behaving Badly

“We’re doing what a bank is supposed to do.” That’s JP Morgan Chase CEO Jamie Dimon before a US Senate Committee after a two billion dollar gambling loss that has since grown to nearly six billion and is forecast to hit even higher numbers. Dimon was much harder on himself than were the Senators, or the members of a House Committee in a subsequent hearing. 

No surprise, members of Congress have good reason to be friendly. Dimon has pitched millions into Congressional war chests -more to Republicans, but lots to go around. The committee members understandably tossed softball questions. Dimon was decked out in cuff links with the presidential seal just so everyone would know where he was coming from. 

Unbelievably nobody called him on his, “We’re doing what a bank is supposed to do” line. This from a “Bankster,” as the Economist has labeled the out-of-control leaders of our financial sector. The billions lost on bad bets placed by one of its traders (AKA gamblers) in London are the least of the problems Dimon is facing. 

Chase is ensnared in the evolving Libor scandal that has a group of international banksters fixing interbank lending rates, impacting every loan rate imaginable. 

The incredibly complex Libor rate fixing scheme crosses civil and criminal legal lines. Dimon was fully aware of his bank’s involvement in this racket when he delivered his “What a bank is supposed to do” line; so we must assume that he thinks juggling interest rates worldwide is what banks do. 

That isn’t even the worst it. When Dimon was flaunting his control over those we send to Washington to do our business, he was fully aware that Chase had just shelled out a seventy-five million dollar fine for rigging a bid on a three billion dollar sewer bond deal that pushed Birmingham, Alabama into bankruptcy. A deal they cinched with a three million dollar bribe to Goldman Sachs. Chase and a host of other banksters have been rigging municipal bond auctions for decades.

This all came out when the Feds convicted three minor players from GE Capital they nailed rigging bond auctions. The Feds got their hands on recordings of telephone conversations between banksters making highly illegal deals to pass municipal bond business around among the banks. In addition to the bankster types from GE who are going to jail, scores of others from virtually every major bank in America and many international banks as well have taken a plea deal. 

Let’s be clear about what’s going on here. 

Between the Libor racket and the municipal bond rigging scam- the banksters have ripped off everyone in America to the tune of untold billions. JP Morgan Chase is not alone in these Mafia style rackets, but if that’s what Jamie Dimon thinks “banks do” then he has a different ethical standard than most of us hold.

CEO Meltdown

What is it with these people? The banking class seems to forget how we got into this mess and who is primarily responsible. Wholesale stripping away of the rules of the road –read banking regulations–over the last few decades opened the doors to unbelievable levels of greed.

Now that the rather mild (after the lobbyists beat it down) Dodd-Frank Act is in place, they are whining about too much regulation. In truth that unregulated playground where greed-monger bankers frolicked, it’s still open. They are playing the same game with reckless abandon. While the law says we won’t bail them out again, they know we can not allow “too-big-to-fail” banks to fail.

The mere mention of restraint triggers an explosive response. Take the reports leaked from a meeting of the Financial Stability Forum in Washington. Mark Carney, Governor of the Bank of Canada, endured a hissy fit from JP Morgan Chase Honcho, Jamie Dimon. Dimon found suggested changes to the Basel III banking standards, “anti-American.”  

When banks like Chase were fighting for their lives and begging our taxpayers to bail them out, Canada’s banks were fine. Carney’s response to Dimon’s attack was measured: "If some institutions feel pressure today, it is because they have done too little for too long, rather than because they are being asked to do too much, too soon." Based on sixteen attributes worldwide, 42,000+ respondents to The Reputation Institute's 2011 annual study ranked Canada #1. Is it any wonder the US came in 23^rd – behind even Greece?

It’s not as though JP Morgan Chase is a “Poster Child.” They are mired in a smarmy Jefferson County, Alabama bribery mess where political types have been convicted of pocketing $8 million. Birmingham’s mayor went down for taking $235,000. As part of the settlement, Chase eats $647 million in fees, pays Jefferson County $50 million, plus a $25 million SEC penalty. This does the county little good; it is still drowning in over $3 billion in derivative based financial instruments.

The ethical no-man’s-land JP Morgan Chase seems to inhabit extends to our fighting men and women as well. The law is crystal clear when it comes to mortgage holders and the military. But, Chase may have missed that memo. In just one case, a Marine captain flying F-18 missions overseas suffered an ongoing nightmare. He and his wife did everything right. To their surprise Chase ignored their on-time mortgage payments, began foreclosure proceedings, and set collection agency dogs on them. The captain’s wife was raising their small children on her own, one with health issues, all the while the Chase collection goons are ringing her telephone around the clock.

When Chase finally recognized the string of goof-ups on the military that included the Marine Captain, a mid-level banker apologized. That – is – pathetic! JP Morgan Chase and its spoiled brat CEO, Jamie Dimon, that’s who is “anti-American” in this sad tale.