Bully Bonus: $11.7 Billion JPM

“Each year they will launder more money back into the system and back onto the books so it becomes “on balance sheet” but the explanation of where the profits came from will be double-talk. But as long as we let them do it, they will be using the proceeds of purse snatching from the little people and wholesale robbery from the the taxpayers to pretend that they have higher and higher earnings, make their stock more and more valuable.

QUESTION FOR THE INVESTORS HOLDING CERTIFICATES OF MORTGAGE BACKED SECURITIES: HOW MUCH OF THIS DECLARED PROFIT AND THE BONUSES ACTUALLY SHOULD HAVE GONE TO YOU AS THE CREDITOR WHOSE INVESTMENT WENT SOUR? IS THERE A CONSTRUCTIVE TRUST HERE CREATED BY LAW? COULD IT BE THAT THE BENEFICIARIES INCLUDE YOURSELF, THE HOMEOWNERS AND THE TAXPAYERS THROUGH THEIR GOVERNMENT. ISN’T IT POSSIBLE THAT THESE ALLEGED PROFITS AND BONUSES WOULD COVER MUCH OF YOUR LOSSES?

  1. ISN’T IT POSSIBLE THAT THE INVESTORS CONTINUE TO BE PLAYED AS FOOLS AS THESE BANKS AND OTHER INTERMEDIARIES SPLIT UP THE MONEY YOU INVESTED?
  2. ISN’T IT POSSIBLE THAT THE SERVICERS AND OTHER INTERMEDIARIES ARE ACTING IN THEIR OWN INTERESTS AND NOT THE INTERESTS OF THE INVESTORS.?
  3. ISN’T IT POSSIBLE THAT YOU HAVE THE RIGHTS OF A MINORITY SHAREHOLDER OR MINORITY PARTNER FOR ACCESS TO THE REAL INFORMATION ON WHAT IS BEING COLLECTED AND WHERE THE MONEY IS GOING?

This is the start of the REST of the scheme. Gradually repatriating income that was previously undeclared. $23.7 trillion was skimmed largely by the four horsemen of the Apocalypse. All that taxpayer money, in cash, obligations and guarantees went out because these banks were “too big to fail” and we accepted the proposition that they were failing when in fact they were sitting on more money than the government had. The “loss” was an accounting loss allowable by changes to generally accepted accounting principles (GAAP), deregulation and failure of the SEC to enforce the most basic elements of disclosure. They called it “off-balance sheet” transactions.

Now they they are laundering the money back in and giving themselves bonuses out of the taxpayer money they obtained through misrepresentation of their REAL financial status.

Each year they will launder more money back into the system and back on the books so it becomes “on balance sheet” but the explanation of where the profits came from will be double-talk. But as long as we let them do it, they will be using the proceeds of purse snatching from the little people and wholesale robbery from the the taxpayers to pretend that they have higher and higher earnings, make their stock more and more valuable.

They have no trouble taking their bonuses in stock. They know the stock will be ever higher and higher and the price earnings ratios will go up, multiplying the effect of the higher earnings. They know it just as surely as they knew the loans would fail, that their influence in Washington was strong enough with the Bush administration to get free money for fake losses, and that their tacit agreement to let non-creditors sue on defective loans as hush money would keep the cycle going.

President Obama told the big four that the only thing between them and pitchforks from the populace was him and he was doing his best to maintain order. But they don’t get it and they won’t get it because they think, perhaps correctly, that they will get away with the multiple phase scheme to drain America dry. Get out the pitchforks or watch your country dry up into a memory.

What does this mean for litigation and discovery. Plenty. The offshore SIV’s are the vehicle through which this money was sequestered and they are the vehicles through which the money is being laundered back in. That is why you must emphasize that you want the WHOLE accounting and not just the part about the records of the servicer, master servicer or some other intermediary in the securitization chain. They will try to keep the court’s attention on the non-payment of the borrower while you are trying to get a full accounting of the money from the start of the transaction all the way from debtor through creditor.

To use a simple analogy, suppose you had a five year loan and you prepaid the principal at the rate of $1,000 per month for the first three years.

Now they come in and want the court only to look at the total obligation and the fact that you missed the last three payments but they refuse to allow you access to an accounting that would prove the total principal has been reduced by your previous prepayments of $36,00 in addition to the regular amortization contained in your regular monthly payments.

Now add the fact that after the closing they realized that they had overcharged you on points for the loan and other charges, and they sent you a letter to that effect but the credit doesn’t show up in the demand, their notice of default of their foreclosure.

You have a right to demand discovery based upon your allegation that there were was money paid and that there are adjustments due in the accounting and that they have only offered a partial accounting, their demand letter was incorrect and so was their notice of default. What I am suggesting is that all of the above may be true PLUS there may have been debits and credits arising from third party transactions with participants in the securitization chain that you are only just learning about and you have a  right to discovery about that too.

REMEMBER: At this stage you are RAISING the question of fact, not proving it. You don’t have to be right to be entitled to discovery. You only have to make an allegation and it helps to have an expert declaration to go with it. Your goal is not to get the Judge to agree that these people can’t foreclose. Your goal is to get to the truth about your loan, the parties and all the money that exchanged hands. At the conclusion of discovery, properly conducted, and with the help of an expert, the case could very well be over.

New York Times

January 16, 2010

JPMorgan Chase Earns $11.7 Billion

JPMorgan Chase kicked off what is expected to be a robust — and controversial — reporting season for the nation’s banks on Friday with news that its profit and pay for 2009 soared.

In a remarkable rebound from the depths of the financial crisis, JPMorgan earned $11.7 billion last year, more than double its profit in 2008, and generated record revenue. The bank earned $3.3 billion in the fourth quarter alone.

Those cheery figures were accompanied by news that JPMorgan had earmarked $26.9 billion to compensate its workers, much of which will be paid out as bonuses. That is up about 18 percent, with employees, on average, earning about $129,000.

Workers in JPMorgan’s investment bank, on average, earned roughly $380,000 each. Top producers, however, expect to collect multimillion-dollar paychecks.

The strong results — coming a day after the Obama administration, to howls from Wall Street, announced plans to tax big banks to recoup some of the money the government expects to lose from bailing out the financial system — underscored the gaping divide between the financial industry and the many ordinary Americans who are still waiting for an economic recovery.

Over the next week or so, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are expected to report similar surges in pay when they release their year-end numbers.

But not all the news from JPMorgan Chase was good. Signs of lingering weakness in its consumer banking business unnerved Wall Street and drove down its share price along with those of other banks.

Chase’s consumer businesses are still hemorrhaging money. Chase Card Services, its big credit card unit, lost $2.23 billion in 2009 and is unlikely to turn a profit this year. Chase retail services eked out a $97 million profit for 2009, though it posted a $399 million loss in the fourth quarter. To try to stop the bleeding, the bank agreed to temporarily modify about 600,000 mortgages. Only about 89,000 of those adjustments have been made permanent. In a statementon Friday, Jamie Dimon, the chairman and chief executive of JPMorgan, said that bank “fell short” of its earnings potential and remained cautious about 2010 considering that the job and housing markets continued to be weak.

“We don’t have visibility much beyond the middle of this year and much will depend on how the economy behaves,” Michael J. Cavanagh, the bank’s finance chief, said in a conference call with journalists. Across the industry, analysts expect investment banking revenue to moderate this year and tighter regulations to dampen profit. As consumers and businesses continue to hunker down, lending has also fallen.

Just as it did throughout 2009, JPMorgan Chase pulled off a quarterly profit after the strong performance of its investment bank helped offset large losses on mortgages and credit cards. The bank set aside another $1.9 billion for its consumer loan loss reserves — a hefty sum, but less than in previous periods.

That could be a sign that bank executives are more comfortable that the economy may be turning a corner. The bank has now stockpiled more than $32.5 billion to cover future losses. Still, Mr. Dimon warned that the economy was still too fragile to declare that the worst was over, though he hinted that things might stabilize toward the middle of the year. “We want to see a real recovery, just in case you have another dip down,” he said in a conference call with investors. Earlier, Mr. Cavanagh said that the bank hoped to restore the dividend to 75 cents or $1 by the middle of 2010, from 20 cents at present.

Over all, JPMorgan said 2009 net income rose to $11.7 billion, or $2.26 a share. That compares with a profit of $5.6 billion, or $1.35 a share, during 2008, when panic gripped the industry. Revenue grew to a record $108.6 billion, up 49 percent.

JPMorgan has emerged from the financial crisis with renewed swagger. Unlike several other banking chiefs, Mr. Dimon has entered 2010 with his reputation relatively unscathed. Indeed, he is regarded on Wall Street and in Washington as a pillar of the industry. On Wednesday on Capitol Hill, during a hearing of the government panel charged with examining the causes of the financial crisis, Mr. Dimon avoided the grilling given to Lloyd C. Blankfein, the head of Goldman Sachs. Mr. Dimon was also the only banker to publicly oppose the administration’s proposed tax on the largest financial companies.

Moreover, JPMorgan appears have taken advantage of the financial crisis to expand its consumer lending business and vault to the top of the investment banking charts, including a top-flight ranking as a fee-earner. Over all, the investment bank posted a $6.9 billion profit for 2009 after a $1.2 billion loss in 2008 when the bank took huge charges on soured mortgage investments and buyout loans.

The division posted strong trading revenue, though well short of the blow-out profits during the first half of the year when the markets were in constant flux. The business of arranging financing for corporations and advising on deals fell off in the last part of the year, though Mr. Cavanagh said there were signs of a rebound in the first two weeks of January.

As the investment bank’s income surged, the amount of money set aside for compensation in that division rose by almost one-third, to about $9.3 billion for 2009. But JPMorgan officials cut the portion of revenue they put in the bonus pool by almost half from last year.

The division, which employs about 25,000 people, reduced the share of revenue going to the compensation pool, to 37 percent by midyear, from 40 percent in the first quarter. The share fell to 11 percent in the fourth quarter because of the impact of the British bonus tax and the greater use of stock awards.

Bank officials have said that they needed to reward the firm’s standout performance, but to show restraint before a public outraged over banker pay. Other Wall Street firms may make similarly large adjustments.

Chase’s corporate bank, meanwhile, booked a $1.3 billion profit this year, even as it recorded losses on commercial real estate loans. Still, that represents a smaller portion of the bank’s overall balance sheet compared with many regional and community lenders. JPMorgan’s asset management business and treasury services units each booked similar profits for 2009.

13 Responses

  1. […] Bully Bonus: $11.7 Billion JPM […]

  2. The obvious question becomes …. who should we vote in ?? All politicians by their very nature are corrupt; they’re all cut from the same cloth. Even if you could find an “honest” one or ones, Washington is now so infested with the cancer of corruption it wouldn’t make a bit of difference.

    Steve
    99Libra@gmail.com

  3. Glenn Beck is the only guy in media (except Gretchen Morganstern) who has his eye on the ball.

  4. StopGOVwaste,

    Thanks for sharing …that video is quite interesting. Goldman has a stranglehold on Washington, but we can change it, one vote at a time. We all should share all that we learn here on Neil’s site with everyone we know and inunndate Washington with our calls of outrage and disgust.

    Let’s take back the America that we all love!

  5. I’m not much on watching/trusting the news as of recent but I found this clip on Youtube and found it VERY INTERESTING!!!

    [youtube=http://www.youtube.com/watch?v=_wVQ3_ZaYB4&hl=en_US&fs=1&color1=0x5d1719&color2=0xcd311b]

  6. The connections between Goldman and Washington DC are elaborate!

  7. Oh, I think it goes way deeper than just Goldman Sachs.

  8. Libra 99

    Who is responsible? Goldman Sachs.
    Sources report Goldman Sachs has engineered every major market manipulation since the Great Depression. Google Goldman Sachs Conpiracy. You will find some interesting reading.

  9. I have to wonder who really initially conceived of this scheme; who’s really pulling the strings behind it all ? Was it really the pinheads on Wall Street ? Was it the banksters ? Seriously folks, this was a very elaborate and ingenious plot. Think about it.

    Steve
    99Libra@gmail.com

  10. Neil,

    Great Article and valuable information! We all appreciate it.

    I have a question:
    At what stage during their foreclosure litigation can a person request Discovery in Court?

    On my last hearing the Court denied motion to vacate judgment, with a sale pending to be held on February 22, 2010. I am preparing to file a request for rehearing or appeal.

    Can I request Discovery or a trial at this stage?
    Please inform so many people who I bet are in my same situation would like to know as well.
    IF ANYONE OUT THERE KNOWS THE ANSWER PLEASE INFORM

    Thank You
    Miriam

  11. so…. a year ago the headlines read the same??!!
    this is just a bit troubling considering what the headlines are.

    http://livinglies.wordpress.com/2009/01/30/those-18-billion-in-bonuses-were-earned-from-hidden-profits-the-joke-is-on-us/

  12. FL 5th District Court of Appeals_Taylor v. Deutsche Bank National Trust Company as Trustee

    http://www.foreclosurehamlet.org/profiles/blogs/5th-district-court-of

  13. […] Taking Aim at Bonuses based on $23.7 Trillion in Taxpayer Gifts Posted on January 15, 2010 by livinglies see bully-bonus-11-7-billion-jpm […]

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