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A bill was placed on the docket to change Delaware Law.  It was supposed to slip through the last minute when no one was watching.    That is Blevins SB 151 regarding the Treasury…   Since it was a surprise, a lot of hoopla as been thrown  in the fire by pundits reacting to the impact of first impressions.   In their defense that was all they had to go on…

Due to time constraints this investigation will take a series of small steps, probably spread across Delaware’s official blog circuit, with help from Starkey of the News Journal

But to back up the word coup in my title,  I first want to show you how the original language was written then show you how it looked with the changes after SB 151.  Of course this was stated as necessary to keep the state treasure in line, a ploy that El Som and Cassandra seem to have swallowed hook, line and sinker.

First the original bill:

For those who follow along (you all are great) here is the passage number  Title 29; 2716(a)(2)

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(1) Require as a condition to any deposit of such funds in any state or national bank or savings and loan institution that such deposits be continuously and fully secured by direct general obligations of or obligations the payment of the principal and interest on which are unconditionally guaranteed by the United States of America or other suitable obligations as determined by the Board;

(2) Require that the selection of financial institutions to provide banking and investment services pursuant to this section be conducted on an open and competitive basis; and

(3) Require that temporary clearing accounts as well as major disbursement accounts be established in a bank or banks whose principal office is located within the State.

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That was the original piece of legislation.  Patty’s bill seeks to amend the section 2 of that piece, the embolden area.  From SB 151…

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(2) Require that the selection of financial institutions to provide banking and investment services pursuant to this section be conducted on an open and competitive basis as defined by the Board.; It shall be the responsibility of the Board to approve the selection of each of the said financial institutions by a majority vote of the members of the Board. The Board, by a majority vote of its members, shall be responsible for setting the policy as to the allocation between short and long term investments and the allocation of funds to the respective financial institutions selected through the open and competitive process; and

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Notice a “lot” of new language. In the synopsis this was sold as a clarification of the responsibilities of the board and the trimming of the responsibilities of the Treasurer. Instead, in what is now typical Markell modus of operandi, this if more of a surreptitious law-change than a clarification.

Previously the directive was this should be done in on an open and competitive basis. The previous directive specifically states this further down: 2716 (e)(1)

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The investment of money belonging to the State shall be made by the State Treasurer in accordance with policies established by the Board and subject to the terms, conditions and other matters, including the designation of permissible investments relating to the investment of the money belonging to the State,

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It is obvious to all that the existing law separates the Treasurer specifically out from all other board members when it comes to the investment of the state’s finances.

And that was really all existing code says in regards to the investment portfolio of the state’s money.

But, the new law, the one proposed by Blevins titled SB 151, makes HUGE changes. Now the board must make that decision. The board which according to Title 29; 2716(c)(4):

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The Board shall meet as often as shall be necessary to properly discharge its duties; provided, however, that the Board shall meet at least 2 times annually; and provided further, that the State Treasurer or the Chairperson of the Board shall be authorized to call special meetings of the Board.

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and 2716 (c)(2)

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a quorum of 5 members shall be necessary to hold a meeting of the Board.

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and 2716 (d)(5)

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The use of teleconferencing or videoconferencing is authorized for use in conducting meetings of the Cash Management Policy Board.

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Even now under existing policy only 3 people out of nine, if they time their conference-call correctly, can decide the future investment strategy of this state. Patty Blevin’s law would now give those three people (whomever they might be) unprecedented power and remove the current oversight of the only elected official responsible to the public.

“Coup” is the proper term for it.

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I’m trying to put all your ideas together into one package. So, let me get this right… All you are asking is for, is a country where:

1) There is no universal healthcare.
2) Few entitlement programs.
3) Low Flat Tax System.
4) Faith based Government.
5) A deep reverence for God.
6) Extremely strict rules against abortion.
7) Marriage has already been strictly defined as between man and woman.
8) Homosexuality is a sin, and illegal.
9) Dress Codes are strictly enforced.
10) Tattoos, piercings, baggy pants, are banned.
11) Has the Death Penalty which they aren’t shy about using.
12) Strong private school system with religious focus.
13) Widespread dependency on oil and natural gas drilling.
14) Growing nuclear program
15) Nonexistent environmental nuisances
16) Culture that promotes family and stereotyped roles for men and women.

I’ve endeavored to put all your values on one page. I share your frustration because today, ever since 2008, it seems like America is moving further and further away from these values.

But you don’t have to be frustrated anymore. I have looked far and wide and have discovered a place already in existence that has those values in place, and more. If you sorely long for those values above, it is sincerely a place where you and your family would be very happy.

It is Iran.

You don’t have to pay me. I don’t need any commission. Just glad to help a fellow Delawarean out…. No problem.

Italy paid back $3.4 Billion to Morgan Stanley it was announced today. That is one half the new tax increase being levied on every Italian as part of the debt solving issue.

Why?

Morgan Stanley is just a company. A piece of paper.

Why should every Italian man, woman, and child, pay out of pocket for a Morgan Stanley bet that went wrong?

When put that way, it is obvious.

They shouldn’t. No one should.

Would any American support a law imposed on us by the Soviet Union?

Would any American support a law imposed on us by Communist China?

Would any American support a law imposed on us by Islamic Iran?

Would any American support a law imposed on us by Mexico?

Would any American support a law imposed on us by Canada?

Would any New Yorker support a law imposed on them by South Carolina?

Would any South Carolinian support a law imposed on them by New York?

Would any Delawarean support a law imposed on them by Alaska?

No?

When put in this perspective, the phrase…”it’s the law…” rings rather hollow…

It’s the law… of what? It’s the law of…. who? It’s the law decided by whom?…… What reference does this law have to me?

Such is every Americans feeling to corporate law… These laws were applied to the lawbooks without our knowledge. These laws were applied to the lawbooks without our approval… There laws were applied to the lawbooks not in an open environment, but subtlely sneaked in, unannounced, unnoticed, unapproved, unsubstantiated, and unconstitutional…..

These laws that are being upheld, benefit a very thin percentage of people, a razor thin percentage of people. at the expense of the majority…..

Rick Santorium stands up and states we are a nation of law. We follow the rule of law…

Yes, we will follow a rule of law onto which a majority of us signs on to… But nowhere in our contract with America did we agree to follow laws that have not been sanctioned by the Constitution as being legal. Nowhere in our contract with America, did we agree to follow the phantom that corporations were human beings. that corporations had just as much right as people to write laws, get them passed, and then uphold them… as if they were people….

There are times when breaking the law, is better than following it…

If you don’t believe me, just ask Jesus.

It’s funny what you get from the little bylines down at the end of a news story. Putting them together creates a truer picture than the one allowed past the paper’s corporate sensors. lol.

I was over at Nancy’s and came across this article which had this article linked to by the words Federal Deposit Insurance Commission.

You may have seen the headline without seeing the number behind it. This headline has the number.

FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets

Within that story is a link to Bloomberg which states:

Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

So unless you were putting numbers together, you are probably not aware that our two major banks, are $154 Trillion in the hole…

How much is that? A lot. THE ENTIRE GDP OF THE UNITED STATES IS $14.5 TRILLION DOLLARS. THAT MEANS IF EVERY DOLLAR AND CENT OF THE UNITED STATES ECONOMY WERE SPENT TO PAY OFF JUST THE DERIVITIVES THAT PHIL GRAMM DEREGULATED SINCE 2000, IT WOULD TAKE MORE THAN TEN YEARS.

Before you panic, consider this. These totals are stretched over time. That is the same ratio as someone making $50,000 who bought a new house whose total cost was $533,000…

Ok, NOW PANIC!!!!!

The global markets lost 1% today… Actually that is pretty good. The losses stemmed over the fact that Republicans won’t allow new revenue to enhance our failing budget…….

Like George Washington, they want to apply more leeches (tax cuts) which eventually will bleed the father of our country dry, and kill him dead.

There are great ideas to get around the impasse……

One was so close last week in which Obama and Boehner had come almost to a 4$ Trillion Deal… It was so, so close. Boehner was about to become the Alexander Hamilton of the 21st Century: Historians would forever know him as the man who brought America back from economic ruin…….

But Boehner’s owner, jerked hard on his leash… cracking Boehner’s trachea. He then spun Boehner to the ground, and applied zip strips to his wrists and ankles. He then tazed Boehner repeatedly. For the first time in his life, Boehner did not cry. He was then strapped to a board, tilted backwards into a tank of water, and held for 45 seconds, over 111 times. He was then blindfolded and pummelled with cans of Pepsi, embedded in old cotton socks, leaving no evidence. He then poked with a tube, in his (you know where) and the other end was attached to a fire hydrant.

The next morning, Boehner said the deal was off; he refused to return Obama’s calls.

Leaks from those working for his owners, tell us the taxes on the wealthy 1% were the sole reason Boehner was given “the treatment”… It’s a damn shame; for a package of $3 trillion in cuts, (yes, includes modifications to SS and Medicare) and a Trillion in tax increases on the top 1%… would shake the dynamics of our economy.

It would spur investment here in America.
It would therefore create jobs.
It would stop the uncertainty where America was financially headed.
It would prevent the immediate loss to our economy of $4 billion a day.
It would reduce the deficit over time, and save money spent paying interest, which could then be used for services.
It would be the proper step at this time in the direction we need to go.

But, if the US defaults on its debt, nothing in the financial markets is sacred, and when nothing is sacred, that… causes panics…

And a panic in 1929… caused the Great Depression. A panic in 2008, caused the mess we’re in right now.

The world’s managed wealth is $122 trillion… A one percent drop.. is $1.2 trillion. That is the amount, that one half, of one third our government,… cost the world today.

They are kids, playing with a live junction box… Sticking a screwdriver in the wrong hole, burns down the entire house……

(At $50,000 a job, today’s loss is the financial equivalent of putting 24 million human beings out of work)

The story goes that Warren Buffet, rather worried about his investments early 2008, wanted to talk to God… God told him to use his phone and he’d send him the bill… He got and paid the $333 million dollar charge. His investments flourished, too… That would be the end of the story, except he was down in Sussex County recently, following up first hand on a corporate case being processed out of Georgetown… once again, he asked God for the right to call, and agreed to accept the charges… When he got his bill, he was fuming… He was only charged 25 cents… “God”, he said, “you ripped me off on that first call, big time!”… God said, “Warren, don’t you get it? In Sussex County, that’s a local call…”

Local call or not, Sussex County is weighing in on whether to say a prayer before County meetings or to not… Here are a few takes on that policy: one, two, three, four……

As someone who grew up where prayers were always said before football games and county meetings, it isn’t a big deal…… That is, as long as everyone agrees it isn’t a big deal. You don’t see prayers before meetings conducted in New York.

Not because New Yorkers are heathens, but because in New York, you have a multiplicity of religions, so praying a prayer from one of them, is a slap in the face for all others…

Why it’s even an issue in Sussex County is because the Positive Growth Alliance, has been building condo’s like ants, and lots of people who did not grow up in Sussex County, now live there. Many have different ideas of religion than those who’ve always been there all their lives…

If everyone believe in the same version of God as does David Anderson, then of course, duh, why are we even arguing about it… Of course we’re going to pray to God to guide us through this meeting.. That’s what He’s for!

Suddenly, thanks to Rich Collins and the Positive Growth Alliance, we have tons of people who do object to having David Anderson’s version of God, one who dislikes Homosexuals, and one who casts pox on Democrats, one who believes married people should have sex only when they have children, one who believes sex between animals is immoral, one who believes taxes are caused by the devil, one who believes that nature was made to bulldoze and pave with a combination of petroleum and gravel. … one who believes that oil companies have the divine right to pollute oceans, one who believes that animals were made for us to kill. … one who believes a national religious holiday should fall on the first day of deer season.. one who believes pick up trucks and baseball caps are proof that homosexuality is a sin,… on who believes killing someone with a gun is not a sin, but taking that gun away for the safety of others is…

(yes, I’m having fun and talking tongue in cheek)…

The point I’m making is that Sussex County is changing; and it is changing mostly thanks to Rich Collins and the Positive Growth Alliance.

Can you make new citizens join the current religion? If so, then by all means, just like the days of old, they will see no qualms in having a tiny prayer before the meeting.

But if they don’t want to join that religion, then, to force one group of religious people to impose their prayers on others, is not American…In fact, it’s kinda creepy…

If in an effort to show fairness, the Sussex County decided they would do prayers from all religions in alphabetical order, when they came to “B” and hit Buddahism, giving an Buddahist prayer before the session, most of those in the audience would be saying WTF! This is our nation, why do we have to listen to such crap…

Which is… exactly what those Buddahists think, who have opened a business in Millsboro, and have come before the county to ask for a variance on something or other that is in their antiqued code….

So… If it is unnatural for a Baptist to suffer a Buddahist prayer, it is equally unnatural for a Buddahist to sit through a Baptist prayer…

It’s not about one religion being right and the other wrong. It’s about who the citizens are that make up Sussex County. If you want to blame anyone over this controversy, the blame solely lies with those who built up Sussex County and brought in all these new people to begin with… Now that they are here, we have to make Sussex County as fair to them as New York, is fair to us, when we take our business up there……

Positive Growth, huh? Depends on your version of positive I guess………….

Today the White House issued this Executive Order.

“Should the debt ceiling not be lifted in time by May 16, in order to prevent the Treasury from running out of funds, I am hereby using the emergency powers given to the Chief Executive by the Constitution, to temporarily suspend the Bush Tax Cuts until: 1) either we can legally borrow the funds to continue paying on our commitments, or 2) we bring our debt down to the 2008 level by having much more tax revenue pour in.

This is in effect, immediately, and I have instructed the IRS to recalculate all 2010 tax forms over the level of $2 million dollars, and asses those individuals and companies, for the differences.

We must take this action because Republicans want to pay politics with your lives. As Chief Executive, I am responsible to you, not them. I won’t let that happen.

With these tax cuts out of the way, and with our austerity programs already in effect, that windfall of profit the Treasury will receive, will be entirely funneled towards the paying off our debt.

This policy will continue until Republicans can act reasonably and in a productive fashion.

Barack Obama.

Duffy is God’s answer to a prayer.. I miss the old days of blogging when we were debating principals instead of people… Duffy has stuck to the old line of debating principals with facts, and that is what makes him special in the eyes of bloggers everywhere…

Since the passing of Steve Newton, he has been the only one to challenge me in any argument, and usually some pretty good stuff comes out of both sides during the exchange… I have respected that.. Cause once again, opinions mean dick. Facts are what we steer by.. It is my hope that in responding to his challenge that an answer may make itself apparent.. Who knows? It may not come from me… But if I’m the catalyst for bringing it out in the open, then… none of this was in vain..

Why I like to debate Duffy is simple.. Neither side, he or I, is concretely set in their opinions… We accept it when the other side makes sense… I usually go into such debates having no idea where they’ll end up… I hope the rest of you enjoy the ride as welI….

That said..

Duffy leads: Wall Street’s problems were caused by Fannie and Freddie loaning money to people they knew couldn’t pay and moreover, forcing banks to lend money to people who couldn’t pay. That was not deregulation but misregulation

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate.

First off, the Community Reinvestment Act of 1977 was developed for, and locked in on, urban developmental areas and had no part of the subprime boom, which primarily occurred out in western desert regions where owning 4 to 5 investment homes was normal… Those homes were overwhelmingly funded by loan originators NOT SUBJECT to the act… We all know the crises was not because people couldn’t afford a payment on their house. It came about, because with no occupants, people could not afford the payments of 4 to 5 houses….. Instead of one loan per borrower turning up in default; four to five were.
Investment Homes lead forclosures not inner city Residences

Second off, The housing bubble reached its point of maximum inflation in 2005.
The Housing Bubble Starts to Dive in 2005
Courtesy of NYT

Third off, During those exact same years, Fannie and Freddie were sidelined by Congressional pressure, and saw a sharp drop in their share of loans secured by the Feds… Follow the dotted line on the very bottom of the graph…
Freddie and Fannie on the lowest line
Courtesy of NYT

Fourth off; During those exact same years, private secures, like Delaware’s own AIG, grabbed the lions share of the market.
Private, not Public Insurers Caused the Crash
Courtesy of NYT

Remember these graphs for later on when I discuss the results of deregulation, versus regulation… But like it or not, these graphs conclusively show that private insurers, who thanks to Marie Evans, we now know were deregulated by Phil Gramm in the 2000 Omnibus Bill, were the primary cause of the worlds financial collapse.. Probably put best by these words of AIG’s spokesperson, who when asked why they didn’t have sufficient funds to cover losses, said point blank, “We were deregulated. We were no laws requiring us to keep any funds, ..so we spent it…”

Duffy leads: The loosely regulated hedge funds escaped this mess largely unscathed. Why? They can’t count on a bailout like the big banks. The Too Big To Fail banks were counting on a bailout (not unlike the S&L bailouts which started on the Republican’s watch) and they got them.

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. I agree that the hedge funds did survive better than the banks. Not because of bailouts, but because they sold short during the crises and made billions while firms closed and people got thrown out of work. There is nothing wrong with that; I did the same. In fact close readers may remember my warnings that the crises was impending almost a year earlier. Very close readers may remember my telling them exactly when to sell, and at what point the stock market would rebound… I must say: I called it rather well. 🙂

“Hedge funds were not in my understanding, at fault in the credit crisis,” said David Ruder, former chairman of the Securities and Exchange Commission. “At the most what they did was to sell securities when some of their investments were declining and they needed to have liquid funds. They were not the architects of these problems.”

De regulated hedge funds are not the issue… De-regulated, excessively leveraged, mortgage securities, are a different story however… They, not the banks that held them, are the cause of the crises…Years from now, when academics search for causes of the stock market crash of 2008, they will focus on the pivotal role of mortgage-backed securities. These exotic financial instruments allowed a downturn in U.S. home prices to morph into a contagion that brought down Bear Stearns a year ago this month – and more recently have brought the global banking system to its knees.

Where you err is when you state that banks too big to fail, assumed they would be bailed out… By implication, you say imply they failed from squandering money, and wanted the bailouts.. But your tax dollars didn’t flow directly to the bottom line.

The roughly $200 billion the Treasury Department has handed out to battered banks was swapped for a special class of stock that pays a 5 percent dividend (rising to 9 percent after five years.) As of April 15, the Treasury had collected about $2.5 billion in dividend payments on its investment.

So in that sense, the bailout money represents an expense for banks. That’s one reason a number of banks have said they want to give the money back as soon as possible.

You say big banks were counting on a bailout, and they got them? That didn’t happen to these banks. New Mexico, Georgia, and Florida each lost a bank just last Friday. That brings to 8, the number of banks failed in June. Unfortunately if a bank is failing, it can’t bet on itself to fail, as can a hedge fund.

Duffy leads: Banks have successfully lobbied to get their losses absorbed by taxpayers and gains are kept private. How nice for them. They felt comfortable making insane gambles because they knew they’d be bailed out. Most of them were right. Also remember that it was Bill Clinton who tore down the wall between retail and investment banking. The idea was to give banks more stability as they typically perform as exact opposites in bull and bear markets. (FWIW, I think that was a good idea and I can tell you first hand that two of the Fortune 100 banks I worked for were carried by retail banking in bear years. They may not have had bonuses those years but they didn’t have layoffs either)

kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. The idea is that the banks made bad decisions knowing taxpayers would bail them out is the issue that is inaccurate. For the record, I have no qualms that it was the Clinton legacy who tore down the wall between banks and investment banking. Like you, I feel it was a good idea to do so… Again the problem was not primarily with banks making loans to people who could not pay.. Although, it was as late as October 2009, when I was made aware of one private Bank in Denver still exaggerating income to make loans look good enough on paper to get approval of securitization. What caused the collapse was the leveraging of those loans as securities, so that as the housing market became overextended, and the ARM jumped past the low cost opening years, the damage was 100 times worse because of leveraging. What made the collapse criminal, was that the insurance most financial institutions had bought from AIG, to cover such an improbable event, had already spent by that companies executives, out on bonuses to themselves. What made it doubly criminal, was that when they received government dollars through a taxpayer bailout, those same executives assumed it was to first go towards paying their bonuses again. However, very recent events may give some cover to the argument that some collusion was implicit in the bailing out of Goldman Sacs and AIG… Basically, once bailed out, AIG paid Goldman Sacs for shares twice as much as they were worth. The documents also indicate that regulators ignored recommendations from their own advisers to force the banks to accept losses on their A.I.G. deals and instead paid the banks in full for the contracts.

This goes on every Democratic paid for billboard October 1st

Reading a recent old copy of the News Journal, I saw an article where some Republican buffoon, said something like: “yeah, we’re gonna stick it to Chris Coons that he’s a tax and spend Democrat.”

I laughed out loud…

Go ahead … Make us draw attention to you..