Washington, D.C.: Big Banks Cash In On Unemployed
Washington, DC–(ENEWSPF)– Americans for Financial Reform, a coalition founded in part by U.S. Public Interest Research Group, released the following statement on Friday concerning the practice of big banks, like Citi, Wells Fargo, JPMorgan Chase, and Bank of America, of fleecing the unemployed through their debit cards.
John Taylor, National Community Reinvestment Coalition: “The release, this morning, of the January unemployment numbers is a stark reminder of the hard work still ahead of us to get the economy to rebound from the recession and to put all Americans back to work. Strong financial reform that will rein in Wall Street, protect consumers and get banks to start lending again will greatly help with economic recovery.”
Gary Kalman, U.S. PIRG: “The numbers released this morning should also serve as a reminder of the practice of big banks to profit from fees from the unemployment benefits that many Americans collect through debit cards. In short, the big banks, like Citi, Wells Fargo, JPMorgan Chase and Bank of America, are raking in tens of millions of dollars on the suffering of millions of unemployed Americans. And many of the unemployed people the banks are profiting from are unemployed because of the economic ruin that followed the financial crisis caused by the banks.
“Big Banks’ fleecing of the unemployed is yet another example of Main Street paying for Wall Street excess. Wall Street had the party and Main Street is left footing the bill. This is a shameful and appalling practice that hurts those mostly directly hurt by the economic downturn that the Big Banks are largely responsible for. The big banks’ practice of preying on the unemployed is stark reminder of why we need strong financial reform, including a strong independent Consumer Financial Protection Agency. It is time Congress puts an end to this practice.”
Dimon Receives $17M Bonus for 2009
Jamie Dimon, JPMorgan Chase's chief executive, will receive an all-stock bonus of about $17m for 2009, a move that underlines the conflict facing Wall Street as public pressure over bank pay levels clashes with industry leaders' desire to be compensated for a strong year.
The pay package awarded to Mr Dimon, who is foregoing a cash bonus for the second consecutive year, is expected to set the tone for other Wall Street banks - particularly Goldman Sachs, which is yet to reveal the extent of its bonuses to executives.
As reported by the Financial Times yesterday, Lloyd Blankfein, Goldman's chief executive, is expected to receive an all-stock bonus along the lines of that paid to Mr Dimon. Goldman's board has not yet met to decide on the pay of its top executives.
The US banking industry is at the centre of a political storm over its pay policies and observers had expected Mr Dimon to take a pay cut on the $28m-plus in cash and stock he received in 2007 before the financial -crisis hit.
JPMorgan's and Goldman's awards have been carefully watched because the two banks' profits and share prices have rebounded faster than those of rivals such as Morgan Stanley and Citigroup.
The companies have repaid a combined $35bn in federal bail-out funds but their critics argue that their surging profits have largely been due to the government's huge intervention in capital markets.
Mr Dimon, whose company more than doubled profits to $11.7bn last year, will receive restricted stock that begins vesting in 2012 and stock options that can be exercised from 2011. In total, the stock and options awards were valued at about $17m at yesterday's share price. He will also be paid a $1m salary for 2009.
Other members of JPMorgan's senior management team will receive cash and stock bonuses valued at between $4m and $14m, -regulatory filings and people close to the situation revealed. About three-quarters of these awards will be paid in shares, with the rest in cash, according to insiders.
JPMorgan's top executives are required to keep most of their shares until they leave the company and are subject to "clawback" provisions that could force them to return part of the bonuses if they are dismissed or fail to perform their duties.
The bank also said it would introduce a non-binding shareholder vote on executive pay at this year's annual investor meeting.
In 2009, the best paid executive after Mr Dimon was Steve Black, until recently the co-head of investment banking.
Mr Black, who worked with the recently ousted Bill Winters to steer the division to record profits, is in line for a total package of about $14m, comprising restricted stock valued at more than $11m plus cash.
Jes Staley, who succeeded Mr Black and Mr Winters at the helm of the investment bank, will be paid about $10m in cash and stock.
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JP Morgan Chase CEO Jamie Dimon Has Lunch with President Obama; Next Treasury Secretary?
Today we have learned that JP Morgan Chase CEO Jamie Dimon is having lunch with President Obama. There has been much speculation as to who will be the next Treasury Secretary and the name Jamie Dimon continues to pop up. President Obama has strong connections with Jamie Dimon since Dimon was the CEO of Bank One in Chicago, Illinois. We all know the connections that the president has to the “Windy City.”
Jamie Dimon was also one of the only CEO’s who avoided the huge risk involved in the Subprime Mortgage Crisis. While most other financial institutions were failing JP Morgan Chase was gobbling them up for pennies on the dollar. Many analysts and “higher ups” on Wall Street feel that Jamie Dimon is the best banker on Wall Street and would do a great job as Treasury Secretary. Mr. Dimon and President Obama have had many talks lately; could this be a sign of things to come?
Most people realize that Timothy Geithner is on thin ice due to the AIG issues at hand. At any time we could hear that Jamie Dimon is named the successor of Mr. Geithner. Nothing is set in stone at the moment but with Mr. Dimon proving to be an amazing banker one can assume that he is the perfect fit to be the next Treasury Secretary.
Major U.S. banks report gigantic profits for 2009
BY BRIAN WILLIAMS
Large U.S. banks reported huge profits for last year, the product of steps taken by Washington to bail them out of the worldwide financial crisis. Proposals by the Barack Obama administration for so-called bank reform and regulation don’t alter the capitalist government’s approach toward these giant financial institutions, which they consider “too big to fail.”
At the same time, millions of working people—considered by Washington not “too big to fail”—face rising long-term unemployment.
Goldman Sachs Group reported a record-high profit of $4.95 billion for the fourth quarter of 2009 and $13.4 billion for the entire year. JPMorgan Chase, the nation’s second-largest bank, said it more than quadrupled that quarter’s profit to $2.38 billion, making $11.7 billion in 2009. Wells Fargo made $2.8 billion in the fourth quarter, even while repaying $25 billion to the U.S. Treasury on its bailout loan.
The massive profits come as the Obama administration continues to serve these banks in numerous ways. Besides funds given to them through the Troubled Asset Relief Program beginning in late 2008, banks can borrow money at close to zero percent interest from the Federal Reserve. They then use these funds to buy Treasury securities yielding 3 percent interest instead of making what they consider uncertain loans to consumers and businesses.
To take advantage of these government policies, investment banks were allowed “to redefine themselves as ‘commercial banks,’ with special access” to Federal Reserve funds, noted the Weekly Standard.
Transferring ‘toxic assets’
“Toxic assets,” for the most part worthless mortgage-backed securities, are being transferred from the banks’ books to the government ledger. The Federal Reserve “holds more than $900 billion in mortgage-backed securities,” reported Crain’s New York Business, with plans to boost this to $1.25 trillion through the end of March.
With Paul Volcker, former chair of the Federal Reserve Board, at his side, Obama announced January 21 what he claimed would be “common-sense” reforms of the banking system. For months Volcker had been shuffled to the background by the White House in favor of Treasury Secretary Timothy Geithner and others more closely identified with big investment houses. Volcker calls for prohibiting commercial banks from owning or investing in hedge funds and limiting the use of federally insured deposit funds for “speculative” and “risky” investments, such as mortgage-backed securities.
Commercial banks, however, could continue to engage in such trading as long as “they could show regulators that they are doing it for their clients, not their own proprietary accounts,” reported MarketWatch Web site.
Volcker has been calling for reinstating the Glass-Steagall Act, in hopes that legally separating commercial and investment banks will halt the debt-driven frenzy inherent to the workings of capitalism. The U.S. rulers were forced to impose Glass-Steagall in 1933 in response to the wave of bank failures in the early years of the Great Depression. It was repealed under the William Clinton administration in 1999.
In a reflection of how little confidence the capitalists have that they have solved the financial crisis, doubts are being raised in Congress about ratifying a second term for Federal Reserve chairman Ben Bernanke, one of the leading proponents of the government’s use of hundreds of billions of dollars to bail out giant banks and the American International Group insurance company. His term expires January 31. Many in capitalist circles, however, are signaling that changing the head of the Federal Reserve could trigger greater financial calamity. “A prolonged delay would unsettle markets; a rejection could be even worse,” noted the Wall Street Journal.
Meanwhile, the number of workers facing long-term unemployment continues to rise. In December 6.1 million people had been without a job for more than six months, according to the Labor Department. The official unemployment rate in December was 10 percent, 15.3 million workers. But this does not count the 2.5 million persons the government claims are “marginally attached” to the labor force.
Are you foolish to pay your mortgage?
If you're 'underwater' on your mortgage, walking away might make sense, but when is it OK to set aside your responsibilities to your lender, your neighbors and yourself?
[Related content: homes, home financing, mortgage, foreclosure, bankruptcy]
By Liz Pulliam Weston
MSN Money
Are you stupid not to walk away from an "underwater" mortgage, even if you can make the payments?
How to avoid foreclosure
How to avoid foreclosure
Law professor Brent T. White thinks the answer may be yes.
White doesn't actually use the word "stupid" in his recent paper, "Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis." Instead, the University of Arizona prof blames emotion for clouding homeowners' judgment.
White asserts that the real reason more homeowners don't default is because of shame, guilt and fear, fed by misinformation about foreclosure's effects promulgated by the government, lenders and the media.
White doesn't just dismiss the idea that homeowners have a moral obligation to pay their debts. He thinks the idea of morality should be removed from their calculations entirely.
It's no wonder Washington Post columnist Kenneth Harney called White's treatise "incendiary." I can picture people's hair bursting into flame at the very idea of a law professor advising huge numbers of homeowners to strategically default.
Full disclosure: I'm one of the people White points to as trying to scare people into unnecessarily paying their mortgages. (I'm bemused by that, since so many readers think my writing about foreclosure and bankruptcy encourages people to abandon their obligations.) But that's not the only reason I found reading his paper to be a bit surreal.
White makes a number of valid points, and I'm sympathetic to his central theme: that lenders and the government are dumping the costs of the housing mess largely on the shoulders of homeowners, who are at a huge power disadvantage.
It's really worth taking the time to read White's paper in its entirety, and I encourage you to do so. But I'll provide the key points here -- along with why I think he's wrong.
Bankers Benefit from JPMorgan’s Stellar Results; Shareholders, Not So Much
Now here's a story that's all about high finance. JPMorgan Chase & Co. (JPM) earned $11.7 billion last year and paid out $26.9 billion in compensation, up 18% from the previous year. Employees on average earn $129,000, while investment bankers earned on average $380,000.
JPMorgan said it hopes to restore its dividend to 75 cents or $1.00 per share by the middle of 2010. This means that if you're a shareholder and you were waiting for a dividend increase, forget about it. Your dividend was used up in the $26.9 billion that went to compensation.
Shareholders are probably wondering why employee compensation shot up 18%. We certainly didn't see worker compensation rise by 18% on Main Street. In fact the average worker probably earned less because he or she had to work two part-time jobs just to survive.
Shareholders are also probably miffed at the fact that they saw no dividend boost. CEO Jamie Dimon should explain to them that the extra 18% compensation amounted to $19.5 billion.
After taking our economy to the brink of disaster in 2008, isn't it wonderful to receive an extra 18% compensation this year? What is 18% compounded over the next five or ten years?
Do you believe that these bankers deserve this kind of compensation?
JPMorgan Chase Celebrates Solid Profits…And Bonuses
The unemployment rate may in double digits and foreclosures may be on the rise, but over at JPMorgan Chase life is good.
To hear Jamie Dimon, chairman and chief executive of JPMorgan Chase, tell it, his bank could have done better last year, and he remains cautious about the coming year. And that after JPMorgan finished off 2009 with $11.7 billion in profits.
After borrowing $25 billion from the federal government in October 2008 to avoid fiscal calamity, the Wall Street institution paid back the money in June and doubled its earnings last year, which featured a $3.3 billion profit in the fourth quarter alone.
Employees are expected to receive almost $27 billion in bonuses and compensation, an 18% jump from 2008. The average bonus will be about $129,000, while executives and other “top earners” will take home multimillion-dollar paychecks.
-Noel Brinkerhoff
Bank CEOs to answer for financial crisis
WASHINGTON (CNNMoney.com) -- As lawmakers start trickling back to Washington next week, a panel tasked with investigating the financial crisis is set to make its first big splash.
The Financial Crisis Inquiry Commission, a 10-member panel appointed last summer by Congress, will hold public hearings on Wednesday and Thursday.
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Goldman Sachs CEO Lloyd Blankfein will be among four banking executives returning to Capitol Hill on Wednesday.
First up are four chiefs of some of the best-known and largest banks: Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500) and Bank of America (BAC, Fortune 500).
The panel's chairman, Philip Angelides, said he's interested in hearing about the banks' role in creating the crisis as well as finding out how they became "too big to fail." The federal government stepped in to prop up the banks in fall 2008, creating the Troubled Asset Relief Program to help provide them with liquidity.
"We think it made sense to start by bringing up the four biggest investment banks that were involved in so many aspects of the crisis," said Angelides, former California State Treasurer, who warned about financial sector abuses back in 2002. "Many of them had arms that were involved in originating mortgages, some were packaging mortgage securities and some of them were betting against these mortgage securities."
Lawmakers say the commission was modeled after the Pecora Commission, a panel that was convened after the 1929 Wall Street crash and other events leading to the Great Depression.
The Pecora panel's findings led to an overhaul of federal banking laws, including the creation of the Glass-Steagall Act of 1933. Glass-Steagall divided investment banking from government-insured commercial banking; ending that separation in the 1990s was seen by some critics as contributing to the current crisis.
Slow start
The Financial Crisis Inquiry Commission has taken a while to get up on its feet.
The panel was appointed last July and held its first meeting in September. It has only started getting staffed up over the past few months.
It has new offices in downtown Washington, a few blocks northeast of the White House. Funded to the tune of $8 million, it aims to employ between 40 and 50 investigators and other staffers.
The crisis panel's one big goal is to complete a final report, sort of like the final 9/11 Commission report that found federal agencies missed signs of the impending terrorist attacks in 2001. The financial crisis report is due Dec. 15.
Critics have noted the panel's impact may be blunted by timing, as the House has already passed a bill to overhaul regulations and the Senate is deep in negotiations on similar proposals.
But panel members have consistently pledged their work will serve as more than window dressing for politicians worried about the appearance that they allowed the financial crisis to happen.
The panel, which has subpoena power, plans to issue interim reports as it collects data, Angelides has said.
The panel's second-in-command is Bill Thomas, a retired California Republican congressman described as strong-willed during his tenure running the powerful Ways and Means Committee.
Record bonus pot at JP Morgan
JP Morgan Chase is set to defy calls for constraint over bankers' bonuses this week when it delivers an expected $29bn (£18bn) compensation pot for its executives.
By James Quinn
Published: 9:27PM GMT 09 Jan 2010
The banking conglomerate, which will on Friday be the first Wall Street bank to report its fourth-quarter results, is on track to offer the record pay-out thanks to a resurgence in investment banking.
Analysts estimate that the world's biggest banks will pay more than $65bn to their staff over the next fortnight despite efforts by governments in Europe and the US to restrict excessive remuneration.
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Goldman Sachs: hero or villain?JP Morgan's pay-out looks set to be the highest ever offered by the bank. Based on analyst consensus, it will be 28pc up on 2008 and 2007 levels, in line with a 50,000 increase in staff, accumulated when it swallowed up Bear Stearns and Washington Mutual.
The investment bank's refusal to rein back bonuses is likely to be seen as an act of defiance both by the US and UK governments. Jamie Dimon, JP Morgan's chairman and chief executive, personally complained to Chancellor Alistair Darling over the new 50pc windfall tax on bonuses.
The US bank is also thought to be considering whether to drop its plans to build a European headquarters in London for £1.5bn because of the tax.
In an interview with The Sunday Telegraph before Christmas, Mr Darling made it clear that bonuses should be pared back.
He said: "Bonuses have been a symptom of the excessive behaviour of some banks over the last few years and even over the last few months."
It now looks like most Wall Street and City investment banks will absorb the cost of the Government's new 50pc windfall tax rather than cut back on remuneration. Wall Street's year-end bonus season will re-ignite fears that the financial services sector wants to go back to "business as usual" and has put behind it its role in bringing the global economy to the brink of a major depression.
"While the numbers will appear big, the story behind those numbers reflects changes many companies have made. These include a kind of 'pay for performance' that more closely links compensation practices to the long term success of the company," said Andrew DeSouza, of Sifma, the US investment banking body.
JP Morgan's 220,861 employees are on average set to earn $131,300 for the year, against $100,000 in 2008. However top performers in its investment banking arm will be much more highly remunerated.
A report by Andrew Cuomo, New York Attorney General, found that 1,626 JP Morgan bankers received bonuses of more than $1m in 2008 – more than any other Wall Street bank. The same study found JP Morgan's 200 best-paid employees took home $1.12bn, more than even Goldman Sachs, whose top 200 staff shared in $995m.
Close scrutiny will be paid to Mr Dimon's compensation, after he and most Wall Street chiefs took a pay cut. It was down from approximately $34m in 2007 to $19.7m in 2008.
JP Morgan was the recipient of $25bn of capital from the US Treasury's Troubled Assets Relief Programme (TARP), a matter that will not go unnoticed by American politicians.
Banking analysts forecast that JP Morgan will produce earnings per share (EPS) of 62 cent in the fourth quarter of 2009 – approximately equivalent to profits of $2.7bn – on revenue close to $27bn, up from a profit of $702m on revenue of $17.23bn in the same period a year ago.
In spite of the stronger financial environment, analysts expect the final quarter of 2009 may have not been as strong as the third quarter.
Jason Goldberg, an analyst at Barclays Capital, and Keith Horowitz, an analyst at Citigroup, recently downgraded their earnings estimate for JP Morgan's final 2009 quarter on a reduction in the size of its balance sheet, lower fee income and further credit deterioration.
A JP Morgan spokesman declined to comment on the results, which are expected to be bolstered by strength in its private equity division and Chase consumer franchise.
I am so thankful I get to help Chase find there own documents. LOL
New York, United States
Jpmorgan Chase & Co. (159.53.110.141) [Label IP Address]
chasehomefinancesucks.com/?tag=httpswwwchasecomchfmortgagehrm_documents
chasehomefinancesucks.com/?tag=httpswwwchasecomchfmortgagehrm_documents
search.yahoo.com/search?p=www.chase.com%2Fchf%2Fmortgage%2Fhrm_documents&toggle=1&cop=mss&ei=UTF-8&fr=yfp-t-701
