If it weren’t Friday the Thirteenth, you’d think it was April’s Fool. It’s all the usual excuses by the CEO’s and the TBTF banks, “we are just finding it was this bad”
JPMorgan Chase, which reported its second-quarter results on Friday, disclosed that the losses on a soured credit bet could mount to more than $7 billion, as the nation’s largest bank indicated that traders may have intentionally tried to conceal the extent of the red ink on the disastrous position. [..]
If the trades, made out of the powerful chief investment office unit in London, had been properly valued, the bank said it would have lost $1.4 billion on the position in the first quarter.
Jamie Dimon, the bank’s chief executive who has consistently reassured investors that the losses would be contained, announced that the bank lost $4.4 billion on the botched trade in the second quarter. So far this year, the bank says it has lost $5.8 billion on the trades in credit derivatives. [..]
Since announcing the multibillion-dollar mistake, JPMorgan has lost $25 billion in market value.
Jamie Dimon finally admitting what we already knew but still not admitting that the real losses for the bank is closer to $30 billion. He is either the most incompetent CEO or he thinks that we’re all stupid to realize he knew about tis all along.
or “but Timmy wrote a memo”
A Barclays employee notified the Federal Reserve Bank of New York in April of 2008 that the firm was underestimating its borrowing costs, following potential warning signs as early as 2007 that other banks were undermining the integrity of a key interest rate.
In 2008, the employee said that the move was prompted by a desire to “fit in with the rest of the crowd” and added, “we know that we’re not posting um, an honest Libor,” according to documents that the agency released on Friday. The Barclays employee said that he believed such practices were widespread among major banks.
In response, the New York Fed began examining the matter and passed their findings to other financial authorities, according to the documents.
But the agency’s actions came too late and failed to thwart the illegal activities. By the time of the April 2008 conversation, the British firm had been trying to manipulate the interest rate for three years. And the practice persisted at Barclays for about a year after the briefing with the New York Fed.
Friday’s revelations shed new light on regulators’ role in the rate manipulation scandal. The documents also raise concerns about why authorities did not act sooner to thwart the rate-rigging.
The perp’s figured they were too big to indict and the Justice Department agreed.
The question needs to be faced in the wake of the bank’s admitted efforts to manipulate the London interbank offered rate, known as Libor, the benchmark for countless interest rate determinations and approximately $450 trillion in derivative contracts.
If the Justice Department was looking for a textbook case of white-collar financial crime – including a conspiracy that was flourishing at the height of the financial crisis – this would seem tailor-made. As the facts released by the government make clear, there were two separate but overlapping schemes to manipulate Libor within Barclays. Yet the bank secured a nonprosecution agreement and agreed to pay a penalty of more than $450 million, a comparatively paltry sum for a bank that had more than £32 billion ($50 billion) in revenue in 2011. “The perception so far has been that the regulators have been toothless,” John C. Coffee Jr., professor of law and specialist in white-collar crime at Columbia Law School, told me this week. [..]
(The criminal division said its agreement with Barclays was reached in conjunction with the antitrust division.)
And this is why Richard Diamond and Jamie Dimon have nothing to worry about and the world is still being screwed.