7/31/2013 7:58 PM
The Evening Line – from this morning’s NYTimes
I’m fighting a head cold or something, but got in a run
anyway, which wiped me out, and then spent a few hours trying to stabilize a
computer set-up. All that by way of saying I meant to write this this morning.
Millions are denied checking accounts because, somewhere, sometime, they bounced a check or had an overdraft.
Millions. Due to records kept in databases they’ve never heard of, including a
big one owned together by all the big banks, including JPMorgan. “[L]enders just don’t want to take a risk on
these clients.”
Two quick points: First,
these are the same banks that would lend hundreds of thousands in mortgages to a
person with no money, and did it millions of times, but they can’t open a
checking account for some paycheck-to-paycheck working stiff?
And second, following their logic, since we
know them for the abject banking failures they are, that overran their debts
and so we had to float them a trillion dollars in overdrafts, can we NOT give
them any more business? “None of the banks listed below may participate in
any way in the issuance of any public entity’s bond or collateral obligations.”
I can dream, can’t I?
Meanwhile, JPMorgan is being fined for corrupt pricing practices < >
selling energy from the powerplants it owns. WTF? The story here isn’t another
bank manipulating commodity prices. GoldmanSachs got caught at it last week, being so greedy it even made the Daily Show last week.
The real story is that the Fed gave banks a loophole in the
regulations, so now banks can own commodities and commodity suppliers. Whether
it’s aluminum or electricity, now that all the money is going to five banks,
and they are allowed to own commodity suppliers that they then trade futures in,
soon these banks will just own…everything. As I pointed out yesterday, they’ve
got legislation queued up to ‘own’ the legal records of property ownership, and
now they can own any other commodities, not just provide markets for trading
them.
And that fine that JPMorgan is going to pay, that
$410 million dollars? That’s just for manipulating the electricity market. Not
for owning the power plants, which used to be illegal, but faded away same as
Glass-Steagall did. And since there’s no admission of guilt, just a settlement,
it’s a “business expense” tax deduction. And it’s only 6.3% of JPMorgan’s profit…this
quarter.
Here’s a silly suggestion: How about rewriting the fines on
the banking regs so that the fines aren’t specific amounts, but percentages of
income based on the prior year’s profits? Whenever I hear some crime having a
penalty of “$10,000 or up to a year in jail, or both,” I always think “To that
banker, $10,000 is nothing, but a year in jail is worth real money.” So why not
just make the penalties dependent on the incomes of the criminals?
And again, Blythe Masters dodges the bullet. At the end of
that article about JPMorgan’s $410M fine, the energy regulatory agency decided
not to charge her with multiple felonies. In case the name doesn’t ring a bell,
she invented the Credit Default Swaps that everyone was trading to insure
all the mortgage securities, which all blew up when both ends of all those
swaps had no money to pay off the failures of those securities. She’s said "I do believe CDSs [credit default swaps] have been miscast, much as poor workmen tend to blame their tools."
Baseball: The Reds finally won, 4-1 against San Diego, but Pittsburgh beat St Louis, so Reds are still 6 games out, but a game closer to the second-place St. Louis. Who (whom?) they play at home starting Friday...
7/31/2013 8:52PM
