JPMorgan To Pay $13 Billion For Causing 2008 Financial Crisis
The financial meltdown in 2008 was not the result of ethereal and enigmatic forces, it was the result of fraud in the financial markets.
That truth was initially hidden by politicians, regulators, banks, and the bought priesthood of mainstream economics. But despite all the lies, the day of reckoning has finally arrived for one of the world’s most powerful corporations, JPMorgan.
Of course, there won’t be jail time for executives – prison is for the little people. But, contrary to some Republican presidential candidates, corporations aren’t people. They are mindless engines of profit and the only acts of contrition the machines can output is in the form of paying money and JPMorgan has already agreed to pay $13 billion for crashing the economy in 2008 through fraud and greed.
JPMorgan Chase & Co CEO Jamie Dimon has pleaded with and complained to the U.S. Justice Department but cannot convince the government to end its criminal probe of his bank because prosecutors are not yet certain of their findings, people familiar with the matter said.
Dimon has negotiated a tentative $13 billion deal to settle many of the U.S. investigations into mortgage bonds that JPMorgan – and the banks it bought during the financial crisis – sold to investors.
Finally, we are talking about a fine that might sting a little. The previous fines Wall Street banks have paid have been laughable. But a $13 billion fine would be more than half of JPMorgan’s profit last year. Serious money. Though apparently JPMorgan thinks it might have to pay even more for its wrongdoing.
JPMorgan has set aside a total of $23 billion to pay for legal issues, and faces more than a dozen probes globally.
What kind of business needs that much money to deal with criminal investigations and lawsuits? A criminal enterprise?
The fraudulent mortgage derivatives JPMorgan and other Wall Street banks sold to investors helped trigger the 2008 financial crisis when the fraudulent loans went bust and no one had enough capital to cover the losses – despite AIG providing insurance in the form of credit default swaps on the mortgage derivatives. AIG, as we all know now, was incredibly reckless and was unable to cover the derivatives it had insured. Ultimately the Too Big To Fail banks received billions from the taxpayers with TARP and over a trillion dollars from the Federal Reserve in the form of secret loans. No bankruptcies for the banks but plenty of painful foreclosures for homeowners who did nothing wrong.
Now JPMorgan inc. is saying sorry the only way a corporation can – paying out lots of money. But have the banksters learned their lesson?
Photo by Steve Jurvetson under Creative Commons license.