Forum Post: Market Forces Starting to Act Against TBTF Banks, JP Morgan
Posted 11 years ago on June 16, 2012, 11 p.m. EST by Middleaged
(5140)
This content is user submitted and not an official statement
Finally, 4 years after the start of the Finacial Crisis we are seeing signs of impact to TBTF executives and the "Failed US Wall Street Business Model".
LET's FACE IT... TBTF Banks don't care who they screwed with the Sub-Prime Mortgage Securitization Scheme. We all know there were international cities and others who must be "cursing" US Banks. The only people that still like Big New York Banks are their cronies in other financial organizations that depend on them. And these are the people that will be hurt in the EuroZone Crisis in the USA. (Everyone has had plenty of notice to decrease financial ties to Europe and Vice Versa the USA, right) US TBTF Banks have a 'Crap' Reputation to anyone with half a brain....
Louisiana Police Pension Fund Sues JP Morgan
Changing Face of Investor Activism, Ney York Times, Friday, June 8, 2012, Ben Protess and Katherine Reynolds Lewis, "Once Reticent Shareholders Unleash Bumper Crop of Proxy Fights".
http://dealbook.nytimes.com/2012/06/07/once-reticent-investors-join-shareholder-revolts/
Rise in Activist Investors leads to small increase in Proxy Fights against Executive Board.
http://en.wikipedia.org/wiki/Proxy_firm
Proxy Advisory Firms:
Institutional Shareholder Services (ISS)
Glass, Lewis & Co
Egan-Jones Proxy Services
Marco Consulting Group
C&W Investment Group
Byline, Susan Pulliam and Jean Eaglesham, WSJ, Investor Hazard: Zombie Funds, Friday, June 1, 2012 (Front Page).
WSJ had a pretty good article on Zombie Hedge Funds that included some reserch on state pensions that had invested. The pensions get stuck in these funds which can't be valued by outsiders. Transparency seems to be a problem. The funds are set up for 10 years usually and charge hefty fees. Many of the funds extend by a year or two it seems. Pension managers have sued to throw out bad management. And some have sent letters requesting that fees be suspended since the funds have exceed their expected life. Some Zombie Funds no longer charge fees or charge reduced fees. INVESCO LTD charged Illinois $340K in 2010.
Sales Tax on Wall Street Transactions might be part of the solution to slow down Leveraging by TBTF gambling. Another Idea from last week was to Increase the percentage on Margin by Jim Rogers. In the US Exhanges you can bet on the stocks, commodities, or Options by placing orders (bets) with only a fraction of money to back up the transaction.
There is so many transactions with few restrictions on Naked Short Selling, Options, Margins, that we have a "free for all" where high risk is encouraged and pays bonuses to Wall Street.
Max Keiser says Naked Short Selling without owning stocks or borrowing stocks is very clearly Fraud. You are trading stocks that you do not own. Counterfit.
Hi Middleaged,
Good post.
Dirty Words: financial product, investment banker, corporation, Wall Street
Agree. Bankers look for people to Stab in the Back... Like if they outsmart you, then you shouldn't have signed the deal. What was that Alabama City that went bankrupt from Bank of New York Mellon Corp. (BK), $3 billion in sewer debt.
http://www.businessweek.com/news/2012-04-20/alabama-supreme-court-says-municipalities-can-file-bankruptcy
Thats all free marketers... The capitalist motto 'let the buyer beware' is the philosophy of a thief. If I can get over on you, goody for me, too bad for you... you should have read the microscopic print.
Agree with that. The 'Money Trust' from Wall Street always wanted to rule that world. And they almost have... or maybe they do, but looks like it might come down on them if we are lucky.
But in a free market all those people would no longer be in business, and the ones that didnt act like shitheads would now be the ones getting the business.
Because the 'invisible hand' would give them an invisible spanking? It's voodoo economics. In a global market nothing is self regulating. They move to an new area and sucker them.
china has begun to unionize and cheap labor is moving to Vietnam
Translation: How wonderful! Capitalism is moving to save the poor peasants of Vietnam, allowing them to enrich their lives and pull themselves out of poverty. Without capitalism they would still be wretched starving communists.
factories perhaps
Because ideally the people arent dumb enough to bail them out...
I believe we had no choice but to bail them out. Systemically our financial system would have completely collapsed because of derivatives and the debt brought on by them.
Just based on national security alone, we could not allow that to happen, never mind the hit the total population would have taken. It would have made the 1930's seem like a vacation.
The Financial System held us hostage with a gun at our heads... bailout or suicide.
And if we paid off mortgages, the derevitives would still probably bring down the system... I guess. Because paying off the mortgages doesn't pay off the CDS, and securitized Tranches. Read this has high risk with further risk since everything is all connected.
It is a system Monster. The linkages increase the risk. We need localization and community financial services. After we outlaw Naked Short Selling, and Shadow banking, and Regulate all Finacial Instruments. Then we need our national and regional banking links to be reduced.
Any income stream from interest rates to credit card payments to bond returns can be 'derivitized.' The bets are on everything, and they are huge. I think the total market is at $1.2 Quadrillion dollars now....some 50 times greater than all the GDP's in the world.
Geez, last I heard it was $600T down from $660T in Global Derivitives. Anyway your larger number must have some additions on to it... or your number reflects Private Banking Derivities that are not transparent to Everyone with public data.
Yes, wow, didn't really think about credit card payments. Clearly it is a 'Monster'.
You made me recheck my numbers... that is an older value. The correct number is $791 trillion.
http://statspotting.com/2012/04/the-derivatives-market-is-11-times-the-size-of-the-entire-world-economy/
Thanks. My number was at least a couple of years old.
I think they built it up much larger than it was. The very top would have taken a big hit, and it would hav trickled down, but we would be 4 years now into a real recovery, not still delaying the inevitable.
I think they just used fear like they always do.
The Financial Services Industry made up over 40% of our GDP. The top 5 firms alone accounted for over half of that amount. WAMU, Wachovia, Lehman Bros, Bear Sterns, Merrill Lynch.... some very big hitters took the dive before action was taken, the dominoes were falling. Derivatives (CDO/CDS's) were the culprit - the common factor that locked them all together.
I'd rather see a drawn out recovery than starvation in the streets and the return of real bread lines.
Your last sentence is still coming, its coming whether you like it or not I think.
This isnt a recovery. This is simply postponing what is still coming- a collpase of this bullshit currency system.
I do think this 8-10% unemploment is the new norm though. I think we are going to dip further than that very soon, economies usually slow in the summer.
I hear the Repub and Dems will pay for registration forms filled to their party
I wouldnt be suprised. They pay for a lot more stupid things than that :)
I hear the chemically-impaired have no use for grammar, punctuation or meaning.
Thank you for link. The damage done by the financial system, is staggering. No one really knows how big it is.
With these guys, the only crime, is in getting caught.
More dirty words: Transpacific Trade Agreement, New World Order, homeland
Who got the 2 billions that JP Morgan "lost" ? Where did it go?
If it is even really as low as 2 billion.
I don't think anyone actually gets the money. It is money that disappears from the system. Like in the US Finacial Crisis of 2008 they said we lost $3T from the US Economy (households and Investors). But then some investments rose up lowering the cost I'd think. Or maybe the way to measure is by Sales and Capitol Losses. Like JP Morgan who had to sell the investment or pay off the investment by selling other assets. Yep, heard it was $5B Total JP Morgan loss.
http://www.bloomberg.com/news/2012-06-12/how-jpmorgan-s-added-risk-led-to-2-billion-loss-timeline.html
http://www.atimes.com/atimes/Global_Economy/LD13Dj05.html
The financial crisis that broke out in the United States around the summer of 2007 and crested around the autumn of 2008 had destroyed US$34.4 trillion of wealth globally by March 2009, when the equity markets hit their lowest points.
On October 31, 2007, the total market value of publicly traded companies around the world reached a high of $63 trillion. A year and four months later, by early March 2009, the value had dropped more than half to $28.6 trillion. The lost $34.4 trillion in wealth is more than the 2008 annual gross domestic product (GDP) of the US, the European Union and Japan combined
See none of that makes any sense. Trillions just gone? Poof! Great example of how shit's fucked.
And now apparently when Greece drops out of the euro-zone, if they do, everything is going to go on a crazy downward spiral in the global market hitting the US really hard as well. According to David Muir on ABC news.
Yeah, there are a couple of good stories on Euro and Greece, one an opinion on NY Times, and one on Reuters News.
What I hate is Naked Short Selling, where JP Morgan or Goldman Sachs can short a city or country or corporation without having shares in the stocks or bonds (and not paying expensive fee to borrow shares in order to Naked Short the target). Max Keiser called it Counterfeiting. I think it is true. Counterfieting stocks.
At this point nothing surprises me. That's not good.
Market forces?
Yes, the "Talking Heads" on TV talk about economic forces that correct for poor performance, bad business models, high wages, high benefits, competitive advantage, etc.
In this case
1) Investors that were buying from TBTF Banks may have shrank (decreased the size of the market, number of participants, and decrease dollars in the market chasing investments sold by TBTF and other US Financial Firms)
2) US Pension Funds
3) Wealthy Shareholders
4) Government Regulatory Agencies and US and State Courts????
Ah the 'invisible hand' at work, how efficient 4 years later.
LOL, I heard that the 'invisible hand' was supposed to come into play in Adam Smith's UK in the event of too many imported goods.
So, I guess there is no real 'invisible hand' or we would'nt have the problem with globalism.
The invisible hand raises its' middle finger.
Yeah, Adam Smith must have gone out regularly to drink with his Banker Buddies!!!