Jamie Dimon, JP Morgan Chase & The Fed: Billions & Trillions for Insiders
Written by William F. Jasper
Oops! Another couple billion dollars lost. Oh well, no biggie; nothing to get too concerned about. That, in essence, was the reaction of Jamie Dimon, CEO of JPMorgan Chase, America’s biggest bank, to the news that Morgan had lost $2 billion in derivatives trading.
“This is a very unfortunate and inopportune time to have had this kind of mistake,” Dimon said in an interview on NBC’s Meet the Press with David Gregory on May 13.
But, not to worry, because JPMorgan Chase has plenty more cash where that came from. “This is not a risk that is life threatening to JPMorgan,” Dimon said. “This is a stupid thing that … we should never have done. But we are still going to earn a lot of money this quarter. So it isn’t like the company is jeopardized.”
Yes, if you’re Jamie Dimon or one of the other Wall Street insider banks — especially those with special status as “primary dealers” — that have a direct pipeline to the Fed’s “thin air” machine, a mere $2 billion is barely a trifle.
Thanks to the decades-long efforts of the Federal Reserve’s tireless nemesis, Rep. Ron Paul, last year the Fed was finally audited by the Government Accountability Office (GAO), which partially lifted the veil on some of the egregious conflicts of interest and colossal theft that have become commonplace in that institution. The GAO audit only partially lifted the veil because the Fed’s lobbyists succeeded in limiting the Congressionally mandated audit; nevertheless, it was the first time the Fed had been independently audited and the revelations were eye-popping. As Senator Bernie Sanders (D-Vermont) noted, on May 14, after Dimon’s Meet the Press interview, the incestuous relationship between Wall Street and the Fed bespeaks obvious corruption on an enormous scale. Sen. Sanders pointed out that the GAO audit revealed:
• Dimon served on the board of the Federal Reserve Bank of New York at the same time that his bank received over $390 billion in total emergency loans from the Fed.
• JPMorgan Chase was used by the Fed as a clearinghouse for the Fed’s emergency lending programs.
• Dimon was successful in getting the Fed to provide JPMorgan Chase with an 18-month exemption from risk-based leverage and capital requirements.
• Dimon convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JPMorgan Chase acquired this troubled investment bank.
$390 billion isn’t small change, even considering our current stratospheric government spendathons that are now measured in Trillions. And since we’re mentioning trillions, it is apropos to bring up another figure that came out of the GAO audit of the Fed: $16 Trillion.
$16 Trillion in Bailout and Loans — Mainstream Media Barely Notice
“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” said Sen. Sanders in a press release on July 21, 2011. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”
JPMorgan Chase was not even the biggest recipient of the Fed’s largesse. That honor fell to Citigroup, which received more than $2.5 trillion! Second was Morgan Stanley, which sucked down more than $2.04 trillion. Third was Merrill Lynch, which took in more than $1.9 trillion. Then Bank of America at $1.3+ trillion, Barclays at $868 billion, Bear Stearns, with $853 billion, Goldman Sachs at $814 … and on and on.
The details of the huge sums involved and the banks they went to are tucked away in Table 8 on page 131 of the GAO audit.
Some of the other cozy relationships between the Fed and Wall Street insiders exposed by the audit and highlighted by Sanders include:
• Stephen Friedman In 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap Fed loans. During the same period, Friedman, chairman of the New York Fed, sat on the Goldman Sachs board of directors and owned Goldman stock, something the Fed’s rules prohibited. He received a waiver in late 2008 that was not made public. After Friedman received the waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009 unbeknownst to the Fed, according to the GAO.
• Jeffrey Immelt The Federal Reserve Bank of New York consulted with General Electric on the creation of the Commercial Paper Funding Facility. The Fed later provided $16 billion in financing for GE under the emergency lending program while Immelt, GE’s CEO, served as a director on the board of the Federal Reserve Bank of New York.
• William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds.
Wall Street wives got in on the action too. Christy Mack, wife of Morgan Stanley CEO John Mack, received $220 million from the Fed for a scheme called Waterfall TALF, which Mrs. Mack and another Morgan Stanley wife used to purchase student loans and mortgages.
ordering pizza in 2015 http://www.aclu.org/pizza/images/screen.swf