[Vision2020] Whores Undressed

[Art Deco]

@Donovan:

I agree bout the hard work, etc.

I call bankers/etc "whores" because that's the term they find most
uncomplimentary and offensive because it cuts right to the bone.

I call sex workers by their proper titles: prostitutes, dominatrices,
escorts with benefits, wives of the religious right, etc.

w.


On Tue, Mar 19, 2013 at 3:04 AM, Donovan Arnold <
donovanjarnold2005 at yahoo.com> wrote:

> Wayne,
>
> You really must stop debasing the reputation of sex workers by comparing
> them to banking and financial institutions. Many of these sex workers
> actually work hard for their money and harm nobody in the process.
>
> Donovan J. Arnold
>
>   *From:* Art Deco <art.deco.studios at gmail.com>
> *To:* vision2020 at moscow.com
> *Sent:* Sunday, March 17, 2013 12:10 PM
> *Subject:* [Vision2020] Whores Undressed
>
>   [image: The New York Times] <http://www.nytimes.com/>
>
>  March 16, 2013
> JPMorgan’s Follies, for All to See By GRETCHEN MORGENSON<http://topics.nytimes.com/top/reference/timestopics/people/m/gretchen_morgenson/index.html>
> BE afraid.
> That’s the takeaway for both investors and taxpayers in the 307-page
> Senate report detailing last year’s $6.2 billion trading fiasco at
> JPMorgan Chase<http://topics.nytimes.com/top/news/business/companies/morgan_j_p_chase_and_company/index.html?inline=nyt-org>.
> The financial system, thanks to dissembling traders and bumbling
> regulators, is at greater risk than you know.
> After bailing out the nation’s banking system in 2008, taxpayers and
> investors have been assured that such a crisis will not happen again. The
> Dodd-Frank legislation was supposed to make our system safe from the
> kinds of reckless banking activities that brought the economy to its knees.
> The Senate report<http://www.hsgac.senate.gov/subcommittees/investigations/hearings/chase-whale-trades-a-case-history-of-derivatives-risks-and-abuses>disproves this premise with vigor.
> Its pages of e-mails, testimony, telephone transcripts and analysis show
> that traders in the bank’s chief investment office hid money-losing
> derivatives positions, if only temporarily; that risk limits created by the
> bank to protect itself were exceeded routinely; that risk models were
> changed to minimize losses; that bank executives misled investors and the
> public; and that regulations are only as good as the regulators enforcing
> them.
> Remember that this is a report examining JPMorgan Chase, the bank that
> enjoys the best reputation among its peers. One can only wonder: if
> JPMorgan Chase traders think nothing of misrepresenting the value of
> their trades to minimize losses, what are the financial world’s lesser
> players up to?
> Unfortunately, that is not something investors are likely to learn until
> it is too late and a wrong-way bet blows up an institution’s balance sheet.
> Before delving into the report and its findings, let’s congratulate the Permanent
> Subcommittee on Investigations<http://www.hsgac.senate.gov/subcommittees/investigations>,
> led by Senator Carl Levin<http://topics.nytimes.com/top/reference/timestopics/people/l/carl_levin/index.html?inline=nyt-per>,
> a Michigan Democrat. This is the second time in recent history that this
> subcommittee and its staff have served the public by illuminating the dark
> corners of the financial world — the first being the riveting hearings
> and reports<http://www.levin.senate.gov/newsroom/press/release/us-senate-investigations-subcommittee-releases-levin-coburn-report-on-the-financial-crisis>on the causes of the 2008 financial crisis, which dove deep on Washington
> Mutual, Goldman Sachs and the credit ratings agencies.
> The hearings on Friday were equally compelling, with Mr. Levin and John
> McCain<http://topics.nytimes.com/top/reference/timestopics/people/m/john_mccain/index.html?inline=nyt-per>,
> the Arizona Republican who is the subcommittee’s ranking minority member,
> subjecting current and former JPMorgan executives, including Ina Drew,
> the former head of the chief investment office, to penetrating and pointed
> questions.
> “Besides the traders who mismarked the book, who should be held
> accountable for breaching JPMorgan’s own internal risk limits and
> adjusting its risk models?” Mr. McCain asked of Douglas L. Braunstein,
> vice chairman at the bank. After Mr. Braunstein cited the significant
> reductions in compensation of JPMorgan executives as one measure of
> accountability, Mr. McCain replied: “It’s hard for me to accept that
> serious responsibility was assumed by the top management of JPMorganespecially in light of e-mails that say that these decisions were,
> according to Ms. Drew, fully discussed and vetted by the top management of
> JPMorgan.”
> Hoping to understand JPMorgan’s practice of relaxing its valuation method
> on the troubled investment portfolio, Mr. Levin asked of Mr. Braunstein:
> “Is it common for JPMorgan to change its pricing practices when losses
> start to pile up in order to minimize the losses?”
> After a bit of back and forth, Mr. Braunstein said: “No, that is not
> acceptable practice.”
> Not acceptable, perhaps, but that is what occurred, as the Senate report
> shows. Normal practice at the bank and across the industry is to value
> these kinds of derivatives at the midpoint between the bid and offer prices
> available in the market. But in early 2012, as it became apparent that
> JPMorgan’s big trades at the chief investment office were going bad, the
> bank began valuing the portfolio well outside the midpoint. This reduced
> its losses.
> For example, in January 2012, the portfolio valuations hewed closely to
> the midpoint on all but 2 of the 18 measures, the Senate investigators
> found. A month later, 5 of the 18 valuation measures deviated from the
> midpoint. In March, however, all 18 deviated, and 16 were at the outer
> bounds of price ranges. In every case, the prices used by the bank
> understated its losses.
> While these valuation shifts were taking place in the chief investment
> office, JPMorgan’s investment bank officials continued to mark their
> identical positions using the midpoint value.
> RISK limits, intended to protect the bank from losses, were also routinely
> breached at JPMorgan Chase, the report found. From late 2011 to the first
> quarter of 2012, Senate investigators saw a huge jump in the number of
> risk-limit breaches — to more than 170, from 6. Then, in April 2012 alone,
> risk limits were exceeded 160 times.
> “Should someone have investigated the risky trading activities that
> triggered all these breaches?” Mr. Levin asked. Yes, but no one did, the
> report concluded. The risk limits were either ignored or modified to make
> the portfolio look better.
> JPMorgan Chase has repeatedly said it made mistakes and has changed its
> policies.
> The Senate report also raises questions about the rigor with which
> JPMorgan conducted its own investigation into the trading loss. That
> report was published in January.
> Mr. Levin cited the internal report’s failings in his questioning of
> Michael Cavanagh, a task force member and co-C.E.O. of JPMorgan’s
> corporate and investment bank. “You just told us that shifting pricing
> practices to minimize losses is not acceptable,” Mr. Levin said. “Did you
> say that in your report? Did you say that’s what happened?”
> “I don’t believe we called that out in the report,” Mr. Cavanaghanswered.
> The report recommends what regulators should do to prevent similar events
> at other banks. It suggests that regulators should be on the lookout for
> manipulation of an institution’s risk models and should encourage banks to
> use independent pricing services to ensure the integrity of valuations.
> But the true value in this Senate investigation is its spotlight on the
> ability of bank executives to hide hundreds of millions of dollars in
> losses and yet survive internal valuation reviews. This “shows how
> imprecise, undisciplined, and open to manipulation the current process is
> for valuing credit derivatives,” the report said.
> JPMorgan, don’t forget, is the largest derivatives dealer in the world.
> Trillions of dollars in such instruments sit on its and other big banks’
> balance sheets. The ease with which the bank hid losses and fiddled with
> valuations should be a major concern to investors.
> As for taxpayers, the Senate report clearly indicates that JPMorgan Chase
> is too big to regulate. The report found that the bank failed to provide
> crucial portfolio data to its regulators at the Office of the Comptroller
> of the Currency and that those regulators did not investigate questionable
> trading at the bank. The overseers accepted the bank’s assurances that
> nothing was amiss.
> We already know that banks of JPMorgan’s size are also too big to be
> allowed to fail and too big to prosecute. Such banks are too big to
> regulate and apparently too big to manage. So how much more evidence do we
> need that banks like JPMorgan are simply too big a risk for taxpayers to
> bear?
>
>
> --
> Art Deco (Wayne A. Fox)
> art.deco.studios at gmail.com
>
>
>
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-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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