Comments on: Making sense of the JP Morgan settlement http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: sap13 http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-49366 Mon, 03 Mar 2014 20:05:36 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-49366 Good insight. I keep seeing articles stating that shareholders will receive compensation ($6 billion in this article) early in 2014 but I’ve not been able to find any documentation regarding if the payout is tied to a date of ownership, the amount per share and when shareholders should expect payment. I was glad to see WaMu emerge as WMIH (which is showing great potential) but the value has in no way returned my investment. I’d appreciate any insight on shareholder compensation.

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By: Kaleberg http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48454 Sat, 26 Oct 2013 03:55:13 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48454 JP Morgan took in over $100B last year, so $13B is small potatoes. This is like a guy making $50K a year, robbing a bank and clearing $100K, then having to pay a $6K fine, but getting to keep the rest of money. He’d have to be completely insane NOT to rob a bank.

Holder is sending a clear message to the banking community. I am still wondering if he is going to retire in late 2014 and take a nice cushy $10M a year job in the financial industry, or if he will wait until 2017.

(I know that JPM only had $18B or so in profit, but most $50K a year earners consider themselves lucky if they break even so it makes better sense to compare revenues.)

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By: thispaceforsale http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48447 Fri, 25 Oct 2013 14:22:48 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48447 JPM set aside $25+ billion for liabilities resulting from the WaMu Bear gift, no?
Which suggests this settlement left substantial money on the table.

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By: klhoughton http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48438 Fri, 25 Oct 2013 02:26:10 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48438 DeMarco wanted US$6B for the FHFA. He’s only getting US$4B.

If I had a JPMC mortgage and tried to pay only 2/3rds of it, would I keep my house?

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By: TBV http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48431 Wed, 23 Oct 2013 21:33:52 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48431 Markets make opinions.

When DeMarco opposed mortgage mods his stock was in freefall; the oft repreated meme held that he was obstructionist:

http://blogs.reuters.com/felix-salmon/20 11/11/16/ed-demarcos-obstructionism/

His stock bottomed when “Very Serious People” (VSP)—often a good contrary indicator—called for his dismissal:

http://krugman.blogs.nytimes.com/2012/07  /31/fire-ed-demarco/

Now, the character trait (obstructionist) that earned DeMarco so much enmity when directed at mortgage mods is winning him plaudits when directed at large banks.

Can someone at BuzzFeed make an animated, rubbable-GIF of the duration & yield of DeMarco’s popularity? Imo it’s got more upside, given the VSPs haven’t yet boarded the bandwagon.

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By: DeyanBrashich http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48430 Wed, 23 Oct 2013 15:09:40 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48430 I beg to disagree. The ultimate cost no matter how you slice it will be borne not by JP Morgan Chase’s shareholders but by consumers and taxpayers. See my comments
Title: OUR NICKELS AND DIMES PAY JPMORGAN CHASE’S FINES
Link: http://deyanbrashich.com/home/2013/9/28/ our-nickels-and-dimes-pay-jpmorgan-chase s-fines.html
Excerpt: America has been sold a bill of goods: the millions and billions of dollars in fines levied on, or penalties agreed to by America’s major financial institutions for causing the financial crisis of 2008 are paid to the Federal and state governments for the benefit of us, the taxpayers.

That is a bald faced lie, galling because it is made by our government elected to protect our interests. In fact we, the taxpayers and consumers, are paying the fines, the real facts being obscured by and with the complicity of our government: we are paying the fines and in fact being double billed.

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By: LadyGodiva http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48429 Wed, 23 Oct 2013 13:05:52 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48429 y2kurtus makes a very insightful observation: rule of law is being applied selectively, I might add, generally by bodies not associated with crime and punishment (e.g. DeMarco).

We have to assume that DeMarco is only still around and wielding real power because TPTB actually want him there.

This is better than nothing, I suppose, but it hardly qualifies as rule of law, the breakdown of faith in which has blighted much of the post-crash landscape. Maybe just for me (but I don’t think so).

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By: y2kurtus http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48428 Wed, 23 Oct 2013 02:07:44 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48428 My mutual community bank is as much a beneficiary of JPM’s unjustifiably large fine as Felix’s credit union. JPM loses 13ish billion in capital… in doing so JPM loses the opportunity to hold 130ish billion in assets. My bank which has lots of capital to burn can buy some of the assets JPM no longer has room for. Small banks win big banks lose… hooray for everyone!

The bottom line is the rule of law is being applied selectively to the detriment of investors in publicly traded banks especially the TBTF or SIFI banks.

Lastly the idea that Jamie went in to Bear and WaMu with his “eyes open” to the idea that the same government that begged him to help wind down those two firms could then extort a fine equal to the market cap of the 15th largest bank in the country is head-in-the-sand thinking.

This fine is rent seeking pure and simple. I wish Dimon had the nuts to fight it in court because it would be dam near impossible for these numbers to hold up. This is 2/3rds of what BP got fined for by far the worst oil spill in history.

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By: realist50 http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48427 Tue, 22 Oct 2013 19:34:42 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48427 Felix – what is the logic for $4 billion in money to homeowners based on “soured mortgage securities”? Logically any payments arising from mortgage security rep and warranty violations should be going to purchasers of securities, not homeowners, so I assume that the rationale for this $4 billion is wholly political.

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By: KenG_CA http://blogs.reuters.com/felix-salmon/2013/10/22/making-sense-of-the-jp-morgan-settlement/comment-page-1/#comment-48426 Tue, 22 Oct 2013 16:42:43 +0000 http://blogs.reuters.com/felix-salmon/?p=22644#comment-48426 Thanks for that explanation, Felix. Up until now, I had only read that JPM was being fined for actions of WaMu and Bear Stearns (I don’t read the WSJ), and I couldn’t understand why Dimon was accepting such a huge fine for the behavior of those firms he bought. I don’t understand why that wasn’t reported.

So JPM wasn’t the only firm on Wall Street that caused billions of losses for investors in mortgage securities, nor necessitated relief for homeowners, which is what the bulk of the fine is for. Does this mean there will be similar deals with other firms, like Goldman, BofA, Citi, etc.?

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