the finance industry / wall street

That piece suggests that no matter how tough the head of the S.E.C. is, the Congress or the White House can undermine things

http://www.nationalreview.com/corner/362637/hillary-clintons-lucrative-goldman-sachs-speaking-gigs-alec-torres

Don't worry, there are several years to for people to forget this kind of pesky detail and declare her the lesser of two evils.

All the people in power, regardless of party, seem to think that the less ordinary people know about how political power operates and the less those folks participate in it, the better the system works.

http://mobile.nytimes.com/blogs/dealbook/2013/11/16/geithner-to-join-private-equity-firm/?_r=0

Warburg Pincus has also taken stakes in banks aided by taxpayer dollars through TARP. That includes Webster Financial, a New England lender in which the firm reaped a return of about 35 percent. Another was Sterling Financial, a Washington State institution in which the buyout firm invested $139 million; it was sold two months ago to another bank, Umpqua, for $2 billion.

Same ol', same ol'. Although Geithner had given interviews as recently as when he was leaving the Treasury job noting that he was unlikely to go this private route because he had always worked in the public sector.

http://neweconomicperspectives.org/2013/11/media-ignore-timothy-geithners-disastrous-leadership-ny-fed.html

Warburg Pincus has had Geithner’s back for at least four years. The revolving door is powered by reciprocity, and Geithner had Wall Street’s back for a decade.

Yep I know, nothing new here.

Thirteen billion dollars is a lot of money — the biggest fine for one company in U.S. history. But it only represents about five months of JPMorgan’s operating income in 2013, and it’s barely more than a third of what JPMorgan is spending on lawyers to defend itself.

wut how is that possible

yeah wait what, $39 billion in legal fees?!?!

which article is that from?

Mounting legal costs from government proceedings pushed JPMorgan to a rare loss in this year's third quarter, the first under CEO Jamie Dimon's leadership. The bank reported Oct. 11 that it set aside $9.2 billion in the July-September quarter to cover the string of legal cases against the bank. JPMorgan said it has placed $23 billion in reserve to cover potential legal costs.

http://www.pantagraph.com/business/feds-jpmorgan-could-settle-for-billion/article_aa903966-511c-11e3-b3b6-0019bb2963f4.html

An expansive definition of legal costs

http://www.thenewamerican.com/usnews/crime/item/16777-jp-morgan-buying-its-way-out-of-legal-troubles

Yeah that's a misstatement, the $23 billion includes the cost of settlements paid out, and the $13 billion is actually already included in the $23 billion (or 39 billion) set aside

fwiw, I'd also think it would make more sense to use net income (profit) rather than operating income as a comparison, although that just makes it like 7-8 months worth instead of 5.

it's "chump change" to JP Morgan as I read one blogger say.

For sure. They have 2.5 trillion in assets, 204 billion in equity

It'll be a bad balance sheet this year and they'll be back to old tricks next year

They fucking print money and always have.

Haven't JP Morgan's profits shot up substantially since the Reagan years? Also, they have relied on Fed printed money over the years as well:

JPMorgan had received $25 billion in support from the bailout fund in October 2008

http://www.huffingtonpost.com/2009/12/11/jpmorgan-bailout-repaymen_n_389345.html

http://www.bloomberg.com/news/2013-10-10/jpmorgan-taps-taxpayer-backed-banks-for-bailout-rules.html

Also, Holder is getting credit from some in the mainstream press because this 13 billion is the biggest deal ever, and JP Morgan originally only offered 3 billion total. But yes still chump change to this entity

dayo otm. 13 billion is never chump change, but the amount of pain it represents to JPMorgan barely rises to significance and will soon be forgotten. that's the whole reason why they settled for 13 billion. if it really hurt them, they'd have kept this tied up in court for decades.

http://www.salon.com/2013/11/20/jpmorgan%E2%80%99s_bait_and_switch_the_ballyhooed_settlement_is_just_a_scam/

Meanwhile, almost all of the deal, save a $2 billion penalty to the U.S. Attorney’s Office in Sacramento to settle a civil lawsuit, is tax deductible as a business expense. Assuming a 38 percent rate for deductions (as JPMorgan does) on $7 billion in business expenses, this knocks another $2.66 billion off the real cost to JPMorgan Chase. A ballyhooed $13 billion settlement winds up being closer to $2.74 billion. That’s less than what BP or GlaxoSmithKline paid in their Justice Department settlements.

I don't follow where he's getting $2.74 billion. It says the $2 billion penalty to the US Atty's office is non-tax-deductible, so that would leave only $0.74 billion coming out of the rest of the settlement.

Math's not my thing, sorry.

Moving on:

http://www.washingtonpost.com/blogs/plum-line/wp/2013/11/21/another-reason-for-filibuster-reform-it-will-help-dems-crack-down-on-wall-street/

A D.C. Circuit with Dem appointed judges is more likely to uphold Dodd-Frank regs

Fingers in dikes, water rolling downhill, etc

You've got a point. But yep a finger in the dike, watered down moderate Dem judge upholding watered down regs, is still better than "hey lets let 'free' market work, as long as its helping ceos we want helped"

Something is always better than nothing, right?

I think so, but Morbs and others do not.

http://dealbreaker.com/2013/11/jpmorgans-top-lawyer-thinks-government-couldve-been-just-as-happy-with-100-million-as-it-was-with-13-billion/

Blah blah blah, JPMorgan lawyer, quoted above, has a typical background:
WilmerHale Partner Stephen M. Cutler was named Executive Vice President, General Counsel of JPMorgan Chase, effective February 2007.

Stephen M. Cutler is a lawyer and was the Director of the Division of Enforcement for the U.S. Securities and Exchange Commission from 2001 until 2005 (in the Bush administration).

http://www.nybooks.com/articles/archives/2014/jan/09/financial-crisis-why-no-executive-prosecutions/

Written by a judge in NY who is overseeing some of the related cases

Written by *the* judge who famously admonished the SEC for always taking these settlements that don't require an admission of fault.

You have any idea/insight what those negotiations are like? Like, why the SEC wouldn't demand them?

(demand admission of fault)

An admission of fault in the legal record would allow private plaintiffs (i.e. non-government) to sue the hell out of them

:D

Yes, I assumed that but wondered if there was some other workaround. thanks kids!

Rakoff points out that the SEC is understaffed/funded. If they had more manpower and resources, it might be easier to extract admissions of fault. His comments on the process are worth reading.

http://qz.com/159004/jamie-dimon-jpm-holiday-card-looks-like-a-ralph-lauren-advertisement/

I'm dying @ these pictures

Thought that was a Bill-Clinton-with-a-tennis-racket cameo there for a minute.

He's got a lotta balls alright. EY!

http://www.nytimes.com/2014/01/19/opinion/sunday/for-the-love-of-money.html

Not sure what to think about that, honestly. Seems like a guy who's self-reflective about being a general destructive shitheel on Wall Street, and is trying to go the opposite way. But the damage is already done, isn't it? I suppose it's better than being totally unrepentant. That line about him making more in a year than his mother made her entire life being inconcievably unfair rings true, as the sentiment usually does. I'm not saying he needs to burn all his assets and live in a monastery, but of course you can do what you want now when you have millions in the bank and your future grandchildren are pretty much taken care of for their lives. Still, at least seems like an honest piece.

I always sense a little bit of "everyone look at what a good boy I am" in these repentant op-ed pieces, like the same impulse that drove him to seek the "feedback" of money now drives him to seek the feedback of approval. Still, better the latter I guess.

i think lots of ppl probably get "enough" money, which is a big chunk, and eventually have that realization one way or another -- "I can do whatever I want, I'm set" and go do something else, typically with less fanfare.

Its typically known as a "fuck you number".

otoh there's the famous wall street folktale wherein one trader says to the other "You know man, if I ever made ten million, I'd just fucking quit right there," and the other says "that's why you'll never make ten million

so you'll never make the big bucks without an infinite sense of greed?

Read Michael Lewis's first book, now reading Barbarians at the Gate. Disappointed in the first, I was expecting more depth into what life was like as a trader/salesman in that era; BatG hasn't gotten to the real drama yet.

man if you didn't love liar's poker i dunno. apparently lewis' next one is about high-frequency trading, supposed to be out sometime this year.

Yeah Liar's Poker is a stone cold classic

I've read BatG, it's more tame

If you're expecting WoWS type level excess, Liar's Poker is as close as you're probably gonna get

xp, right, I think that's the idea, that it takes bottomless hunger for money to make large amounts of money, at least as a trader. My mom went to high school with a guy who made fuck you level money as I guess sort of a quant/hf guy and isn't like that -- quit to take care of his kids, doesn't believe in tax avoidance strategies, etc. But that's probably not all that common.