Category Archives: Wall Street

JP Morgan Foreclosing On Former Civil Rights Activist

Helen Bailey

JP Morgan is in the process of foreclosing on Helen Bailey, a 78-year-old former civil rights activist and current resident of Nashville, Tennessee. According to change.org, she is being foreclosed on because she cannot keep up with her mortgage payments.  

Helen Bailey is a 78-year-old grandmother who participated in the civil rights movement, worked as a childcare provider for autistic children, and was a community volunteer. She has paid her mortgage since 1999, but now she can’t keep up the payments. All she wants is to stay in her home until she dies, in the neighborhood where she feels safe and has lived for nearly quarter of a century. She could have refinanced with a company willing to let her live in the house for free until her death, but Chase Bank would not reduce her principal by $9,000. She’s been paying 7% interest, well above most rates, so Chase could have decided they had made enough. Instead, they have started foreclosure…While Chase tries to tie itself to the incredible legacy of Martin Luther King, who really did believe in communities, Chase tries to throw a grandmother who marched for civil rights out onto the street. 

Juxtapose this with the fact that JP Morgan Chase has just launched a project to digitize the documents of MLK along with other civil rights leaders to make them available online. Jamie Dimon, the CEO of JP Morgan, said “It’s important for JPMorgan Chase to support Dr. King’s legacy because of the important values he committed his life to promoting, such as equality, equal opportunity, and quality education for all. People like Dr. Martin Luther King are what made America what it is today. The values he espoused are the values that JPMorgan Chase also tries to stand for around the world.”  

Gary Flowers, Executive Director and CEO of the Black Leadership Forum, Inc, responded to the news of the foreclosure. “JP Morgan Chase must practice what it preaches. On one hand, the bank cannot earnestly invoke the values of Reverend Doctor Martin Luther King, Jr. while devaluing the very principles for which he lived and died.” 

Change.org has started a petition to save her house. To date more than 44,000 people have signed the petition.

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Congressional Republicans and Democrats Guilty of Crony Capitalism

Federal Reserve Chairman Ben Bernanke with committee chairman Spencer Bachus (R-AL) on Capitol Hill March 2, 2011. Bernanke reportedly defended the Federal Reserves monetary policy against criticism from Republicans.

Hypocrisy at its best. For us commoners, it is illegal to trade stocks and bonds if we have access to non-public information about a company. Remember Martha Stewart. She was sent to federal prison for this exact crime. But did you know it is not illegal for everyone. The members of the U.S. Congress are exempt from this law.  

Steve Kroft reports members of Congress and their aides have regular access to powerful political intelligence, and many have made well-timed stock market trades in the very industries they regulate. For now, the practice is perfectly legal, but some say it’s time for the law to change.  

Peter Schweizer’s new book, Throw Them All Out, delves into the details of how both parties are enriching themselves with inside information that the public is not privy to. Many members of Congress are shown to have made suspiciously timed trades including John Kerry, Dick Durbin, and Jim Moran. But it is a Republican from Alabama, Spencer Bachus, who tops them all.  

Henry Blodget of Daily Ticker recently reported on this.     

Rep. Bachus made more than 40 trades in his personal account in the summer and fall of 2008, in the early months of the financial crisis. 

The fact that Bachus personally traded while getting private government briefings is bad enough. The fact that he was the ranking member of the House Financial Services Committee at the time is simply outrageous. 

In one case, the day after getting a private briefing on the collapsing economy and financial system from Ben Bernanke and Hank Paulson, Rep. Bachus effectively shorted the market (by buying options that would rise if the market tanked.) 

A few days later, after the market tanked, Bachus sold his position and nearly doubled his money. 

If a corporate executive or Wall Street trader did this–cashed in personally after getting private, non-public information from his work–Rep. Bachus and every other member of Congress would be up in arms about corruption and insider trading. 

And they would be right. 

Tax Subsidies — A Total of 56% Go To Just 4 Industries

Darrel Issa, Chairman of the House Oversight and Government Reform Committee, along with his fellow Republicans have been pushing for an investigation into the now bankrupt Solyndra, a solar company that received approximately $500 million in subsidies from the Obama administration. They are saying this has resulted in huge losses for the tax payer. This may turn out not to be true.  

CNN Money reported that during the bankruptcy hearing it was revealed the company had $859 million in assets and $749 million in liabilities at the start of 2011, and as a result there are some in Washington that believe we can actually recoup a big chunk of its cash. 

“The federal government owns the assets of borrowers that default and can manage or sell them,” Mark Muro, policy director at the Brookings Institution’s Metropolitan Policy Program, wrote in an article earlier this week. “It’s conceivable that taxpayers will not lose any money.”  

I think we should be looking at the other industries receiving subsidies from our government. This is something Republicans really don’t want to do as they are some of their biggest contributors. They have been resistant since tax reform has become the main topic in our political debates on ending these subsidies as they consider these to be a form of tax hikes (thanks to the Grover Norquist tax pledge). In all fairness though, Democrats also receive contributions from the very same industries, but they have been very focal at ending these subsidies. 

Citizens for Tax Justice has analyzed corporate tax rates from 2008 to 2010. They have examined over half of the Fortune 500 companies and it should be to no ones surprise that the richest industries are the ones that get the biggest subsidies. They found that 56 percent of the total tax subsidies went to just four industries: Financial, utilities, tele-communications, and oil, gas & pipelines.   

So I ask you, who are the biggest crooks in this system.

Could Another Bail-Out For Bank of America Be On The Way

Bank of America is in the news yet again and of course not for a good reason. They are again trying to position itself for another bailout, and it is going under the radar of mainstrem media. A recent article came out in Bloomberg (available here) titled BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit

William K. Black of ThinkProgress describes this article:   

The thrust of their story is that Bank of America’s holding company, BAC, has directed the transfer of a large number of troubled financial derivatives from its Merrill Lynch subsidiary to the federally insured bank Bank of America (BofA). The story reports that the Federal Reserve supported the transfer and the Federal Deposit Insurance Corporation (FDIC) opposed it. Yves Smith of Naked Capitalism has  writtenan appropriately blistering attack on this outrageous action, which puts the public at substantially increased risk of loss.  

Bloomberg reports:  

Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation… 

Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades. 

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show. 

If you recall, derivatives played a huge part in bringing down the financial system in 2008, and it was determined at that time that some derivatives should absolutely be eliminated. 

Remember the credit default swaps (per Naked Capitalism): 

They have virtually no legitimate economic uses (no one was complaining about the illiquidity of corporate bonds prior to the introduction of CDS; this was not a perceived need among investors). They are an inherently defective product, since there is no way to margin adequately for “jump to default” risk and have the product be viable economically. CDS are systematically underpriced insurance, with insurers guaranteed to go bust periodically, as AIG and the monolines demonstrated. 

America’s Income Inequality – More Reasons for Occupy Wall Street

During the debate in Las Vegas, Herman Cain told people attending that Occupy Wall Street protesters should blame themselves for their unemployment. “Don’t Blame Wall Street. Don’t blame the big banks. If you don’t have a job and you’re not rich, blame yourself.”   

What he fails to acknowledge is that the system is rigged against us.  Our politicians are passing legislation that benefits the highest income earners because the wealthy are the ones who finance the ever-increasing costs of our elections.  As a result, they expect the politicians to lower their tax rates and institute austerity measures cutting everything from Pell Grants, education, healthcare, and infrastructure funding as well as turn the Medicare into a privatized program. 

Well, I came across these grafts showing just how big the gap has grown in America between the very wealthy and the ever shrinking middle class.  The GOP are hell-bent on removing the safety nets that make it possible for people to climb up the income ladder and create successful lives for themselves. 

MotherJones has come out with a series of articles that delve into this issue, and I wanted to share just a few of the findings their research has come up with.  

A huge share of the nation’s economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.  


The 2007 data (the most current) doesn’t reflect the impact of the housing market crash. In 2007, the bottom 60% of Americans had 65% of their net worth tied up in their homes. The top 1%, in contrast, had just 10%. The housing crisis has no doubt further swelled the share of total net worth held by the superrich. 

The superrich have grabbed the bulk of the past three decades’ gains.  

A Harvard business professor and a behavioral economist recently asked more than 5,000 Americans how they thought wealth is distributed in the United States. Most thought that it’s more balanced than it actually is. Asked to choose their ideal distribution of wealth, 92% picked one that was even more equitable. 



Invisible Hand of the Free Market Man from “This Modern World”

This is a great way to start a Monday.  This Modern World’s take on the Occupy Wall Street movement versus the bankers.  Enjoy!

CitiBank Caught: Claimed OWS Customers Closing Accounts “Disruptive” – Video Evidence Not True

During the demonstrations Saturday, 23 customers of Citibank found themselves locked in the bank at 555 La Guardia Place, New York by security guards while trying to close their bank accounts. Citibank issued the following statement: 

A large amount of protesters entered our branch at 555 La Guardia Place around 2:00 PM today. They were very disruptive and refused to leave after being repeatedly asked, causing our staff to call 911. The Police asked the branch staff to close the branch until the protesters could be removed. Only one person asked to close an account and was accommodated. 

Unfortunately for Citibank the entire incident was being filmed….Oops. Really, should they not have known? 

The video below shows those inside the branch were not being disruptive remaining calm and peaceful. There are also reports from eyewitnesses stating the explanation given by Citibank is far from the truth.

The only disruption occurred when a plain clothed either security guard or policeman man-handled a woman after she identified herself as a customer and showing him her account information after which he proceeded to get physical with her.