Nobody Should Shed a Tear for JP Morgan Chase

By Matt Taibbi, Rolling Stone

POSTED: October 25, 1:05 PM ET

Look, there’s no denying that this is a lot of money. It’s the biggest settlement in the history of government settlements, and it’s just one company to boot. But this has been in the works for a long time, and it’s been in the works for a reason. This whole thing, lest anyone forget, has its genesis in a couple of state Attorneys General (including New York’s Eric Schneiderman and Delaware’s Beau Biden) not wanting to sign off on any deal with the banks that didn’t also address the root causes of the crisis, in particular the mass fraud surrounding the sale and production of subprime mortgage securities.

Those holdouts essentially forced the federal government’s hand, leading Barack Obama to create a federal working group on residential mortgage-backed securities (widely seen as the AGs’ price for okaying the $25 billion robosigning deal), headed up by Schneiderman, whose investigation of Chase and its affiliates led to the deal that’s about to be struck. Minus all of that, minus those state holdouts in those foreclosure negotiations, this settlement probably would never even take place: The federal government seemed more than willing previously to settle with the banks without even addressing the root-cause issues that are at the heart of this new Chase deal.

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In fact, this deal is actually quite a gift to Chase. It sounds like a lot of money, but there are myriad deceptions behind the sensational headline.

First of all, the settlement, as the folks at Better Markets have pointed out, may wipe out between $100 billion and $200 billion in potential liability – meaning that the bank might just have settled “for ten cents or so on the dollar.” The Federal Housing Finance Agency alone was suing Chase and its affiliates for $33 billion. The trustee in the ongoing Bernie Madoff Ponzi scandal was suing Chase for upwards of $19 billion.

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And remember, this sort of liability was basically the only risk Chase took in these deals. The government took on most of the rest, in order to make the acquisitions happen.

Chase got to buy Bear Stearns with $29 billion in Fed guarantees, with the state setting up a special bailout facility, Maiden Lane, to unwind all of the phony-baloney loans created through Bear’s Ponzi-mortgage-mechanism described above. So Chase got to acquire one of the world’s biggest investment banks for pennies on the dollar, and then got the Fed to buy up all the toxic parts of the bank’s portfolio, essentially making the public the involuntary customer of Bear’s criminal inventory.

Later on, Chase took $25 billion in TARP money, bought Washington Mutual and its $33 billion in assets for the fire-sale price of $1.9 billion, and then repeated the Bear scenario, getting another Maiden Lane facility to take on the deadliest parts of Washington Mutual’s portfolio (including, for instance, a pool of mortgages in which 94 percent of the loans had limited documentation).

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Moreover, the settlement is only $9 billion in cash, with $4 billion earmarked for “mortgage relief.” Again, as Better Markets noted, we’ve seen settlements with orders of mortgage relief before, and banks seem to have many canny ways of getting out of the spirit of these requirements.

In the foreclosure settlement, most of the ordered “relief” eventually came in the form of short sales, with banks letting people sell their underwater houses and move out without paying for the loss in home value. That’s better than nothing, but it’s something very different than a bank working to help families stay in their homes.

There’s also the matter of the remaining $9 billion in fines being tax deductible (meaning we’re subsidizing the settlement), and the fact that Chase is reportedly trying to get the FDIC to assume some of Washington Mutual’s liability.

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A few more notes on the deal. This latest settlement reportedly came about when CEO Jamie Dimon picked up the phone and called a high-ranking lieutenant of Attorney General Holder, who was about to hold a press conference announcing civil charges against the bank. The Justice Department meekly took the call, canceled the presser, and worked out this hideous deal, instead of doing the right thing and blowing off the self-important Wall Street hotshot long used to resolving meddlesome issues with the gift of his personal attention.

Only on Wall Street does the target of a massive federal investigation pick up the telephone and call up the prosecutor expecting to make the thing go away – and only in recent American history would such a tactic actually work.

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These guys at Chase knew exactly what they were buying when they took on these companies. They just thought they were getting the deal of the century, by taking on the still-functioning businesses of two finance giants for a song, giving Chase a state-subsidized push into the pole position of American banking. And they figured, very nearly correctly, that they would never have to pay any serious freight for all the offenses committed by their new acquisitions.

Now they’ll have to write a big check, which sucks for them, but what about the victims? To those critics crying about a “shakedown”: Would you prefer that Chase merely be required to pay back every dollar to those investors wiped out by these schemes? Because that would be a hell of a lot more than $13 billion.

Because I’ve always wanted to write about dancing vaginas pizza.

Well, the highlight could turn out to be American Celtic punk music group Dropkick Murphys singing the national anthem, especially if you’re a Cards fan.

In Monday’s game the Sox scored in the Top of the 1st off a 1 Out Double followed by another for an RBI.  In the 4th the Cards tied it up on a Solo Shot.  Then in the 7th the Sox put it away with a 1 Out Single, a Walk, an RBI Double, and an RBI Single.  Red Sox 3 – 1, lead Series 3 – 2.

Now the Cards have to win 2 straight at Fenway which will not be easy.

Facing elimination tonight’s lineup features Allen Craig at DH replaced at 1st by Matt Adams for the Cardinals with Daniel Descalso replacing the error prone Pete Kozma at Short and Jon Jay instead of Shane Robinson in Center.  The Sox will DH David Ortiz substituting Mike Napoli at 1st and replace Daniel Nava with Shane Victorino in Right.

Boston will start John Lackey (10 – 13, 3.52 ERA R).  He’s not much better than that in the post-season, he lost Game 2 last Thursday at Fenway in this same matchup and is 2 – 1 with 16 hits and 7 runs in 19 and a 3rd innings for an ERA of 3.36 (6.75 in the loss).  He’ll be countered by rookie phenom Michael Wacha (4 – 1, 2.78 ERA R) who is 4 – 0 in the playoffs with 11 hits and 3 runs in 27 innings for a still stunningly low (anything less than 1.0 is pretty gosh darn stunning) ERA of 0.98.

Now if it wasn’t for Thursday’s game I might be more pessimistic about the Cardinal’s prospects for extending the Series to 7.  They are facing elimination in one of the quirkiest Parks in all Baseball, but Lackey is no prize.  I would expect Sox Manager John Farrell to tap the Bullpen early if he gets into trouble, but the Sox Bullpen is no prize either.  I suspect instead he’s playing for a deciding Game 7 tomorrow when he’ll probably start Peavy against Kelly.

But, since I do naturally favor the Senior League over the Junior and the Cards are most in need of the help (and the video is so much more entertaining), tonight the Rally Squirrel will make what could be his last appearance this season.

HHS chief: President didn’t know of Obamacare website woes beforehand

By Greg Botelho, CNN

updated 10:29 PM EDT, Wed October 23, 2013

President Barack Obama didn’t know of problems with the Affordable Care Act’s website — despite insurance companies’ complaints and the site’s crashing during a test run — until after its now well-documented abysmal launch, the nation’s health chief told CNN on Tuesday.

In an exclusive interview with Health and Human Services Secretary Kathleen Sebelius, CNN’s Dr. Sanjay Gupta asked when the President first learned about the considerable issues with the Obamacare website. Sebelius responded that it was in “the first couple of days” after the site went live October 1.

“But not before that?” Gupta followed up.

To which Sebelius replied, “No, sir.”

Spying Known at Top Levels, Officials Say

By MARK LANDLER and MICHAEL S. SCHMIDT, The New York Times

Published: October 29, 2013

The nation’s top spymaster said on Tuesday that the White House had long been aware in general terms of the National Security Agency’s overseas eavesdropping, stoutly defending the agency’s intelligence-gathering methods and suggesting possible divisions within the Obama administration.

The official, James R. Clapper Jr., the director of national intelligence, testified before the House Intelligence Committee that the N.S.A. had kept senior officials in the National Security Council informed of surveillance it was conducting in foreign countries. He did not specifically say whether President Obama was told of these spying efforts, but he appeared to challenge assertions in recent days that the White House had been in the dark about some of the agency’s practices.

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The White House has faced criticism for the N.S.A.’s surveillance practices since the first revelations by a former agency contractor, Edward J. Snowden, in June. But in recent weeks it has struggled to quell a new diplomatic storm over reports that the agency monitored the cellphone of Chancellor Angela Merkel of Germany for more than a decade. White House officials said that the president did not know of that surveillance, but that he has told Ms. Merkel that the United States is not monitoring her phone now and would not in the future.

NSA infiltrates links to Yahoo, Google data centers worldwide, Snowden documents say

By Barton Gellman and Ashkan Soltani, Washinton Post

Wednesday, October 30, 12:19 PM

According to a top secret accounting dated Jan. 9, 2013, NSA’s acquisitions directorate sends millions of records every day from Yahoo and Google internal networks to data warehouses at the agency’s Fort Meade headquarters. In the preceding 30 days, the report said, field collectors had processed and sent back 181,280,466 new records – ranging from “metadata,” which would indicate who sent or received e-mails and when, to content such as text, audio and video.

The NSA’s principal tool to exploit the data links is a project called MUSCULAR, operated jointly with the agency’s British counterpart, GCHQ. From undisclosed interception points, the NSA and GCHQ are copying entire data flows across fiber-optic cables that carry information between the data centers of the Silicon Valley giants.

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Outside U.S. territory, statutory restrictions on surveillance seldom apply and the Foreign Intelligence Surveillance Court has no jurisdiction. Senate Intelligence Committee Chairwoman Dianne Feinstein has acknowledged that Congress conducts little oversight of intelligence-gathering under the presidential authority of Executive Order 12333 , which defines the basic powers and responsibilities of the intelligence agencies.

John Schindler, a former NSA chief analyst and frequent defender who teaches at the Naval War College, said it was obvious why the agency would prefer to avoid restrictions where it can.

“Look, NSA has platoons of lawyers and their entire job is figuring out how to stay within the law and maximize collection by exploiting every loophole,” he said. “It’s fair to say the rules are less restrictive under Executive Order 12333 than they are under FISA.”

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In 2011, when the Foreign Intelligence Surveillance Court learned that the NSA was using similar methods to collect and analyze data streams – on a much smaller scale – from cables on U.S. territory, Judge John D. Bates ruled that the program was illegal under the Foreign Intelligence Surveillance Act and inconsistent with the requirements of the Fourth Amendment.

Today, of course they deny everything, including that they said what they said yesterday or last week.

Even though it’s on video tape.

Who you going to believe?  Proven, admitted liars or your own lying eyes?

Word up Aasif.

Fired by the way.  Barnum, Buncombe, Bastard.

The definition of a Beltway Conventional Wisdom summary.

NSA chief denies collecting millions of phone records on European citizens

By Ellen Nakashima and William Branigin, Washington Post

Updated: Tuesday, October 29, 3:30 PM

On one hand, there is the approach taken by Sen. Patrick J. Leahy (D-Vt.), the Senate Judiciary Committee chairman; Rep. F. James Sensenbrenner Jr. (R-Wis.), a former House Judiciary Committee chairman; and Sen. Ron Wyden (D-Ore.), a senior member of the Senate Intelligence Committee. They would end the mass collection of phone data by requiring the government to prove to a court that it is seeking call records relevant to either an agent of a foreign power who is the subject of a terrorism investigation or someone with a link to that agent. Such a requirement would make bulk collection impossible, the proponents say.

The legislation also would require a warrant to deliberately search for the e-mail and phone call content of Americans that is collected as part of a surveillance program targeting foreigners located overseas.

“The government has not made its case that bulk collection of domestic phone records is an effective counterterrorism tool, especially in light of the intrusion on American privacy,” Leahy said at a hearing this month.

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On the other hand, the approach taken by Sen. Dianne Feinstein (D-Calif.), chairman of the Senate Intelligence Committee, and Rogers, chairman of the House Intelligence Committee, focuses on increasing transparency and privacy protections.

The intelligence committee leaders have not introduced their respective bills, but Feinstein has outlined the changes under consideration. They include limiting access to the call database; codifying the requirement that analysts have a “reasonable articulable suspicion” that a phone number is associated with terrorism to query the database; requiring that the FISA court promptly review each such determination; and limiting the retention period for phone records, now five years.

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The Intelligence Committee’s bill, she said, would also expand the NSA’s authority to allow it to continue intercepting for three days the phone calls and e-mails of an overseas foreign target who had entered the United States. That would give the government a chance to go to the FISA court to seek a traditional individual warrant to continue the collection. If the warrant was denied, the intercepts would have to be deleted.

The bill would also require Senate confirmation of the NSA director and inspector general.

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The proposal to end bulk collection, if it is allowed to reach the floor, could succeed in the House, where a similar effort failed by only 12 votes in July. At least eight lawmakers who voted against the July measure and two who did not vote on it are now in favor of Leahy and Sensenbrenner’s approach, congressional aides said.

“The public is justifiably concerned about the fact that everybody’s phone calls apparently have been snared in this – even people who have no relationship to terrorism,” Sensenbrenner said in an interview. “But what has come out since the end of July, I think, is going to tip the scales in favor of a significant NSA reform.”

So, the rubber (it’s a Lawn Bowling thing thing) of the stand at Busch and since the BoSox have already split we’ll travel again to the friendly confines of Fenway and worship the Great God Citgo and face the dreaded Green Monster.

It’s just a game and the Cards are tied at 2.

First the one they won Saturday.  In the 1st inning it looked like a rout, Single, Sacrifice, RBI Single, RBI Single, 2 – 0 Cards.  Then came the Sox 5th, Leadoff Triple, RBI Sacrifice.  And the 6th, Leadoff Walk, Single, RBI Single, all tied up.  Cards answered in the 7th, Leadoff Single, Hit by Pitch, 2 RBI Double.  Knotted again in the 8th, Leadoff Single, HBP, Sacrifice, Walked Loaded, RBI Sacrifice, RBI Single.  Bottom of the 9th, Single, Double, Sacrifice.

And then there was an obstruction–

In baseball, obstruction is when a fielder illegally hinders a baserunner running within the basepath.

Baserunners are generally permitted to run from base to base without being physically blocked or hindered by a fielder. The only time that a fielder is not obligated to “get out of the way” of a baserunner is when the fielder is fielding or in possession of the ball.

Game over dude. 5 – 4 Cardinals, they lead the Series 2 – 1.

And so they take the field again last night.  In the Cardinals 3rd a Single and an Error puts the runner at 2nd with 1 Down.  RBI Single. In the 5th the Sox come back with a Leadoff Double, Back to Back Walks, and a Sacrifice.  It could have been much worse and it was in the 6th, 2 Out Single, a Walk, 3 RBI Homer.  Cards score again in the 7th, 2 Out Double and an RBI Single, but it’s too little too late.  4 – 2 Red Sox, Series tied at 2.

We have not yet had a squirrel sighting, but were I a serious Cards fan I might consider smuggling one in my pants.

You want text with that?