Sometimes, inconvenient facts (in this case, as far as Democrats are concerned) speak for themselves; and, there's really no amount of spin in the world that will change those greater truths. Sadly, I'm not directly referencing today's much-anticipated oratory (and, it's not necessarily being "anticipated" in a good way, so to speak) of our President as it concerns our country's budgetary and fiscal affairs. I'm talking about the convergence of other stories that will probably not receive nearly as much coverage during the day's news cycle; but, these other stories all may, collectively and ultimately, be much more damning for our Party in the longer run.
This is one of those posts where less is more. So, here's the Cliff Notes' version...
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ABOUT A YEAR AGO, JP Morgan Chase was named as one of the leading actors in a nationwide bid-rigging scheme which defrauded U.S. municipalities of billions of dollars.
From my diary on March 26th, 2010...
Breaking DoJ: 12+ Wall St. Firms Conspired In Muni Ripoffs
by bobswern
DailyKos
Friday, March 26, 2010 5:34AM
This evening, the MSM brings us the latest--and, perhaps, one of the most egregious--in a growing list of Wall Street outrages perpetrated against Main Street in: "JPMorgan, Lehman, UBS Named as Conspirators in Muni Bid-Rigging."
In tonight's report, we're now learning of how more than 12 of the world's largest financial institutions have been named as "co-conspirators" in a scam to outright ripoff towns and cities across America via underpayments "...to U.S. state and local governments on investments, according to documents filed in a U.S. Justice Department criminal antitrust case..."
...
...Apparently, based upon this latest information, those stories may have merely scratched the surface of an ongoing, widespread Wall Street scam perpetrated throughout the U.S. concerning "...alleged collusion in the $2.8 trillion municipal securities market that the government says delivered profits to Wall Street at taxpayers' expense."
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AROUND THAT TIME, Naked Capitalism Publisher Yves Smith's first book, "ECONNED," was published. In it we learned of the "mother"--not as much for its size but for its importance--of all subprime mortgage/derivatives investor fraud travesties, Magnetar Capital. Yves has since gone on to publish, literally, well over 100 follow-up pieces about this story on her blog. Many observers would agree that, apart from the senior executives at Magnetar, themselves, Yves may be the world's leading expert on this subject. JP Morgan Chase, as you'll learn by clicking upon the link immediately preceding this sentence, was the lead underwriter of this notorious series of collateralized debt obligations (CDO).
As Yves noted, last November 1st, concerning what she wrote about Magnetar in her book, "ECONNED, it was the "systemic impact" of the Magnetar trade, itself, that makes it important.
...It isn’t simply that Magnetar was a bad actor; its Constellation CDO program played a direct and substantial role in increasing the severity and damage of the toxic phase of the [entire] subprime bubble...
(Note: The use of the word, "entire," in the above blockquote, is my word; I'm taking the license to give the quote context.)
At the very least, if one were to discuss the two most important (and/or well-known) Wall Street deals (actually, both were comprised of multiple deals) that helped bring about our nation's subprime mortgage meltdown, they would be the Goldman-Sachs'-led Abacus deals and JPMorgan's Magnetar trades.
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ABOUT TWO WEEKS AGO, At a conference on global capital markets competitiveness sponsored by the U.S. Chamber of Commerce in our nation's capital, JP Morgan Chase CEO Jamie Dimon had this to say about impending municipal bond defaults in the United States: "Dimon Says a Hundred Municipalities in U.S. Won’t ‘Make It’ Out of Debt"
Dimon Says a Hundred Municipalities in U.S. Won’t ‘Make It’ Out of Debt
Bloomberg Media
By Dawn Kopecki - Mar 30, 2011 5:24 PM ET
...JPMorgan Chase & Co. (JPM) Chairman and Chief Executive Officer Jamie Dimon said some municipalities will need to renegotiate debt and a hundred may not “make it.”
“I wouldn’t panic about what I’m about to say,” Dimon, 55, said today at a U.S. Chamber of Commerce event in Washington. “You’re going to see some municipalities not make it. I don’t think it’s going to shatter America, I just think it’s a part of the credit cycle...”
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...JPMorgan, the second-biggest U.S. bank by assets, said in February its commercial bank’s municipal-debt holdings are diversified enough to handle a likely increase in defaults. The number of issuers that can’t manage debts may be about a hundred, Dimon said today.
“It’s not going to be thousands,” he said. “It’s going to be maybe a hundred. It’s going to be a small number” out of roughly 14,000 municipalities...
"A small number," we're told by the CEO of the nation's second largest bank, by assets, JPMorgan Chase. I mean, what's a hundred, or so, cities and towns and municipal organizations across the U.S. going bankrupt when you're running a trillion-dollar-plus financial services institution, right? It's not like the bank had anything to do with that.
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TODAY, we're just beginning to hear, courtesy of Bloomberg, about how JPMorgan Chase senior executive Michael Llodra, the head of the firm's structured-products group at the time of the Magnetar trade, is now one of two primary subjects in a major SEC fraud investigation.
This will be big news in the financial press for at least awhile.
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Not to worry! The President will know just how to react to all of this thanks to William Daley, who was, among other titles, JPMorgan's national director of corporate responsibility up until the day he became White House Chief of Staff, a little over three months ago.
If you recall, Daley, brother of previous Chicago Mayor Richard M. Daley, replaced Rahm Emanuel, who was recently elected Mayor of Chicago, thanks to overwhelming, traditionally Democratic financial backing and political support in that city.
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For the record, despite everything noted above, I will be voting for President Obama in his re-election bid in 2012. But, seriously folks, he hasn't been doing a whole hell of a lot of late to make this decision any easier on my part.