Another politico is claiming that he got “Christied.”
This time it’s Jersey City mayor, Steven Fulop, who said that after he declined to endorse the Republican governor of New Jersey, Chris Christie, meetings with the governor were cancelled and money for hurricane relief dried up.
I guess in this Alice-in-TV-Land world we live in, this counts as news.
This comes on the heels of a federal investigation into Christie’s use of federal hurricane relief funds, which Obama is sure were used for nefarious purposes; presumably that means purposes that didn’t include electing Democrats.
While Barack Obama didn’t invent the “Christie” – that is punishing political friends and foes by use of his office—he’s certainly used it more vigorously in my lifetime than any politician not named Clinton.
Just today, as JP Morgan reported earnings, we are reminded of this.
“JPMorgan Chase reported a 7.3 percent slump in fourth-quarter earnings on Tuesday,” reports the New York Time’s Deal Book, “as billions of dollars in legal costs from a series of government settlements continued to weigh on profit at the nation’s largest bank. The net earnings of $5.28 billion, or $1.30 a share, fell slightly below Wall Street analysts’ expectations of $1.35 a share. The results underscored how expensive it has been for the bank to obtain peace with Washington. All told, JPMorgan has paid roughly $20 billion over the last 12 months to resolve government investigations.”
Legal costs? That makes its sound like it went to lawyers rather than Uncle Sam.
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By contrast Deal Book reports that JPM competitor Wells Fargo’s earnings came in up 10 percent.
“Wells Fargo’s earnings rose to $5.6 billion,” says the New York Times, “or $1 a share, from $5.1 billion, or 91 cents a share, in the fourth quarter of 2012, slightly exceeding the 98 cents a share that Wall Street analysts estimated the bank would make in the period.”
It’s amazing what not having settlements of $20 billion did to Wells Fargo’s bottom line.
JP Morgan made the mistake of having a CEO who has spoken out too forcefully about the TARP bailouts, claiming the bank was forced by the government into taking money and taking mortgages from failing lenders that they didn’t want.
And, why, yes: These were the same mortgages—mortgages that weren’t made by JP Morgan in the first place-- that the government sued the bank over.
“JP Morgan took TARP because we were asked to by the Secretary of the Treasury of the United States of America,” Dimon told senators during an investigation of JP Morgan’s trading losses. “Put the FDIC in the room; the head of the New York Fed, Tim Geithner; chairman of the Federal Reserve, Ben Bernanke.
He added: “We did not, at that point, need TARP. We were asked to, because we were told, I think correctly so, that if the nine banks there, and some may have needed it, take this TARP, we can get it into all these other banks and stop the system from going down.”
Asked would be putting it politely.
The banks, in fact, were told they’d be taking the loans.
And later they were told that they should just shut up and be grateful.
“And it goes to the enormous frustration,” later chided Senator Jeff Merkley (D-Orgeon), when Dimon disputed the notion that the bank needed the loans, “how many companies in the history of the planet have been offered half-a-trillion dollars in low interest loans? Not many.”
Translation: We can’t you just be grateful that the government forced you to take the loans in the first place.
Well by June 2009 JP Morgan was in position to pay back the $25 billion in loans that it didn’t want or need in the first place.
And the cost was pretty high to shareholders, despite Senator Merkley’s notion of “low-interest loans.” Government low interest loans are like the Affordable Care Act: unaffordable and not very caring. Just ask a student. Or a patient with cancelled insurance.
Democrats always suck at math anyway.
JP Morgan’s capital position was pretty strong in 2008—well above the 6 percent target-- and the prompt repayment of the funds just shows it. While TARP started in October of 2008, under Bush, by April of 2009, merely two quarters later, JP Morgan was already in position to pay back the money, but couldn’t until government regulators would let them.
In addition to the original $25 billion, the company paid $795 million in interest—an excellent 3 percent return for a six-month investment (GE Capital pays 0.70 percent on a six-month CD)—plus another $936 million in warrants in the company that the Treasury sold in the open market at $10.75, which brings the total return to $1.731 billion or just shy of 7 percent for government.
And yes that’s real money.
If the company had agreed to those terms on any other conditions besides a government fiat, shareholders would have a good case against Dimon and JP Morgan for breaching their fiduciary obligations to them.
If this were a private market loan, for example, the government would now be investigating JP Morgan for taking a loan that cost them far above the going rate.
The testimony by Dimon and Senator Markley, ironically, was necessitated by a $2 billion trading loss in JP Morgan’s London office that Congress was suddenly interested in, because, well, JP Morgan’s Dimon had been critical of the government and TARP.
The Senate was outraged by $2 billion on losses, but thought $2 billion in loan costs reasonable.
Dimon said in 2009 that while TARP started out “bravely and boldly” it eventually turned into something “painful.” And that was before the government collected another $20 billion in freedom of speech taxes from the bank these last twelve months. TARP turned into something painful because it was how the Democrats were going to keep their hooks in the banking system.
And Dimon blew their cover.
So "painful" is the right adjective, but criminal is also not out of the realm of possibility either.
JP Morgan has ten New Jersey locations and plenty of New Jersey shareholders.
Christie should investigate the investigations into the JP Morgan fines. He should out “Christie” Obama and the Democrats.
If he did, he’d end up president.
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