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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

September 20, 2013 at 10:28 AM

Vote: Was justice done with JPMorgan?

So the federal government has imposed a $920 million fine on JPMorgan Chase in connection with the fraud known as the “London Whale,” which led to $6 billion in losses to this institution which is ultimately backed by American taxpayers. The event is noteworthy for several reasons. First, the settlement required the bank to admit wrongdoing, a significant departure from the usual “neither admitting nor denying” guilt. Unfortunately, the Securities and Exchange Commission failed to name a single senior individual as being responsible. As a result, as Michael Santoro wrote in the New Yorker, “the S.E.C. will be supporting the bank’s own narrative about the Whale missteps.” As for the size of the fine, it represents about 13 days of profits.

The London Whale episode is remarkable, too, because it happened in 2012, not in 2007. It’s disheartening enough to know that every executive that built the house of cards that brought on the Great Recession — and personally profited handsomely doing so — got away with it. None went to prison or even on trial. None was forced to return even some of the compensation they received for engaging in risk hustles and derivative grifting. It was left to American taxpayers, most of whom are making less than they did in 1989, to pay the bill. The poor kid who gets caught knocking over a convenience store should be so lucky. No, the Whale came in 2012, a reminder that not only did the Too Big to Fail banks get bigger in the crisis, but their dangerous gambling continues. And remember, Jamie Dimon was considered the statesman of finance (still is) and the House of Morgan (buyer of Washington Mutual) the most prudent institution.

What do you think about the settlement?

Read on for some of the best business and economic stories of the week, and the haiku:

This Week’s Links:

The Fed has investors overjoyed and for all the wrong reasons | Mohamed El-Erian

Post mortem on the decision to continue Fed stimulus | Tim Duy

How can Bernanke taper in light of this? | Zero Hedge

Women waiting tables provide most of female job gains | Bloomberg

TD Bank: ‘We don’t have to obey the law’ on check processing | Naked Capitalism

U.S. textile plants return, with floors largely empty of people | NY Times

The two most important numbers in American health care | Wonkblog

RIP the middle class, 1946-2013 | Salon

Five years after the financial crisis, big banks are still committing crimes | The Big Picture

Everything you need to know about the deficit | Washington Post

Today’s Econ Haiku:

Health care, debt ceiling

Partisan war in D.C.

Time to take profits





Comments | More in Banking | Topics: banking, JPMorgan Chase


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