"The $9 Bllion Dollar Witness." JP Morgan Chase Whistleblower comes forward!

[RedFoxOne]

The $9 Billion Dollar Witness by Matt Tiabbi

http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106

In late 2006, not long after the "no e-mail" policy was implemented, Fleischmann and her group were asked to evaluate a packet of home loans from a mortgage originator called GreenPoint that was collectively worth about $900 million. Almost immediately, Fleischmann and some of the diligence managers who worked alongside her began to notice serious problems with this particular package of loans.

For one thing, the dates on many of them were suspiciously old. Normally, banks tried to turn loans into securities at warp speed. The idea was to go from a homeowner signing on the dotted line to an investor buying that loan in a pool of securities within two to three months. Thus it was a huge red flag to see Chase buying loans that were already seven or eight months old.

But when she and others raised objections to the toxic loans, something odd started happening. The number-crunchers who had been complaining about the loans suddenly began changing their reports. The process she describes is strikingly similar to the way police obtain false confessions: The interrogator verbally abuses the target until he starts producing the desired answers. "What happened," Fleischmann says, "is the head diligence manager started yelling at his team, berating them, making them do reports over and over, keeping them late at night." Then the loans started clearing.

The government's failure to speak to Fleischmann lends credence to a theory about the Holder-Dimon settlement: It included a tacit agreement from the DOJ not to pursue criminal charges in earnest. It sounds outrageous, but it wouldn't be the first time that the government used a wink and a nod to dispose a bank of major liability without saying so publicly. Back in 2010, American Lawyer revealed Goldman Sachs wanted a full release from liability in a dozen crooked mortgage deals, while the SEC didn't want to give the bank such a big public victory. So the two sides quietly agreed to a grimy compromise: Goldman agreed to pay $550 million to settle a single case, and the SEC privately assured the bank that it wouldn't recommend charges in any of the other deals.

Hey guys! I came across this article last night through twitter. Very interesting piece from Rolling Stone. Although I do know that this isn't exactly breaking news. But interesting to see the collusion between government and banks painted so clearly. Thought you guys might enjoy it!

PS. Hawt. 8/10. Would hit!

 

[__Big_D__]

Very interesting, thanks. I'll have to read the rest of the article later but Matt Taibbi is awesome. Always bringing the hammer to these greedy, rich cocksuckers.

 

[Francis Rossi]

Well, that was a depressing read. Excellent article.

 

[MadSquabbles500]

Is this anything new? Of course they cooked the books, and made false estimates, lied or fibbed to investors, and all those shenanigans to make it all look hunky dorry. How else could the financial crisis happen? How else can any financial crisis happen?

 

[RedFoxOne]

Although I agree with your sentiments MadSquabbles, I think it's still important to throw some sunshine on these assholes who knowingly and willingly did fraudulent and criminal acts. Even if the government is willing to protect them to a large extent. As Mr. Rossi said, it's certainly depressing.

Not only do the bad guys win, but they get richer as well. Heartbreaking.

 

[IDL]

Yes they are a highly protected group because of the power they wield within the system we live in. Money talks.

Nice to see little bits of corruption get publicized but I'm sure it's the tip of a very large iceberg.

 

[Rod1]

Why do you envy the rich guys? they clearly worked for it.

 

[PEB]

A lot of people may think evil intent but like everything they likely looked at 900 million number and said not worth the impact on the market. 900 million is an insane amount of money but in the world of Banking its likely far less than a day's trading. Government likely weighs their actions based on the size and the repercussions on the market. Look at it this way if they had gone after JP Morgan Wall Street could have been hit by 100 billion dollar drop in stock prices? These actions have consequences that affect everyone. This is the issue that the US is facing with the banks and to big to fail.

 

[Lee978]

Why do you envy the rich guys? they clearly worked for it.

Don't be so quick to paint with a broad brush. Many of those rich guys do work hard and deserve every penny they earned.

 

[IDL]

A lot of people may think evil intent but like everything they likely looked at 900 million number and said not worth the impact on the market. 900 million is an insane amount of money but in the world of Banking its likely far less than a day's trading. Government likely weighs their actions based on the size and the repercussions on the market. Look at it this way if they had gone after JP Morgan Wall Street could have been hit by 100 billion dollar drop in stock prices? These actions have consequences that affect everyone. This is the issue that the US is facing with the banks and to big to fail.

Yes they have a huge amount of leverage and they know it.

 

[Stoic1]

But in other news Justin Bieber has a new hairstyle! And Snooki is pregnant! Hey, look over here at this racially charged incident that we can distract you with!

 

[funcrusher2007]

A lot of people may think evil intent but like everything they likely looked at 900 million number and said not worth the impact on the market. 900 million is an insane amount of money but in the world of Banking its likely far less than a day's trading. Government likely weighs their actions based on the size and the repercussions on the market. Look at it this way if they had gone after JP Morgan Wall Street could have been hit by 100 billion dollar drop in stock prices? These actions have consequences that affect everyone. This is the issue that the US is facing with the banks and to big to fail.

Yup..thats the scariest part of it..what do you do as a gov. ..penalize/prosecute and arrest the crooks but at what cost.the people will be hurt more from the gov. Going after the banks then from the crimes the banks did..very fucked situation. We've allowed them to become untouchable.

 

[PEB]

But in other news Justin Bieber has a new hairstyle! And Snooki is pregnant! Hey, look over here at this racially charged incident that we can distract you with!

Bieber has a new hairstyle??! Really?

 

[dawnslayer]

Say hello to your gods

they are not just or kind

but they are gods

 

[Michaelangelo]

All this banking fraud is ridiculous. Along with the Libor scandal and currency manipulation that BOFA is entangled in, it's too much. They pay some fines and no one is held accountable.

 

[PEB]

Yup..thats the scariest part of it..what do you do as a gov. ..penalize/prosecute and arrest the crooks but at what cost.the people will be hurt more from the gov. Going after the banks then from the crimes the banks did..very fucked situation. We've allowed them to become untouchable.

Unfortunately but there could be backdoor way to hurt the banks without the repercussions on people's 401K and other retirement vehicles? I was thinking the banks need the Federal Reserve to support borrowing.

I imagine if the thing is banks were not so tied to the Reserve the Fed could tighten borrowing limits to said bank? The bank would literally have to reduce the amount of borrowing the bank could perform? Overtime this could reduce their cash reserve and their earnings?

The bank would likely be forced overtime to reduce their size or have to split. It would have only negligible effect on Wall Street overtime? Of course this would likely never happen because the Fed is tied at the hip of the biggest banks.

 

[IDL]

Unfortunately but there could be backdoor way to hurt the banks without the repercussions on people's 401K and other retirement vehicles? I was thinking the banks need the Federal Reserve to support borrowing.

I imagine if the thing is banks were not so tied to the Reserve the Fed could tighten borrowing limits to said bank? The bank would literally have to reduce the amount of borrowing the bank could perform? Overtime this could reduce their cash reserve and their earnings?

The bank would likely be forced overtime to reduce their size or have to split. It would have only negligible effect on Wall Street overtime? Of course this would likely never happen because the Fed is tied at the hip of the biggest banks.

Why would the Federal Reserve do anything to hurt their compadres? They are on the same team.

 

[PEB]

Why would the Federal Reserve do anything to hurt their compadres? They are on the same team.

I pointed that out in my post. It would require strong external forces to take up the fight.

 

[IDL]

I pointed that out in my post. It would require strong external forces to take up the fight.

hah, yes you did my bad. It really is a conundrum.