JPMorgan’s investment arm, which includes its energy group, collects $14 billion annually; in comparison, six months’ worth of fines would amount to a paltry $180 million.
THERE IS A REASON WHY THE BANKSTERS INVESTED HEAVILY IN OBAMA’S
CORRUPT ADMINISTRATION!
Records show that four out of Obama's
top five contributors are employees of financial industry giants - Goldman
Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup
($358,054).
Obama: JPMorgan Is 'One of the
Best-Managed Banks'
By Mary Bruce | ABC
OTUS News – 2 hrs 31 mins ago
Obama:
JPMorgan Is 'One of the …
Lou
Rocco / ABC News
Just
hours after a top JPMorgan Chase executive retired in the wake of a
stunning $2 billion trading loss, President Obama
told the hosts of ABC's "The View" that the bank's risky bets
exemplified the need for Wall Street reform.
*
JPMorgan Chase
investigated for manipulating California energy market
By Oliver Richards
23 July 2012
23 July 2012
The California
Independent Systems Operator (CalISO), the nonprofit organization that coordinates
the state’s electricity market, has alleged that JPMorgan Chase & Co.
manipulated the state’s energy market, resulting in at least $73 million in
improper payments—costs passed along to the state’s energy consumers.
The accusation
emerged on July 2 in court filings by the Federal Energy Regulatory Commission
(FERC), which oversees CalISO, as part of its investigation into the bank.
Normally, ongoing FERC investigations are not disclosed to the public. The case
was only revealed after the agency subpoenaed e-mails from JPMorgan relating to
the inquiry.
The bank claimed that
the e-mails were confidential on the basis of attorney-client privilege.
However, under pressure, it released some of the e-mails in non-redacted form
to the agency that belied their argument. The bank responded to the petition by
arguing that FERC was engaged in an “abusive litigation tactic.”
FERC was granted
expanded powers in 2005 in the aftermath of the manipulation of California’s
energy market by Enron, which resulted in energy warnings and rolling blackouts
throughout the state. The regulatory overhaul gave the agency the ability to
fine companies as much as $1 million a day per violation. These fines, however,
in no way discourage companies from gaming the system. JPMorgan’s investment arm, which includes its energy group, collects
$14 billion annually; in comparison, six months’ worth of fines would amount to
a paltry $180 million.
“The incentive
remains for outfits like JPMorgan,” notes a July 18 article in the Los Angeles Times, “to stretch the rules to the breaking
point—if they get caught, the cost is tolerable; if not, the returns are
fabulous.”
Responding to the
allegations, the bank’s spokeswoman Jennifer Zuccarelli said, “We believe we
have complied in all respects with the law, as well as FERC rules and
applicable tariffs, governing this market.” This claim, in fact, is likely
true.
JPMorgan was able to
take advantage of loopholes built into the regulations governing energy and
natural gas markets. The ISO takes bids from power plant owners on energy costs
in both the future day-ahead and current real-time markets. To encourage plant
owner participation in the auction, the ISO provides a “bid cost recovery,”
which ensures that the operators receive a guaranteed minimum support for
running the plant even if their bid is not accepted.
JPMorgan exploited
these rules by placing extremely low bids on the day-ahead markets—sometimes
negative bids where the bank would be paying the ISO to take its energy—making
them eligible for bid cost recovery payments, then charging electricity prices
so high on the real-time market that ISO would never purchase the energy.
As the LA Times reports, “JPMorgan’s traders never
intended to sell its electricity via these bids. The scheme, [the ISO] says,
seems to have been designed purely to capture a bid cost recovery payment the
bank didn’t deserve, at a rate that was inflated anyway.”
Carl Wood, who was on
the California Public Utilities Commission in the aftermath of the 2000-2001
energy crisis, commented on the latest allegations that “there is something
fundamentally broken about the system.”
FERC opened its probe
into the bank in August 2011 after California and Midwest grid operators
noticed unusual trading patterns and questionable bidding practices between
March and June of 2011. The agency has conducted 11 probes of alleged
manipulation of electricity and natural gas markets since January 2011. FERC
recently reached a record $245 million settlement with Constellation Energy
Group Inc. and has issued a preliminary determination that Deutsche Bank AG
manipulated the California energy market.
The drive toward
privatization and deregulation of energy markets emerged in the 1970s as the
postwar boom began to wane and placed pressure on profit rates. Privatization
of electricity began first in Chile after the US-sponsored military coup of
1973. In the US, systematic deregulation of the energy market was set off with
the Natural Gas Policy Act of 1978 in the aftermath of the 1973 oil crisis, the
Public Utility Regulatory Policy Act of 1978 (PURPA), and the National Energy
Policy Act of 1992.
California became the
first state to deregulate its energy markets, which opened the doors to the
criminal activities of Enron. But California is no aberration. Starting in the
late 1970s, both Democratic and Republican administrations have worked to
remove virtually any legal limitation on the pursuit of corporate profit in
every sector of the economy, from finance, to communications, and finally to
energy.
Major corporations
have been given free rein to supervise their own safety, environmental, and
ethics practices. The Obama administration’s record on the pursuit of such
policies is unequivocal. The BP Gulf oil disaster of April 2010 is a recent
example of the results of energy deregulation policies. In his 2012 State of
the Union address, President Obama boasted: “Over the last three years we’ve
opened millions of new acres for oil and gas exploration.” In the aftermath of
the Gulf oil spill, no new regulations were established to prevent another
similar disaster.
The latest
allegations against JPMorgan once again underscore the parasitic nature of the
financial oligarchy that dominates all aspects economic and political life. The
speculative activities that triggered the current economic crisis continue
unabated.
Copyright
© 1998-2012 World Socialist Web Site - All right
*
NO PRESIDENT IN HISTORY HAS TAKEN MORE LOOT FROM CRIMINAL
BANKSTERS THAN BARACK OBAMA! WHILE HIS DOJ IS OUT HARASSING LEGALS ON BEHALF OF
OBAMA’S LA RAZA PARTY BASE OF ILLEGALS, THE BANKSTER GO UNPUNISHED!
DURING OBAMA’S FIRST TWO YEARS ALONE, HIS CRIMINAL
BANKSTERS’ PROFITS SOARED GREATER THAN ALL EIGHT UNDER BUSH!
BANKSTERS’ PROFITS AND CRIMES ARE SOARING… so are
foreclosures!
OBAMA and HIS CRIMINAL BANKSTERS – THE
LOOTING OF A NATION CONTINUES!
Records
show that four out of Obama's top five contributors are employees of financial
industry giants - Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase
($362,207) and Citigroup ($358,054).
Consider the Obama
administration's choices for the four most important positions in financial
sector law enforcement. The attorney general (Eric Holder) and the head of the
Justice Department's criminal division (Lanny Breuer) both come to us from Covington & Burling, a law firm that represents and
lobbies for most of the major banks and their industry associations; indeed
Breuer was co-head of its white collar criminal defense practice, and
represented the Moody's rating agency in the Enron case. Mary Schapiro, the
head of the SEC, spent the housing bubble in charge of FINRA, the investment
banking industry's "self-regulator," which gave her a $9 million severance for a job well done. And her head of
enforcement, perhaps most stunningly of all, is Robert Khuzami, who was general counsel for Deutsche Bank's North American
business during the entire bubble. So zero prosecutions isn't much of a
surprise, really.
Banking Is a Criminal Industry Because Its Crimes Go
Unpunished
Posted: 07/16/2012 8:23 am
Consider just this
month's news in financial services.
First, Barclay's has
been manipulating the Libor, the main interest rate upon which most other
interest rates and financial transactions are based, since 2005. Moreover,
Barclay's traders were colluding with traders in many other banks to assist
them in manipulating the Libor too, so that they could all profit from their
bets on it.
Second, JP Morgan
Chase is having a really great month. Recent reports describe how it is resisting Federal subpoenas related to
price-fixing in U.S. electricity markets. It is also accused (by former
employees among others) of deliberately inflating the performance of its
investment funds to obtain business. And finally, JP Morgan's failed "London whale" trade, which has now cost over
$5 billion, is being investigated to determine whether the loss was initially
concealed from regulators and the public.
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