Tuesday, May 22, 2012


Suspect linked to death of teen, police say

Suspect linked to death of teen, police say

MORGAN HILL, Calif. -- A 21-year-old man in custody was linked to the kidnapping and murder of a missing teenager by DNA evidence found in her bag, authorities said Tuesday.
Santa Clara County Sheriff Laurie Smith said Antolin Garcia-Torres's DNA was found inside a bag belonging to Sierra LaMar. Sierra's DNA was also found on unspecified property belonging to Garcia-Torres, according to sheriff's officials.
Smith said it appeared to be a random act of violence.
"We believe this is the worst kind of crime, a stranger abducting a young girl," she said at a news conference attended by Sierra's family.
Garcia-Torres was arrested Monday on suspicion of murder and kidnapping of Sierra, whose disappearance more than two months ago prompted hundreds of volunteers to turn out for organized searches.
Sierra hadn't been seen or heard from since she left her home in Morgan Hill to go to school on March 16. Authorities believe she was kidnapped while walking to a school bus stop.
Smith said Garcia-Torres had been under 24-hour surveillance since March 28 and that evidence also linked him to at least one assault in March 2009. Authorities identified other suspects during the course of the investigation and also put them under surveillance before focusing on Garcia-Torres, Smith said.
Garcia-Torres's DNA had been in a law enforcement database following his arrest on suspicion of felony assault, according to sheriff's officials. They did not provide details about that arrest.
Volunteers and sheriff's officials searched the fields, open spaces and reservoirs near Morgan Hill since Sierra's disappearance. The KlaasKids Foundation, founded by Marc Klaas, whose 12-year-old daughter Polly was kidnapped from her Petaluma home and murdered in 1993, has been organizing volunteer searches on Wednesdays and Saturdays.
Investigators found Sierra's handbag with clothing and a cellphone along the side of the road near her home shortly after her mother reported her missing.
Earlier this month, investigators located a red Volkswagen Jetta they said may have been connected to Sierra's abduction given that surveillance cameras and witnesses put the car near the area where authorities believe she disappeared. Smith said late Monday that Garcia-Torres owns the Volkswagen.
Smith said Garcia-Torres has spoken to investigators. Sierra's mother, Marlene, asked Garcia-Torres to reveal any information he has that could lead to Sierra.
"I would like you to come forward and say where she is and end this nightmare for us as a family," she said.

Read more: http://www.azcentral.com//news/20120522california-suspect-linked-death-teen-police-say?source=nletter-#ixzz1vd2rzSyK


"The violent MS-13 - or Mara Salvatrucha - street gang is following the migratory routes of illegal aliens across the country, FBI officials say, calling the Salvadoran gang the new American mafia. MS-13, has a significant presence in the Washington area, and other gangs are spreading into small towns and suburbs by following illegal aliens seeking work in places such as Providence, R.I., and the Carolinas, FBI task force director Robert Clifford said. "The migrant moves and the gang follows," said Mr. Clifford, director of the agency's MS-13 National Gang Task Force."

INS/FBI Statistical Report on Undocumented Immigrants 2006 (First Quarter) INS/FBI Statistical Report on Undocumented Immigrants CRIME STATISTICS 95% of warrants for murder in Los Angeles are for illegal aliens. 83% of warrants for murder in Phoenix are for illegal aliens. 86% of warrants for murder in Albuquerque are for illegal aliens. 75% of those on the most wanted list in Los Angeles, Phoenix and Albuquerque are illegal aliens. 24.9% of all inmates in California detention centers are Mexican nationals here illegally 40.1% of all inmates in Arizona detention centers are Mexican nationals here illegally 48.2% of all inmates in New Mexico detention centers are Mexican nationals here illegally 29% (630,000) convicted illegal alien felons fill our state and federal prisons at a cost of $1.6 billion annually 53% plus of all investigated burglaries reported in California, New Mexico, Nevada, Arizona and Texas are perpetrated by illegal aliens. 50% plus of all gang members in Los Angeles are illegal aliens from south of the border. 71% plus of all apprehended cars stolen in 2005 in Texas, New Mexico, Arizona, Nevada and California were stolen by Illegal aliens or “transport coyotes". 47% of cited/stopped drivers in California have no license, no insurance and no registration for the vehicle. Of that 47%, 92% are illegal aliens. 63% of cited/stopped drivers in Arizona have no license, no insurance and no registration for the vehicle. Of that 63%, 97% are illegal aliens 66% of cited/stopped drivers in New Mexico have no license, no insurance and no registration for the vehicle. Of that 66% 98% are illegal aliens.


206 Most wanted criminals in Los Angeles. Out of 206 criminals--183 are hispanic---171 of those are wanted for Murder.

Why do Americans still protect the illegals??




http://www.wnd.com/news/article.asp?ARTICLE_ID=53103 Did you know illegals kill 12 Americans a day?

http://www.freerepublic.com/focus/bloggers/1738432/posts FBI Crime Statistics - Crimes committed by illegals.

See: CFR’s Plan to Integrate the U.S., Mexico and Canada

http://www.proliberty.com/observer/20050816.htm The Great Alien Invasion - What's Happening Now http://www.rense.com/general69/inva.htm


"Bush Secret Border Wars" Mayhem and terror in Southern states to protect government drug cartels

http://www.prisonplanet.com/articles/august2005/140805borderwars.htm Mexican/Bush Crime


“Through love of having children, we are going to take over.”  AUGUSTIN CEBADA, BROWN BERETS, THE LA RAZA FASCIST PARTY





 206 Most wanted criminals in Los Angeles. Out of 206 criminals--183 are hispanic---171 of those are wanted for Murder.

Why do Americans still protect the illegals??




http://www.wnd.com/news/article.asp?ARTICLE_ID=53103 Did you know illegals kill 12 Americans a day?

http://www.freerepublic.com/focus/bloggers/1738432/posts FBI Crime Statistics - Crimes committed by illegals.


Pentagon official: US could send troops to fight Mexican “insurgency”



Richard (RJ) Eskow

JPMorgan Chase: Break Up the Big Banks Now. Here's How.

Posted: 05/21/2012 2:34 am

When Jamie Dimon revealed that JPMorgan Chase had lost billions through risky and legally questionable trading, he said the losses would be about $2 billion and maybe more. Apparently it is more -- a lot more. People in a position to know are saying the real figure is probably in the $5-7 billion range.

The JPMorgan Chase scandal -- and yes, it is a scandal -- shows us why we need to break up the big banks as quickly as possible.

But that won't happen unless we can get our hands around the real scope of the problem, which is probably far greater than we're being told. That means cutting through the enveloping shroud of jargon, euphemisms and double talk -- "crap," if you will -- that keeps us from seeing the situation as it really is.

Here's why we need to do it, and here's how.

Talk Talk

Two images come to mind when considering too-big-to-fail banks like JPMorgan Chase: The first is of the gigantic spaceships hovering over all of the world's cities in Independence Day, leaving the citizenry in shadows and the world in fear and uncertainty.

The second image is of an old New Yorker cartoon which shows a husband and wife chatting with guests over drinks and h'ors d'oeuvres while an enormous monster scowls in the corner. The caption reads: "We deal with it by not talking about it."

Most politicians are either talking about tighter regulations for too-big-to-fail banks, or about the virtues of self-regulation and the so-called "free markets." But the real problem isn't how to manage too-big-to-fail banks, which are inherently unmanageable. The real problem is that they exist, an everpresent menace that hovers over our economy while we go about our daily lives.

They deal with that problem by not talking about it.

Monster Mash

JPMorgan Chase is either our largest or second-largest bank, depending on when and how you ask the question. News stories often point out that it has $2 trillion in assets, which sounds impressive. But they usually fail to mention that it has liabilities of more than $2 trillion, too, leaving it roughly $183 billion in the black.

That ain't bad -- but it's not much more net worth than you'll see sitting around the table when Mitt Romney's super PAC friends get together for lunch.

And we can't trust those numbers. We now know that these risky London deals weren't accurately conveyed in last year's annual report. What else don't we know about JPM's liabilities?

All of our big banks were on the hook for hundreds of trillions of dollars in the run-up to the financial crisis of 2008. And now they're bigger than ever. How big? We don't know for sure -- and that's a big part of the problem.

Our four largest banks have 95 percent of the total exposure to derivatives. Two years ago we analyzed the raw data and found that JPM alone held 44 percent of that risk -- and JPM has grown since then.

Because they intend to keep right on growing. As Jamie Dimon promised shareholders, "I want to assure you that your company will be bigger and stronger and better a year from today."

If that doesn't frighten you, you haven't been paying attention.

Bigger ≠ Better

Here's an example of what we mean when we say it's time to "cut the crap" when we talk about big banks:

Writers should no longer be allowed to tell us, even in passing, that "I agree we need large institutions" unless they tell us why we need them.

Jamie Dimon was leading the chorus of bankers saying that their large size leads to increased efficiency and economies of scale. Okay, Mr. Dimon: Where are they? Is the cost of borrowing cheaper at JPM than it is at community banks? Are ATM fees lower? Are loans easier to get?

"Economies of scale" work well for customers -- when you're manufacturing toasters. But banks like JPM aren't in the toaster business. They're not even in the customer business anymore. Ordinary clients at the big banks are like cannon fodder in a colonial army: They're there to be used and discarded, not to be served or respected.

(John Reed's interview with Bill Moyers offers an enlightening glimpse into this shift in banking culture.)

So let's stop repeating the mantra that big institutions have anything to offer us -- anything, that is, except moral hazard. We did fine without them for centuries, and we'll be better off once they're gone.

Gaming the Numbers

Here's something else that needs to stop: When a bank deceives its investors, reporters need to stop saying only that it "changed its risk model." That makes it sound arcane. What JPM really did was mislead everyone.

The bank told investors that they had begun assessing internal risk in a new and more effective way. But reports say that the unit which made these hazardous trades reported directly to Dimon, bypassing the bank's other executive and risk management channels. And despite what they told the public -- including investors -- the bank did not use its new risk model to assess these trades. They used an old model which dramatically understated the risk involved.

Listen, I know this kind of talk confuses some people, but if there's one thing I learned after working in risk management it's this: The more jargon you hear, the less trustworthy the source.

If reports are true, then Chase was deceiving the public and it was deceiving investors. That's not "changing its risk model." It's lying. And it's very possibly fraud.

Byline Creep

And while we're in the crap-cutting business, here's something else that needs to stop:

Just because Jamie Dimon described the loss as "stupid" doesn't mean that you have to believe him, or use the same language. Listen, writers: He's the architect of this charade, not an observer.

If this disaster should tell you anything, it's to stop letting Jamie Dimon write your copy for you.

Something Stupid

Executives at Chase and the other big banks live in confidence that they'll reap the profits for risky betting and leave the losses to you. That may be many things -- venal, selfish, greedy -- but it's not stupid.

What's more, as long as nobody is indicted for Wall Street's ongoing criminality, they can keep breaking the law knowing they'll never pay the price for that either.

And if laws were broken in JPMorgan Chase's case, as Dimon himself acknowledges is possible, then these deals were only "stupid" the way any crime is stupid: It's only stupid if you get caught.

It Can Be Done. Here's How.

We've been led to believe that it's politically and economically impossible to break up these banks. That's not true. How can the political climate be changed?

The first step is to push for better financial reporting, so that we see less of the mistakes described above. If people are better-informed about big banks, sentiment against them will run even stronger than it is right now.

Which gets us to the politics of big banks.

Democracy First

The commonsense SAFE Act introduced by Sen. Sherrod Brown and Rep. Keith Ellison would end the era of too big to fail. It's a smart first step toward ridding the world of these menaces to society.

Legislation should also be introduced to strengthen and expand antitrust laws so that they can rein in out-of-control banks like JPM.

True, the SAFE Act and antitrust banking bills are unlikely to pass under our corrupt political system. But every politician in Washington should be forced to vote "yes" or "no" on this bill before the elections and let the public know where they stand on this vital issue. That's the only way Americans can make an informed decision in November.

During the drafting of Dodd/Frank financial legislation we saw something important happen a number of times: If politicians were allowed to craft deals in private, those deals always benefited the big banks. But if they were forced to debate these issues publicly, we saw a much greater consensus against Wall Street.

Public debate: It's how democracy is supposed to work. It will help us break up the big banks.

Contraptions and Elegance

The Dodd/Frank bill's reforms, while anemic, are somewhat useful. It's madness to suggest repealing them, as Republicans are trying to do. But Dodd/Frank isn't useful at all unless agencies are staffed with regulators determined to do their jobs. The Administration's record has been lackluster (or worse) in that regard, while the Republicans have made it clear that they'll staff regulatory agencies with people determined not to do their jobs.

It doesn't help that when it comes to too-big-to-fail banks the current system of financial regulation is a rickety, complicated, Rube Goldberg-ish contraption designed to work around the massive danger that they pose to the economy.

Simple solutions are usually the best, and the simple solution to too big to fail banks is: Break them up.

That may not be politically feasible right now, but it's the job of a mobilized citizenry to change the political equation with public pressure whenever possible. That means keeping the issue on the front burner by inundating elected officials from the White House on down with emails and calls in support of the SAFE Act. (More here.)

Lead the Fed

The public needs to pres Congress about the Federal Reserve, too. The Fed is feeding the growth of the megabanks with free or very low-interest money, no strings attached. That gives megabanks the resources and the incentive to place that where it can maximize income in a stagnant, nearly consumerless economy. That tempts the banks into increasingly risky transactions and instruments like the ones that caused JPM's loss.

The Fed must also stop interfering with shareholder democracy, which cuts to the core of executive accountability. We should demand that Congress hold the Fed accountable for its actions in propping up too-big-to-fail banks.

That's not very likely to happen as long as the Federal Reserve, a creation of the United States government, is governed by boards that are dominated by bankers -- bankers like Jamie Dimon. So the public must demand that Dimon step down, and that bankers are removed from Fed boards altogether.

Shine a Light

The public has the right to know about the banks it's been coddling, spoon-feeding low interest loans to, and protecting for years. It should demand a full and complete audit of these banks by trustworthy outsiders -- if enough of them can still be found. Auditors can provide the banks with all the proprietary protections they rightfully deserve. But twe rescued them, and now we need to shine a light into their dark corners.

In addition to these general audits, we also need an immediate, extensive and transparent no-holds-barred review of the JPMorgan Chase debacle. Simon Johnson compares this event with the near-collision of two jet airliners, which would trigger an immediate investigation by the National Traffic Safety Board. It's an apt analogy, and an excellent idea.

And bank executives must be investigated, too -- for criminal activity. That, and that alone, would discourage illegal risk-taking. It would also make them take their legal responsibilities under Sarbanes-Oxley much more seriously than they apparently do today, and would discourage them from routinely deceiving the public -- which in many cases appears to cross the line into fraud.

Declare Independence

Our national and world economies are in grave danger as long as banks like JPMorgan Chase exist in their present form. They've already left our economy in ruins once. It's only a matter of time before they do it again.

Even if we assume that JPM's current problems can be contained, we should realize that every loss of this kind has the potential to turn into a chain reaction. Each could become a cascading failure that threatens JPM or another megabank -- and which therefore threatens the entire financial system.

The megabanks pose an existential threat to our economy. They hover over our economy, our political system, and our personal lives like a fleet of giant spaceships. They serve no useful social purpose, and they only exist because we allow them to exist.

it's time to declare our independence from their domination and demand that our elected officials help us in our fight for freedom. It's time to stop living in their menacing shadow and come out into the sunlight.

It's time to dedicate ourselves to breaking up JPMorgan Chase and the other too-big-to-fail banks, and to ensuring that they never threaten the world's economy again.



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).


“Barack Obama's favorite banker faces losses of $2 billion and possibly more -- all because of the complex, now-you-see-it-now-you-don't trading in exotic financial instruments that he has so ardently lobbied Congress not to regulate.”

Is JPMorgan's Loss a Canary in a Coal Mine?

Posted: 05/16/2012 4:49 pm

That sound of shattered glass you've been hearing is the iconic portrait of Jamie Dimon splintering as it hits the floor of JPMorgan Chase. As the Good Book says, "Pride goeth before a fall," and the sleek, silver-haired, too-smart-for-his-own-good CEO of America's largest bank has been turning every television show within reach into a confessional booth. Barack Obama's favorite banker faces losses of $2 billion and possibly more -- all because of the complex, now-you-see-it-now-you-don't trading in exotic financial instruments that he has so ardently lobbied Congress not to regulate.

Once again, doing God's work -- that is, betting huge sums of money with depositor funds knowing that you are too big to fail and can count on taxpayers riding to your rescue if your avarice threatens to take the country down -- has lost some of its luster. The jewels in Dimon's crown sparkle with a little less grandiosity than a few days ago, when he ridiculed Paul Volcker's ideas for keeping Wall Street honest as "infantile."

To find out more about what this all means, I turned to Simon Johnson, once chief economist of the International Monetary Fund and now a professor at MIT's Sloan School of Management and senior fellow at the Peterson Institute for International Economics. He and his colleague James Kwak founded the now-indispensable website baselinescenario.com. They co-authored the bestselling book 13 Bankers and a most recent book, White House Burning, an account every citizen should read to understand how the national deficit affects our future.

Bill Moyers: If Chase began to collapse because of risky betting, would the government be forced to step in again?

Simon Johnson: Absolutely, Bill. JPMorgan Chase is too big to fail. Hopefully in the future we can move away from this system, but right now it is too big. It's about a $2.5 trillion dollar bank in terms of total assets. That's roughly 20 percent of the U.S. economy, comparing their assets to our GDP. That's huge. If that bank were to collapse -- I'm not saying it will -- but if it were to collapse, it would be a shock to the economy bigger than that of the collapse of Lehman Brothers, and as a result, they would be protected by the Federal Reserve. They are exactly what's known as too big to fail.

Moyers: I was just looking at an interview I did with you in February of 2009, soon after the collapse of 2008 and you said, and I'm quoting, "The signs that I see... the body language, the words, the op-eds, the testimony, the way these bankers are treated by certain congressional committees, it makes me feel very worried. I have a feeling in my stomach that is what I had in other countries, much poorer countries, countries that were headed into really difficult economic situations. When there's a small group of people who got you into a disaster and who are still powerful, you know you need to come in and break that power and you can't. You're stuck." How do you feel about that insight now?

Johnson: I'm still nervous, and I think that the losses that JPMorgan reported -- that CEO Jamie Dimon reported -- and the way in which they're presented, the fact that they're surprised by it and the fact that they didn't know they were taking these kinds of risks, the fact that they lost so much money in a relatively benign moment compared to what we've seen in the past and what we're likely to see in the future -- all of this suggests that we are absolutely on the path towards another financial crisis of the same order of magnitude as the last one.

Moyers: Should Jamie Dimon resign? I ask that because as you know and as we've discussed, Chase and other huge banks have been using their enormous wealth for years to, in effect, buy off our politicians and regulators. Chase just had to pay up almost three quarters of a billion dollars in settlements and surrendered fees to settle one case alone, that of bribery and corruption in Jefferson County, Alabama. It's also paid out billions of dollars to settle other cases of perjury, forgery, fraud and sale of unregistered securities. And these charges were for actions that took place while Mr. Dimon was the CEO. Should he resign?

Johnson: I think, Bill, there should be an independent investigation into how JPMorgan operates both with regard to these losses and with regard to all of the problems that you just identified. This investigation should be conducted separate from the board of directors. Remember that the shareholders and the board of directors absolutely have an incentive to keep JPMorgan Chase as a too-big-to-fail bank. But because it is that kind of bank, its downside risk is taken by the Federal Reserve, by the taxpayer, by the broader economy and all citizens. We need to have an independent, detailed, specific investigation to establish who knew what when and what kind of wrongdoing management was engaged in. On the basis of that, we'll see what we'll see and who should have to resign.

Moyers: Dimon is also on the board of the Federal Reserve Bank of New York, which, as everyone knows is supposed to regulate JPMorgan. What in the world are bankers doing on the Fed board, regulating themselves?

Johnson: This is a terrible situation, Bill. It goes back to the origins, the political compromise at the very beginning of the Federal Reserve system about a hundred years ago. The bankers were very powerful back then, also, and they got a Federal Reserve system in which they had a lot of representation. Some of that has eroded over time because of previous abuses, but you're absolutely right, the prominent bankers, including most notably, Jamie Dimon, are members of the board of the New York Federal Reserve, a key element in the Federal Reserve system. And he should, under these circumstances, absolutely step down from that role. It's completely inappropriate to have such a big bank represented in this fashion. The New York Fed claims there's no impropriety, there's no wrong doing and he doesn't involve himself in supervision and so on and so forth. Perhaps, but why does Mr. Dimon, a very busy man, take time out of his day to be on the board of the New York fed? He is getting something from this. It's a trade, just like everything else on Wall Street.

Moyers: He dismissed criticism of his dual role yesterday by downplaying the role of the Fed board. He said it's more like an "advisory group than anything else." I had to check my hearing aid to see if I'd heard that correctly.

Johnson: Well, I think he is advising them on lots of things. He also, of course, meets with some regularity with top Treasury officials, and some reports say that he meets with President Obama with some regularity. The political access and connections of Mr. Dimon are second to none. One of his senior executives was until recently chief of staff in the White House, if you can believe that. I really think this has gone far enough. Under these kinds of circumstances with this amount of loss of control over risk management, what we need to have is Mr. Dimon step down from the New York Federal Reserve Board.

Moyers: He told shareholders at their annual meeting Tuesday -- they were meeting in Tampa, Florida -- that these were "self-inflicted mistakes" that "should never have happened." Does that seem reasonable to you?

Johnson: Well, it's all very odd, Bill, and I've talked to as many experts as I can find who are at all informed about what JPMorgan was doing and how they were doing it and nobody really understands the true picture. That's why we need an independent investigation to establish -- was this an isolated incident or, more likely, the breakdown of a system of controlling and managing risks. Keep in mind that JPMorgan is widely regarded to be the best in the business at risk management, as it is called on Wall Street. And if they can't do this in a relatively benign moment when things are not so very bad around the world, what is going to happen to them and to other banks when something really dramatic happens, for example, in Europe in the eurozone?

Moyers: Some of his supporters are claiming that only the bank has lost on this and that there's absolutely no chance that the loss could have threatened the stability of the banking system as happened in 2008. What do you say again to that?

Johnson: I say this is the canary in the coal mine. This tells you that something is fundamentally wrong with the way banks measure, manage and control their risks. They don't have enough equity funding in their business. They like to have a little bit of equity and a lot of debt. They get paid based on return on equity, unadjusted for risk. If things go well, they get the upside. If things go badly, the downside is someone else's problem. And that someone else is you and me, Bill. It goes to the Federal Reserve, but not only, it goes to the Treasury, it goes to the debt.

The Congressional Budget Office estimates that the increase in debt relative to GDP due to the last crisis will end up being 50 percent of GDP, call that $7 trillion dollars, $7.5 trillion dollars in today's money. That's extraordinary. It's an enormous shock to our fiscal accounts and to our ability to pay pensions and keep the healthcare system running in the future. For what? What did we get from that? Absolutely nothing. The bankers got some billions in extra pay, we get trillions in extra debt. It's unfair, it's inefficient, it's unconscionable, and it needs to stop.

Moyers: Wasn't part of the risk that Dimon took with taxpayer guaranteed deposits? I mean, if I had money at JPMorgan Chase, wouldn't some of my money have been used to take this risk?

Johnson: Again, we don't know the exact details, but news reports do suggest that yes, they were gambling with federally insured deposits, which just really puts the icing on the cake here.

Moyers: Do we know yet what is Dimon's culpability? Is it conceivable to you that a risk this big would have been incurred without his approval?

Johnson: It seems very strange and quite a stretch. And he did tell investors, when he reported on first quarter earnings in April, that he was aware of the situation, aware of the trade -- he called it a "tempest in a teacup," and, therefore, not something to worry about.

Moyers: He's been Wall Street's point man in their campaign against tighter regulation of derivatives and proprietary trading. Were derivatives at the heart of this gamble?

Johnson: Yes, according to reliable reports, this was a so-called "hedging" strategy that turned out to be no more than a gamble, but the people involved perhaps didn't understand that or maybe they understood it and covered it up. It was absolutely about a bet on extremely complex derivatives and the interesting question is who failed to understand exactly what they were getting into. And how did Jamie Dimon, who has a reputation that he burnishes more than anybody else for being the number one expert risk manager in the world -- how did he miss this one?

Moyers:I've been reading a lot of stories today about members of the House, Republicans in particular, saying this doesn't change their opinion at all that we've got to still diminish regulation. What do you think about that?

Johnson: I think that it is a recipe for disaster. Look, deregulating or not regulating during the boom is exactly how you get into bailouts in the bust. The goal should be to make all the banks small enough and simple enough to fail. End the government subsidies here. And when I talk to people on the intellectual right, Bill, they get this, as do people on the intellectual left. The problem is, the political right largely doesn't want to go there because of the donations. I'm afraid some people, not all, but some people on the political left don't want to go there either.

Moyers: The Washington Post reported that the Justice Department has launched a criminal investigation into JPMorgan's trading loss. Have you spotted -- and I know this is sensitive -- but have you spotted anything in the story so far that suggests the possibility of criminality? Dodd-Frank is not in existence yet, so where would any possibility of criminality come from?

Johnson: Well Dodd-Frank is in existence but the rules have not been written and therefore not implemented. So yes, it is hard to violate those rules in their current state. And many of those rules, by the way, violation would be a civil penalty, not a criminal penalty. If you violate a securities law -- if you've mislead investors, if there was material adverse information that was not disclosed in an appropriate and timely manner -- that's a very serious offence traditionally.

I have to say that the Department of Justice and the Securities and Exchange Commission have not been very good at enforcing securities law in recent years, including and specifically since the financial crisis. I am skeptical that this will change. But if they have an investigation that reveals all of the details of what happened and how it happened, that would be extremely informative and show us, I believe, that the risk management approach and attitudes on Wall Street are deeply flawed and leading us towards a big crisis.

Moyers: So what are people to do, Simon? What can people do now in response to this?

Johnson: Well, I think you have to look for politicians who are proposing solutions, and look on the right and on the left. I see Elizabeth Warren, running for the Senate in Massachusetts, who is saying we should bring back Glass-Steagall to separate commercial banking from investment banking. I see Tom Hoenig, who is not a politician, he's a regulator, he's the former president of the Kansas City Fed, and he's now one of the top two people at the Federal Deposit Insurance Corporation, the FDIC. He is saying that big banks should no longer have trading desks. That's the same sort of idea that Elizabeth Warren is expressing. We need a lot more people to focus on this and to make this an issue for the elections.

And I would say in this context, Bill, it's very important not to be distracted. I understand for example, Speaker Boehner, the Republican Speaker of the House of Representatives, is proposing to have another conflict over the debt ceiling in the near future. This is the politics of distraction. This is refusing to recognize that a huge part of our fiscal problems today and in the future are due to these risks within the financial system that are allowed because the people running the biggest banks hand out massive campaign contributions across the political spectrum.

Moyers: Are you saying that this financial crisis, so-called, is at heart a political crisis?

Johnson: Yes, exactly. I think that a few people, particularly in and around the financial system, have become too powerful. They were allowed to take a lot of risk, and they did massive damage to the economy -- more than eight million jobs lost. We're still struggling to get back anywhere close to employment levels where we were before 2008. And they've done massive damage to the budget. This damage to the budget is long lasting; it undermines the budget when we need it to be stronger because the society is aging. We need to support Social Security and support Medicare on a fair basis. We need to restore and rebuild revenue, revenue that was absolutely devastated by the financial crisis. People need to understand the link between what the banks did and the budget. And too many people fail to do that. "Oh, it's too complicated. I don't want to understand the details, I don't want to spend time with it." That's a mistake, a very big mistake. You're playing into the hands of a few powerful people in the society who want private benefit and social loss.

Watch Moyers & Company weekly on public television. See more web-only features like this at BillMoyers.com


Why hasn’t Obama been impeached? His violations of our borders laws, inducing illegals to vote, sabotage of jobs for Americans, connections to criminal banksters…. WHAT DOES IT TAKE?



For much of Obama’s tenure, Jamie Dimon was known as the White House’s “favorite banker.” According to White House logs, Dimon visited the White House at least 18 times, often to talk to his former subordinate at JPMorgan, William Daley, who had been named White House chief of staff by Obama after the Democratic rout in the 2010 elections.


The JPMorgan scandal also throws into relief the government’s failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.

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).

The JPMorgan debacle

15 May 2012

The economic and political fallout from JPMorgan Chase’s sudden announcement last Thursday night that it lost more than $2 billion from speculative bets on credit derivatives continued to grow on Monday. The biggest US bank announced the forced retirement of Ina Drew, who headed up the bank’s London-based Chief Investment Office, which placed huge bets on the creditworthiness of a collection of US corporations. Other top executives and traders are expected to be sacked or demoted.

The bank’s shares fell another 3.2 percent, bringing its two-day market capitalization loss to nearly $19 billion. The Wall Street Journal reported that JPMorgan was prepared for a total loss of more than $4 billion over the next year from its soured stake in credit default swaps—the same investment vehicle that played a central role in the collapse of Lehman Brothers and the government bailout of insurance giant American International Group (AIG) in September of 2008.

In an interview on NBC’s “Meet the Press” program on Sunday, JPMorgan CEO Jamie Dimon sought to present the loss as an innocent mistake, resulting from “errors, sloppiness and bad judgment.” Only a month ago, Dimon, who has led the public campaign by Wall Street against even the mildest restrictions on speculative banking practices, dismissed warnings over the massive bets being made by his Chief Investment Office as “a complete tempest in a teapot.”

The scale of the loss and the denials that preceded it raise the likelihood that banking rules and laws against investor fraud and deception were breached.

President Obama, however, rushed to the defense of JPMorgan and Dimon, declaring on a daytime television talk show Monday that JPMorgan was “one of the best managed banks there is” and Dimon was “one of the smartest bankers we got.” At the same time he cited the bank’s loss as a vindication of the Dodd-Frank financial regulatory bill that he signed into law in July of 2010. “This is why we passed Wall Street reform,” he said.

In fact, the JPMorgan debacle demonstrates that nearly four years after the Wall Street crash nothing has changed for the financial aristocracy. No measures have been taken to rein in the banks, which received trillions of dollars in government handouts, guarantees and cheap loans. The same forms of speculation and outright swindling that led to the financial meltdown and the worst economic crisis since the Great Depression continue unabated.

The big banks, such as JPMorgan, have increased their stranglehold over the US economy. They have recorded bumper profits by withholding credit from consumers and small businesses, keeping unemployment high, while speculating on credit default swaps and other exotic financial instruments that drain resources from the real economy. On this basis, bank executives and traders, including those at bailed-out institutions, have continued to rake in eight-figure compensation packages. Last year, Ina Drew made $14 million, and Jamie Dimon took in $26 million.

The Dodd-Frank law trumpeted by Obama is a fraud, an attempt to give the appearance of financial reform while enabling the banks to continue their parasitic and criminal activities. A case in point is the so-called Volcker Rule, named after the former chairman of the Federal Reserve and economic adviser to the Obama White House, Paul Volcker.

The rule, incorporated into the Dodd-Frank Act and supposedly one of its most daring provisions, ostensibly bars proprietary trading—speculation by a bank on its own account—by commercial banks whose consumer deposits are guaranteed by the federal government. The idea is to prevent government-insured banks from speculating with depositors’ money.

But the regulation as drafted by federal regulators—under pressure from the Federal Reserve and Obama’s treasury secretary, Timothy Geithner, as well as the banks—would actually allow the type of speculative bet made by JPMorgan in the guise of a “hedge” to offset risk in the bank’s overall investment portfolio.

The Volcker Rule, whose precise form is yet to be announced, will do nothing to halt speculation by government-backed banks using small depositors’ money.

The JPMorgan scandal also throws into relief the government’s failure to prosecute those responsible for the 2008 financial meltdown. Despite overwhelming evidence of wrongdoing and criminality uncovered by two federal investigations last year, those responsible have been shielded from prosecution.

When Iowa Senator Charles Grassley submitted a letter to the Justice Department earlier this year asking how many bank executives had been prosecuted in response to the financial crisis, the Justice Department replied it did not know because it was not keeping a list.

According to a study by Syracuse University, however, federal financial fraud prosecutions have fallen to 20-year lows under the Obama administration, and are down 39 percent since 2003. Under Obama, the number of financial fraud cases has fallen to one-third the level of the Clinton administration.

These facts demonstrate the de facto dictatorship exercised by the financial aristocracy over the entire political system and both major parties. The Obama administration, in particular, is an instrument of the most powerful financial institutions. It has focused its efforts on protecting and increasing the wealth of the privileged elite while utilizing the crisis to permanently slash the wages and living standards of the working class.

For much of Obama’s tenure, Jamie Dimon was known as the White House’s “favorite banker.” According to White House logs, Dimon visited the White House at least 18 times, often to talk to his former subordinate at JPMorgan, William Daley, who had been named White House chief of staff by Obama after the Democratic rout in the 2010 elections.

The incestuous and corrupt relations between Wall Street, the Obama administration and the entire political system underscore the necessity for the working class to build its own mass socialist movement to fight for its interests in opposition to the ruling elite.

The bankers responsible for the financial crisis, including Dimon and his co-conspirators, must be held criminally liable for their lawlessness and held accountable for the social suffering that has resulted from their actions. The ill-gotten trillions accumulated by the banks must be expropriated, with full protection for small depositors and small businesses, and used to provide decent jobs, housing, health care and education for all.

There is no way to rein in the banks and end their socially destructive activities within the framework of the capitalist system. The only way to stop the fraud and parasitism that go on every day on Wall Street is to nationalize the banks and run them as democratically controlled public utilities.

Andre Damon and Barry Grey



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).