Jamie’s Cryin – Episode 3: Wherein Jamie Loses the Debit Swipe Battle & is Forced to Take Bernanke to Task for Raising Capital Requirements from the Floor of a Finance Summit
Update: I want to add that IMO Jamie is the best Bank CEO out there. He is brilliant. He is savvy, he is kewt, he is a capitalist, I dig it. I wanted him for Treasury Secretary and wrote about it in March of ’09. But the TBTF have refused to allow the consumer to deleverage from the crushing weight of their housing debt, and the TBTF helped create this problem.
They are the whiz kids in the room, Mom and Pop Homeowner need a HOLC, and the TBTF blocked it and continue to block it, assuring us a long, slow, slog through a Depression like forced deleveraging as the Fed continues to try to inflate its way out of this massive debt it used to prop the very same TBTF.
All unnecessary pain, if only the TBTF would take some of the responsibility they like to lecture about when they laughingly call principal writedowns moral harazrd after they made the Goddamned loans. (see Meredith Whitney ask Jamie about this on an earnings call in January 2010)
Lost juice Jamie? Have you Lost Hand? Did you think buying the POTUSship for Obama meant a free reign?
Did you think basing all our policies on what is best for a handful of TBTF bankstas was really a good way to GROW the American economy?
Oh woe is me. Cry me a river.
PragmaticCapitalism has it:
(…) his bank was saved from the brink of disaster in 2008. The US government took extraordinary measures to ensure that he did not go down as one of the greatest bank failures of all-time. In fact, the US government did him a huge favor by making his bank the linchpin in the US economy.
Of course, this was done by making Mr. Dimon’s already too big to fail bank too bigger to fail. But none of this is enough. Saving someone’s career and ensuring that their bank is now an instrumental portion of the US economy is not enough. And in a fit of rage Mr. Dimon went and rewarded himself with a monstrous $16MM pay package last year. After all, he deserved it. But this is not enough.
It’s not enough to pay yourself outrageous sums of money when your company should be in a hole in the ground. It’s not enough to have the government by the throat and know that the taxpayers can never let your company fail. It’s not enough to have been a key player in helping the US banking system become the gigantic leach on the world’s largest economy. It’s not enough that you help pull our best and brightest minds out of productive fields and into finance where they will do nothing but think of new ways to help separate the middle class from their savings. It’s not enough that you helped build a banking system that nearly crashed a $15 trillion economy.
No none of this is enough. And when we pass an incredibly weak regulatory bill that does nothing to actually fix what caused the crisis you go and complain that the government is doing too much….
Then today REALLY SUCKED for Jamie when he lost the Debit Card Swipe Fee battle to the retailers despite INSANE LOBBYING and Jon Tester- D-MT, Bob Corker R-TN last minute attempt to stave off the changes for a year.
This is a Fed set cap on swipe fees. Lowering avg fee charged to RETAILERS from .44 a swipe to .12 a swipe. TBTF are babied left and right, the retailers are going out of business left and right let the Fed baby someone else for a change Jamie. I’m sure Obama will give you another bailout any second now anyway.
…The fee cut could cost the card industry and banks billions of dollars, but nobody in the retail business is shedding any tears — it will save them money.
Bank stocks, up earlier in the day, flipped into the red on the news and ended down nearly 1%, making them among the worst performers in the market today….
Update: 4/17/11~ Question Asked, Question Answered~ (emphasis from original)
…Stunningly, today we learn that to keep long rates low, the Fed may have resorted to nothing short of the same suicidal trade that destroyed AIG FP and brought the entire system to its knees. Namely, Ben Bernanke is now quite possibly the second coming of Joe Cassano, since in order to keep rates low, Bernanke is forced to a last resort action of selling billions upon billions of Treasury puts to “pin” rates low contrary to natural supply-demand mechanics…
Housing Double Dip revealed as New Sales plunge 17% m/m down 28% y/y to record low ~ Let the TBTF Games Begin!
Update at end of post
American Homeowners are Home Alone while Benny and the Feds continue to PROTECT TBTF BANKS as their ONE AND ONLY MANDATE.
New sales of single-family homes fell nearly 17% in February from a month earlier, coming in well below analysts’ estimates and at the lowest level recorded….
…February sales are down 28% from a year earlier….
And as we have been saying til we’re blue in the face, it is now NATIONWIDE:
In the Northeast in February, new homes sales cratered, falling 57% from January, according to the joint release from the Census Bureau and the Department of Housing and Urban Development.
Okay you say, how about prices? What is the delta, the RATE of change? It is ACCELERATING TO THE DOWNSIDE~lowest price since December 2003~
…The median sales price of new homes sold last month was $202,100, down nearly 14% from January, representing the largest monthly decline yet….
Tiny Tim and Bankster Ben have been in full save the banks, ‘extend and pretend’ on housing mode for THREE YEARS.
And where has that gotten the REAL ECONOMY~ The Main St economy? Absolutely nowhere.
Where has that gotten the TBTF? They will still fail if they take the losses they NEED to take, but they have lots of nice bonuses and dividends (Except for BofA which is the redhaired stepchild and is allowed to wither on the vine sans dividends) and Jamie Dimon was even able to produce a $20Billion line of credit for ATT to become Ma Bell, again.
The economy on Main St will NOT RECOVER until housing is addressed in a MEANINGFUL way that allows consumers to correct their balance sheets.
You know, the way the TBTF are allowed to. The way CRE is allowed to. The way every Wall St firm is allowed to, by RESTRUCTURING THE DEBT. HOLC or real mods, pick your poison.
Or we can keep IGNORING the real problem and let the banks who MADE THE STUPID LOANS be the ONLY ONES who get off with NO LOSSES TAKEN while the US consumer continues to struggle for years under the housing morass as Ben prints to infinity and beyond like a deranged Buzz Lightyear.
Update: Oh lookee here!! Chris Whalen says FAN FRED are hiding ANOTHER 100B in losses on their books! But TPTB and TBTF are claiming writing down homeowners principal will cost taxpayers? Bullshit. And don;t EVEN talk to me about moral hazard after the shxt the Fed is doing for the banks.
…Both investors and Congress need a lot more details about the purchases of defaulted loans by Fannie and Freddie. We need to know exactly how many dud loans have migrated back to the GSEs, what their loan loss reserve is, how much of that loan loss reserve is “covered” by the MIs and how much “capital” the MIs have against these exposures. The GSE are letting dead loans sit on their books in part to avoid recognizing the losses, an event that would drive many of the MIs into bankruptcy. If you look at how slow the process of final loss recognition by Fannie and Freddie is proceeding, then you’ll understand why the publicly disclosed loss rates reported by Fannie and Freddie have been falling.
Instead of demanding insurance payments, the GSEs are doing everything in their power to keep the MIs looking like going concerns so that they can count the MI “receivable” as a good asset. This is why the GSEs direct LTV based LLPAs to the MIs, to keep some cash flowing their way, and…
If there was a proper mark-to-market on the MIs (like all proper insurance/reinsurance businesses do), then the MIs would be massively insolvent. The GSEs would have to take another huge amount of capital from Treasury. Geithner and the GSEs are trying to avoid it, and to date are getting away with it….
CSPAN linky here. Hearing has begun.
Finally. Yeah the ‘core’ number is total BS and Jim Grant, a witness, will testify to just that!
ZeroHedge has it:
..The much anticipated hearing on “The Relationship of Monetary Policy and Rising Prices” chaired by Ron Paul..
witness list consists of:
Thanks for telling it like it is Rick! Keep up the great work!!
Clips courtesy of CNBC, MRC, and CommonSenseCapitalism
Spin baby spin! CONTAINED, I do not think that word means what you think it means Ben.
They gave away trillions of USDollars to corporations and foreign entities and have done JACK and SHXT for the American consumer.
FIX HOUSING – HOLC.
Courtesy of CBS
What do you do for $:Fed reveals partial data on emergency lending facilities, still mum on discount window
Update: Well, it would appear absolutely EVERYONE got a bailout except the middle class. And I do mean everyone.
Zero Hedge breaks down the 35 foreign banks that the Fed bailed out here.
…$1.27 trillion in agency MBS was traded by foreign banks…
led by the $410 billion by German-based Deutsche Bank ..
…the $382 billion by the Switzerland-based Credit Suisse.
Other highlights of the disclosure include that GE among other commercial endeavors got $ from the Fed, and that the Fed has essentially been taking all the polluted assets from everyone with a pulse (again, except for the US middle class consumer/homeowner who has been lectured about ‘moral hazard’ and whose house has been foreclosed upon):
.the Federal Reserve purchased $1.25 trillion in agency MBS from all participating banks.
Goldman Sachs borrowed 84 times from Fed’s dealer facility (PDCF) from Sept. 15 to 11/26/08 for amounts ranging from $100m to $8b
Bank of America borrowed 118 times from the PDCF from Sept 18 2008 to May 2009, in amount ranging from $375 million to $11 billion.
And even CA Pension funds got in on the bail out action, per ZeroHedge:
Looking at the TALF data, we see that the biggest borrower by subscription is Calpers, with a total of about $5.4 billion
…The data released Wednesday include short-term liquidity moves for financial institutions and companies made as part of the Fed’s traditional role as lender of last resort, liquidity injections directly to borrowers and investors in key credit markets and financial support for Bear Stearns Cos. and American International Group Inc. (See all the data from the Fed)
Fed officials reported details on more than 21,000 transactions from December 2007 to July 2010. The emergency programs caused the size of the Fed’s balance sheet to swell. (See a history of the Fed’s lending)…