Tag Archives: Jamie Dimon

New Econparody Song About “Guess Who”

It’s always a pleasure to introduce new songs from versuplus.com. Their latest release is called “The Ballad of Diamond Jim,”  and is  a collaboration with acclaimed country econosinger/songwriter Merle Hazard and the PBS NewsHour economics team. “Diamond Jim” is an original econosong about banking regulation. It has – of course – nothing to do with the famous CEO of JPMorgan Chase, Jamie Dimon, also know as “the most dangerous man in america”.

“Our Game is diseconomy of scale. The key is to be too big to fail.”

Diamond Jim

You may watch and listen to the song  (with lyrics) at www.verusplus.com,

or you can download the video at youtube.

And here’s your bonus!

The PBS NewsHour has done an extraordinary 12-minute companion video – featuring former IMF chief economist Simon Johnson – that analyzes the lyric.

You can find it here:

The Ballad of a Would-Be, Too-Big-to-Fail Banker

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Sarkozy: We Will Never Let The Euro Fall!

In a speech to some of the worlds most powerful businessmen, currently gathering in Davos for the annual World Economic Forum,  French president Nicolas Sarkozy was waving the EU flag, raising his voice and almost shouted out: “Ms. Merkel and I will never – do you hear me? – never let the euro fall!” I suppose everyone present could hear him – if anyone takes any notice is a completely different matter.

“To those who bet against the euro, watch out for your money because we are fully determined to defend the euro.”

Nicolas Sarkozy


“The consequences of a failure of the euro would be so cataclysmic that we could not possibly entertain the idea. We couldn’t even play with the idea of entertaining the idea,” president Sarkozy said in a key-note at the World Economic Forum in Davos (Switzerland), Thursday, as he tried to put an end to corridor speculations about the future of the euro.

Personally, I’m pretty sure the speculations will go on – perhaps even reinforce – after the French presidents latest outburst against those he sees as the evil speculators, trying to destroy the euro zone and its common currency.

Last year he claimed that the EU would use “a secret weapon” to fight the forces of the financial markets.

(Maybe it’s a superfast money printing machine?)

Anyway – according to Mr. Sarkozy, France and Germany have some kind of agreement to defend the “speculators” by all means:

The euro is Europe. And Europe spells 60 years of peace. Therefore we will never let the euro go or be destroyed,” he said, according to todays reports from Davos.

“To those who bet against the euro, watch out for your money because we are fully determined to defend the euro.”

“Ms. Merkel and I will never – do you hear me? – never let the euro fall.”

Failure Would Be Cataclysmic

“The consequences of a failure of the euro would be so cataclysmic that we could not possibly entertain the idea. We couldn’t even play with the idea of entertaining the idea.”

“To imagine that we might pull out, that we might abandon the euro, is to show a complete misunderstanding of the state of mind of Europeans who have been at each others’ throats for decades and who have only one thing in mind – peace and co-operation,” he said.

Adding that Europe’s identity is inseparable from the single currency.

“To imagine that we might pull out shows a complete misunderstanding of the European psychology. It has to do with our identities as Europeans.”

Well, some might argue theat it is the French president who shows a “complete misunderstanding” when it comes to the psychology and feeling of identity amongst Europeans.

Here’s the official video recording of the welcoming remarks by Doris Leuthard, President of the Swiss Confederation and Federal Councillor of Economic Affairs, and then; the opening address by Nicolas Sarkozy, President of France:

More at: http://www.weforum.org


It’s The Derivatives, Stupid!

He also took a swipe at commodity speculators, a growing theme of his tenure this year as chairman of the G20 and G8.

The president repeatedly pointed out that in the last few weeks he holds investors responsible for the rise in food and energy prices that have aggravated riots in some developing nations.

He criticised the derivatives market for the role he believes it played in the economic crisis.

“They played a ‘pass the parcel’ game which was, of course, very profitable because everyone you passed the parcel to made money – until finally there was no one to pass it to,” the French president says.

I would suggest that Mr. Sarkozy takes a few lessons and updates his knowledge of psychology and human behavior – not only the common, but also market behavior and psychology.

I can recommend a few books.

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Want To Be A Bank Executive?

In the aftermath of the financial crisis, we’ve come to learn the facts of the top bank executive’s luxurious life, with numerous private estates and apartments, private jets, billion dollar bonuses and gold-plated waste bins. Sounds like a dream job, don’t it? But what if you were to be held personal accountable if your bank failed? If you were to be sued by the government, dragged through court and charged with a billion dollar fine? Even if you did nothing wrong? Would you still want the job?

“The process went on 20 years ago and is happening again now.”

Thomas Vartanian


It seems like there will be an openings for some experienced managers in the financial industry over the next months. The Federal Deposit Insurance Corp, (FDIC), has authorized lawsuits against more than 50 officers and directors of failed banks and aims to recoup more than $1 billion in losses stemming from the credit crisis.

The lawsuits were authorized during closed sessions of the FDIC board and haven’t been made public, Bloomberg Reports.

FDIC, which has closed down 294 lenders since the start of 2008, has held off court action while conducting settlement talks with executives whose actions may have led to bank collapses, Richard Osterman, the agency’s acting general counsel, says in an interview.

“We’re ready to go,” Osterman states.

“We could walk into court tomorrow and file the lawsuits.”

Want Money Back

The FDIC  has so far brought only one case against financial officers or directors tied to the recent collapses; a suit filed in July seeking $300 million in damages from four executives of IndyMac Bancorp Inc.

When a bank fails, the agency’s investigators take about 18 months to complete their autopsies, meaning most of the probes stemming from the financial crisis are still ongoing, Osterman says.

The usual practice is, if FDIC investigators finds something suspicious early in the process, they send letters to the bank executives alerting them that a law suit may be coming to recoup a portion of the losses.

15 bank directors and officers at BankUnited recivied such a letter on November 5th last year.

According to the letter, they’ve “blindly made loans to borrowers who, for the most part, were un-creditworthy, creating an unduly high risk of inevitable failure when the housing market began to decline,” and that they had “breached their fiduciary duties.”

However, the FDIC says they only file suits “where they are believed to be sound on the merits and likely to be cost-effective.”

Meaning; there’s a lot of room for interpretation.

The recently authorized lawsuits, if filed by the agency and not settled, would claim damages of more than $1 billion, according to FDIC spokesman David Barr.

Osterman says the goal is to reach as many settlements as possible.

The Cost Effectives

Obviously there’s been some purely criminal activity going on in the heat of the boom, but the main issue have turned into a question if these persons are able to refund the FDIC with a couple of hundred million dollar, or not.

The severity of the mismanagement is subsidiary.

The former IndyMac employees, accused of granting loans that were unlikely to be repaid, denies any wrongdoing.

Attorney Lawrence Kaplan is representing two of the IndyMac defendants. He says the paucity of cases filed to date shows the difficulty of assigning blame for a crisis that took down so many financial companies.

“The current crisis was caused by economic conditions that few, if any experts, including leading federal officials, saw coming,” said Kaplan, who’s a lawyer at Paul Hastings Janofsky & Walker LLP.

“As a result, claims that directors and officers of many failed banks engaged in negligence lack credibility as such claims attempt to hold those directors and officers to an impossible standard of care,” Kaplan says.

So, Who Want A Job?

I guess that wasn’t mentioned in any of the IndyMac executives’ job contracts – an “impossible standard of care,” I mean.

But then again, if it was, we probably wouldn’t have got the amusements of John Thain, Dick Fuld, Vikram Pandit, Lloyd Blankfein, Jamie Dimon, among others.

Wonder if any of the above ever thought:

“Holy shit! If something goes wrong, I will be held personal responsible and sued  by the authorities for almost everything I owe…”

Well, personally I doubt any of them hardly knew what a CDO was until they blew up in their faces two years ago.

You cold argue that they should have known.

In that case, they also should have know about the “impossible standard of care.”

It’s not something new.

In fact, the same happened to the bank executives after the so-called savings and loan crisis in the late 80’s/early 90’s.

A 20 Year Process

During that period, the FDIC sued executives from more than 24 percent of the 1.813 lenders that failed.

“The process went on 20 years ago and is happening again now,” Thomas Vartanian, a partner at law firm Dechert LLP in Washington, says.

“This is the way it’s going to go over the next few years as they catch up with doing these investigations and doing claims.”

According to FDIC, 2010 will be the peak year for bank failures, and the agency’s list of so-called problem lenders suggests banks will keep collapsing at an accelerated rate in coming months.

The confidential list had 829 banks with $403 billion in assets by the end of the second quarter, according to Bloomberg.

Introducing: The B-Team

One particular interesting question arise from this questionable case:

What kind of people are willing to take on the leadership of a major financial institution knowing that they’re signing up for  job that requires an “impossible standard of care”?

In my view they’re either overconfident, reckless or stupid. (Perhaps all three).

And that’s not the people we need; not running US banks, nor any other important business.

But that’s what we’ll get with a practice like this.

As the resent crisis seems to be an evidence of.

You Sue Me, I Sue You, Oh Peggy, Peggy Sue

Italy Charge Foreign Banks With Fraud

EU Wants Answers From Wall St. On Greek Debt

Goldman Sachs Charged With Fraud – Here’s The SEC filing

Civil And Criminal Probes Against JP Morgan For Silver Manipulation

SEC To Take Action Against Moody’s

Banks Face Multi-Hundred-Million Dollar Settlements

The Truth, Some Truth And Something Like The Truth

DnB NOR Except Penalties of NOK 26 million

Hey, America! Wall Street Got A Message For You

6 US Banks Collects 93% Of Industry’s Trading Revenue

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