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Raymond J. Learsy Headshot

JPMorgan Chase's Culture as Economic Parasite

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The culture of what we expect from banks is not overly complex. They are institutions meant to safeguard our deposits and are meant to anchor and enhance our economy by lending to viable businesses, finance trade and receivables, finance business expansion, help people purchase their homes, and where their charter permits, help raise capital for the creation or expansion of industry, and generally serve the communal good where economically sound private sector projects need financial support.

JPMorgan, on the other hand, has taken their vaunted position of privilege and access in the banking world down the nefarious path of becoming a leech on the American economy. It has preyed on the economy's well-being to enrich itself through proprietary trading, from which it has added nary an iota of material contribution to the economy's general welfare. This, while hyping life's day-to-day cost of living through their warehousing of billions of dollars worth of core commodities, including but not limited to aluminum, copper and enormous oil tankers of 200,000-ton capacity and more, filling them with oil products from heating oil to crude oil itself, and holding them at sea, at anchor, for months at a time. All the while playing the derivatives market on the commodity exchanges with the object pushing prices of their gambling chips (especially their billions in physical inventory) ever higher.

The action of the likes of JPMorgan in pursuing their profit objectives at the cost to the economy as a whole come in total disregard of the president's admonition calling for major banks and other financial institutions to end irresponsible risk-taking as long ago as 2010
(which was concurrently and arrogantly dismissed by JPMorgan announcing that they were making a $4 billion acquisition of the Royal Bank of Scotland's trading division RBS Sempra Commodities, which European regulators had forced RBS to divest. Incorporating Sempra into the sinews of JPMorgan brought with it:

  • One of the three biggest U.S. gas and power trading desks; hello California
  • The biggest physical base metals trading desks; hello aluminum and copper warehousing and the London Metal's Exchange
  • A global oil team with a decade of experience in trading physical crude oil cargoes and diesel barges; hello pumped up oil prices at levels $30 to $40 higher than they should be

Over the past weeks JPMorgan has been targeted with at least six investigations by government agencies extending from the FBI -- to the the Justice Department which recently announced an energy market manipulation inquiry coming on the heels of FERC's settlement with JPMorgan for having manipulated the energy/electricity markets in California and the Midwest as well as six other recent investigations.

Of course there are many both in Washington and in the media quick to lay the moniker of 'overzealousness' on the government agencies that are finally waking up to the outrages of Wall Street excess over the past years. JPMorgan, so accustomed to the profits of their prop trading not to speak of their full court press to dismantle Dodd-Frank, certainly presumes it is being bullied, that, all in all, it is but "a tempest in a teapot" -- which should become their corporate logo. This, especially for an organization that has consistently profited handsomely on the back of and at a cost to the American economy, with its guarantees of 'too big to fail,' the largesse of virtually endless and cheap money at the Fed window, the money of its depositors guaranteed by the government's Federal Deposit Insurance Corporation, its access to the seats of power including appointments to the New York Federal Reserve. All being contorted to a corporate culture of greed and profit while our pathetic watchdog agencies were looking away, moneyed and lobbied into doldrums of quiet acceptance to a culture of malign excess.

Will that be changing? Will there be accountability? Yes, there are murmurings of JPMorgan leaving the physical prop trading business. Well and good, but will it be a continuation of what Senator Elizabeth Warren only recently labeled disdainfully as the Justice Department's forever 'timid enforcement policy.'

Time will tell. But you wanna bet!?