By Greg Hunter’s USAWatchdog.com
Monday, we started out the week with a front page story on USA Today that was more like a public relations stunt than real journalism. The headline read “Dimon sees good times in 2011.” The story was mostly an interview with JP Morgan CEO Jamie Dimon by CNBC news reader Maria Bartiromo. I could not find any objectivity or tough questions put to the Chairman and CEO of one of the nation’s top financial institutions. Please keep in mind J P Morgan was bailed out by taxpayers to the tune of $260 billion during the financial crisis. When asked, “How do you characterize the economy right now? Dimon replied, “The economy is getting stronger every day, and I would say it’s rather broad-based, and hopefully this will continue. That’s true globally. It’s good for America when the rest of the world grows, because you can sell more to the rest of the world. Large corporations are in very good shape, have plenty of capital and are starting to expand. . . .” (Click here to read the complete story from USA Today.)
If Mr. Dimon thinks the economy is really getting that much “stronger” and there is “plenty of capital,” why not go back to “mark to market” accounting? I would have loved it if Ms. Bartiromo could have found the guts to ask that question. The rules were changed nearly 2 years ago to let banks hold mortgage-backed securities, real estate and other assets at whatever bankers think they will be worth in the future. Some call this “mark to fantasy” accounting. I call it government sanctioned accounting fraud. No matter what it’s called, it simply makes the banks look like they’re in better financial shape than honest accounting would reveal. Some big banks would be insolvent, or at the very least much less profitable, were it not for the accounting rule change. Why does the MSM feel compelled to routinely paint a rosy economic picture?
When asked about foreclosures and how Dimon saw that “playing out,” the CEO said, “The mortgage pain is just a terrible story. Too many mortgages were badly done. I’m not talking about us.” Let’s stop right there. “Too many mortgages were badly done. I’m not talking about us.” Does Mr. Dimon really want the public to believe JP Morgan did nothing to help cause this enormous mess? I did a simple Google search, and several headlines would call into question Dimon’s squeaky clean claim: “JP Morgan Chase Freezes Foreclosures and Faces Criminal Investigation,” “Ohio official calls for DOJ probe of Chase mortgages,” “J.P. Morgan Faces Suits Alleging Foreclosure Fraud,” and “Chase and Wells Fargo anger federal judges due to fraud and incompetence in mortgage cases.” We have a record of more than one million foreclosures in 2010, and experts say we are on track for another one million more and a new record this year. I find it hard to believe JP Morgan did all of its mortgages correctly and did not have a hand in this national tragedy. Why not ask about these and other allegations?
I wonder if Mr. Dimon sees good times for the Bernie Madoff fraud victims. If Ms. Bartiromo would have done her job as a “journalist” then she would have surely known about the recently unsealed documents from the U.S. Bankruptcy Court handling the Madoff case. The Daily Beast reported a little more than two weeks ago, “The bank’s own executives, the complaint said, recognized a “well-known cloud” over Madoff’s activities, perhaps in 2006 and certainly by June, 2007—18 months before Bernie confessed. (Madoff bankruptcy trustee is Irving Picard.) Picard’s complaint damns the bank by saying: “By October, 2008, JPMC’s London office reported to the United Kingdom’s Serious Organised Crime Agency (SOCA) that it knew Madoff was ‘too good to be true,’ and a likely fraud….Incredibly…JPMC still did nothing to stop the fraud.” Madoff, his family, and his securities firm were loyal JPMorgan Chase customers for more than two decades as the bank processed billions of dollars through his accounts.” This story didn’t rate even a single question? You have to be kidding me. Madoff was the single biggest fraud in history, and JP Morgan allegedly knew about the fraud and didn’t stop it? Ms. Bartiromo was standing in front of the top decision maker of JP Morgan and she does not ask him, “What did you know and when did you know it?”
While we are on the subject of fraud, during the aftermath of the savings and loan crisis in the early 90’s, more than 1,000 financial elites were successfully prosecuted. According to Economist William Black, this current financial calamity is at least 40 times bigger than the S and L crisis. How many have been indicted with the financial meltdown of 2008? None.
Matt Taibbi of Rolling Stone asked the right question in a piece last week titled “Why Isn’t Wall Street in Jail?” Taibbi writes, “Nobody goes to jail.This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff . . . The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted.” (Click here to read the complete Rolling Stone story.)
Is it asking too much to put Dimon on the spot as to why he thinks nobody has gone to jail over this ongoing mammoth mess? I am not going to even comment on the rest of the interview, because to me, this is just a media spin job. The interview was not designed to enlighten the public or ask tough questions. It was done to make Mr. Dimon, JP Morgan and the economy look good. I don’t blame Mr. Dimon for the poor interview. I blame Maria Bartiromo and USA Today for reducing themselves to a public relations tool.