Goldman and JPMorgan -- The Two Winners When The Rest of America is Losing

[Hannah Bell]

Besides Goldman Sachs, the Street's other surviving behemoth is JPMorgan. Today it posted second-quarter earnings up a stunning 36 percent from the first quarter, to $2.7 billion.

...JP is mounting a furious lobbying campaign against regulations that would funnel derivatives trading through exchanges where regulators can monitor them, and thereby crimp JP's profits. Now the Street's biggest derivatives player, JP has generated billions helping clients navigate these contracts and assuming counter-party risk in such transactions. Its derivatives contracts were valued at roughly $81 trillion at the end of the first quarter, representing 40 percent of the derivatives held by all banks, according to the Office of the Comptroller of the Currency. JP has played down its potential risk exposure from these derivatives contracts, of course, but anyone who's been paying attention over the last ten months knows that unregulated derivatives have been at the center of the storm.

The tumult on the Street has also given both firms extraordinary market power. That's where much of the current profits are coming from...

Antitrust law was designed to prevent just this sort of market power and political heft. The Justice Department or the Federal Trade Commission should investigate the new-found dominance of Goldman and JP -- and, if warranted, break them up. Alternatively, Congress should impose a surtax on the newly-exclusive group of Wall Street firms, most notably Goldman and JPMorgan, which are now backed by implicit government bailout insurance guaranteeing that, should they get into trouble, taxpayers will keep them afloat. The surtax would approximate the economic benefit to these firms of such government largesse, which I'd estimate to be at least 50 percent of their profits from here on.

http://tpmcafe.talkingpointsmemo.com/talk/blogs/robert_reich/2009/07/goldman-and-jpmorgan----the-tw.php?ref=fpd

[RandomThoughts]

1. That depends on your definition of winning, and how far you look forward n/t

[backtoblue]

2. I'm sick and tired of rich corporations taking my paycheck and now my tax money.

Just pissed off and sick of it, just sick!!!!!


And to think they want "personhood" for corporations, well I say to them then -

[cascadiance]

3. And makes you wonder if J.P. Morgan can avoid a Smedley Butler this time to institute fascism here!

It was J.P. Morgan, du Pont, and other big banksters of the earlier times of last century that were thwarted in their attempt to have a fascist coup overthrow FDR in those earlier days to align themselves (and by their wishes, us) more with the likes of Mussolini then!

Makes you wonder if there are subtle threats of the same thing happening now which is the source of us "protecting them" again. Even back in those days, they weren't sentenced to prison time or hanging for treason like they should have been then.

http://coat.ncf.ca/our_magazine/links/53/butler-by_frazier.html

The Business of War
(an excerpt about Smedley Butler)

By Wade Frazier

Smedley Butler was one of the most beloved military leaders in American history. Teddy Roosevelt called him, "The finest fighting man in America." Butler was known as "the fighting Quaker." Butler was only one of four Americans ever awarded the Congressional Medal of Honor twice. He tried returning one of them because he did not feel it was earned, but was instead ordered to wear it. Rank-and-file American soldiers loved him. Butler helped run the Marines for a generation, carried a pack and was in the trenches with his troops. Butler was known for his honesty and appreciation for the common man. In Butler's case, it was genuine.

...

A 1937 State Department report stated that "Fascism is becoming the soul of Italy." The Fascist experiment was praised because it "brought order out of chaos, discipline out of license, and solvency out of bankruptcy." The report stated that in order to "accomplish so much in a short time severe measures have been necessary." The State Department in 1937 saw Fascism as compatible with the United States' interests. Just as after World War II, the United States would embrace anybody as long as they were anticommunist. While the Fascists were merely raping their own people and making the country safe for American investment, the U.S. government minimized the suffering of that nation's people, and eagerly participated. With Japan, Germany and Italy, it was only when they began stepping on imperial toes that it became a matter of war.

When Butler retired amid the Mussolini furor, he became an even bigger national hero than before. Although many politicians and industrialists were avid fans of Fascism, not everybody in America was. The veterans groups lionized Butler, and he was a big hit on the talk circuit, giving speeches to veterans groups almost daily. Butler was a paragon to the veterans groups and a populist hero, which made what happened in 1933 seem strange. A Wall Street bond salesman and former commander of the Connecticut American Legion approached Butler. Gerald MacGuire had a proposal. MacGuire said he was acting as a front man for wealthy industrialists and bankers, and J.P. Morgan, du Pont and other names came up in the conversations. The proposal was this: Butler would get elected as the American Legion's national commander. With that office, Butler would have the loyalty of 500,000 veterans. With that private "army" (du Pont would arm them through their controlling interest in Remington Arms Company) and up to $300 million of funding made available by the bankers and industrialists, they would take over the White House.

MacGuire said that the same people with the money also controlled the press, and would concoct a rationale that Roosevelt was ill and needed a strongman to help run the country. The public would easily swallow it, and Butler would be installed in a new cabinet position as Roosevelt's right hand, in a position dubbed the "Secretary of General Affairs." MacGuire had been studying the Italian and German Fascist "miracles," and the plan was closely modeled after Hitler's Brown Shirt coup. They would ease Roosevelt out of office, and Butler would be America´s new Hitler.

They picked the wrong man. Although Butler had been openly critical of Mussolini, they thought that Butler could be controlled. MacGuire mentioned other candidates they would approach if Butler turned them down, such as Douglas MacArthur. MacGuire even told Butler that his superiors doubted that Butler would obediently play the game right, but nobody else in America could gain the ready allegiance of millions of veterans. Butler did not say anything publicly and played along, trying to find out more, such as who was behind it. Butler enlisted Philadelphia Record reporter Paul French to dig deeper into the situation. Butler introduced French to MacGuire, and French gained MacGuire's confidence. MacGuire told French the same story that Butler heard. They tried getting MacGuire to give them more names, but he was too smart for that. Butler met one rich conspirator who said that he would spend half his fortune to save the other half.

...

[truedelphi]

4. Uh, you do not need a military coup when the Executive branch is complicit with

Those wanting the takeover.

What more would one of their own people do than what Barack Obama has done? Obama allowed Bailout Monies to be offered to the banking elite, without much oversight or any stipulations as to what the banks had to do with their monies. He also avoided the wiser course of putting "Too Big To Fail" firms into receivership - and on account of him not doing this, these firms are busy paying out to make good contracts involving the Credit Default Swap bets, rather than using the monies offered to boost the rise in the value of assets. This is ass backward.

He let them have Bernanke in on the Federal Reserve, making him the Chairman. Now Bernanke is letting it be known that if the American people's attempt to regain control of OUR ECONOMY succeeds through passage of the "Audit the Federal Reserve Bill," making its way through the House and Senate, Bernanke has threatened that the Fed (combined with the banking industry) will bring the economy to its knees.

Obama put Geithner into the top spot at the Treasury, despite Geithner's failure to help the Asian crisis back in the late nineties when the IMF sent him there to assist their recovery. One possible reason for the Japanese economic leaders to be openly laughing at Geithner some three weeks ago was because they all remember the failure Geithner brought to their system. He prolonged their agony, just as he is prolonging ours.

Geithner also helped jimmy the system last fall, so that AIG was given the dough to pass through to Goldman Sachs some 13 Billion bucks.

Cost of all this to taxpayers - perhaps as much as $ 80,000 per man, woman and child.