Tag: finance

In short: young firms.

As the following chart summarizing OECD data for the developed world, all the net job creation in the 21st century has come from firms that are 5 years old or less, having even created jobs during the peak years of the post-Lehman depression. And where do jobs go to die? Simple – old corporations, as firms older than 6 years having been net eliminators of jobs since the year 2001!

 

What is perhaps paradoxical about this data, is that as we have shown in the past, the one age group that has benefited the most in the US “New Normal” are old workers, those 55 and above, who have been the net recipients of all job creation since the onset of the second great depression (and whose employment level just hit all time records). As for workers under 55, i.e. those in their prime, they still have several million jobs to recover before they get back to even.

The conclusion? In order to spur a true recovery, and not one of the S&P500 price level, where corporations give the impression of normalcy as a result of corporate buybacks and QE of course, governments of the developed world should encourage creation of new firms. Instead what do they do? Allow themselves to be manipulated and pander to the well-established D.C. lobbies of the decrepit corporate cryptkeepers that control all the levers… and continue to fire in droves.

via Zero Hedge http://ift.tt/1lJtwnD Tyler Durden

The machines have learned well that 1015ET is buying time… Why, you ask? Well, it’s POMO time – when the Fed hands out its fully fungible, rehypothecatable, infinitely leveragable free-money and risk assets pop… apart from today, there is no POMO… USDJPY 102 was all that mattered – no excuses. At least the currency manipulation crack down has fully rooted out all the front-running, options-strike-searching behavior…

 

 

and then a few minutes later… doh…

via Zero Hedge http://ift.tt/1c1XJeC Tyler Durden

 .

 

 

THe WOLF ON WONTON STREET

.

via Zero Hedge http://ift.tt/1kEHngW williambanzai7

Winter Storm 'Pax' has already crippled much of the South, snarling traffic and dumping more snow than most can remember on places that are unarguably ill-prepared to cope. But, as The Weather Channel warns, up to 18 more inches of snow is forecast for the Northeast as Pax pushes up the East Coast. With no thaw expected in the South until at least the weekend (and freezing winds causing havoc), forecasters expect more power outages. Trouble has already started though further North with DC over 13 inches of snow and NYC having over 7 inches this morning alone. It's not everyday that snow is falling in Atlanta and Boston at the same time! 585,000 households are without power in 7 states this morning. Flight cancellations have begun from DC to NYC building on the 4,000 that were cancelled yesterday.

 

Snowing from Atlanta to Boston

 

Near Blizzard conditions in Manhattan/NYC:

 

Chaos on the roads…

 

Total Freeway gridlock…

 

And now it is heading North… with up to 18 inches of snow forecast for the NorthEast

 

In the last few hours, NYC alone has received 7 inches of snow and over 13 inches of snow in DC…

 

Though further west is getting more…

 

New York City's Central Park has record 5 inches of snow in the last 2 hours…

As a reminder, here is how Weather.com described Pax yesterday:

"Sometimes we want to tell them, 'Hey, listen, this warning is different. This is really extremely dangerous, and it doesn't happen very often,'" Jacks said.

 

The service's memo early Wednesday called the storm "an event of historical proportions."

 

It continues: "Catastrophic … crippling … paralyzing … choose your adjective."

And power outages in the south are likely to surge…

Heads up.. winds will be picking up next few hrs before the ice melts…potential surge in pwr outages http://t.co/nptlDkbDAY #gawx

— NWS Atlanta (@NWSAtlanta) February 13, 2014

We suspect the image of weathermen with hands on their faces will be more prevalent today…

 

As this is coming…

via Zero Hedge http://ift.tt/1iSbwGm Tyler Durden

Winter Storm 'Pax' has already crippled much of the South, snarling traffic and dumping more snow than most can remember on places that are unarguably ill-prepared to cope. But, as The Weather Channel warns, up to 18 more inches of snow is forecast for the Northeast as Pax pushes up the East Coast. With no thaw expected in the South until at least the weekend (and freezing winds causing havoc), forecasters expect more power outages. Trouble has already started though further North with DC over 13 inches of snow and NYC having over 7 inches this morning alone. It's not everyday that snow is falling in Atlanta and Boston at the same time! 585,000 households are without power in 7 states this morning. Flight cancellations have begun from DC to NYC building on the 4,000 that were cancelled yesterday.

 

Snowing from Atlanta to Boston

 

Near Blizzard conditions in Manhattan/NYC:

 

Chaos on the roads…

 

Total Freeway gridlock…

 

And now it is heading North… with up to 18 inches of snow forecast for the NorthEast

 

In the last few hours, NYC alone has received 7 inches of snow and over 13 inches of snow in DC…

 

Though further west is getting more…

 

New York City's Central Park has record 5 inches of snow in the last 2 hours…

As a reminder, here is how Weather.com described Pax yesterday:

"Sometimes we want to tell them, 'Hey, listen, this warning is different. This is really extremely dangerous, and it doesn't happen very often,'" Jacks said.

 

The service's memo early Wednesday called the storm "an event of historical proportions."

 

It continues: "Catastrophic … crippling … paralyzing … choose your adjective."

And power outages in the south are likely to surge…

Heads up.. winds will be picking up next few hrs before the ice melts…potential surge in pwr outages http://t.co/nptlDkbDAY #gawx

— NWS Atlanta (@NWSAtlanta) February 13, 2014

We suspect the image of weathermen with hands on their faces will be more prevalent today…

 

As this is coming…

via Zero Hedge http://ift.tt/1iSbwGm Tyler Durden

I’ve worked hard to establish a strong reputation – not only in terms of competence but in terms of integrity. For those who don’t know of me, you can view my media apearances and calls as well as my Wikipedia page. You see, my mommy and daddy raised me to appreciate both aspects of success – not only one. With that in mind I’d like to address the recent report from JP Morgan slamming Bitcoin. Just so most know my viewpoint, the typical Bitcoin enthusiast and entrepeneur is primarily technologist leaning, thus may or may not see all of the aspects of the financial side of this new… “thing”. In addition, and because of that, the financial guys often get away with some outrageous bullshit that they’d never even try under different circumstances. Let’s apply this perspective to JPM’s latest FX strategic outlook report, “The Audacity of Bitcoin“. I will refute this report, point by point, and in the process make the managing director whose name is on the report look downright ignorant and uneducated. This is not a personal attack or an attempt at sleight (hey, he may be a downright stand-up guy), I am simply calling it as I see it.

Before we get to the report though, I want to address the foolishness of following these “reports” from the big name brand money center banks. Since JP Morgan is the name du jour, let’s focus on that one shall we? On Wednesday, 27 April 2011 I penned a piece called There’s Something Fishy at the House of Morgan wherein I pointed out quite a few inconsistencies and made an educated extrapolation (my way of saying prediction without having to sound like a guru). One of them was a marked spike in JPM’s legal costs, despite a marked drop in the rate of reserving said legal expenses, to wit:

 

 

I have warned of this event. JP Morgan (as well as Bank of America) is literally a litigation sinkhole. See JP Morgan Purposely Downplayed Litigation Risk That Spiked 5,000% Last Year & Is Still Severely Under Reserved By Over $4 Billion!!! Shareholder Lawyers Should Be Scrambling Now Wednesday, March 2nd, 2011.

Traditional banking revenues: manifest destiny as forwarned – Weakening Revenue Streams in US Banks Will Make Them More Susceptible To Contingent Risks

 Was I right? Well, here’s a list of JP Morgan’s fines PAID (yes, paid) over just the last 6 months (this would be $31 billion on an annualized run rate, but whose counting?). Actually, I may be counting – after all you (the taxpayer) paid $30B to bailout Bear Stearns (bought by JP Morgan with US guarantees and financing, remember I warned about Bear Stearns in explicit detail months before the fact- Is this the Breaking of the Bear?) as well as JP Morgan to the tune of at least $12B more. Oh well, back to that list…

1. January 8th Scandals cost JPMorgan $1 billion in fines (various intergovernmental agencies)
2. January 7th: OCC Assesses a $350 Million Civil Money Penalty Against JPM 
3. January 7th UNITED STATES OF AMERICA DEPARTMENT OF THE … -vs JP Morgan
4. October 16th JPMorgan to Pay $100 Million Fine on CFTC London Whale Claim
5. September 19th SEC.gov | JPMorgan Chase Agrees to Pay $200 Million and Admits …
6. September 18 $221 million – UK FCA
7. Septembe 17 $300 million – OCC
8. September 18CFPB Orders Chase and JPMorgan Chase to Pay $309 Million
9. September 18 $60 million – OCC
10. July 30 JP Morgan penalized $285 million for manipulating California electricity prices
11. July 30 JPMorgan to Pay $410 Million in U.S. FERC Settlement – Bloomberg
12. Plus that $13 billion dollar WHOPPER!

This is just the last 6 months!

Go to 12:28 in the video and realize why JP Morgan is a bit more desperate than many believe…

.

 Better Markets summarizes the past ten years of JP Morgan credibility better than I ever could, as follows: Highlights From A Decade of Illegal Conduct by JP Morgan Chase

1. United States v. JPMorgan Case Bank, NA, No-1:14-cr-7 (S.D.N.Y. Jan 8, 2014) ($1.7 billion criminal penalty); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-13-109 (Jan. 7, 2014) ($350 million civil penalty); In re JPMorgan Chase Bank, N.A., Dept. of the Treasury Financial Crimes Enforcement Network Admin. Proceeding No. 2014-1 (Jan. 7, 2014) ($461 million civil penalty) (all for violations of law arising from the bank’s role in connection with Bernie Madoff’s Ponzi scheme, the largest in the history of the U.S.);
2. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 14-01 (Oct. 16, 2013) ($100 million civil penalty); In re JPMorgan Chase & Co., SEC Admin. Proceeding No. 3-15507 (Sept. 19, 2013) ($200 million civil penalty); In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 13-031-CMP-HC (Sept. 18, 2013) ($200 million civil penalty); UK Financial Conduct Authority, Final Notice to JP Morgan Chase Bank, N.A. (Sept. 18, 2013) (£137.6 million ($221 million) penalty); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-2013-75, #2013-140 (Sept. 17, 2013) ($300 million civil penalty) (all for violations of federal law in connection with the proprietary trading losses sustained by JP Morgan Chase in connection with the high risk derivatives bet referred to as the “London Whale”);
3. In re JPMorgan Chase Bank, N.A., CFPB Admin. Proceeding No. 2013-CFPB-0007 (Sept. 19, 2013) ($20 million civil penalty and $309 million refund to customers); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-2013-46 (Sept. 18, 2013) ($60 million civil penalty) (both for violations in connection with JP Morgan Chase’s billing practices and fraudulent sale of so-called Identity Protection Products to customers);
4. In Re Make-Whole Payments and Related Bidding Strategies, FERC Admin. Proceeding Nos. IN11-8-000, IN13-5-000 (July 30, 2013) (civil penalty of $285 million and disgorgement of $125 million for energy market manipulation);
5. SEC v. J.P. Morgan Sec. LLC, No. 12-cv-1862 (D.D.C. Jan. 7, 2013) ($301 million in civil penalties and disgorgement for improper conduct related to offerings of mortgage-backed securities);
6. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 12-37 (Sept. 27, 2012) ($600,000 civil penalty for violations of the Commodities Exchange Act relating to trading in excess of position limits);
7. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 12-17 (Apr. 4, 2012) ($20 million civil penalty for the unlawful handling of customer segregated funds relating to the bankruptcy of Lehman Brothers Holdings, Inc.);
8. United States v. Bank of America, No. 12-cv-00361 (D.D.C. 2012) (for foreclosure and mortgage-loan servicing abuses during the Financial Crisis, with JP Morgan Chase paying $5.3 billion in monetary and consumer relief);
9. In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 12-009-CMP-HC (Feb. 9, 2012) ($275 million in monetary relief for unsafe and unsound practices in residential mortgage loan servicing and foreclosure processing);
10. SEC v. J.P. Morgan Sec. LLC, No. 11-cv-03877 (D.N.J. July 7, 2011) ($51.2 million in civil penalties and disgorgement); In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 11-081-WA/RB-HC (July 6, 2011) (compliance plan and corrective action requirements); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-11-63 (July 6, 2011)($22 million civil penalty) (all for anticompetitive practices in connection with municipal securities transactions);
11. SEC v. J.P. Morgan Sec., LLC, No. 11-cv-4206 (S.D.N.Y. June 21, 2011) ($153.6 million in civil penalties and disgorgement for violations of the securities laws relating to misleading investors in connection with synthetic collateralized debt obligations);
12. In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-11-15, #2011-050 (Apr. 13, 2011) (consent order mandating compliance plan and other corrective action resulting from unsafe and unsound mortgage servicing practices);
13. In re J.P. Morgan Sec. Inc., SEC Admin. Proceeding No. 3-13673 (Nov. 4, 2009) ($25 million civil penalty for violations of the securities laws relating to the Jefferson County derivatives trading and bribery scandal);
14. In re JP Morgan Chase & Co, Attorney General of the State of NY Investor Protection Bureau, Assurance of Discontinuance Pursuant to Exec. Law §63(15) (June 2, 2009) ($25 million civil penalty for misrepresenting risks associated with auction rate securities);
15. In re JPMorgan Chase & Co., SEC Admin. Proceeding No. 3-13000 (Mar. 27, 2008) ($1.3 million civil disgorgement for violations of the securities laws relating to JPM’s role as asset-backed indenture trustee to certain special purpose vehicles);
16. In re J.P. Morgan Sec. Inc., SEC Admin. Proceeding No. 3-11828 (Feb. 14, 2005) ($2.1 million in civil fines and penalties for violations of Securities Act record-keeping requirements); and
17. SEC v. J.P. Morgan Securities Inc., 03-cv-2939 (WHP) (S.D.N.Y. Apr. 28, 2003) ($50 million in civil penalties and disgorgements as part of a global settlement for research analyst conflict of interests).

Now, how many bankers went to jail during this entier ten year period? Crickets chirping in the background…

Then there’s the actual financial fidelity of the bank itself, which so few call into question… JP Morgan’s Derivatives Portfolio Was (and STILL MAY BE) VASTLY Inferior To That of Bear Stearns AND Lehman Brothers Just Before They Collapsed!!!

The oft used chart below was created in the 4th quarter of 2009. I’m sure it’s worse now!

So, have I demonstrated the nature of the entity that has issued said report “The Audacity of Bitcoin” and clearly contrasted it to thine humble author (media apearances/calls & Wikipedia page)? This is not a credible institution. The same institution that penned and distributed “The Audacity of Bitcoin” also files patent for Bitcoin-style payment system but JPMorgan’s “Bitcoin-Alternative” Patent Was Rejected (175 Times)! 

The Sheer Audacity!

JP Morgan’s John Normand says:

“Unlike other asset markets, FX rarely welcomes newcomers for the simple reason that launching a widely-used currency traditionally required creating a sovereign or supra-sovereign entity with a central bank to issue the unit and manage its supply over time.

Hence the audacity of bitcoin: it is a stateless, virtual and peer-to-peer currency, so exists only digitally and is associated with no sovereign, central bank or bank payments system. It is also incredibly illiquid extremely volatile and often caricatured.“

Ignorant statement correction #1: Bitcoin is not a currency. It is a bifurcated system consisting of:

1. Bitcoin – an open source peer to peer protocol that enables a fully distributed ledger of data (and not just financial data) that is agreed upon by networked consensus, thus eliminating the need for trust. No fiat currency can come remotely close to doing what it can do;
2. and bitcoin – a stream of data traveling along the fully distributed ledger mentioned above, manifested as a virtual currency that has an inherently native scripting language that fully qualifies it as a smart, programmable currency in stark contrast and direct contravention to “dumb” fiat currencies which have no programmable features whatsoever.

Mr. Normand/JP Morgan also state: “virtual and peer-to-peer currency, so exists only digitally”. This patent nonsense. Here is a physical bitcoin right here, compared to two other very popular physical manifestations of digital money:

Mr. Normand and JP Morgan then go on to state: “For corporates, bitcoin’s appeal is two-fold: no or low transaction costs from a peer-to-peer payments system, and the potential brand recognition from trialing a new technology. These advantages must be weighed against extreme illiquidity and volatility, both of which impede risk management. All-in transaction costs may also be higher once the fees from transferring bitcoins to fiat currencies are included.”

Well, that’s exactly what we’re working on at UltraCoin. If you simply do the math you can find out exactly how much using Bitcoin will cost. What JP Morgan forgot to mention was the inherently safe risk management attributes that can come with using UltraCoin over bitcoin. UltraCoin effectively hedges and isolates the user from both credit risk and market risk, if the user is willing to pay the hedging costs. This makes the UltraCoin enabled bitcoin deal multiples safer than doing a similar deal with JP Morgan itself as the counter party. As a reminder, see the two charts above which illustrate JP Morgan’s holdings then glance down to the flowchart below.

Tell me, would Greece have been better off dealing with me through UltraCoin and Bitcoin or JP Morgan and Goldman Sachs through their opaque swaps. As a reminder I bring you the BoomBustBlog article I penned a couple of years ago – Smoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware!

The Greeks (again)…

1. 1. According to people familiar with the matter interviewed by China Securities Journal, Goldman Sachs Group Inc. did as many as 12 swaps for Greece from 1998 to 2001, while Credit Suisse was also involved with Athens, crafting a currency swap for Greece in the same time frame.

      Under its “off-market” swap in 2001, Goldman agreed to convert yen and dollars into euros at an artificially favorable rate in the future. This helped Greece to use that “low favorable rate” when it recorded its debt in the European accounts-pushing down the country’s reported debt load.

      Moreover, in exchange for the good deal on rates, Greece had to pay Goldman (the amount wasn’t revealed). And since the payment would count against Greece’s deficit, Goldman and Greece came up with another twist: Goldman effectively loaned Greece the money for the payment, and Greece repaid that loan over time. And the two sides structured the loan as another kind of swap. So, the deal didn’t add to Greece’s debt under EU rules. Consequently, Greece’s total debt as a percentage of GDP fell from 105.3% to 103.7%, and its 2001 deficit was reduced by a tenth of a percentage point in GDP terms, according to people close to Goldman.

      Another action that smacks of Hellenic manipulation, at least to the staff of BoomBustBlog: for years it apparently and simply omitted large portions of its military-equipment spending from its deficit calculations. Though, European regulators eventually prevailed on Greece to count everything and as a result, in 2004, there was a massive revision of Greek deficit figures from 2000 (a budget deficit of 2.0% of GDP in 2000 to beyond the 3% deficit limit in 2004), by then Greece had already gained entrance to the euro. As in my trying to prepare for the coming sovereign debt crisis, timing is everything, isn’t it???

You see, these shenanigans are not possible when the swap is implemented with UltraCoin (the derivative layer that we overlay on top of Bitcoin). Remember “Ignorant statement correction #1″: Bitcoin is not a currency. It is a bifurcated system consisting of Bitcoin – an open source peer to peer protocol that enables a fully distributed ledger of data (and not just financial data) that is agreed upon by networked consensus, thus eliminating the need for trust. No fiat currency can come remotely close to doing what it can do;…

 Because everything is accounted for in the Blockchain, you cannot double count, double deal, lie, cheat, steal or deceivingly overleverage – in other words the typical Wall Street bank business model is fractured!

 

This means my potential inability to write artciles such as these: Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! or Once You Catch a Few EU Countries “Stretching the Truth”, Why Should You Trust the Rest?

To think, all of this wording… and I’m just getting to the bottom of the first page of this report! If you want me to address the rest, simply give me the heads up in the comment section below – and…

If you want to contribute to the further education of Mr. Normand and JP Morgan, contibute to the UtlraCoin crowdfunding effort here. As you can see from this article, Reggie Middleton’s UltraCoin is no mere alternative cryptocurrency. I fully intend to disintermediate the typical Wall Street bank through this technology by elimintating them as the unnecessary, full friction, inefficient and costly (where do you think those $20 million bonuses come from?) middlemen that they are. Remember, THEIR profit margin is MY business model! Click here to crowdfund the disintermediation of Wall Street!

Oh yeah, Mr. Normand, if you ever want to debate Bitcoin in public, I’m game. Let’s dance! 

via Zero Hedge http://ift.tt/1iSbu1i Reggie Middleton

I’ve worked hard to establish a strong reputation – not only in terms of competence but in terms of integrity. For those who don’t know of me, you can view my media apearances and calls as well as my Wikipedia page. You see, my mommy and daddy raised me to appreciate both aspects of success – not only one. With that in mind I’d like to address the recent report from JP Morgan slamming Bitcoin. Just so most know my viewpoint, the typical Bitcoin enthusiast and entrepeneur is primarily technologist leaning, thus may or may not see all of the aspects of the financial side of this new… “thing”. In addition, and because of that, the financial guys often get away with some outrageous bullshit that they’d never even try under different circumstances. Let’s apply this perspective to JPM’s latest FX strategic outlook report, “The Audacity of Bitcoin“. I will refute this report, point by point, and in the process make the managing director whose name is on the report look downright ignorant and uneducated. This is not a personal attack or an attempt at sleight (hey, he may be a downright stand-up guy), I am simply calling it as I see it.

Before we get to the report though, I want to address the foolishness of following these “reports” from the big name brand money center banks. Since JP Morgan is the name du jour, let’s focus on that one shall we? On Wednesday, 27 April 2011 I penned a piece called There’s Something Fishy at the House of Morgan wherein I pointed out quite a few inconsistencies and made an educated extrapolation (my way of saying prediction without having to sound like a guru). One of them was a marked spike in JPM’s legal costs, despite a marked drop in the rate of reserving said legal expenses, to wit:

 

 

I have warned of this event. JP Morgan (as well as Bank of America) is literally a litigation sinkhole. See JP Morgan Purposely Downplayed Litigation Risk That Spiked 5,000% Last Year & Is Still Severely Under Reserved By Over $4 Billion!!! Shareholder Lawyers Should Be Scrambling Now Wednesday, March 2nd, 2011.

Traditional banking revenues: manifest destiny as forwarned – Weakening Revenue Streams in US Banks Will Make Them More Susceptible To Contingent Risks

 Was I right? Well, here’s a list of JP Morgan’s fines PAID (yes, paid) over just the last 6 months (this would be $31 billion on an annualized run rate, but whose counting?). Actually, I may be counting – after all you (the taxpayer) paid $30B to bailout Bear Stearns (bought by JP Morgan with US guarantees and financing, remember I warned about Bear Stearns in explicit detail months before the fact- Is this the Breaking of the Bear?) as well as JP Morgan to the tune of at least $12B more. Oh well, back to that list…

1. January 8th Scandals cost JPMorgan $1 billion in fines (various intergovernmental agencies)
2. January 7th: OCC Assesses a $350 Million Civil Money Penalty Against JPM 
3. January 7th UNITED STATES OF AMERICA DEPARTMENT OF THE … -vs JP Morgan
4. October 16th JPMorgan to Pay $100 Million Fine
   on CFTC London Whale Claim
5. September 19th SEC.gov | JPMorgan Chase Agrees to Pay $200 Million and Admits …
6. September 18 $221 million – UK FCA
7. Septembe 17 $300 million – OCC
8. September 18CFPB Orders Chase and JPMorgan Chase to Pay $309 Million
9. September 18 $60 million – OCC
10. July 30 JP Morgan penalized $285 million for manipulating California electricity prices
11. July 30 JPMorgan to Pay $410 Million in U.S. FERC Settlement – Bloomberg
12. Plus that $13 billion dollar WHOPPER!

This is just the last 6 months!

Go to 12:28 in the video and realize why JP Morgan is a bit more desperate than many believe…

.

 Better Markets summarizes the past ten years of JP Morgan credibility better than I ever could, as follows: Highlights From A Decade of Illegal Conduct by JP Morgan Chase

1. United States v. JPMorgan Case Bank, NA, No-1:14-cr-7 (S.D.N.Y. Jan 8, 2014) ($1.7 billion criminal penalty); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-13-109 (Jan. 7, 2014) ($350 million civil penalty); In re JPMorgan Chase Bank, N.A., Dept. of the Treasury Financial Crimes Enforcement Network Admin. Proceeding No. 2014-1 (Jan. 7, 2014) ($461 million civil penalty) (all for violations of law arising from the bank’s role in connection with Bernie Madoff’s Ponzi scheme, the largest in the history of the U.S.);
2. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 14-01 (Oct. 16, 2013) ($100 million civil penalty); In re JPMorgan Chase & Co., SEC Admin. Proceeding No. 3-15507 (Sept. 19, 2013) ($200 million civil penalty); In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 13-031-CMP-HC (Sept. 18, 2013) ($200 million civil penalty); UK Financial Conduct Authority, Final Notice to JP Morgan Chase Bank, N.A. (Sept. 18, 2013) (£137.6 million ($221 million) penalty); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-2013-75, #2013-140 (Sept. 17, 2013) ($300 million civil penalty) (all for violations of federal law in connection with the proprietary trading losses sustained by JP Morgan Chase in connection with the high risk derivatives bet referred to as the “London Whale”);
3. In re JPMorgan Chase Bank, N.A., CFPB Admin. Proceeding No. 2013-CFPB-0007 (Sept. 19, 2013) ($20 million civil penalty and $309 million refund to customers); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-2013-46 (Sept. 18, 2013) ($60 million civil penalty) (both for violations in connection with JP Morgan Chase’s billing practices and fraudulent sale of so-called Identity Protection Products to customers);
4. In Re Make-Whole Payments and Related Bidding Strategies, FERC Admin. Proceeding Nos. IN11-8-000, IN13-5-000 (July 30, 2013) (civil penalty of $285 million and disgorgement of $125 million for energy market manipulation);
5. SEC v. J.P. Morgan Sec. LLC, No. 12-cv-1862 (D.D.C. Jan. 7, 2013) ($301 million in civil penalties and disgorgement for improper conduct related to offerings of mortgage-backed securities);
6. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 12-37 (Sept. 27, 2012) ($600,000 civil penalty for violations of the Commodities Exchange Act relating to trading in excess of position limits);
7. In re JPMorgan Chase Bank, N.A., CFTC Admin. Proceeding No. 12-17 (Apr. 4, 2012) ($20 million civil penalty for the unlawful handling of customer segregated funds relating to the bankruptcy of Lehman Brothers Holdings, Inc.);
8. United States v. Bank of America, No. 12-cv-00361 (D.D.C. 2012) (for foreclosure and mortgage-loan servicing abuses during the Financial Crisis, with JP Morgan Chase paying $5.3 billion in monetary and consumer relief);
9. In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 12-009-CMP-HC (Feb. 9, 2012) ($275 million in monetary relief for unsafe and unsound practices in residential mortgage loan servicing and foreclosure processing);
10. SEC v. J.P. Morgan Sec. LLC, No. 11-cv-03877 (D.N.J. July 7, 2011) ($51.2 million in civil penalties and disgorgement); In re JPMorgan Chase & Co., Federal Reserve Board Admin. Proceeding No. 11-081-WA/RB-HC (July 6, 2011) (compliance plan and corrective action requirements); In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-11-63 (July 6, 2011)($22 million civil penalty) (all for anticompetitive practices in connection with municipal securities transactions);
11. SEC v. J.P. Morgan Sec., LLC, No. 11-cv-4206 (S.D.N.Y. June 21, 2011) ($153.6 million in civil penalties and disgorgement for violations of the securities laws relating to misleading investors in connection with synthetic collateralized debt obligations);
12. In re JPMorgan Chase Bank, N.A., OCC Admin. Proceeding No. AA-EC-11-15, #2011-050 (Apr. 13, 2011) (consent order mandating compliance plan and other corrective action resulting from unsafe and unsound mortgage servicing practices);
13. In re J.P. Morgan Sec. Inc., SEC Admin. Proceeding No. 3-13673 (Nov. 4, 2009) ($25 million civil penalty for violations of the securities laws relating to the Jefferson County derivatives trading and bribery scandal);
14. In re JP Morgan Chase & Co, Attorney General of the State of NY Investor Protection Bureau, Assurance of Discontinuance Pursuant to Exec. Law §63(15) (June 2, 2009) ($25 million civil penalty for misrepresenting risks associated with auction rate securities);
15. In re JPMorgan Chase & Co., SEC Admin. Proceeding No. 3-13000 (Mar. 27, 2008) ($1.3 million civil disgorgement for violations of the securities laws relating to JPM’s role as asset-backed indenture trustee to certain special purpose vehicles);
16. In re J.P. Morgan Sec. Inc., SEC Admin. Proceeding No. 3-11828 (Feb. 14, 2005) ($2.1 million in civil fines and penalties for violations of Securities Act record-keeping requirements); and
17. SEC v. J.P. Morgan Secur
    ities Inc., 03-cv-2939 (WHP) (S.D.N.Y. Apr. 28, 2003) ($50 million in civil penalties and disgorgements as part of a global settlement for research analyst conflict of interests).

Now, how many bankers went to jail during this entier ten year period? Crickets chirping in the background…

Then there’s the actual financial fidelity of the bank itself, which so few call into question… JP Morgan’s Derivatives Portfolio Was (and STILL MAY BE) VASTLY Inferior To That of Bear Stearns AND Lehman Brothers Just Before They Collapsed!!!

The oft used chart below was created in the 4th quarter of 2009. I’m sure it’s worse now!

So, have I demonstrated the nature of the entity that has issued said report “The Audacity of Bitcoin” and clearly contrasted it to thine humble author (media apearances/calls & Wikipedia page)? This is not a credible institution. The same institution that penned and distributed “The Audacity of Bitcoin” also files patent for Bitcoin-style payment system but JPMorgan’s “Bitcoin-Alternative” Patent Was Rejected (175 Times)! 

The Sheer Audacity!

JP Morgan’s John Normand says:

“Unlike other asset markets, FX rarely welcomes newcomers for the simple reason that launching a widely-used currency traditionally required creating a sovereign or supra-sovereign entity with a central bank to issue the unit and manage its supply over time.

Hence the audacity of bitcoin: it is a stateless, virtual and peer-to-peer currency, so exists only digitally and is associated with no sovereign, central bank or bank payments system. It is also incredibly illiquid extremely volatile and often caricatured.“

Ignorant statement correction #1: Bitcoin is not a currency. It is a bifurcated system consisting of:

1. Bitcoin – an open source peer to peer protocol that enables a fully distributed ledger of data (and not just financial data) that is agreed upon by networked consensus, thus eliminating the need for trust. No fiat currency can come remotely close to doing what it can do;
2. and bitcoin – a stream of data traveling along the fully distributed ledger mentioned above, manifested as a virtual currency that has an inherently native scripting language that fully qualifies it as a smart, programmable currency in stark contrast and direct contravention to “dumb” fiat currencies which have no programmable features whatsoever.

Mr. Normand/JP Morgan also state: “virtual and peer-to-peer currency, so exists only digitally”. This patent nonsense. Here is a physical bitcoin right here, compared to two other very popular physical manifestations of digital money:

Mr. Normand and JP Morgan then go on to state: “For corporates, bitcoin’s appeal is two-fold: no or low transaction costs from a peer-to-peer payments system, and the potential brand recognition from trialing a new technology. These advantages must be weighed against extreme illiquidity and volatility, both of which impede risk management. All-in transaction costs may also be higher once the fees from transferring bitcoins to fiat currencies are included.”

Well, that’s exactly what we’re working on at UltraCoin. If you simply do the math you can find out exactly how much using Bitcoin will cost. What JP Morgan forgot to mention was the inherently safe risk management attributes that can come with using UltraCoin over bitcoin. UltraCoin effectively hedges and isolates the user from both credit risk and market risk, if the user is willing to pay the hedging costs. This makes the UltraCoin enabled bitcoin deal multiples safer than doing a similar deal with JP Morgan itself as the counter party. As a reminder, see the two charts above which illustrate JP Morgan’s holdings then glance down to the flowchart below.

Tell me, would Greece have been better off dealing with me through UltraCoin and Bitcoin or JP Morgan and Goldman Sachs through their opaque swaps. As a reminder I bring you the BoomBustBlog article I penned a couple of years ago – Smoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware!

The Greeks (again)…

1. 1. According to people familiar with the matter interviewed by China Securities Journal, Goldman Sachs Group Inc. did as many as 12 swaps for Greece from 1998 to 2001, while Credit Suisse was also involved with Athens, crafting a currency swap for Greece in the same time frame.

      Under its “off-market” swap in 2001, Goldman agreed to convert yen and dollars into euros at an artificially favorable rate in the future. This helped Greece to use that “low favorable rate” when it recorded its debt in the European accounts-pushing down the country’s reported debt load.

      Moreover, in exchange for the good deal on rates, Greece had to pay Goldman (the amount wasn’t revealed). And since the payment would count against Greece’s deficit, Goldman and Greece came up with another twist: Goldman effectively loaned Greece the money for the payment, and Greece repaid that loan over time. And the two sides structured the loan as another kind of swap. So, the deal didn’t add to Greece’s debt under EU rules. Consequently, Greece’s total debt as a percentage of GDP fell from 105.3% to 103.7%, and its 2001 deficit was reduced by a tenth of a percentage point in GDP terms, according to people close to Goldman.

      Another action that smacks of Hellenic manipulation, at least to the staff of BoomBustBlog: for years it apparently and simply omitted large portions of its military-equipment spending from its deficit calculations. Though, European regulators eventually prevailed on Greece to count everything and as a result, in 2004, there was a massive revision of Greek deficit figures from 2000 (a budget deficit of 2.0% of GDP in 2000 to beyond the 3% deficit limit in 2004), by then Greece had already gained entrance to the euro. As in my trying to prepare for the coming sovereign debt crisis, timing is everything, isn’t it???

You see, these shenanigans are not possible when the swap is implemented with UltraCoin (the derivative layer that we overlay on top of Bitcoin). Remember “Ignorant statement correction #1″: Bitcoin is not a currency. It is a bifurcated system consisting of Bitcoin – an open source peer to peer protocol that enables a fully distributed ledger of data (and not just financial data) that is agreed upon by networked consensus, thus eliminating the need for trust. No fiat currency can come remotely close to doing what it can do;…

 Because everything is accounted for in the Blockchain, you cannot double count, double deal, lie, cheat, steal or deceivingly overleverage – in other words the typical Wall Street bank business model is fractured!

 

This means my potential inability to write artciles such as these: Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! or Once You Catch a Few EU Countries “Stretching the Truth”, Why Should You Trust the Rest?

To think, all of this wording… and I’m just getting to the bottom of the first page of this report! If you want me to address t
he rest, simply give me the heads up in the comment section below – and…

If you want to contribute to the further education of Mr. Normand and JP Morgan, contibute to the UtlraCoin crowdfunding effort here. As you can see from this article, Reggie Middleton’s UltraCoin is no mere alternative cryptocurrency. I fully intend to disintermediate the typical Wall Street bank through this technology by elimintating them as the unnecessary, full friction, inefficient and costly (where do you think those $20 million bonuses come from?) middlemen that they are. Remember, THEIR profit margin is MY business model! Click here to crowdfund the disintermediation of Wall Street!

Oh yeah, Mr. Normand, if you ever want to debate Bitcoin in public, I’m game. Let’s dance! 

via Zero Hedge http://ift.tt/1iSbu1i Reggie Middleton

It was only two weeks ago when Goldman’s Jan Hatzius, as we predicted he would, took a hammer to its GDP forecasts for Q1 GDP upon the shocking realization that Q4 “growth” was all inventory driven. This morning, the hammering resumes as Goldman, in the aftermath of today’s disastrous retail sales, not only cut its Q4 2013 GDP forecast from 2.8% to 2.4% (vs the 3.2% initially reported), but slashed its current quarter estimate from 2.3% to 1.9%. As a reminder, this number was 3.0% three weeks ago. Once again, nothing beats an economist forecast to know what the future will not be.

From Jan Hatzius:

BOTTOM LINE: The January retail sales report was a significant disappointment, compounded by negative back revisions. Adverse weather was likely a substantial contributor to the weaker January figures. Separately, jobless claims were roughly in line with expectations. We reduced our Q1 GDP tracking estimate by four-tenths to 1.9%.

 

Headline retail sales unexpectedly declined 0.4% in January (vs. consensus Flat). Core sales?which the Commerce Department uses to estimate the personal consumption expenditures component of GDP?declined 0.3% (vs. consensus +0.2%). The composition of sales across categories was consistent with a negative weather impact, with weakness at department stores (-1.5%), sporting goods stores (-1.4%), and restaurants and bars (-0.6%). However, non-weather sensitive categories, such as non-store retailers?mainly online sales?also showed weakness, down 0.6% on the month. In addition to disappointing core sales growth in January, December growth was revised down four-tenths to 0.3%. Outside of core retail sales, auto sales fell 2.1%?consistent with disappointing unit auto sales reported by dealers?while building materials rose 1.4% and gasoline station sales increased 1.1%.

 

Initial claims for jobless benefits stood at 339k in the week ended February 8 (vs. consensus 330k), an increase from the prior week’s 331k. Continuing claims fell slightly to 2,953k in the week ended February 1 (vs. consensus 2,964k), from an upwardly-revised 2,971k in the previous week. As we noted recently, we view the rise in continuing claims over the last month as mostly artificial.

 

We reduced our Q1 current-quarter GDP tracking estimate by four-tenths to 1.9%. We also reduced our Q4 past-quarter estimate by four-tenths to 2.4% (vs. 3.2% initially reported).

via Zero Hedge http://ift.tt/1aYPB0c Tyler Durden

The retail sales control group – the components of retail sales that feed straight into the GDP calculation – rose at a pace of 2.4% in December, the lowest since 2009, and dropped 0.3% sequentially, the biggest drop since December 2011. What this means is that GDP growth – expected to be flourishing until recently and which Joe LaVorgna has at about 4% for 2014 – is about to be monkeyhammered. Why? Snow in the winter, of course.

via Zero Hedge http://ift.tt/1g1sWh8 Tyler Durden