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New York Sues JPMorgan Over Mortgage-Backed Securities
"New York's attorney general has sued JPMorgan Chase, alleging that a unit now owned by the banking giant fraudulently sold mortgage-backed securities in the run-up to the 2008 financial crisis."
AFAIK, these are the securities that JPM got when it acquired Bear Sterns. Ironically, it was Fed arranged shotgun marriage that got JPM into this business. They acquired Bear Sterns dirt cheap at $2/share so the cost of litigation could have been factored out but maybe not. JPM has proven that they too can make mistakes like in derivatives trading episode in London.
Reply to @Investor: the cost ended up being $10/share because of Bear executives revault; and that was too much. Bear was worth as much as Lehman at the time - negative equity. but it was still March 2008 -- several months before people realized that those firms were not worth their lawsuits...Eric is a bit late to the party (not to mention that he recycles claims of private litigators, without contributing much).. But if(or, rather when) he (NY) wins, then current equity investors will pay former MBS investors, lining attorneys' pockets with hundreds of millions dollars along the way. .... i guess, in some circles, this constitutes fairness.
on another note, this board's favorite PONDX and similar others are basically printing money precisely in Bear, Countrywide and WaMu AltA securities which are subject of the lawsuit.
I'm not sure how the government wins this one. Seems like a lot of grandstanding. Unless of course we don't really believe the story Government "made" JPM takeover Bear Stearns and paid it to do so. The other side of the story is JPM was itself in deep doodoo and had no choice but to do the deal, or risk going under itself. So if it was JPM that was bailed out by government and got money to take over Bear Stearns, THEN it might make sense. Else, more taxpayer dollars down the drain.
But of course, there's always the "settle without admitting any wrong doing". DA's will get promoted, maybe run for office in future. For JPM, just cost of doing business. And the general population feels good for a few days someone "paid".
I've a sudden urge to watch Kafka, Parallax View, etc.
Reply to @VintageFreak: of course they'll settle... whereby JPM will pay holders of MBS (who now enjoy a huge rally) billions of dollars from its earnings. the resulting reduction in earnings will push the share price down hurting the current shareholders (it started yesterday). the current shareholders are all large cap mutual funds, more or less. the company is in Dow Jones and S&P500. that's all it is -- a transfer of money from one set of investors to the other, enriching legal profession and, as you said, promoting a NY DA (or getting him hired by private sector, why not JPM?) oh well...
What I can never understand is so many rich guys are in office who don't really need to work for a living. So if they take the trouble to get elected, WTF don't they do anything to change the system? Why does nothing ever change? Just because I didn't grow up in Mongolia, doesn't mean I shouldn't complain, right?
I have decided not to vote this year. George Carlin was right. No one can blame me if either Obummer or Abominee becomes President. I am not responsible, which to clarify, does not mean I'm irresponsible.
Reply to @Old_Joe: Well, I am the Vintage Freak after all Maybe FDR should have confiscated ALL gold instead of only that which had been bought till after a few years before? Maybe same kind of thinking would prevent "commodity hoarding" where pension funds and what not are "invested" in commodities driving their price up artificially, or even into MBS crap of yore?
Cannot comment on whether he tried. However, coming from the IT sector I can say, his "design" may have been sound, but his "implementation" left a lot to be desired.
Comments
on another note, this board's favorite PONDX and similar others are basically printing money precisely in Bear, Countrywide and WaMu AltA securities which are subject of the lawsuit.
But of course, there's always the "settle without admitting any wrong doing". DA's will get promoted, maybe run for office in future. For JPM, just cost of doing business. And the general population feels good for a few days someone "paid".
I've a sudden urge to watch Kafka, Parallax View, etc.
I have decided not to vote this year. George Carlin was right. No one can blame me if either Obummer or Abominee becomes President. I am not responsible, which to clarify, does not mean I'm irresponsible.
Cannot comment on whether he tried. However, coming from the IT sector I can say, his "design" may have been sound, but his "implementation" left a lot to be desired.
http://market-ticker.org/akcs-www?post=212306