Blog on the Run: Reloaded

Monday, October 14, 2013 7:56 pm

JPMorgan Chase just posted its first quarterly loss in a decade.


Yes, the nation’s largest bank lost $388 million. Alex Pareene of Salon explains why that matters:

… in one important sense, this loss doesn’t really “count.” The loss didn’t happen because the things JPMorgan does to make money stopped making money, the loss happened because JPMorgan has spent a fortune — a truly staggering amount of money — defending itself against legal inquiries and paying fines for bad behavior. This quarterly loss is the result of the bank needing a couple billion dollars to spend on lawyers and fines and fees, with a few billion set aside this quarter as “part of a $23 billion pot the bank has set aside to cover mounting legal costs.” Take away those costs, and you have a bank that is making almost as much money as usual. “Excluding litigation expense and reserve release,” according to Reuters, “the company posted a profit of $5.82 billion, or $1.42 per share.”

As Felix Salmon has said, a fantastically profitable bank is a bank that is extracting rents from the economy. A bank that would be fantastically profitable if it weren’t for the expense of dealing with myriad investigations into its corrupt and criminal activities is a bank that would seem to have reached the limits of its rent-extraction strategy.

So crime is baked into JPMorgan Chase’s business model. The nation’s largest bank apparently is little more than a continuing criminal enterprise, as defined under the RICO act, if it has to put billions, with a “B,” aside in just one quarter for legal defense. But nothing bad will ever happen to JPMorgan Chase because Barack Obama’s Justice Department can’t be bothered to investigate world-historical swindles, and nothing will happen to CEO Jamie Dimon because CEOs aren’t responsible for the crimes of the corporations they are so handsomely rewarded to run. Ever.

Advertisements

4 Comments »

  1. Failure was their business plan, ( Obama’s crony clean energy loans ) Yeah shame on JPM.

    The U.S. Government Could Lose $2.7 Billion As A Result Of These Loans, According To A White House Commissioned Study. “The U.S. government could lose $2.7 billion as a result of the loans and loan guarantees it offered to clean-energy companies, according to a White House-commissioned study carried out in the wake of Solyndra LLC’s bankruptcy.” (Tennille Tracy, “Clean-Energy Aid Racks Up Losses,” The Wall Street Journal, 2/11/12)

    Comment by Fred Gregory — Monday, October 14, 2013 8:09 pm @ 8:09 pm | Reply

  2. No changing the subject, Fred. Besides, that article’s a year and a half old. Now go look up the ACTUAL losses. Hint: nowhere near $2.7 billion. But keep what you learn to yourself; we’re talking about JPM here.

    Comment by Lex — Monday, October 14, 2013 9:00 pm @ 9:00 pm | Reply

  3. This ain’t chicken feed and there are more to come. Is there a Volt in your future ?

    So far, 34 companies that were offered federal support from taxpayers are faltering — either having gone bankrupt or laying off workers or heading for bankruptcy. This list includes only those companies that received federal money from the Obama Administration’s Department of Energy and other agencies. The amount of money indicated does not reflect how much was actually received or spent but how much was offered. The amount also does not include other state, local, and federal tax credits and subsidies, which push the amount of money these companies have received from taxpayers even higher.
    The complete list of faltering or bankrupt green-energy companies:

    Evergreen Solar ($25 million)*
    SpectraWatt ($500,000)*
    Solyndra ($535 million)*
    Beacon Power ($43 million)*
    Nevada Geothermal ($98.5 million)
    SunPower ($1.2 billion)
    First Solar ($1.46 billion)
    Babcock and Brown ($178 million)
    EnerDel’s subsidiary Ener1 ($118.5 million)*
    Amonix ($5.9 million)
    Fisker Automotive ($529 million)
    Abound Solar ($400 million)*
    A123 Systems ($279 million)*
    Willard and Kelsey Solar Group ($700,981)*
    Johnson Controls ($299 million)
    Brightsource ($1.6 billion)
    ECOtality ($126.2 million)
    Raser Technologies ($33 million)*
    Energy Conversion Devices ($13.3 million)*
    Mountain Plaza, Inc. ($2 million)*
    Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
    Range Fuels ($80 million)*
    Thompson River Power ($6.5 million)*
    Stirling Energy Systems ($7 million)*
    Azure Dynamics ($5.4 million)*
    GreenVolts ($500,000)
    Vestas ($50 million)
    LG Chem’s subsidiary Compact Power ($151 million)
    Nordic Windpower ($16 million)*
    Navistar ($39 million)
    Satcon ($3 million)*
    Konarka Technologies Inc. ($20 million)*
    Mascoma Corp. ($100 million)

    *Denotes companies that have filed for bankruptcy.

    The problem begins with the issue of government picking winners and losers in the first place. Venture capitalist firms exist for this very reason, and they choose what to invest in by looking at companies’ business models and deciding if they are worthy. When the government plays venture capitalist, it tends to reward companies that are connected to the policymakers themselves or because it sounds nice to “invest” in green energy.

    AND

    Renewable energy projects cost US taxpayers $26 Billion for only 2300 permanrnt jobs which is $11.5 milion per job

    Comment by Fred Gregory — Thursday, October 17, 2013 6:55 pm @ 6:55 pm | Reply

  4. Fred, would it KILL ya to stay on topic?

    Comment by Lex — Thursday, October 17, 2013 9:20 pm @ 9:20 pm | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: