How JP Morgan Took Over All Kentucky's Financial Services, And Why You Should Be Scared

[marmar]

North of Center / By Danny Mayer

How JP Morgan Took Over All Kentucky's Financial Services, And Why You Should Be Scared
One of the major players in the global financial crisis is now in charge of all financial transactions in an entire state. Could this spread?

August 4, 2011 |


On July 1, JP Morgan Chase became the Commonwealth’s bank. As the state’s official depository, JP now receives all deposits, writes all checks and makes all wire transfers on the $12-15 billion that flow through Kentucky state government in the course of a fiscal year. It will cut payroll checks, receive federal and other funds earmarked for the state, and disburse educational or transportation or any other funds to their appropriate monetary endpoints. For its trouble, the bank will receive $1.3 million in state fees and the ability to re-lend idle state funds out to customers for private gain.

Yes, you should be worried.

JP's decade

A global corporation with more than $2 trillion in assets and operations in 60 countries, JP Morgan Chase has been a major figure in the ongoing global financial crisis. As one of the largest private banks in the U.S., the bank made incredible amounts of money by underwriting many of the questionable loans (sub-prime, zero down, adjustable rate) that fueled the American housing bubble. It then made even more money by packaging hundreds of these shitty loans into a single “product,” a mortgage backed security, which it sold like Twinkies to pious religious non-profits, filthy-rich hedge fund managers, municipal fire-fighters, retired auto-workers, and the like, each security effectively putting these groups on the hook—and not JP—for the shitty loans that it had helped create.

When, inevitably, individual homeowners began to default on their loans, thereby triggering the stock market collapse of 2008, JP Morgan found a way to make money on that, too, by buying insurance (known as credit default swaps) on the shitty securities of shitty mortgages that it had sold to unwitting investors. For good measure, the U.S. government handed the corporation $25 billion in TARP funds, $30 billion in U.S. treasury backing to purchase bankrupt Bear Stearns (previously a global leader in mortgage backed securities), and the biggest chunk of the $129 billion of taxpayer-provided money earmarked for creditors of bankrupt credit default swaps provider AIG. ............(more)

The complete piece is at: http://www.alternet.org/story/151917/how_jp_morgan_took_over_all_kentucky%27s_financial_services%2C_and_why_you_should_be_scared/

[geckosfeet]

1. And bitch McConnell is in up over his chinless neck in this.

[Blue_Tires]

3. +1

[get the red out]

2. Great

I thought I had escaped them by joining a credit union, I had been with them because my previous bank had been eaten by them, now I see that they basically have my whole state by the financial short-hairs, lovely. :mad: