General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe banking committee hearing is nothing more than a sham show.
The Senators are asking Dimon for advice on how to fix the financial problems with institutions. Pricks like Dimon caused the problems. We will never get these problems fixed because the corporations own us, period. Nothing is "really" being done. A few arrests here and there of white collar criminals is nothing more than a "See. We're taking care of the issues and economic problems." The Republicans are damn jerks and asking totally soft ball questions and soliciting positive comments from Dimon. DeMint just said they are "Not sitting in judgement." Then what the hell are you doing you DeMinted dumb F#$k! I'm watching this on CSPAN and it is sickening.
still_one
(92,108 posts)so who are we to "sit in judgement", as you said
I am sorry but the more I hear from these thugs, who mostly represent Southern states, the more I realize why the South is in even worse shape than the rest of the country
Sekhmets Daughter
(7,515 posts)Has been Republican longer....the rest of the nation seems to want to catch up...or down...
still_one
(92,108 posts)malaise
(268,844 posts)ReTHUGs are apologizing to Dimon for holding hearings on JPs blowing billions
uponit7771
(90,323 posts)...even worse
Romulox
(25,960 posts)Sekhmets Daughter
(7,515 posts)I've been watching the hearing and it's rather like watching Dimon get a blow job.
banned from Kos
(4,017 posts)Morgan was not in subprime at all before that.
So Morgan did not "cause" the mortgage crisis in any way.
It was the WaMus and Countrywides that did.
Sekhmets Daughter
(7,515 posts)My late fiance had a No Doc 95% mortgage directly from J P Morgan Chase...he signed it in August of 2007. With an 850 middle credit score. Too few people know just which types of mortgages are considered "sub prime" To call it a "mortgage crisis" is also incorrect...If the MBOs hadn't mixed sub prime with prime loans, every sub prime mortgage in the nation could have gone under without bringing down the financial system. It was a credit crisis....What Dimon did when he took over JPM was to unload as many of those derivatives as possible....possibly into your 401K
banned from Kos
(4,017 posts)A score like that would deserve a no-doc.
Anyway its beyond dispute that Morgan had no subprime issues. And it was a credit crisis like you say but the root cause was mortgages.
JPM was so strong they took on Bear Stearns and WaMu - two of the weakest in terms of foreclosure writedowns.
Sekhmets Daughter
(7,515 posts)JPM was given a gift of Bear Stearns. Initially they bought the company for $2. a share and federal guarantees of over $26 billion. "Program to guarantee potential losses on Bear Stearns' portfolio; smoothed the way for JPMorgan Chase to buy the failed investment bank." The quote is from CNN Money. BS shareholders screamed so loudly that JPM raised the price to $10. a share....
As to WaMu...JPM bought if from the FDIC after it was seized. They paid $1.9 billion "For his $1.9 billion, Dimon gets WaMu's deposits along with $176 billion of home loans, on which JPMorgan is expected to lose some $31 billion. These include home equity and options-ARM loans where losses exceed 20%. Dimon emphasized the branch network JPMorgan will pick up. "This builds a big franchise for us. The only negative in the thing was how to handle these bad assets. We think this deal is extremely compelling," he said." Per Bloomberg Business.
I think you need to read up more on the actual causes of the financial crisis...
banned from Kos
(4,017 posts)* limited debt experience (so the lender's assessor simply does not know, and assumes the worst), or
* no possession of property assets that could be used as security (for the lender to sell in case of default)
* excessive debt (the known income of the individual or family is unlikely to be enough to pay living expenses + interest + repayment),
* a history of late or sometimes missed payments (morose debt[citation needed]) so that the loan period had to be extended,
* failures to pay debts completely (default debt), and
* any legal judgments such as "orders to pay" or bankruptcy (sometimes known in Britain as county court judgements or CCJs).
http://en.wikipedia.org/wiki/Subprime_lending
You fail Mortgage Finance 101.
Sekhmets Daughter
(7,515 posts)You are going to try to define mortgages by Wikipedia standards? Get a grip. I wrote Prime loans, Alt-A loans and sub prime loans. Even Alt-A loans are not considered prime and are the types of loans that got Fannie & Freddie into trouble. Chase wrote Alt-A loans....I have written sub prime loans for people with credit scores of 550 and credit scores of 740. I wrote a D-paper loan, otherwise known as a "hard equity" loan for someone who had a 763 middle score but wanted to hold the property in his company's name. D-paper meant he was willing to put 50% down and pay 16% interest. The original sub prime loans were limited Doc or No Doc loans created for business owners who hide income on their tax returns and thus couldn't qualify for a "prime " loan. A prime loan is one that offers the lowest interest rate and could be sold to Fannie & Freddie as A-Paper. Alt-A rates are a bit higher, as they are not prime loans.
The Wiki article was no doubt written by some fool who hasn't a clue as to how mortgages really are rated.
You fail mortgage 101 and all credibility tests.
banned from Kos
(4,017 posts)You have yet to source your claim.
By your definition Warren Buffett would be subprime if he signed a 90% loan with no documentation. The notion is absurd.
Sekhmets Daughter
(7,515 posts)Never tries to hide his assets. Because of those assets he would be given a prime loan for 100% financing an 80/20 no doubt. You are completely clueless about mortgages aren't you? Still a renter I presume?
banned from Kos
(4,017 posts)Two or more 30-day delinquencies in the last 12 months, or one or more 60-day delinquencies in the last 24 months;
Judgment, foreclosure, repossession, or charge-off in the prior 24 months;
Bankruptcy in the last 5 years;
Relatively high default probability as evidenced by, for example, a credit bureau risk score (FICO) of 660 or below (depending on the product/collateral), or other bureau or proprietary scores with an equivalent default probability likelihood; and/or
Debt service-to-income ratio of 50% or greater, or otherwise limited ability to cover family living expenses after deducting total monthly debt-service requirements from monthly income.
Not one single word on documentation or loan percentage like you claim.
Sekhmets Daughter
(7,515 posts)Insures bank deposits, it does not write mortgages.
As you like Wiki so much here:
en.wikipedia.org/wiki/Mortgage_industry_of_the_United_States
Be sure to read the section on "origination" It is more than credit score....
banned from Kos
(4,017 posts)That is why they close banks. Subprime valuations are at the heart of their responsibilities.
banned from Kos
(4,017 posts)non performing loans (mostly subprime) were the root cause of the Financial Crisis.
Sekhmets Daughter
(7,515 posts)your limited ability to comprehend. Had the banks not created MBOs and MBSs which contained both prime and sub prime loans, there would have been no crisis. The issue was was not that loans were defaulting, but that no one knew which derivatives were good and which weren't. Credit froze as the banks had no idea of what they had on their balance sheets.
Joseph Stiglitz, in his book "Free Fall", posits that without that mixture the markets would have burped and moved on.
The actual root of the problem was that interest rates were kept too low for too long, then the Fed began raising the rates, the housing market began to collapse, home values declined (as they always do when interest rates go up) and people, who had been sold a bill of goods regarding the ability to refinance their mortgages before double digit interest rates overtook them, couldn't afford the new payments began defaulting. I left the industry in 2004 and returned briefly as an office manager in 2007. I left for good when I saw the types of bs prospective buyers were being fed.
Credit Default Swaps are not the only derivatives. Mortgaged Backed Obligations, M B Securities, CDOs are all derivatives as well and there are a host of others.
banned from Kos
(4,017 posts)Now I may not know what OTHER peoples account balance is just like I didn't know how bad the hole AIG was in @2008.
MBS are not a derivative. They are bonds with a yield. You may buy a CDS or other derivative on an MBS however. You may buy a CDS on an entire company.
You still have not sourced any of your bogus claims.
girl gone mad
(20,634 posts)MS had more limited exposure to subprime after learning from past mistakes, but they lost billions, and in fact they were heavily involved in subprime lending.
banned from Kos
(4,017 posts)and you are talking about Morgan Stanley. They have been separate firms since the 1930's.
girl gone mad
(20,634 posts)They were a big player up until late 2006 and they still got killed on LBO and jumbo in the credit crunch.
Pimp your bankster nonsense to Yahoo dim-bulbs.
banned from Kos
(4,017 posts)although I don't see a source in your first link and dispute its claim.
evalu8tor
(8 posts)When that sham of questioning is over, Dimon might as well go on up and hand them each some a envelop full of cash.
Sekhmets Daughter
(7,515 posts)He goes before the House committee... That will make today's testimony before the senate look like a bloodbath.
FarCenter
(19,429 posts)They are basically an opportunity for the Senators or Representatives to get on television and attempt to impress the public with their bloviations.
All substantive work is done in the back rooms and offices away from the media.