just got my absentee ballot for new york yesterday. there’s a constitutional amendment in regards to veteran’s affairs on there.

wait til you get a load of this one…

http://tinyurl.com/6ewdk8

say what?

Erie school board member Eva Tucker asked DiCarlo how much JPMorgan would make in the deal.

“Everybody has asked, and it is a reasonable question, what does JPMorgan, what do we get on this transaction?” DiCarlo said, according to minutes of a school board meeting.

“I can’t quantify that to you,” he said. “What this transaction is, is a financial transaction that is put into a huge hedge fund that JPMorgan controls. There’s a trillion dollars of investments in that hedge fund. There’s some other issuer in Tokyo or somewhere else who’s got an opposite bet and they’re going to offset each other.”

i/o/w this story and the yen story may be 2 sides of the same story.

The products combine exposure to foreign exchange, interest rate differentials and domestic inflation

Topic: Reform

the above can go a long way toward a definition of the current crises to educate the public on what has happened to them and how.

US News media, if they understand it themselves, are useless -indeed, worse than useless because their skill is acting as if they know what they are talking about and people starved for news who watch c-span think they are being educated by congressional hearings that further exploit this absence with sensationalized history, pandering to the public, and more propaganda from witnesses.

every financial instrument including credit cards, mortgages and bank agreements sold to the public must feature language that can be understood by any high school student with an above B average grade.

…the old lady

The reasons I suspect not is that (admittedly a decade ago) I had some peripheral knowledge of the sales practices of Bankers Trust, which at the time was one of the two biggest players in complex OTC derivatives. They would regularly fleece customers by taking structures that might have made sense and pricing them and/or larding them with fees so that they were a bad deal for the customer.

And these customers were the Treasury departments of Fortune 500 companies. And when Proctor & Gamble went after them in court, that was basically the end of BT.

Now you would think P&G would have no case. They are a big sophisticated company, right? Caveat emptor, right? The case never went to trial, but the sales force comments on tape and the (apparent) misrepresentations by the sales force were bad enough that BT was a goner.

Now, to understand complex derivatives, you do not merely need to have a good grasp of calculus. You need to work enough with calculus (as in daily, a ton), that it is INTUITIVE to you.

How many people like that do you think are working in city and state government? I'd guess if there were ANY, they'd be on the fund management side, not the fund raising side.

You think? Like these counties and school districts are swimming in an ocean of cash.

Do you also think JP Morgan sales reps were, shall we say, upfront about the risks involved? That they didn’t “help” the financial advisor’s that were supposed to work for their clients?

There are several legitimate reasons why US prosecutors are on these cases. Especially when one considers how difficult they are to successfully prosecute.

Probably threatened the municipalities rating and used as a selling pressure point.

Fees the first time around, the second the around, third time……..

The district needed money so JP Morgan bought a swaption off them for around $750k. JPM then proceeded to immediately turn around and sell that same derivative for its market price of $2 million. After paying around 250k in fees, JPM made an easy million. It would later cost the school district $2.9m to get out of the deal.

Now one could say caveat emptor but obviously a school board has no chance at figuring out the risks of something like that. Before the deal was signed, the school board's law firm turned to an outside investment consultancy to advise on the deal. Being far too trusting, the law firm failed to see the conflict of interest in hiring the consultancy that was recommend by JP Morgan. The consultant said the school district should sign the deal and thus the sheep were sheared.

I'd have trouble sleeping at night knowing I just plundered a struggling school district but apparently those at JPM have no such problems.

The full story is even more sickening than you could possibly imagine. Refer to this should you ever have a twinge of sympathy for the big banks.

http://www.bloomberg.com/apps/news?pid=20602007&sid=ay5LDbjbjy6c&refer=rates