Saturday, October 17, 2009

JP Morgan Earnings Fraud

JP Morgan pulled off quite a feat...They made most of their money with the investment bank. This means trading...buying and selling (mostly buying obviously) stocks bonds and other assorted inflation assets. Their banking activities foundered to say the least, deposits declined significantly and cash available declined by 61%.

However, at the very same time they repaid the 25 billion in bailout funds and now are preparing to pay record bonuses for a supposedly outstanding year. A year in which the quality of their fake balance sheet declined even further than it had been during the Lehman debacle. The implications are not insignificant.

The bank will be using its fractional reserve mandate to finance the FDIC. Why not create 100 billion and loan it to the FDIC so you can insure your own deposits with more fictitious cash? And, the question is, will they similarly chose or need to represent or increase loans to the government or its minions to generate interest payments (earnings streams) such as those they will receive from the FDIC to compensate for lack of earnings in their core business in the next quarters. At the same time will depositors continue to withdraw money and the worthless assets on their books continue to be marked at full value despite obvious counterparty insolvency? Will the FDIC be able to insure JPM against its obvious misrepresentations of its financial health?

Recently, despite the public relations push by the Obama contingent for exchange based derivatives markets for the very types of instruments that make up JPM's vast 89 trillion worth of derivatives held on their books...(not to mention the trillions lying around on other banks books), Jamie Diamond wrote a letter indicating that this would NEVER be allowed to happen. Since JPM owns the FED they are dictating the terms - not the reverse. Obama is a pawn in this game. He will need to play the game of Fed, JPM and Goldman Sachs speak to keep the can kicking - including his own.

Since the big banks, JPM, Goldman, Wells, Deutsche Bank etc, made most of their money on the way up using money that was supposed to be lent out to actually buy inflation assets...makes you wonder if they will try to make the most of the coming decline...why else would they be buying large amounts of out of the money puts on the EURO and calls on the Dollar. The key to the market is the it like a hawk...another fraud is about to start...just look closely at JPM's balance sheet. I don't think there are very many believable numbers on it...JPM is short way to many dollars for their own good. They will be buying a lot more of em than they already have soon enough. A lot more most likely than they are expecting to. The naked short on the dollar is about to be covered. JPM started the mess in 1913...JPM will likely take huge payouts for their favored employees and then transfer their default to the taxpayer as per the usual methods.

So, what, pray tell, are they going to do to try to cover up the losses on those derivatives?

The rich manipulators will only get richer as the dollar they stole gain in purchasing power. And this pattern will continue over and over until the public wakes up and say "No More".  Ron Paul has said it. Have YOU?
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