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It’s hard to believe considering what happened in 2008 on Wall Street and in Washington, but banking is built on trust.

A worker hands his hard-earned dollars to a teller and trusts the money will be deposited and available for withdrawal when needed. Despite the crash on Wall Street, workers still trust bankers to safeguard deposits from robbers and reckless investments.

Granting banks a little less credulity might be wise. Just consider what happened in the past two weeks. A U.S. Senate investigation revealed that the 2010 Dodd-Frank banking reforms utterly failed in the case of the $6.2 billion “London Whale” gambling loss at JPMorgan Chase. Then a U.S. House committee passed seven measures to weaken Dodd-Frank. And there was the European Union’s demand that Cyprus expropriate money from depositors to prevent that nation’s big banks from failing. That means no depositor can trust that a government won’t dip its hands into savers’ accounts to bail too-big-to-fail banks. The trust is gone, baby.

Last week’s bad banking news began in Cyprus. It’s a cautionary tale about trust in both politicians and bankers. Cyprus is a tax haven for wealthy Russians the way the Caymans are for wealthy Americans. The Cypriot financial institutions, which made bad bets on Greek debt, are teetering on the edge of bankruptcy and were closed last week to stave off bank runs.

The European Union, which includes Cyprus but not Russia, was not eager to provide loans to secure moneyed Russians. Euro zone finance ministers and representatives of the International Monetary Fund (IMF) and European Central Bank worked out a deal under which Europe and the IMF would provide $13 billion to bail out the banks if the country took $7.5 billion from depositors’ accounts.

Cypriot and European officials betrayed depositors, particularly small ones whose savings of less than $130,000 supposedly are insured. The newly elected president of Cyprus, Nicos Anastasiades, turned on his own people. He rejected a proposed deal under which Cyprus would take 12.5 percent from depositors with more than $130,000 euros and about half of that from smaller account holders. Anastasiades demanded the rich, often Russian oligarchs, pay less, which meant, of course, the smaller depositors, everyday Cypriot workers, would have to pay more. (more…)

If you are sensitive to stories of human suffering and economic hardship, let me warn you that the following report contains materials that could be upsetting, so discretion is advised.

It’s about a fellow named Jamie. He lives in New York, and he had a very rough go in 2012 with a large financial institution – and, as you can imagine, such behemoths can he heartless, so it’s tough to stand up to them. The giant in this case is JPMorgan Chase, Wall Street’s biggest bank, and it went after poor Jamie Dimon hard. In the end, the bank took more than half of his income.

It was bitterly painful, but thanks to the human spirit, Jamie’s story turned from sad to uplifting! He was down, but not out – because, luckily, JPMorgan is his bank. Yes, he’s the CEO, and even having his previous year’s income slashed by 53 percent, he will still take home $11.5 million in pay for his labors last year. Plus, he keeps his job.

It’s a miraculous ending, considering that one of the bank’s exotic trading divisions under Jamie’s CEOship lost a whopping $6.2 billion last year, due to finagling, incompetence, or both – federal authorities are still investigating. Yet, the board of directors didn’t can Dimon because, as it explained to regulators, he had “accepted responsibility” for the management failures that let to the stunning losses. (more…)

JPMorgan Chase, Goldman Sachs, Bank of America and the handful of other behemoths of Wall Street that dominate American banking – who needs them?

After enduring years of insatiable greed by the slick-fingered hucksters who run these gambling houses; after watching in dismay as their ineptness and avarice drained more than $19 trillion from America’s household wealth since 2007 and plunged our real economy into the worst financial crisis since the 1930s Depression; after witnessing their shameful demands for trillions of dollars in taxpayer bailouts to save their banks and their jobs; and now after seeing them return immediately to business as usual, including paying multimillion-dollar bonuses to themselves – we have to ask: Huh!?!

Oh, no-no, cry the banking titans, don’t even think of looking behind the curtain! Trust us, say these Wall Street alchemists, for we are essential to juicing the economy with our complex abracadabra investment schemes.

In fact, however, those schemes just move money around, spiraling real investment capital from the grassroots up to superrich global profiteers who create nothing but more wealth for themselves. Shell games at carnival sideshows are more honest than big-bank trading houses, for the hustles of such hucksters as JPMorgan, Goldman, B of A, etc. are based on financial illusions, off-the-books accounting, illegally leveraged borrowing, ridiculous tax subsidies and hide-the-pea secrecy.

The obvious truth is that these high-flying, high-tech, high-speed emporiums of high finance serve themselves, not us – so we have no obligation or need to keep serving them. Of course we need banks – to lend to us consumers and our productive businesses, to handle our commercial transactions, to manage our savings and provide financial advice, etc. But that’s not what the leviathans of Wall Street do. Rather than keep protecting them, let’s decentralize America’s capital, reinvesting our public trust in community banks and credit unions that actually deserve it and serve it.

Rather than keep protecting them, let’s decentralize America’s capital, reinvesting our public trust in community banks and credit unions that actually deserve it and serve it.

This month has brought us yet another screaming example of a big-shot Wall Street banker who got too big for his britches – a story revealing the inevitable excess that comes from banks that are simply too big. (more…)

When Jamie Dimon revealed that JPMorgan Chase had lost billions through risky and legally questionable trading, he said the losses would be about $2 billion and maybe more. Apparently it is more — a lot more. People in a position to know are saying the real figure is probably in the $5-7 billion range.

The JPMorgan Chase scandal — and yes, it is a scandal — shows us why we need to break up the big banks as quickly as possible.

But that won’t happen unless we can get our hands around the real scope of the problem, which is probably far greater than we’re being told. That means cutting through the enveloping shroud of jargon, euphemisms and double talk — “crap,” if you will — that keeps us from seeing the situation as it really is.

Here’s why we need to do it, and here’s how.

Talk Talk

Two images come to mind when considering too-big-to-fail banks like JPMorgan Chase: The first is of the gigantic spaceships hovering over all of the world’s cities in Independence Day, leaving the citizenry in shadows and the world in fear and uncertainty.

The second image is of an old New Yorker cartoon which shows a husband and wife chatting with guests over drinks and h’ors d’oeuvres while an enormous monster scowls in the corner. The caption reads: “We deal with it by not talking about it.”

Most politicians are either talking about tighter regulations for too-big-to-fail banks, or about the virtues of self-regulation and the so-called “free markets.” But the real problem isn’t how to manage too-big-to-fail banks, which are inherently unmanageable. The real problem is that they exist, an everpresent menace that hovers over our economy while we go about our daily lives.

They deal with that problem by not talking about it.

Monster Mash

JPMorgan Chase is either our largest or second-largest bank, depending on when and how you ask the question. News stories often point out that it has $2 trillion in assets, which sounds impressive. But they usually fail to mention that it has liabilities of more than $2 trillion, too, leaving it roughly $183 billion in the black.

That ain’t bad — but it’s not much more net worth than you’ll see sitting around the table when Mitt Romney’s super PAC friends get together for lunch.

And we can’t trust those numbers. We now know that these risky London deals weren’t accurately conveyed in last year’s annual report. What else don’t we know about JPM’s liabilities?

All of our big banks were on the hook for hundreds of trillions of dollars in the run-up to the financial crisis of 2008. And now they’re bigger than ever. How big? We don’t know for sure — and that’s a big part of the problem.

Our four largest banks have 95 percent of the total exposure to derivatives. Two years ago we analyzed the raw data and found that JPM alone held 44 percent of that risk — and JPM has grown since then.

Because they intend to keep right on growing. As Jamie Dimon promised shareholders, “I want to assure you that your company will be bigger and stronger and better a year from today.”

If that doesn’t frighten you, you haven’t been paying attention.

Bigger ≠ Better

Here’s an example of what we mean when we say it’s time to “cut the crap” when we talk about big banks:

Writers should no longer be allowed to tell us, even in passing, that “I agree we need large institutions” unless they tell us why we need them.

Jamie Dimon was leading the chorus of bankers saying that their large size leads to increased efficiency and economies of scale. Okay, Mr. Dimon: Where are they? Is the cost of borrowing cheaper at JPM than it is at community banks? Are ATM fees lower? Are loans easier to get?

“Economies of scale” work well for customers — when you’re manufacturing toasters. But banks like JPM aren’t in the toaster business. They’re not even in the customer business anymore. Ordinary clients at the big banks are like cannon fodder in a colonial army: They’re there to be used and discarded, not to be served or respected.

(John Reed’s interview with Bill Moyers offers an enlightening glimpse into this shift in banking culture.)

So let’s stop repeating the mantra that big institutions have anything to offer us — anything, that is, except moral hazard. We did fine without them for centuries, and we’ll be better off once they’re gone. (more…)

JPMorgan Chase CEO Jamie Dimon recently said that he felt safer in Lebanon than he did when Occupy marched past his house. If nothing else, it proves that Wall Street bankers haven’t gotten any better at risk management – the art of knowing where danger lies and avoiding it – than they were when their bad bets crashed the economy and caused the Great Recession.

But then we knew that already, didn’t we? After all, Chase is one of five too-big-to-fail banks that could lose $80 billion or more from their poorly-thought-out risk-taking in Europe’s most troubled countries. The risky behavior shouldn’t surprise anyone, though. These banks know — or at least believe — that their too-big-to-fail status means we’ll rescue them again when they make the next devastating set of blunders.

What’s really striking about comments like these is the fact that executives at America’s big banks never seem to worry when police cars approach their houses. Their biggest fear is that that they might glimpse a sign or hear the sound of a mic check reverberating faintly through well-aged brick walls.

Consider JPMorgan Chase, the institution run by Mr. Dimon. To call his bank “scandal-plagued” would be putting it mildly. Chase has settled six fraud cases with the SEC over the last thirteen years and is implicated in several ongoing investigations, including the two most notorious fraud cases of our time. At any other moment in history the headlines would be screaming with various combinations of the words “JPMorgan Chase,” “fraud,” “probe,” “drop,” mistakes,” “disaster,” “incompetence,” and “scandal.”

But these aren’t normal times. The public has come to expect that bankers will commit fraud, and that the government will ignore it. They’ve come to expect that banks will make bad loans, and that the governments of the world will rescue them by making life more difficult for ordinary people. (more…)

Hoo, boy, it’s tough in our economy. I know you worry about your own little world, Bucko – whether you’re going to have a job, your shrinking paycheck, no health care, rising prices on everything… stuff like that. But, hey Bucko, it’s not all about you.

Show a little concern for those who’re taking a real hard hit in this lean year. Like Wall Street bankers.

Did you know that top executives at Goldman Sachs, JPMorgan Chase, Citigroup, Bank of America and so forth are facing up to 30 percent cuts in their bonus money? Some of them are looking at a bleak, Dickensian end-of-year holiday season with no more than maybe a $5 million dollar bonus stuffed in their stockings. I’ll pause here for a second so you can reach for a tissue to dry those tears. (more…)

Jamie Dimon, head of JP Morgan Chase, moved the annual shareholders meeting from New York to a corporate office in Ohio surrounded by a moat. Outside the meeting, his palace guard was not amused as the serfs crossed the moat and stormed the castle. Inside, Dimon promised them mortgage  assistance.

By Sam Pizzigati
Editor, on line weekly Too Much

America‘s top bankers and CEOs don’t have any more talent than millions of other Americans. They do have, two timely new data dumps remind us, plenty of generous friends in pivotal places.

We Americans, former Reagan White House budget director David Stockman told a reporter last week, “no longer have a democracy.” Instead, Stockman charged, we have “crony capitalism,” a system that’s rigging the economy to benefit the powerful few — at everyone else’s expense.

Last week brought still more evidence on how revoltingly raw this rigging has become. Wall Street and Corporate America, new data detail, have some incredibly thoughtful cronies who sit in some incredibly important places.

Some of these cronies run the Federal Reserve. Others serve on corporate boards of directors. Together, they’ve made the Great Recession a Great Sensation — for America’s corporate and banking elite. (more…)

By Richard (RJ) Eskow
Senior Fellow, Campaign for America’s Future

If you’re a banker who bought your estate with the millions you made from mortgage fraud, relax. The Justice Department isn’t looking for you. But if you’re an illegal immigrant who’s working on that banker’s estate, look out. The Department of Justice is ignoring your boss and devoting most of its resources to catching you.

And the Justice Department’s “mortgage fraud” unit doesn’t prosecute bankers. It protects them.

Joe Nocera of the New York Times contrasts the legal treatment that was given to one high-flying borrower with that received by Angelo Mozilo, CEO of the fraudulent lender Countrywide. But if stories like this one are bad, the numbers are even worse.

If you also take a qualitative look at some of the federal government’s other well-publicized mortgage fraud efforts, like its “Stop Fraud” website, the picture becomes pretty stunning — if not downright infuriating. (more…)

By James Parks
AFL-CIO Senior Writer

Across the country late last week, hundreds of union members, religious leaders, community activists, farm workers and victims of bank home foreclosures protested at 200 JPMorgan Chase branches to demand the bank respect the basic human rights of people to have decent places to live and work.

Large banks such as Chase are flush with cash and protestors demanded the bank declare a one-year moratorium on home foreclosures. The Wall Street Journal reports that Chase has $19.5 billion worth of home loans in foreclosure—nearly 7.5 percent of its mortgage portfolio and more than any other big bank.

“Foreclosures are a plague on families and communities,” said the Rev. Charles Williams, a leader in Detroit’s anti-foreclosure coalition, People Before Banks.

It cannot be in any bank’s best interest to pursue a policy that leaves so many people and communities in ruins—and for a bank like Chase that professes to be a good citizen, tearing families and communities apart is morally indefensible.

The protestors also called on Chase to use its influence as the lead banker for Reynolds American Inc. (RAI) to promote talks that could lead to improved conditions in America’s tobacco fields and farm labor camps.

(more…)