JPMorgan scandal like Enron

This video from the USA is called Elbow From The Sky On JPMorgan – Trading Loss Surges.

From Bloomberg news agency in the USA:

How JPMorgan Is Like Enron

By Jonathan Weil

May 18, 2012 12:00 AM GMT+0200

Put this one in the category of the famous quote often credited to Mark Twain: “History does not repeat itself, but it does rhyme.”

Last week when JPMorgan Chase & Co. warned investors about a $2 billion trading loss at its chief investment office, it also disclosed it had been using a faulty model to determine the unit’s so-called value at risk. For me at least, the story conjured up memories of a similar tale at Enron Corp. more than a decade ago, the details of which I’ll get to in a moment.

Initially, in its first-quarter earnings press release on April 13, JPMorgan said the average value-at-risk figure for its chief investment office was $67 million during the three months ended March 31. JPMorgan revised that to $129 million when it filed its quarterly report with regulators last week.

See also here.

Jessica Silver-Greenberg and Ben Protess, The New York Times News Service: “Scores of federal regulators are stationed inside JPMorgan Chase’s Manhattan headquarters, but none of them were assigned to the powerful unit that recently disclosed a multibillion trading loss. The lapses have raised questions about who, if anyone, was policing the chief investment office and whether regulators were sufficiently independent. Instead of putting the JPMorgan unit under regular watch, the comptroller’s office and the Fed chose to examine it periodically”: here.

Is JPMorgan Paying for John Boehner‘s Personal Polling Operation? Questions Surround Shadowy Front “New Models USA”. Lee Fang, Republic Report: “We’d like to call your attention to a secretive nonprofit, ‘New Models U.S.A.’ The media has linked the group to a number of shady electioneering efforts in the past. In this day and age, not only can corporations spend unlimited amounts on elections, they can fully hide their identities using nonprofit groups that can operate as Super PACs or quasi-lobbying firms. New Models appears to exist for the express purpose of hiding political money”: here.

JPMorgan Chase and Credit Suisse will pay $416.9 million to settle charges by the Securities Exchange Commission that they lied to investors about the quality of mortgage-backed bonds: here.

At a Senate hearing ostensibly called to interrogate JPMorgan Chase CEO Jamie Dimon about billions of dollars in speculative losses revealed last month, Dimon was given free rein to reiterate his opposition to any increase in bank regulation: here.

Why the Senate Won’t Touch Jamie Dimon: How JPMorgan Props Up US Debt. Ellen Brown, Truthout: “When Jamie Dimon, CEO of JPMorgan Chase Bank, appeared before the Senate Banking Committee on June 13, he was wearing cufflinks bearing the presidential seal. ‘Was Dimon trying to send any particular message by wearing the presidential cufflinks?’ asked CNBC editor John Carney. ‘Was he … subtly hinting that he’s really the guy in charge?'” Here.

Enron scandal on stage

This video is called Enron: The Smartest Guys in the Room.

By Len Phelan in England:


Noel Coward Theatre, London WC2

Monday 01 February 2010

The collapse of US energy giant Enron in 2001 with billions of losses may not at first glance appear to be a godsend to dramaturgy.

But as Cary Churchill proved with Serious Money and Stewart Lee with Jerry Springer: The Musical, big subjects treated with the snap, crackle and pazazz of a show like this are guaranteed to get the bums of ideas-hungry theatre-goers on seats.

The disintegration of the world’s seventh-largest company with billions of debts and the jaw-dropping synergistic corruption which engendered it might seem pretty inconsequential compared with the current global scale of capitalist rapacity.

But in exposing the way in which the gadarene swine of lawyers, accountants and bankers – along with smaller-scale suckers – fell so readily for Enron’s mark-to-model futures scam which brought the whole house of cards tumbling down, this is a pretty sophisticated piece of agitprop by one-to-watch writer Lucy Prebble, whose second play this is.

High-tech staging and a compelling synthesis of music theatre, visual effects and mordant satire make these complex machinations entertainingly and often hilariously explicit.

Stock-market scenes illuminated by figures bleeding from projection screens onto the deranged bear pit of the trading floor, the collapse of Enron staged as a Twin Towers moment, “debt-eating” companies portrayed as ever-ravenous alligators, Lehman Brothers represented as a pair of conjoined twins – the theatrical effects flow thick, fast and tellingly in Rupert Goold‘s inventive production.

Foregrounding these epic moments, the fall from grace of Enron head honchos Jeffrey Skilling (the excellent Samuel West), Ken Lay (Tim Piggott-Smith, ditto) and Andy Faslow (Tom Goodman-Hill) is presented as a kind of ur-Greek tragedy.

Though Lucy Prebble attempts to give this unholy trio some kind of emotional hinterland and the tone darkens considerably in the latter stages as the Enron “Death Star” implodes in less than a month, there’s precious little empathy for chief architect of the collapse Jeffrey Skilling, who pleads that he only wanted to “change the world.”

The consequences of his messianic vision is fleetingly glimpsed when an Enron security guard spells out what unemployment will mean for himself and the other 20,000 sacked employees, some of whom had been brainwashed to invest in the whole fraudulent scam as an opportunity to “invest in yourself.”

In such moments, we were in the presence of an affecting personal tragedy, subsumed though it rapidly is by the relentless drive towards a bathetic conclusion.

All in all, Enron is an unmissable show for anyone with leftish leanings.

But you’ll need to get your skates on. Tickets are selling fast and you may have to beg, borrow or – following the example of the Enron protagonists – steal one.

Runs until May 8. Box office: 0844-482-5140.

Class and justice in America: The Supreme Court and Enron felon Jeffrey Skilling: here. And here.

Economic recession news

USA: Wall Street’s breaking the Dow’s 10,000 mark Wednesday was hailed as a further sign of the recession’s end, even as foreclosures rose to an all-time record and the official unemployment rate continued to edge toward 10 percent: here.

This video from the USA is called A conversation about the documentary “Enron: The Smartest Guys in the Room“.

The US Supreme Court and the Enron scandal: here.

Over the past two months, workers in New Zealand have faced an intensifying barrage of attacks on their jobs, wages, and working conditions: here.

USA: Ken Lay, Enron fraudster, dies

Bush, Cheney, Lay, and Enron scandal, cartoon

Associated Press reports:

HOUSTON – Enron Corp. founder Kenneth Lay, who was convicted of helping perpetuate one of the most sprawling business frauds in U.S. history, died Wednesday of a heart attack in Colorado.

He was 64.

From People for the American Way:

Kenneth Lay, CEO of Enron, was until recently on the board of trustees of American Enterprise Institute.

Other famous former trustees include Vice President Dick Cheney.

Update: here.

Tony Blair and Enron scandal: here.

Update: after the Skilling conviction: here.

Enron and finance firms: here.

Post Enron anti fraud rules rescinded: here.

Bush and Enron, cartoon

USA, Enron financial scandal

This video from the USA is the film Enron The Smartest Guys In The Room.

By Joe Kay:

The Enron verdicts: corruption and American capitalism

29 May 2006

The guilty verdicts handed down by a Houston jury last week against former Enron chiefs Kenneth Lay and Jeffrey Skilling provide an opportunity to evaluate the significance of the company’s rise and fall within the context of American capitalism.

Accounts by jurors given after the verdicts were announced indicate they all agreed that the evidence against the two executives was overwhelming.

It consisted mainly of testimony from over a dozen former executives, who implicated Lay and Skilling for their roles in defrauding investors and employees through various forms of accounting manipulation.

The jurors quickly rejected the absurd position of the defense that Enron was basically a healthy company that collapsed into bankruptcy in December 2001 largely as the result of Wall Street machinations and negative press coverage.

Several jurors indicated they reacted negatively to the testimony of the defendants, and particularly Lay, who could not hide his arrogance while on the stand.

Arrogance which Lay also showed, eg, in a 2004 interview with Larry King on CNN, in which he claimed the God of Christianity was on his side.

Bush and the Enron scandal: here.

More Enron: here.

Update January 2008: here.