Friday, March 23, 2012
Gangster Banks Keep Winning Public Business. Why?
Rolling Stone's Matt Taibbi has released another MUST READ - this time examining why the Gangster Banksters keep winning public business. Please take some time this weekend to review Taibbi's excellent expose.
From Matt Taibbi:
A friend of mine sent this article from Bloomberg, along with the simple comment: “Perfect.” What’s perfect? That the banks that have been caught repeatedly ripping off communities and munipalities — banks that have paid hefty settlements for rigging bids, bribery and other sordid misdeeds — keep winning the most public business. Apparently, our public officials aren’t concerned about whom they hire to serve as the people’s investment bankers.
From the piece, entitled “JPMorgan Claims No. 1 for Government Debt After Jefferson County”:
JPMorgan, which emerged from the worst financial crisis since the 1930s as the most profitable U.S. bank, has parlayed crisis-era loans to cities and states and a willingness to outbid other firms in local government bond auctions into becoming the top underwriter of municipal debt last year, according to data compiled by Bloomberg. It was the first time the firm held that rank.
The turnaround was a milestone for JPMorgan’s municipal- bond department, which has been marred by its involvement in two of the biggest scandals in the history of U.S. public finance: a so-called pay-to-play scheme in Jefferson County, Alabama, that contributed to the biggest-ever U.S. municipal bankruptcy, and a federal probe that uncovered bid rigging of municipal-bond investment products.
This story dovetails with the larger story I have out in the magazine now about Bank of America, another Too-Big-To-Fail behemoth that placed a very close second in the area of municipal bond business, according to the Bloomberg survey. Chase managed $35.7 billion in long-term bond sales, while BOA/Merrill Lynch came in at about $200 million less.
Why does this matter? Because both banks, Chase and Bank of America, have been repeatedly tied to scandals involving the issuance of public debt.
Read more from Rolling Stone:
Posted by The Doc at 3:19 PM