The Liberty Tree Lantern

ACORN Funder JPMorgan Chase Doesn’t Look Good in New Madoff Book

NLPC

The only good thing that can be said about JPMorgan Chase is that, like Arvedlund, it was perceptive enough to smell the Madoff rat. But unlike Arvedlund, who tried to sound the alarm, JPMorgan Chase kept quiet and tried to protect itself.

Arvedlund explains:

In 2006, JPMorgan Chase developed a derivative product for its wealthy clients. It was linked to the Fairfield Sentry Fund offered by the Madoff feeder Fairfield Greenwich. The bank offered investors — mostly in Europe — a note that paid three times the earnings, or returns, of the Sentry Fund. The note matured in five years. To hedge its risk on the derivative product, the bank invested in the Sentry Fund itself. This way, if the Sentry Fund did well, the bank’s returns would offset its obligation on the notes.

By the summer of 2008, JPMorgan Chase had deposited $250 million with the Sentry Fund. With the financial meltdown on Wall Street and around the world in full swing, most of the markets were down 30% or more, and yet the Sentry Fund reported gains of 5%. JPMorgan Chase began to grow suspicious.

As a result:

In September 2008, JPMorgan Chase quietly liquidated its entire $250 million position in the Sentry Fund, even though it remained liable on the derivatives it had sold to the wealthy clients. At the time, the Fairfield Sentry investment notes were showing a 5% gain for the year. The bank had concluded Madoff was a phony, and the only way to protect itself was to liquidate anything connected with Madoff.

When JPMorgan Chase bought what was left of Bear Stearns last year, it inherited a relationship with Madoff that is also sure to raise more questions about its ethics. According to Arvedlund:

Brokers who traded at Bear Stearns used the firm’s automated equity order system to buy and sell stocks. A broker would enter the stock symbol and the number of shares he or she wanted to trade. The system was supposed to do the rest: work to find the best counterparty to trade with from among the many market makers that traded with Bear Stearns. However, for Nasdaq stocks, Bear Stearns had an unwritten code: the system automatically defaulted to trade with Madoff.

Madoff reportedly paid Bear Stearns substantial fees for this default setting on their equity order system, and he may have paid other customers to do the same as well. Between 2000 and 2008, Bear Stearns’ 400 or so brokers all used this system, and all their Nasdaq trades defaulted to Madoff. It was a big source of revenue for Madoff, and it vaulted Bear Stearns to a position as the largest counterparty trading with Madoff. The arrangement was in place when Bear Stearns went under in early 2008, and it continued under JPMorgan Chase.

JPMorgan Chase and/or the JPMorgan Chase Foundation are major funders of the Association of Community Organizations for Reform Now (ACORN) and related organizations. ACORN is a network of as many as 360 organizations, structured to escape accountability, a network far more complicated than anything Madoff ever constructed.

ACORN has had its own embezzlement scandal. Dale Rathke, the brother of ACORN founder Wade Rathke, stole nearly $1 million in 1999 and 2000. ACORN treated the crime as an internal matter and did not even notify its board. A whistle-blower made it public. Dale Rathke remained on ACORN’s payroll until June 2008.

According to its 2007 tax return (the most recent available), the JPMorgan Chase Foundation made a million-dollar gift to ACORN Housing, Inc. that year. This donation is likely the tip of the iceberg of the bank’s total support of ACORN. JPMorgan Chase is one of ACORN largest corporate backers, if not the largest. JPMorgan Chase can take a step toward accountability by disclosing the specifics of its support for ACORN.

Last fall, JPMorgan Chase accepted $25 billion in taxpayer TARP funds. In 2008, the top 200 bonus recipients at JPMorgan Chase received $1.12 billion. The firm had 1,144 employees who received a bonus of least $1 million last year, more than any other Wall Street firm.

You would think with all these millionaires walking around the company, there would be at least a passing acknowledgement of the wealth generation potential of a free economy. Not a chance.  CEO Jamie Dimon sneers at free market advocates. The firm funds a variety of anti-business activists, ACORN being just the most dramatic example.

Dimon is apparently not self-conscious either about ACORN’s role in the residential mortgage crisis, much of it driven by subprime lending. Starting in the Seventies, ACORN saw the big banks as shakedown targets. The weak-kneed executives at these institutions were pretty easy pickings.

ACORN screamed “racism.” It accused mortgage lenders of “redlining,” or denying credit to borrowers in certain areas. It picketed the homes of bank directors in leafy suburbs.
A way out was offered to the banks. They could make contributions to ACORN and/or they could “invest” in ACORN Housing, which made loans to “underserved” borrowers.

They also could back off from opposition to a law called the Community Reinvestment Act of 1977 that required banks and thrifts to lend more money from areas where they took deposits. It meant more loans to “underserved” communities, and a loosening of lending standards.

Of course, many of ACORN’s “deserving” borrowers were not deserving at all. Increasingly, the banks dumped the loans on Fannie Mae and Freddie Mac, which were under pressure by Congressmen like Barney Frank (D-MA) to make more loans to the “underserved.”

The result was the mortgage meltdown that nearly took down our entire financial system, providing the justification for the massive bailouts of the banks. But Dimon acts like JMorgan Chase has no culpability because of its “solid” balance sheet.

According to Arvedlund, there are already civil suits against JPMorgan Chase by investors whose funds were acccepted into Madoff’s account at the bank after it had concluded that Madoff was a fraud. Of course, this may also be criminal, but there is no word that the bank is the target of a criminal investigation.

During the campaign, Dimon was a vocal supporter of Barack Obama. On July 18, the New York Times called Dimon “Obama’s favorite banker.” Dimon may hope that this relationship will insulate his firm from prosecution in the Madoff case. In any event, JPMorgan Chase’s culture must be questioned, along with Dimon’s credibility and leadership.

The Liberty Tree Lantern analysis and commentary on the above article: 

J.P. Morgan Chase Bank is one of the 12 Banking concerns that own The Federal Reserve “System”.  See: OWNERSHIP OF THE FEDERAL RESERVE.  This bank is one of the programmers of The MATRIX, our economy that only exists in our minds because our minds have been programmed to believe that a small piece of paper with green ink on it is worth 100 cents, when in the real world, outside of The MATRIX, outside of our minds, they are really only worth 2 – 3 cents each. So you have never been even close to fully paid for your labor and you have never paid for anything your mind believes you paid for.  In essence nothing, IN A FINANCIAL SENSE, you can see, touch or smell really exists because it was paid for with almost worthless pieces of paper with ink on it.  How can you buy a car or a refrigerator with nothing more than  pieces of paper with almost nothing backing it up, that is printed out of thin air on glorified computer printers at a Federal Reserve office?  If this is possible then how come only these super rich bankers can print out this Monopoly money, you have a computer printer too, why can’t you print your own?  The Banking cartel of twelve privately owned banks, do it almost every single day.  Now the question that will really blow your mind is; if you didn’t really pay for anything you have, because you used dollars that in the real world was only worth about 4 cents or less each, than who really owns it?  Someday soon we may all find out and it isn’t going to be pretty.

In any case this MATRIX is going to collapse, by something known as hyper-inflation, which is actually the revaluation of the dollar to its true value by the entire world, in less than three years.  Welcome this nightmare folks, because without the total collapse of the MATRIX we will never be free or have liberty, or ever be individually wealthy.  The MATRIX was created to imprison our minds and enslave us for the power and wealth of the power hungry megalomaniacs of the world; the forty owners of The Federal Reserve “System” and their cronies in the U.S. Government and in ‘certain’ BIG Corporations. 

Pray for the temporary horror of the utter collapse of The MATRIX, our economy, because if we each INDIVIDUALLY BUT UNITED fight for and   PERSONALLY   ENFORCE  the rule of LAW that we wrote, established and ordained in The Constitution upon our U.S. Government, word for word, in spirit and intent, as it WAS meant on the day it was ratified, then the vast majority of our common average working men and women will, through very hard work and the blessings of God, become wealthy with REAL money from our creator. 

So pray people, pray for the end of our economy, THE MATRIX, our prison of the mind, which now uses each and every one of us as though we are utter slaves of “the system” being controlled and manipulated through usurpation, Constitutionally illegal legislation, tyranny, oppression, taxation and so-called tax credits where they first STEAL our earnings, before we even get them, in the form of Federal, FICA, and Medicare ”withholding” and payroll taxes that we would have otherwise received from our employers on our paychecks, and then they say they will give us a “little fraction” of what they stole out of our paychecks IF we cow tow to their DEMANDS and mandates. 

What gives them the right to hold us in such utter contempt, when it was We The people who ‘borrowed’ them SEVENTEEN enumerated items in Article 1 Section 8 of The Constitution as further supported by the 9th and 10th Amendments in The Bill of Rights, certain authorities that we individually received from our creator,  for the ‘privilege’ of handling for us.    How dare they?

READ THE DECLARATION OF INDEPENDENCE   and the dovetail CONSTITUTION OF THE UNITED (but independent and sovereign) STATES OF AMERICA, today, so you know what you must fight for.  Also read the numerous writings of our founding fathers.   And be sure to read The 5000 Year Leap which will greatly facilitate the meaning, spirit and intent of the Declaration and the Constitution so that you understand both of them perspicuously. 

Also see: One World Order to Come After Economic Boom Leads to Black Friday