Yeah, I think you can take THAT to the bank, so to speak.A piece in the Wall Street Journal dug up yet another damning fact about Jamie Dimon's J.P. Morgan Chase. This time, reporters got hold of an internal bank survey of its credit-card collections suits. It turns out that Chase's own survey found that huge numbers of lawsuits filed by the bank contained errors.
From the article:
The bank studied roughly 1,000 lawsuits and found mistakes in 9% of the cases, said people familiar with the review.The story is actually far worse than is being described in the papers. It involves allegations of a rather complicated scam tied to secondary sales of credit-card debt – it's easier to sell credit card debt when a judgment has already been obtained, so it seems companies like Chase will go to great lengths, including mass robosigning and other abuses, to obtain judgments.
"Any rate above zero is high," said one person familiar with the bank's conversations with regulators.
Chase is the headline target of these new investigations, but most analysts believe the same exact things go on at other banks and credit companies.
Matt Taibbi
And then we have this:
Because they can.It turns out that in recent times, if you paid them an extra subscription fee of a few thousand dollars a month, Thomson Reuters would allow you access to the Consumer Confidence data a full two seconds earlier than the rest of its subscribers – at 9:54:58 a.m., as opposed to 9:55:00 exactly.
[...]
The two-second head start allows high-speed traders to plunge into the markets en masse and retreat all the way back again before most of the world sees this market-altering economic data.
[...]
There's a reason why high-frequency trading is such a lucrative business. With the tiniest head start on market-moving data, computerized traders can make giant piles of money.
[...]
Deutsche Borse sells access to its Chicago Business Barometer three minutes early to anyone willing the relatively modest sum of 2,000 Euros a year.
Meanwhile, the Institute for Supply Management teamed up with Thomson Reuters to also sell a kind of enhanced access to the results to a monthly survey of purchasing managers (which measures both manufacturing and non-manufacturing industries). The ISM releases the data to everyone at 10:00 a.m. once a month, but those who pay extra get the data in a form that's a few ticks easier for computer trading algorithms to read and digest.
[...]
Thomson Reuters threw the P.R.-office version of a hissy fit today after [New York State Attorney General Eric] Schneiderman closed shop on their neat little revenue stream. The firm refused to permanently end the practice and defiantly insisted upon their right to sell data to whomever they want, whenever they want.
Matt Taibbi
But there is a tiny ray of sunshine out there trying to push back: Massachusetts freshman Senator Elizabeth Warren.
It’s a start. If it gets any traction.Sen. Elizabeth Warren (D-Mass.) and a bipartisan group of senators introduced a bill Thursday that would break up the nation's biggest banks, forcing them to split their routine commercial banking operations from their risky trading activities.
The 1933 Glass-Steagall Act, which Congress passed in response to the 1929 financial crash, separated traditional commercial banks—which hold Americans' checking and savings accounts and are backed by taxpayer money—from investment banks, which make riskier bets. But in 1999, the Gramm-Leach-Bliley Act—which was backed by the Clinton administration—gutted this law. A bonanza of bank mergers ensued, and the size of these new behemoths, such as Citigroup, JP Morgan Chase, and Bank of America, made their downfalls more threatening to the overall US economy. [...] The senators behind this new bill—a group that includes John McCain (R-Ariz.), Maria Cantwell (D-Wash.), and Angus King (I-Maine)—refer to their legislation as the 21st Century Glass-Steagall Act because it would reinstate a firewall between normal banking functions and casino-like finance.
Mother Jones
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