J.P. [For Pirates] Morgan Is Being Sued By Everyone

March 19, 2008

Elaine Meinel Supkis

Recently, an unconstitutional judge tried to destroy an entire web site, Wikileaks. They then won the appeal and are online again and leaking more stuff our rulers prefer to keep in a very dark, dank cave guarded by three headed hell hounds. On top of all this, as I predicted, not only is the 10% holder of stocks in Bear Stearns suing everyone, so are a lot of other very angry stockholders. The Fed, Teasury and J.Pirate Morgan all tried to pull a heist as I said right off the bat! And I always hit home runs, too! The various schemes to save the ill-gotten gains of the tax-evading pirates will come to grief in the end.

Whistleblower exposes insider trading program at JP Morgan

KEVIN WILSON, MARIA CHRISTINA PADRO, JULIAN ASSANGE & staff
Monday March 17, 2008

A confidential memo obtained by Wikileaks shows that not only has the U.S. Securities and Exchange Commission created an insider trading loophole big enough to drive a truck through, but that Wall Street is taking full advantage of it, establishing 'how-to' programs and even client service divisions to help well-heeled clients circumvent insider trading regulations.

Most of us think of insider trading as illegal. It allows those with inside knowledge to tilt the playing field, with the small investors invariably losing to the privileged few. Unfortunately for the small investor, the big boys get to play by different rules, and it has all been made legal, thanks to the SEC.

In 2000 the SEC promulgated Rule 10b5-1. The new Rule was designed to address the confusion caused by a series of court decisions that had left investors uncertain about what constitutes insider trading. Rule 10b5-1 was designed to "clarify" what constitutes illegal insider trading.

But top Wall Street houses were not to be deterred from advantaging their big clients at the expense of their small ones. Wall Street firms like JP Morgan found loopholes in Rule 10b5-1 that allowed them to continue trading on inside information "legally." Indeed, JP Morgan has gone so far as to set up an entire 'selling program' within its Securities division to help their clients profit from the loophole.

Documents obtained earlier this month by Wikileaks from JP Morgan Private Bank, which subtitles itself as "World class solutions for wealthy individuals and families", show the firm has a dedicated '10b5-1 Selling program,' along with a 'dedicated 10b5-1 team' to help its clients take advantage of the loophole.

Here's how it works:

1. An insider client transfers all or a portion of their company stock into a JP Morgan Securities Inc. brokerage account.

2. The insider then develops, in conjunction with the 10b5-1 team, a 'phased, pre-planned sales program to be executed at either market or
specified prices'.

3. Depending on the information available to the insider (but not the public), the insider can decide whether to execute the sale or not.

By gaming the system this way, JP Morgan teaches insiders how to use their knowledge to create a rigged market, one in which it is the "house" that always wins, and the small investor that always loses.

According to a statistical research paper published by Stanford's Graduate School of Business in September last year, executive 10b5-1 trades beat gains relative to non 10b5-1 executive trades by more than 500%.
One can only guess at how many insiders profited under JP Morgan's "insider trading program," leaving small investors holding the bag.

Wikileaks depends on the net to spread breaking stories. The mainstream media, always sleeping in bed with these gangsters, NEVER breaks these sorts of stories. They will break stories about prostitutes but the #1 prostitute, themselves, is never busted. Since all the big players pay the media to run huge ads which are undisguised bribes, this means the reporters never venture into dangerous territory. So nothing much gets reported. Indeed, Wikileaks is mostly made up of frustrated reporters who DO find the information and DO understand the bigger picture. And they can't get published so they dump the data with their wonderful analysis at Wikileaks! Thank you, dear, brave reporters! The ruling elites are out to nail all of you to the wall. They are furious you are now part of the news stream thanks to a bunch of tax cheating pirates getting an American judge to commit gross crimes against the Constitution!

And is that judge disbarred yet? HAHAHA. Arrest him for impersonating a judge. And I extend this to all judges who think they can destroy my Constitution. Especially the ones in Washington, D.C.

As usual, I love reading corporate crap. So we have it here: at the top of the page is the one where the Pyramid of Power on the Dollar gets to balance two things: legality and weasel ways. And guess what wins? The Weasels!

Only not the people who this is aimed at. The Bear Stearns weasels win. Sort of. Except if the market goes down. Then they lose. See? Geniuses at work! They get paid huge sums to figure things out. Being geniuses, they said, 'What goes up goes up!' And this only works in outer space. But not near Black Holes that are sucking in galaxies.

Here are some samples from this lovely brochure written by vinyl sidings sales men who got kicked upstairs:

OK: since when is any hedge 'guaranteed'? Anyone who promises to completely protect some investment is someone who is conning me. Cheats and rip off artists love to say, 'You WON'T lose!' But there is always risk. If risk is eliminated, the profits are missing since they represent risk. In the very beginning of banking, lending was given to merchants who might die while trying to move goods from Cathay through the Middle East to Venice. So, to make up for the risk of total failure, a percentage was tacked on and had to be paid for during the course of the business. When the merchant arrived with all his stuff and sold it, he would then have to share the profits with the bankers! If the death rate was 25%, the added-on risk costs reflected this harsh reality.

But today, we live in a fantasy world! We ignore reality. Which is why the damn banking system is COLLAPSING! Geeze? Who would have thought? Note that this CONFIDENTIAL scheme cooked up by the geniuses fresh out of business school allows people to use stock for BORROWING. This was so effing illegal just a few years ago! It was NOT allowed after the Great Crash and the Great Depression. This is because, if things go bad, the hedges trigger the sales of these stocks or someone has to do something to make a hedge work and this causes a chain reaction crash! So it was illegal. When it became legal, like cockroaches in a flithy kitchen, all these new schemes proliferated.

See? Hey, with this little game, you can use your stocks to purchase more stocks! And then park them in this place we created and then do it over and over again! Infinite money! So long as stocks go up, that is. And then the really cool promise that if stocks fall, no worries. No calls will be made. You can go down and down and down forever, too.

See how these pirates work? You give them all your stocks. They give you loans. Then you want the stocks back, they give them back but you take a haircut that can be very significant, if they go up. They take a haircut if the stocks drop.

ONLY THERE IS ONE BIG HITCH: If J.Pirate Morgan goes down the same tubes Bear Stearns is in, they give back NOTHING. And when do they go under? Well, if the stocks of all these tax evaders go down all at once and they all ask for their stocks back, J.Pirate Morgan's ship sinks! So they have a huge interest in keeping the stock market bubble blowing up bigger, not shrinking even slightly.

I recall when the big financial houses always were prepared for a down-market using ancient means set up post-1929 Great Crash. So they didn't make a lot of money. No big deal. They hunker down and return even stronger.

But now, the slightest downwinds and they all sink! The hedges are not hedges, they are tombstones.

And why is this document 'confidential' anyway? Is this scheme a hot little number all the other pirates would imitate if they discovered this trick? Did any government authorities peruse this brochure? I'm sure, lawyers for J.Pirate looked it over. This is legal, of course, this document isn't a crime. But it SHOULD be a crime. For it sets into motion, events and forces it cannot control when there is a down market. Many of the goofy schemes destroying our banking system were all set up after the many laws that hedged off such games, were repealed after years of bribing Congress and a Presidential coup.

Now onto the other big theft in the news: the J.Pirate Morgan attempt at stealing the shareholder's value in Bears Stearn:

Billionaire Lewis moves to block JP Morgan

British billionaire Joe Lewis is working to block JP Morgan Chase's $236m discounted takeover of Bear Stearns in order to negate the $1bn (£500m) loss he now faces.

Mr Lewis, whose Tavistock Group is Bear's second largest investor with a 9.4pc stake, is understood to be deeply unhappy with JP Morgan's $2-a-share offer.

The offer, values the stricken investment bank at 1/15th of its closing $30 share price on Friday evening, and at a fraction of Bear's 52-week high of $159.36 last spring. Mr Lewis, the East End-born currency trader with a fortune in excess of $5bn, is known to be actively involved in a number of alternative strategies, including talking to a number of potential rival bidders who might act as a white-knight on behalf of Bear's major shareholders.

Other options he is considering include voting against JP Morgan's offer at the scheduled shareholders' meeting, something that would only work if he were to garner the support of other investors.
*snip*
Separately, law firm Coughlin Stoia Geller Rudman & Robbins, acting for unspecified Bear shareholders, filed a class-action lawsuit against the bank and a number of its directors, citing violations of securities laws.

Of course, he is suing. And he should. The deal struck was striking in its criminality. Normally, businesses are not liquidated like this until their stocks fall to $2 a share. In this case, it was at $30 a share. No biggie. Maybe it would have fallen further on breaking news. But there was NO NEWS this last weekend. Banks can't go bankrupt on a weekend, anyway. Instead of letting the forces of nature go to work, they all jumped the gun. Not only did the pirates get the company, they got US government assurance that the US would hedge their bets! The deal Bernanke and Paulson made is very similar to the deals we see in this 'confidential' brochure!

So I am betting this very rich man with very powerful lawyers will give the clowns who tried to pull this heist, a run for all their money and then some.

Here is an old story I wrote last September when all this began to come crashing down. It was called, 'Bernanke's Teddy Bear Picnic':

Fed, Blamed for Asset-Price Inaction, Is Told `Tide Is Turning'

Sept. 4 (Bloomberg)

Federal Reserve officials, wrestling with a housing recession that jeopardizes U.S. growth, got an earful from critics at a weekend retreat arguing they should use regulation and interest rates to prevent asset-price bubbles.

Otmar Issing, former chief economist at the European Central Bank, and Stanley Fischer, head of the Bank of Israel, were among guests at the Fed's summer symposium in Jackson Hole, Wyoming, to challenge the hands-off approach. Fed Governor Frederic Mishkin reiterated his view in a paper at the conference: Officials should only respond to the effects of asset prices on the outlook for economic growth and inflation.

``The position that `this isn't an issue for central banks' has lost some support,'' Issing said in an interview at the gathering, which ran from Aug. 30 to Sept. 1. ``The tide is turning.''

And here is my comment on that news story last September:

Back to our Federal Reserve that has chosen to keep only $60 billion in reserve and of that, if they need any reserves, they print up a few extra trillion and peddle this to the three major trade surplus nations that used to buy these up without flinching only none of them are doing this anymore so we are in the middle of one honking, huge bank crisis. The solution so far is to run deeper into debt. So the Fed just keeps manufacturing money by waving its little wand with a pink ribbon bow tied on the shaft. Santa Claus likes this. We hope.

Indeed, this entire Labor-free Labor-day festival in Jackson Hole in the Pocket was all about persuading the Federal Reserve to play more funny money games, to hell with anyone trying to save money. The trick it to ignore savers for another 20 years and run up epic debts to our trade partners such as China, a communist nation that told me years ago, their grand scheme is for the US to run up huge debts with them so they could bankrupt us and take over the planet earth, BWAHAHA. Or wave that Little Red Book. 'A revolutionary swims in the sea of capitalist red ink,' Mao wrote or rather, this is how I edited his book for the Chinese. Alas.

Goldman, Morgan Stanley Use Fed's Wall Street Window

Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. said they've borrowed from a program created by the Federal Reserve to jumpstart lending amid concern that Wall Street faced a cash shortage.

Morgan Stanley Chief Financial Officer Colm Kelleher said in an interview today, referring to the Fed lending program. ``It's meant to be there for normal business. It's not meant to be there as a last-recourse thing.''

HAHAHA. They want to drive me mad or make me laugh to death! Every month, the Fed 'opens a new window' and then the pirates go there and 'test it' to see if they use it, they can 'remove the stigma'. What are they, nervous nuns with bleeding palms? HAHAHA. 'Oh, Sister of Mercy For Only The Rich, my palms bleed and I didn't drive any nails into them, either!' cries Sister Rip Off.

'And look! My head is bleeding and I didn't run into any doors, either! It is a MIRACLE!' cries Sister of MFOTR. Yes, by the way, the other sisters do notice the initials are very close to a very dirty word if one is talking about a Sister who is a Bride of the God of Wealth.

Of course, these virgins have NO INTERCOURSE when they go to the WINDOW and poke their arms through it to get billions in goodies at a super-low interest rate set just for them! Indeed, the guy on the other side of the window, the Federal Reserve Santas, shove tons of money into the waiting arms of these trembling virgin financiers who then fly off in their private jets to their private yachts to sail to their private pirate coves and then park it there. Aren't we happy, this doesn't rebound on them in any negative fashion?

As for these windows that open and close only for the Virgin Sisters of No Mercy To Anyone Else But Themselves, they need to convince us that nothing is wrong with their virginity. So what, if they had sex in the gutter with everyone and anyone, so what, if they are whores? They even slept with Spitzer. Bwahaha.

No, they are pure in heart. Gold hearted strumpets, all. And this mysterious window that opens and closes and that has 'stigma' is NOT stigmatic. It is pneumatic! Automatic! It isn't evil, it is good! Indeed, only healthy virgin bankers go to this window, not disease-raddled old whores bleeding from every pore.

Fresh off better-than-expected earnings reports Tuesday, Lehman BrothersLEH borrowed a small amount from the Federal Reserve's discount window and Goldman SachsGS is soon expected to do the same, The Wall Street Journal reported.
*snip*
Opening the discount window to primary dealers like Lehman and Goldman are part of several extraordinary moves the Fed has taken in the intensifying credit crisis to provide liquidity to choked markets. While there has been a stigma attached to borrowing at the window in the past -- the window was viewed as a lender of last resort, thus marking borrowers with a sense of desperation -- investment banks have expressed enthusiasm for the idea.

Goldman CFO David Viniar, in a conference call Tuesday discussing the firm's first quarter results, called the move "a very good thing" that "will help our liquidity as well as the liquidity in the market."

These old Ladies of the Night need liquid. So the Fed passed them a barrel of whiskey and they will now go back into the streets and peddle this booze to investors. And they are so happy. Who said there is no Santa Claus? Who said, there is no free lunch? And who said, 'Let them eat cake'? Enough with these brats and brigands. On to more news:

Fremont General's counterparty rating cut to 'D' on interest payment delay - S&P

-- Standard & Poor's (NYSE:MHP) Ratings Services has lowered Fremont General (NYSE:FMT PR) (NYSE:FMT) Corp's long-term counterparty credit rating and senior debt rating to 'D' from 'CC', after the financial services holding firm said it will delay its semi-annual 6.6 mln usd interest payment on 169 mln usd of Series B 7.875 pct senior notes due March 2009.

The ratings firm said the delayed payment will result in a default of all of the company's financial obligations given the amount of financial stress the company is experiencing.

Maybe the magic window will open for them! They can reach in and get 2.5% loans. Then they can re-lend it to us at 7% to 30%. Wow. Maybe I should open a bank. The Bank of the Sainted Whore of Babylon in Berlin, New York. I have no shores here so I can call it a mountain bank like Liechtenstein.

This is what a bank looks like when it is crashing. Note how the stocks are in the single digits. Bear Stearns was NOT anywhere near this point on Friday. That story grows fishier and fishier, doesn't it? Why isn't Bernanke and his buddies saving this bank? But then, note how the Bank of America got a sweetheart deal for Countrywide? That fell down the stairs but Bank of America didn't care. The US government and the Federal Reserve are hedging that little deal, too!

All aboard the Federal Reserve cash express

By David Litterick

Bernanke earnt the "Helicopter Ben" tag after a speech in 2002. Referring to comments by Milton Friedman, who had suggested the US could use a "helicopter drop of money" to avoid deflation, he argued: "The US government has a technology called a printing press that allows it to produce as many US dollars as it wishes at essentially no cost."

He was speaking figuratively, of course, in response to critics who suggested that at some point, the Fed would run out of bullets. The Fed will never run out of tools, he suggested, so long as it effectively controlled - through the US Treasury - the amount of money in the system.

Yet that is already soaring. According to Capital Economics, M3 - the broadest measure of the money supply - grew at an annual rate of 15.3pc in February, almost double the long term average and the highest rate of growth in 37 years.

Economists debate the relative wisdom of such a move. Many are concerned that such rapid growth will lead to rampant inflation. [Elaine: I made a chart illustrating all this:]

However Paul Ashworth, senior US economist at Capital Economics, said: "This is not necessarily inflationary. The increase has to be measured against the rising precautionary demand for relatively liquid balances in the current period of financial market distress. Indeed, there is a risk that even after the latest acceleration, the supply of money is still not increasing quickly enough. [Elaine: a second chart clearly showing that we are seeing inflation even as money vanishes]

The failure of central banks to pump enough liquidity into the banking system was one of the principle causes of the debt/deflation spirals that hit the US in 1873 and 1929 and Japan in the 1990s."

OK: 1873: I wrote about that extensively in the past. That was the beginning of the Long Depression. Fixing this with 'more money' would only have turned that into the Short Hyper-inflation. The battle over how to 'inflate' the currency raged for 20 years. This was the gold versus silver debate in the US which ended when we had the Alaskan Gold Rush which flooded the gold markets and thus, caused inflation which led to the 1907 crash. For South Africa found gold, too, at the same time. Only when there is a depression, do people go on gold hunts. This is why the California Gold Rush coincided with a global depression, too.

The price of gold is dropping right now even as the dollar drops and inflation continues. A lot of people who were holding gold are rushing out to get cheap US loans. We just started the Japanese carry trade...HERE. So now, the money is at that mysterious window that opens and closes that has gotten its stigma removed by having a bunch of rip-off old whores and pirates stick their grubby hands in it. See? And who holds a lot of gold?

Take a wild guess. They can now translate it into lending which will multiply it by 10X over or 95X over or to infinity. NOTHING rises faster than the return on infinite loans at 0% being relent at 30% via Visa credit cards. Note that Visa suddenly got billions of dollars today when they opened business right at the same time this new carry trade window opened! HAHAHA. And I knew this would happen.

FSA to launch probe as rumours hit UK banks

Britain's financial watchdog has launched an investigation into false rumours sweeping the market that a British lender is in crisis. The Financial Services Authority's intervention followed a vehement denial by the Bank of England that it has been called into emergency meetings with a struggling bank.

The Bank and the FSA are believed to be livid with what they see as short sellers trying to profit by spreading inaccurate stories. They fear the irresponsible action could undermine the stability of Britain's financial system in these fragile markets.

The FSA confirmed that "it is investigation trading in UK financial shares in recent days." Sally Dewar, wholesale and institutional markets managing director, said: "There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling.

"We will not tolerate market participants taking advantage of the current market conditions to commit abuse by spreading false rumours and dealing on the back of them."

I didn't do it! I swear on the Queen's crown, I didn't pass any rumors along. On the other hand, even bizarre stories seem to come true, lately. And the Crown doesn't like people poking around in the affairs of the offshore pirates using London as their clearing house.

While researching this story, I came across, via Google, a letter I wrote many years ago, back when the New York Times published me regularly:

Published: December 16, 1994
To the Editor:

Governor-elect George E. Pataki proposes a 25 percent tax cut for New Yorkers. If the Republicans believe that we can afford this, why not give the entire tax cut to the working poor -- those who earn less than $30,000 a year?

I see plenty of people who live in two homes, have $50,000 cars, vacation at expensive places, eat at expensive restaurants and buy $500 dresses. They don't need a tax cut.

The working poor worry about heating their trailers. We hope to have enough to buy a pair of sneakers for our children's growing feet. We worry about the bills. Increase the spending power of this class of hard-working Americans. This state is rich enough to remove onerous taxes on the poor. ELAINE SUPKIS Petersburg, N.Y., Dec. 9, 1994

Ah, those were the days! When I lived in a tent and my son's feet were growing an inch a month!

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Comments

[mad mike]

i agree with you 100%. but it aint just control of the money supply.
by causing inflation in goods and deflation in wages and savings folks who are unrich, that is poor, will not consume anymore.
then those goods, such as oil and food, can be sold to other nations. i'll pull a name out of the hat, china. because they have a trillion dollars in forex reserves.
i predict that the (un)intended consequences of this is a famine. even here in the usa.
expect civil unrest and food riots.
expect massive arrests and martial law.
expect suffering on an untold scale.
expect rationing and black markets.
now folks are starving and being tortured everyday. uh-merikans chose to ignore this.
because times is good, for now. this will all change real soon. it will all become a matter of daily life. before 2012.
and all those gold man sackers and other pirates and hell hounds will make tons of money and tell the starving, freezing or
baking masses that it is good and desirable.
and dumb ass citizens will say, "what can you do?".

[CK]

One of the goodthings© that will come from this farago of idiocy is the return of the Rubenesque female. Someone who can stand the 7 lean years. Jackie Gleason and Kate Smith will be the models for future perfection.

[Elaine Supkis]

Enforced diets.

[Chris]

In effect the Fed is leveraging the US itself without any fundamentals to do so.

It is a Pyramid scheme: "A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered."

Up until now the product has been the dollar itself. But as the fiat dollar dies the 'service' is now a gun pointing to the head. Ask Iraq and Iran. Or the UAE. One day soon it will be the US citizens themselves.

[Chris]

... looking down the barrel of that gun.

[Pat O'Meara]

J,P, gets Bear for $2 on shares trading at $30. This was facilated by Chopper as the Fed took Bears toxic waste. This is beyond belief. The shareholder's of Bear should sue the Fed and their individual board members personally. Hopeflly Joe Lewis can lead this successfully.
This looks a lot more like the old Soviet way of doing business than capitalism. Where the hell is the mainstream media?

[Elaine Meinel Supkis]

Not only lawsuits but other investigations. I want to know the truth and what went on in those weekend meetings. There is more to come, by the way, a lot more.

[Chris]

The MSM are laughing with Bush at luncheons...

I am beginning to think they are just milking the dollar for all it's worth now before they declare bankruptcy and switch to the amero. There is no way to introduce the amero without a resounding crash anyway so why not engineer and profit on the crash while you are at it. The Gulf nations are planning to introduce their own common currency by 2010. At the latest then the dollar is done as a world reserve currency as it loses it's 'petro' status.

Look at the deal Iraq made with Big Oil -Shell, BP, Exxon-Mobile, Chevron et al. Looks like they are going to let them develop fields for crude straight up as payment. That is simply barter, they don't even bother with dollars anymore.

[Elaine Meinel Supkis]

Forbes magazine contacted me. They want to do a deal with my blog. Yikes! Will I be mainstreamed?

[John]

Good for Forbes! You should be mainstreamed ..your blog makes a lot better reading than anything in the NYT's thats for sure!

[Chris]

Good luck!

Will you get invited to presidential luncheons now?

[PW]

Damn... Forbes already hooked my second favorite blogger. Now you? I say go for it.

[OC]

Elaine,

Take the offer whilst it last: Get as many folks as possible to be aware of what's happening before it's too late!!

All the news on the net indicate window of opportunity to do so is closing fast!!

Once USD is toast as reserve dollar status, many will be cut off from the net due to financial circumstances!!

[CK]

Read the fine print, someone at Forbes will be your editor, someone who has a vested interest in not having any serious boat rocking. Forbes believes in a different system of magic than you believe in, and a different set of older gods.

[Elaine Meinel Supkis]

Correct. Thus, the negotiations. I am a tough nut to crack.

[JSmith]

"the J.Pirate Morgan attempt at stealing the shareholder's value in Bears Stearn"

Amusing as usual, Elaine! WHAT shareholder value?

"Of course, he is suing. And he should."

It's the American Way! (Even if you're a Brit.) Didn't get what you want? Sue someone! You have a RIGHT to get what you want! It says so right there in the Constitution or the DofI or something!

"So I am betting this very rich man with very powerful lawyers will give the clowns who tried to pull this heist, a run for all their money and then some."

Could be. But the people at Morgan can negotiate also. I'd like to see what happens if they rescind the offer and let the market do what it wants with Bear Stearns. If it truly tanks, then the books get opened in the bankruptcy proceedings and we find out where the toxic waste is buried.

Which would be better for the market overall, even if poor Mr. Lewis winds up with -0-, instead of $2/share.

"This is what a bank looks like when it is crashing. Note how the stocks are in the single digits. Bear Stearns was NOT anywhere near this point on Friday."

But where would it be 15 minutes after the markets opened on Monday? Thanks to The Wonder of The Net, banks and companies can indeed tank over a weekend.