Jamie Dimon, CEO of JPMorgan Chase (JPM), and Emilio Botin, Chairman of Banco Santander (STD) of Madrid, exchanged emails on how best to collaborate in the event of forthcoming bank failures. But the key here is that the exchange happened in June of 2008.
Afterward, Dimon and Botin met to discuss bidding on failing U.S. banks. Keep in mind that this was before the financial crisis gathered steam in fall of 2009. And keep in mind that this was before the TARP monies were provided to the big banks. This was before the collapse of Lehman Brothers, Washington Mutual (which JPMorgan bought), Merrill Lynch, Bear Stearns and so on.
Clearly Dimon and Botin were planning long before the start of the collapse. They had a gentleman's understanding that Botin would not bid on banks that Dimon was bidding. Botin stated that his bank did not have the resources to bid against JPMorgan.
The key question is: Were such moves acts of collusion by the two men or just exploratory conversations. It's rather weird that they were plotting the take over of weaker banks long before the collapse started.
In the back of your mind you might be asking: Why did JPMorgan even need TARP money if it already was in position to take over failing banks?
Should the U.S. Justice Department pursue this matter?
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Reader Comments (Page 1 of 1)
2-07-2010 @ 4:05PM
Raymond R. Murray said...
Looks like the crooked bankers knew the situation the banks were in and perpetuated this in order to profit from same. Justice Dept is too political and is in bed with the banksters and would be very reluctant to mess with the banksters unless political pressure is applied to the Justice
Dept, which might occure because of the revealing of this collusion.
2-07-2010 @ 5:12PM
gmc said...
1. Bear Stearns collapsed and was sold in March 2008, before those june mails
2. The financial crisis gained momentum in Fall 2008, not 2009, which was quite pleasant in comparison (for the financial markets)
3. Ever since BNP Paribas froze 2 funds in mid 2007, it was quite clear that there were inevitable bumps in the road ahead for several financial institutions which were heavily exposed to mortgages. So in June 2008 (pre-Lehman) the big banks were expecting a minor crisis during which they could buy some of the weaker competitors - they didn't expect to be hit that hard themselves.
2-07-2010 @ 6:16PM
Patrick Ziegler said...
Foreclosures in California were up 57% in January 2008. It barely made the news. Two years later, Sarah Palin talks to 600 nuts and it's headline news across the globe.
What do these two things have in common? They show how little news is covered by modern day journalists.
Did these two men know our world was about to change forever? Most likely. Did the media report this story...sure, but did they do a good job? Hardly.
Investors have to learn how to get past the fake news put out by Fox News and many other news sources as they push for higher ratings and leave real news on the cutting room floor.
The real news story of early 2008 was the massive foreclosures that hit three states...yet, very few Americans were aware. Did these two bankers make that happen? Hardly! They simply took advantage of it.
This news story about two bankers will be buried just like the story about foreclosures in early 2008. There are more pressing issues to talk about...like the tea party nuts.
2-08-2010 @ 2:28AM
jamesparker.cdz said...
Hi
Great information in this post and this was before the TARP monies were provided to the big banks.
2-08-2010 @ 2:44AM
Emanuel Levy said...
Yes indeed the U.S. Justice Department pursue this matter. Also why why Washington Mutual shut down just days before the TARP program launched? The FDIC and OTS knew that TARP was coming and had no reason to sell a still solvent bank for less than the deposits were worth.
2-10-2010 @ 1:49PM
Whit Kuhn said...
JPM didn't want the Tarp monies they were told by the government that they had to take it!!!
4-07-2010 @ 4:19AM
globaleworld said...
this is a good post!
Also why why Washington Mutual shut down just days before the TARP program launched?