JP Morgan Gets a Record Fine

The serial financial offender JP Morgan is still trying to negotiate its way out of criminal liability for its misdeeds over the last decade, but finally the DOJ is through playing nice with criminals and while proposing a US record fine of $13 Billion, they refused to allow JP Morgan to do the standard "Admit No Guilt" settlement, and the DOJ may charge some of the big fish in the firm with crimes.

WASHINGTON, Oct 19 (Reuters) - JPMorgan Chase & Co has reached a tentative $13 billion agreement with the U.S. Justice Department to settle a range of mortgage issues, a source familiar with the talks said on Saturday.
The tentative deal does not release the bank from criminal liability, a factor that had been a major sticking point in the discussions, the source said.
As part of the deal, the bank will continue to cooperate in criminal inquiries into certain individuals involved in the conduct at issue, the source, who declined to be identified.

JPMorgan is seeking a single settlement to resolve all claims from federal and state agencies over its mortgage-related liabilities stemming from the bust in house prices.

Oregon Tea Party Leader Talks Big, Doesn't Pay Mortgage

Consider this statement to KATU last week by John Kuzmanich, the chairman and founder of the Oregon Tea Party.

"We're just good and decent, principled Americans that believe in the Constitution, a fiscally responsible government, individual and economic liberty and want to be free and left alone," he told KATU's Steve Dunn.

But Kuzmanich's mortgage company, Fannie Mae, has filed court papers showing Kuzmanich hasn't paid his mortgage on his duplex in three years.

Fannie Mae also hasn't been able to find Kuzmanich to serve him with legal papers.

His BMW was outside the duplex Thursday night. There was a light on inside and a dog barking, but no one answered the door when a reporter knocked on it.

Fannie Mae has also tried to find Kuzmanich at a property in Cannon Beach and in Portland but with no luck.
 

 Willamette Week also reported.

“In late 2009,” according to a Kuzmanich bio on the University of Iowa website, “John made the decision to run for United States Congress in Oregon’s 1st Congressional District, his home, and following in the political tradition of Senator Mark Hatfield, a member of his family, he decided to put all his relevant experience to work to serve and represent his principles, his family, his community and country.”

He added this in his 2010 Voters’ Pamphlet statement: “We need to decrease the size of government and make it live within its means just like we do.”

Medical Industrial Complex Tramples US

I continually run across stories on health care costs in the US that make me gasp in disbelief at how we are being legally robbed (sometimes robbed to death) by the Medical Industrial Complex and their partners in crime, the FDA.  The latest is an article published in the NY Times about Asthma treatments.  It includes many of the infuriating facts driving drug costs in the US.

Pulmicort, a steroid inhaler, generally retails for over $175 in the United States, while pharmacists in Britain buy the identical product for about $20 and dispense it free of charge to asthma patients. Albuterol, one of the oldest asthma medicines, typically costs $50 to $100 per inhaler in the United States, but it was less than $15 a decade ago, before it was repatented. 

Rhinocort Aqua, a prescription drug that was selling for more than $250 a month in Oakland pharmacies last year but costs under $7 in Europe, where it is available over the counter.

Unlike other countries, where the government directly or indirectly sets an allowed national wholesale price for each drug, the United States leaves prices to market competition among pharmaceutical companies, including generic drug makers. But competition is often a mirage in today’s health care arena — a surprising number of lifesaving drugs are made by only one manufacturer — and businesses often successfully blunt market forces. 

Thanks in part to the $250 million last year spent on lobbying for pharmaceutical and health products — more than even the defense industry — the government allows such practices. Lawmakers in Washington have forbidden Medicare, the largest government purchaser of health care, to negotiate drug prices. Unlike its counterparts in other countries, the United States Patient-Centered Outcomes Research Institute, which evaluates treatments for coverage by federal programs, is not allowed to consider cost comparisons or cost-effectiveness in its recommendations. And importation of prescription medicines from abroad is illegal, even personal purchases from mail-order pharmacies.

“Our regulatory and approval system seems constructed to achieve high-priced outcomes,” said Dr. Peter Bach, the director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center. “We don’t give any reason for drug makers to charge less.”

And taxpayers and patients bear the consequences.

See also this story on the FDA,  this story on high health care costs, and this story on Novartis in particular, as well as this one.

US Shutdown the $24 Billion Mistake

The great polarization racked our political system for 16 days in October 2013 and while it was a win for President Obama and Democrats, everybody shed some political blood, and S&P estimated the direct economic loss to the US was $24 Billion.

The GOP was unified by fear of the wrath of the extremist conservative Tea Party apparatus, mostly directed by the Heritage Action Fund, FreedomWorks and the Club for Growth organizations.  The organizations promised to oppose any Republican straying from the fold in the 2014 primaries.  87 Republicans felt safe enough in their districts to vote Yea on the final bill extending US funding through 2013 and into January 2014.  Oregon Rep Greg Walden is evidently feeling insecure, he voted Nay.

The influence of the extreme Right-Wing groups is based mostly on big money, Koch and other Right Wing supporters - the number of Republicans who say they are favorable to the Tea Party was once at 46%, but have fallen to 27% of Moderate Republicans and Independents according to CNN.

"The Tea Party’s favorability rating has fallen across most groups since June, but the decline has been particularly dramatic among moderate and liberal Republicans. In the current survey, just 27% of moderate and liberal Republicans have a favorable impression of the Tea Party, down from 46% in June," a release from the Pew Research Center said.
Cruz has become much more visible during the shutdown and the showdown leading up the shutdown. And the poll indicates Cruz's popularity among tea party Republicans has soared, from 47% in July to 74% now. But among those who say they are non-tea party Republicans, the freshman senator from Texas and possible 2016 GOP White House contender's unfavorable rating jumped from 16% to 31%.
The Pew Research Center poll was conducted October 9 to 13, with 1,504 adults nationwide - including 655 Republicans and independents who lean toward the GOP - questioned by telephone. The survey's overall sampling error is plus or minus 2.9 percentage points.

 We  seem assured that this battle will rage again in early January 2014, who knows if we'll get another attempt to hold the debt limit and force a default?  The extremists seem willing to have another go at it.

US Meltdown Day -1, Time to Do or Die

Now that things have dragged on to the final few hours, it looks like a bill that can pass both houses will proceed through the House and Senate, and kick the can down the road for less than 6 months. The US rating agency Fitch was about to downgrade US Treasury debt, probably causing another spike in rates.

The news came as the Treasury Department said it had only about $35 billion in cash on hand. It expects to run out of “extraordinary measures” to keep on paying all of the government’s bills on Thursday, at which point outgoing payments might exceed that cash, plus any revenue, on any day going forward.

As the United States nears default, investors have demanded more compensation for lending to the government, with yields on short-term debt spiking to their highest levels in years.

Fitch warned that Congress has not “raised the federal debt ceiling in a timely manner.” It said that it “continues to believe that the debt ceiling will be raised soon,” but that “political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default.”

US Shutdown Day 16, It Ain't Over Till It's Over

"Very Close to a Deal" has become the most over-used phrase in the headlines, and so far it has just been wishful thinking, but it looks like the House and Senate will actually pass legislation today to fund the government and raise the debt limit, but we will likely be going through the same song and dance in January, 2014.

We will soon see if Ted Cruz and the Tea Party will try to delay the bill even though they have no hope of stopping it, but they could still make the default happen if several things went wrong at once.

US Meltdown Day -2, Deal, Maybe

The stock markets seem almost euphoric, which may make for a brutal awakening if this nail biter doesn't go down perfectly.  The "close to a deal" phrase has been overused since late last week, before the House deal unraveled.  Whatever deal evolves still has to pass both House and Senate, seems like a lot of ifs driving the optimism.  The US may not default on Treasury Bonds, but it would have to default on something, like payments to government contractors, Social Security payments and who knows what else.

I think the hardliners will not hesitate to force us into the abyss, and we'll see if it even gets a vote in the Senate by Thursday.  Any single senator could block a vote for several days, and I'll bet Cruz does it, so we will probably go past the Oct 17 deadline before any vote.   President Obama may have to use the 14th Amendment to stave off disaster.

I hope voters remember this in elections to come, the Tea-Party creating a crisis plan is irresponsible, and a danger to us all.