To settle a barrage of government legal actions over the last year, JPMorgan Chase has agreed to penalties that now total $20 billion, a sum that could cover the annual education budget of New York City or finance the Yankees’ payroll for 100 years. It is also a figure that most of the nation’s banks could not withstand if they had to pay it. But since the financial crisis, JPMorgan has become so large and profitable that it has been able to weather the government’s legal blitz, which has touched many parts of the bank’s sprawling operations. The latest hit to JPMorgan came on Tuesday, when federal prosecutors imposed a $1.7 billion penalty on the bank for failing to report Bernard L. Madoff’s suspicious activities to the authorities. Yet JPMorgan’s shares are up 28 percent over the last 12 months. Wall Street analysts estimate that it will earn as much as $23 billion in profit this year, more than any other lender. And JPMorgan’s investment bankers, who on average earned $217,000 in 2012, can look forward to another lush payday as bonus season approaches. “The fines have been manageable in the context of the bank’s earnings capacity,” Jason Goldberg, a bank analyst at Barclays, said. “It makes $25 billion in revenue per quarter and has record capital.” [Dealbook]
Paulson and Company has had a tough couplea months. The firm has been on the receiving end of a lot of shit, none of it really due but mostly thanks to a certain Frenchman and his blood-sucking overlords dragging the hedge fund’s name into the press and June didn’t go so amazingly as it relates to making money. But! There is some good news to report which that P&C’s assets under management only fell to to $30.9 billion, down from $33.1 billion, leaving investors with something to smile about. Read more »
Following his pit-stop for wings in Buffalo yesterday, Obama spoke at a campaign fundraiser at The St. Regis hotel, which you might’ve assumed would be attended by top Wall Street brass. Jamie, since they’re buds. Lloyd, because he has to. Vikram, because his plans always fall through. But you would’ve assumed wrong! The bank CEO’s decided they were all good and opted not to pay the $50,000 entrance fee to hear the prez talk about buzz-kill topics like “reform” and “responsibility” (he also said “there are a lot of good people who work in the financial industry who do things the right way,” so they missed out on that free ego boost). Read more »
Nobody really listened to him much though, probably because the subject lines of his emails to Bob Rubin and Co were fairly mundane (“THIS LOOKS REALLY FUCKING BAD, FELLAS”) and he forgot to mark them high alert. Just kidding, of course, that’s exactly what he did.