Continued from Page 1 – JP Morgan Chase, 25 Billion Bailout Recipient, to Spend 400 Million to Outsource Thousands of Jobs to India
Continued from BNN

Both Obama and Geither claim they were unaware of the bonuses until just last week, yet Rupert Cornwell of the U.K’s Independent noted that the bonuses were in the “works” for months and were well known to Washington:

“As commentators and administration critics alike point out, the existence of bonuses for workers in AIG’s financial products unit that brought the group to the bankruptcy, has been known about for months, well before the Obama administration came to office in January. Why then did it not take action to stop them before they were paid, as part of the most recent $30bn of government aid for AIG, unveiled a fortnight ago? “Where was the Secretary of the Treasury?”, Richard Shelby, the top Republican on the Senate Banking Committee, asked yesterday. “Why didn’t Treasury step in and let the American people know, just try to block it?”"

Jonathan Turley cited an article by the New York Times, published back in October, where an employee of JP Morgan inadvertently revealed his company’s plans for the 25 billion the government doled out, plans which included “acquisitions”:

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” he began. “What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop.”

What JP Morgan Chase did with part of the 25 billion was to acquire Washington Mutual, a deal which was brokered by government regulators.

“Washington Mutual’s long, drawn-out struggle to find a buyer came to an end late Thursday, Sept. 25, when it was announced that the nation’s largest savings and loan would be bought by an even larger rival, JPMorgan Chase (JPM). WaMu customers are not expected to see any disruption in service. The deal, brokered by federal regulators, resolves the largest bank failure in U.S. history. WaMu (WM) had $310 billion in assets.
–Business Week“

JP Morgan Chase also acquired Bear Stearns, in what the New York Times referred to as a “shocking deal”:

“In a shocking deal reached on Sunday to save Bear Stearns, JPMorgan Chase agreed to pay a mere $2 a share to buy all of Bear — less than one-tenth the firm’s market price on Friday.

As part of the watershed deal, JPMorgan and the Federal Reserve will guarantee the huge trading obligations of the troubled firm, which was driven to the brink of bankruptcy by what amounted to a run on the bank.”

According to Bob Evans of Information Week, the JP Morgan Chase deal with India stems from JP Morgan Chase’s acquisition of Bear Stearns and Washington Mutual, which JP Morgan Chase used government bailout funds to acquire:

“JP Morgan Chase is reportedly planning to increase its use of Indian outsourcers by 25% to handle the IT integration of Washington Mutual and Bear Stearns and other projects. The moves are expected to cut overall IT costs for JPMC even as it raises its volume of Indian outsourcing business to a reported $400 million.

JP Morgan will use Indian outsourcers to integrate IT systems from its recent Washington Mutual and Bear Stearns acquisitions, pushing its 2009 Indian outsourcing contracts to almost $400 million, according to a news report out of Bangalore.”

So while JP Morgan Chase came to Washington, hat in hand, and begged for a tax payer bailout, it’s been revealed that Chase chose to use the money to acquire Washington Mutual and Bear Stearns, then replace thousands of those workers with outsourced jobs in India. All on the tax payer dime.

Imagine the hypothetical if the heads of the Big Three auto makers, who were heaped with such scorn by members of Congress when they asked for a tax payer fund bailout, had performed such a feat? Imagine the outcry if Ford had received the funds, bought Chevy, then laid off the Chevy workers and outsourced their jobs to China?

Last, but not least, is the continuing “meme” being used by Washington and Federal Reserve Chief Bernanke, that the main reason tax payers have to continue to bailout such institutions such as AIG and JP Morgan Chase, is to ease the credit crunch and once again get “lending” back on its feet:

“Federal Reserve Chairman Ben Bernanke is asking that more taxpayer money be used in a new stimulus package designed to bolster stalled credit markets.

Bernanke made the announcement today stating that the credit crunch is hitting the economy much too hard and must be addressed. The second stimulus package would act to compliment the $700 billion bailout bill by putting Federal Reserve funds directly into the credit market.”

We heard the same meme on Monday when Obama announced the government was going to buy up 15 billion in securities in order to “ease a credit squeeze” to small businesses:

“The Obama administration said on Monday that it would try to ease a credit squeeze afflicting small businesses by buying up to $15 billion of securities that are linked to small-business loans.”
–New York Times

On February 10, Secretary of the Treasury Timothy Geithner “unveiled” the trillion dollar bailout plan. Geithner also addressed the loss of millions of jobs and an “urgency of government action” needed to “increase consumer lending”.

“Treasury Secretary Timothy Geithner said Tuesday the new administration will wage an aggressive battle against the worst financial crisis in seven decades through programs designed to increase consumer lending and remove toxic assets from banks’ balance sheets.”

“Right now critical parts of our financial system are damaged,” Geithner said. “Instead of catalyzing recovery, the financial system is working against recovery and that’s the dangerous dynamic we need to change.”

“Geithner said the loss of 3 million jobs last year, and another 600,000 just last month underscored the urgency for government action.

“It is essential for every American to understand that the battle for economic recovery must be fought on two fronts,” Geithner said in a speech in Treasury’s ornate Cash Room where he unveiled the administration’s new plan.”

Yet, in regards to the “battle for economic recovery”, it’s been the American tax payers who are not only paying for the “economic recovery” battle, but have also suffered the most causalities, in the form of lost jobs and the disappearance of their 401K’s, of which AIG manages thousands of 401k funds. AIG admitted on March 15 that it had paid out billions to overseas banks, billions which were the courtesy of the government in the form of a bailout:

“The largest recipient of these payouts was France’s Societe Generale, which received $4.1 billion, while Germany’s Deutsche Bank received $2.6 billion and Goldman Sachs took $2.5 billion. Merrill Lynch and Bank of America got, between them, $2 billion.

Over the same period, the insurer paid $43.7 billion to securities lending counterparties. Chief among these was U.K.-based Barclays which received $7 billion. Deutsche Bank got $6.4 billion, as did the combination of Bank of America and Merrill Lynch.”
–MarketWatch

The Obama administration continues to claim that the billions in bailouts are needed to ease “consumer lending” yet the evidence now coming to light paints a different picture, of acquiring other financial institutions, sending billions to banks overseas, and implementing plans to spend 400 million to lay off thousands of American workers and ship their jobs overseas.

Jonathan Turley noted back in October that Chase had no “intention” to use their bailout funds to “make new loans”:

“For those who opposed the massive bailout, a report in the New York Times may be little surprise. A reporter was able to get into a telephone conference call with JPMorgan Chase to hear executives discuss the $25 billion it received from Congress. Just four days after the bailout, JPMorgan Chase’s chief executive, Jamie Dimon held the conference call during which an executive admitted that Chase has no intention to use the money to make new loans but instead will use it to try to take over other companies.”

The Obama adminstration claims it had no prior knowledge of the AIG bonuses. So far, there’s been no “outrage” from the administration over the money paid by AIG to international banks or JP Morgan Chase’s plan to lay off thousands of Washington Mutual employees and ship their jobs to India.

By LBG

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Source – KDKA.com – New Bailout May Tip Scales At $1 Trillion
Image – Bailout Cartoon