JP Morgan’s Corporate Jets

JNS-I not sure how many more shiny objects this country can follow until that’s all its doing. Focusing on symptoms and not the cure. Mean while the real issues concerning the lack of regulations, enforcement, out right fraud, incompetence are not brought to light or investigated.

Reports like these are probably not helping….
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But they’re so much easier to report than getting into the meat of the toxic assets and explaining to the public where the real problems lie.
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Buying corporate jets is a lousy PR move. Breathless reporting on it is almost as unhelpful.

Chase also said: “A spokesperson for JPMorgan Chase emphasized that no TARP money will be spent on the project and that it will repay its taxpayer money before proceeding with the plans.”

If they actually repay the TARP money first, why should this be an issue with anybody, but the stockholders. People get put to work building the new hanger and the jets.

Furthermore, I hereby claim authorship rights and demand royalties for Nell Minnow’s response!

http://swampland.blogs.time.com/2008/12/18/the-rick-warren-choice-offensive-foolish-or-just-uninspired/#comment-28721

“It’s a remarkably boneheaded decision,” said corporate watchdog Nell Minnow, the editor and founder of The Corporate Library, a group that provides independent corporate governance research and analysis. “It’s completely tone deaf.”
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As the link clearly shows, my use of boneheaded and tone-deaf in the same sentence predates his by over three months!

JNS — even half way decent reporting would have included for instance that JP Morgan never needed a bailout. One of the main reasons that Dimon has been so reluctant to fall in line is because Paulson strong-armed him to take the TARP funds in order to try to disguise the fact that Citibank was insolvent.
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Frankly, at this point the media is doing more harm than good trying to gin up populist rage. My God how self serving is it to bring attention to every little shiny object you can find so you can bring attention to your stories that count the number of pitch forks.
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You are just as much a part of corporate America as Dimon. And while you act as if you are on the side of America railing against the luxury perks, I remember the story about the media bitchin and moaning because the Obama plane wasn’t nice enough — give me a break.

“Buying corporate jets is a lousy PR move.”
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Can we at least assume that JP spent real money to buy real objects which then became real assets. The real assets were made by real people with real jobs who in turn spent their real pay checks some where in the real world’s economy. In other words these jets actually exist.
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Now if it comes to light that JP allowed a small division in their company to create these jets out of thin air. They don’t really exist. But they bundled them up with one real jet that does exist, bought insurance on them as if they all were real, then sold the entire bundle to other banks and kept it up by simply rinsing and repeating then maybe we would have a story.

Shouting “Fire!” in a crowded theater sure is fun, ain’t it, Jay!
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I call journalistic malpractice on this post.

Nothing contributes less to thoughtful discussion than a Brian Ross hit-and-run. Except maybe Eric Cantor.

Where are the articles challenging the people who are inserting themselves into the national news cycle? When is the Connecticut Attorney General up for reelection? Is the CT attorney General going to challenge Chris Dodd? Do these events make it more likely that Cuomo will challenge Paterson in the gubernatorial race?
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The bottom line is if you insist on shoving these shiny objects into our line of sight, then the very least you can do is to also tell us who stands to benefit if we fall for the bait.

When J.P. Morgan personally took responsibility for stanching the panic of 1907, his bank lost millions of dollars for the year. He considered it preferable to the consequences of a world-wide financial disaster, which would probably have destroyed his bank along with most of the financial sector. Today those who run the descendant of his original company can’t even forgo the purchase of a couple of jet planes. It was as much Morgan’s gesture as the substance of his deeds that eased the panic a century ago. And it’s the gestures as much as the substance of today’s financial companies’ deeds that are going to aggravate today’s panic. That’s not what we need.

I’m available to run any of the bailed-out banks for my present salary as a federal civil servant — no bonuses. I know beans about financing, but I couldn’t do worse than the current clowns, who can’t even get the PR right.

Jay Newton-Small:
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No, the rage has not settled.
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The rage isn’t only over what financiers are doing, however.
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Lots of people are angry about Treasury’s plan to stage a production of “Oklahoma!”
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Lots of other people are upset at the political press corp who, on the one hand wave shiny objects like “Corporate jets!” and “Bonuses we knew about last year!” in front of our faces, and on the other somberly tut-tut “Can we all just calm down a little?” and “Could we put down the pitchforks for just a moment and have a reasonable discussion…? Once the pitchforks are out, it’s awfully hard to convince the mob to put them down.”.
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Still others are quite unhappy about the apparent state of ignorance and confusion the people tasked with explaining what’s going on to the public have about even the most basic realities of the bank bailout plan.
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And finally, most people are really terribly concerned about what’s happening to the country, and are being somewhat tormented by stories of profiteering at their hardship.
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We need help, Jay Newton-Small. Something terrible is going on in our country. We need to understand what it is, so we can stop it from going forward.
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Please help us.

SZ-this is directed to all, as well as you in particular, because from your last comment it appears that you understand that it’s our inability to understand what’s going on that is fueling the public outrage.
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So I ask, as a first step, that everyone who has an idea of what will work or not work for that matter, include a statement of priorities. For example, if the Geithner plan wont work is it because the banks benefit too much or is it because following this plan will make the financial system fail?
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Let’s at least separate ideology from the policy because I’m having trouble understanding the criticisms because they lack transparency about the winners and losers as well as what are the criteria for determining the winners and losers. Tell me what is your priority for the plan. Should the goal be to fix the old system or create a new financial system? And if the choice is a new system then what are the goals for the new system, is it reducing the income gap or preventing future meltdowns?
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How do you judge success?

Gysgt213 hits on a big impact point with the jobs situation in the corporate jet market. You want a place that’s being majorly impacted? Go to Wichita, KS – one airport has manufacturing for Cessna, Bombardier and Hawker. Layoffs are heavy, orders are down, etc. Even if economy at large starts recovering this summer, the time it takes to spin up production will mean that Wichita will be in dire straits for a while. Bizjets are both a luxury for some, and an essential business tool for others. Sure it can be abused and that needs to be watched for. But Buffet, Warren didn’t buy NetJets for the hell of it – he views private travel as a highly useful tool, and of course a profit line.

Dee:
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Let me first start with this:
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Jay Newton-Small wrote:
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There’s something about this [AIG bonus] scandal that feels spun.
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But why all the furious spinning? Because, I’m told, very soon the Administration is going to have to come back to Congress hat in hand and ask for upwards of another $750 billion in bank bailout money.

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If Geithner’s plan works, why would they need $750 billion more?
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Either Jay Newton-Small is being lied to about another round of three-quarters of a TRILLION dollars in NEW bailout money, or we’re being lied to about the necessity of this plan to get banks to lend money again.
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Which is it?
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Jay Newton-Small:
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Were you lied to? How is it possible that Treasury would need to come back to Congress for that kind of money, when they’ve just assured the country that they’re on the right track to getting banks lending at a normal clip?
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What would Geithner need all of that money for?
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Do you think now that your sources were wrong, Jay Newton-Small?

just a reminder that before Jay Newton Small wrote about the spin she seemed to be buying into it:
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“Meanwhile, Rep. Connie Mack, a Florida Republican, today became the first member of Congress to call for Geithner’s ouster. And Grassley today also asked the Treasury Inspector General to investigate Geithner’s handling of AIG bonus-gate. Some of those unique qualifications might come in handy now.”

I cannot wait until we turn our attention to Health Care. Just think of all those doctors who receive medicare/medicaid payments who have the gall to spend that money on houses and cars and country club memberships. I can see Obama and the media now whipping the masses into a frenzy so they march on hospitals and doctor’s homes. Obama will try to cap their incomes, retroactively of course. Ah, what great theater awaits us this year. Too bad it will not solve anything.

Or people could get worked up about this:

http://www.redstate.com/moe_lane/2009/03/23/paterson-aig-contribution-not-related-to-aig-rescue/

Stuartzechman:
Geithner’s budget place holder request for $750 billion has been WIDELY reported. Google “Geithner $750 billion budget” and there are 18,800 results including:
http://www.usatoday.com/money/economy/2009-03-22-recovery-plan-one-trillion_N.htm
http://www.bloggingstocks.com/2009/02/26/budget-750-billion-more-for-bank-bailout-higher-hedge-fund-ta/
http://wcbstv.com/national/obama.2010.budget.2.949012.html
http://www.reuters.com/article/politicsNews/idUKTRE5234VS20090304
http://abcnews.go.com/Politics/wireStory?id=6997821
http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20090303&id=9662099
http://www.boston.com/business/articles/2009/03/03/obama_to_work_with_congress_on_rescue_geithner/
It’s in the president’s FY2010 budget outline. No one is lying to me and my sources weren’t “wrong.”
JNS

Jay Newton-Small:
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I’m very, very appreciative of the support you’ve given to your reporting. Thank you so very much for backing up the claims of your sources. No, they were indeed not lying to you. This is very, very good to know.
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Let me say that a bit more clearly:
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Jay Newton-Small accurately reported on the likelihood of the Treasury’s future request for $750 billion in additional funds.
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Here is a description of the additional money:
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In testimony before the U.S. House of Representatives Ways and Means Committee, Geithner said a $250 billion “placeholder” provision in Obama’s budget plan for additional financial stability costs did not represent a specific request.
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The fiscal 2010 budget “acknowledges that, as expensive as it already has been, our effort to stabilize the financial system might cost more,” Geithner said in prepared remarks..
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The placeholder, which would allow the Treasury to purchase $750 billion in financial sector assets, will “help ensure we can cover any additional financial stability costs.”
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This amount would be in addition to the $700 billion that the U.S. Treasury is spending through a financial rescue fund approved by Congress in October. That fund is more than half spent or committed.

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This comes back to my original question: What is that money for?
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If Geithner’s plan is to use the rest of the original TARP plus between 500 billion and a trillion dollars in Federal Reserve loans, then what is the extra $750 billion for?
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Thanks again for proving to everyone I was thoroughly wrong about sources misleading you, and that you were absolutely correct in your reporting, Jay Newton-Small –sincerely.

@bobell: JPMC slashed its dividend payments to be able to pay back the TARP funds asap. No TARP money is going to this. It’s a legitimate expense for a global financial institution. This plan creates jobs, puts money into the local economy and abroad when they order materials, and in general shows that this institution is trying to get back to business as usual – which is what has to happen if we want to get out of this recession. People and corporations have to be willing to spend money. JPMC is doing just that.
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The villagers with their torches and pitchforks won’t like it. Those who are rousing the rabble love it. It stokes that low-brow outrage just fine, because the people who are really that angry have no clue about any of the points I made above. And, really, if they did, they wouldn’t care. All of these caricatures of outrage kind of remind me of the immigration episode of South Park where increasingly inarticulate yokels keep screaming, “They’re takin’ our jobs!” Eventually, the slogan became a strangled screech of unintelligible noise. I think that’s where we’re at right now.

[...] don’t really distinguish between AIG executives giving themselves bonuses funded by taxpayers and J.P. Morgan spending TARP money on luxury jets and John Thain building himself a fancy schmancy bathroom. They’re mad at the whole out-of-control [...]