This is a massive story that deserves headline coverage. Reporter Joe Nocera dialled in to a JPMorgan internal conference call. Subject: how will the bank use the free $25bn handout they’ve received from Treasury Secretary Henry M. Paulson for “recapitalization”.
Maybe to ease the credit crunch and start the lending cycle again? That was, after all, the stated purpose.
No chance. As most of us knew from the outset, it was always going to be used for corporate welfare, state socialism at its most extreme.
This is what Nocera heard:
“What we do think it [i.e. the $25bn] 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.”
This is incendiary stuff - read the full article here.
