Whose bad news is Cyprus burying?

JPMorgan, SAC Capital, HSBC breathe a sigh of relief.

As CNBC's John Carney points out, it's a great time to bury bad news.  While everyone looks at Cyprus, JPMorgan Chase's story has been dropped by most publications - which is a good thing for them, as their panel hearing on Friday did not go well...

So here it is in brief, via extracts from the New York Times report, during which CEO Douglas Braunstein is berated "for nearly an hour":

For nearly an hour, the executive, Douglas L. Braunstein, was berated for playing down JPMorgan’s risky bets to investors and regulators on a conference call in April, just weeks before the bank disclosed the costly blowup.

“You give this very glowing call,” said Senator Carl Levin, Democrat of Michigan, “instead of telling them what you knew” — that the portfolio “had been losing money and violating risk limits.”

Mr. Braunstein defended his statements in the conference call, saying they were the most “accurate” depiction based on the information at the time.

“You thought that was a balanced presentation?” Mr. Levin asked incredulously, peering over his glasses.

..and during which Ina Drew, the former head of JPMorgan’s chief investment office (which was at the centre of the scandal), also comes under some aggressive over-the-glasses peering:

While Ms. Drew acknowledged that “things went terribly wrong,” she directed virtually all of the blame at lower-level traders in London and other subordinates. She returned to this defense throughout the hearing, deflecting culpability by faulting inaccurate information.

..eventually all this the blame-shifting starts prompting sarky comments from John McCain, the chief Republican on the panel:

“The traders seemed to have more responsibility and authority than the higher-up executives,” he said.

..and even Michael Cavanagh, co-head of the corporate and investment bank, which was more removed from the scandal, is questioned closely and sarcastically:

But Mr. Levin persisted, asking, “How do you possibly justify your process?” Was it a “coincidence,” he asked, that the models shifted just as losses on the trades were ballooning? At one point, he reminded Mr. Cavanagh that he was under oath.

The other pieces of submerged bad news are a money laundering fine for HSBC, and a record insider trading fine for SAC Capital - of $6000m, announced on Friday. This is huge (c.f. the second largest SEC insider trading sanction was $156 m, paid by Galleon Group founder Raj Rajaratnam back in May 2011).

"These settlements call for the imposition of historic penalties," SEC's George Canellos said during a press conference call on Friday.


London Whale submerged. Photograph: Getty Images
Show Hide image

No, David Cameron’s speech was not “left wing”

Come on, guys.

There is a strange journalistic phenomenon that occurs when a party leader makes a speech. It is a blend of groupthink, relief, utter certainty, and online backslapping. It happened particularly quickly after David Cameron’s speech to Tory party conference today. A few pundits decided that – because he mentioned, like, diversity and social mobility – this was a centre-left speech. A leftwing speech, even. Or at least a clear grab for the liberal centre ground. And so that’s what everyone now believes. The analysis is decided. The commentary is written. Thank God for that.

Really? It’s quite easy, even as one of those nasty, wicked Tories, to mention that you actually don’t much like racism, and point out that you’d quite like poor children to get jobs, without moving onto Labour's "territory". Which normal person is in favour of discriminating against someone on the basis of race, or blocking opportunity on the basis of class? Of course he’s against that. He’s a politician operating in a liberal democracy. And this isn’t Ukip conference.

Looking at the whole package, it was actually quite a rightwing speech. It was a paean to defence – championing drones, protecting Britain from the evils of the world, and getting all excited about “launching the biggest aircraft carriers in our history”.

It was a festival of flagwaving guff about the British “character”, a celebration of shoehorning our history chronologically onto the curriculum, looking towards a “Greater Britain”, asking for more “national pride”. There was even a Bake Off pun.

He also deployed the illiberal device of inculcating a divide-and-rule fear of the “shadow of extremism – hanging over every single one of us”, informing us that children in UK madrassas are having their “heads filled with poison and their hearts filled with hate”, and saying Britain shouldn’t be “overwhelmed” with refugees, before quickly changing the subject to ousting Assad. How unashamedly centrist, of you, Mr Prime Minister.

Benefit cuts and a reduction of tax credits will mean the Prime Minister’s enthusiasm for “equality of opportunity, as opposed to equality of outcome” will be just that – with the outcome pretty bleak for those who end up losing any opportunity that comes with state support. And his excitement about diversity in his cabinet rings a little hollow the day following a tubthumping anti-immigration speech from his Home Secretary.

If this year's Tory conference wins the party votes, it’ll be because of its conservative commitment – not lefty love bombing.

Anoosh Chakelian is deputy web editor at the New Statesman.