Celebrated financial blogger Max Keiser is fond of saying that the nine scariest words in the English language are “I’m from JP Morgan, and I’m here to help you.” He’s probably right, but did you know they are the main partner bank for the UK Post Office? No, I didn’t either.
The reality is that JP Morgan (Europe) handles all the welfare payment transmissions for the Post Office. (They’re into this welfare shtick in a big way in the States as well). So JPM has all the details of how much money HMG pays out in welfare benefits, and all the people on the recipients’ database.
Hands up all those who think this is a good idea. All those with their hands up, read on.
Morgan the Pirate’s Chief Investment Office in London booked billions of dollars in losses earlier this year, after several gigantic trades went pear-shaped. In 2011, Bank of England officials raised concerns internally about the riskiness of some JPM practices, although Merv’s pervs didn’t formally alert other regulators. (Nothing new there then). In 2010, the BoE’s finest also became nervous about J.P. Morgan’s domination of residential mortgage-backed securities in the City.
Only last week, the respected financial site Seeking Alpha suggested that ‘the JP Morgan trading blunder could result in a $100 billion loss, a contagion of its massive portfolio, and even the wipeout of its entire asset base.’
And, um, leave millions of Britons without any welfare payments.
The Pirate’s credit derivatives, interest rate derivatives, and currency trading are in turn vulnerable to leveraged hidden bets. “At J P Morgan, we view leverage as a potentially powerful resource,” burbles the firm’s website, but like Goldman Sachs and other Wall Street habituees, JPM is ludicrously over-leveraged….and really hasn’t a clue to the nearest $50 billion how much of its debt is or isn’t adequately hedged.
So what on earth is this Wily ol’ Coyote doing running our dear old Post Office?
Well, you may recall that when Teflon Tony
was shoved out of Downing Street by the Caledonian blackmailer resigned gracefully as Prime Minister in 2006, he fairly swiftly became a consultant to…..J P Morgan. Within months, Northern Rock went under and, to save three Labour seats, was bailed out by Alistair Darling, Brown’s Chancellor of the Exchequer. Now, you’ll never guess who lucked into getting the good bit of the bank where all the savings were: J P Morgan, thanks to an introduction from Moral Tone. We the taxpayers picked up Northern Crock, the debt-ridden part that was standing on the naughty step.
In a speech last month, Blair observed that “We need to be on the side of the modern-minded, sensible people”. All along, in fact – as the debate raged throughout the Naughties – he insisted that we couldn’t afford to keep the Post Office going in its then form. So although Peter Mandelson made promises to the TUC in the mid 1990s that he would keep the royal mail a closed shop if they helped get Tony Blair into power, once in power Mandelson demanded they get rid of 30,000 staff.
Ironically, Margaret Thatcher never seriously considered privatising it. Like most people of her generation, she saw the post as one of the bulwarks of the British state — an institution of which the nation could be proud. But Tony Blair had very different ideas.
As part of the softening-up process, Blair propagated the myth that the Post Office was losing money. This simply wasn’t true: in 1999, it contributed £310m to the Exchequer, and had made a profit for every one of the previous twenty-three years. But keen to conform to the new orthodoxy of Thatcherism, New Labour meddled and fiddled and left it in limbo, neither public nor private. Meanwhile, deliveries were slashed, staff numbers were axed mercilessly, and many villages saw their post offices sacrificed in the name of solving an inefficiency problem that didn’t exist.
Even the bonkers Dacre Mail observed last December that ‘Future generations may laugh with disbelief that we were so attached to our state monopoly. But the Royal Mail’s proud history is a reminder that there is more to life than fat profits for the few.’
One of the few is, of course, Teflon himself. When he joined Jamie Dimorgan Chase, the former British PM gushed (my italics):
“It is a great opportunity to be able to contribute to the work of
JPMorgan Chase. They are a leading company at the cutting edge of
the global economy, with a footprint in virtually every part of the
world. I look forward to advising them on how they approach the huge
political and economic changes that globalisation brings.”
And no doubt, when the hour came for the Post Office to get into bed with JPM, Tony was able to oil the wheels and grease the pump. I don’t know that’s what happened. But isn’t it awful when you suggest such a heinous thing about a former socialist, God-fearing bible-thumper, and everyone’s immediate reaction is that it’s highly possible…not to say probable?
As they used to say in the mail business, “Sorted”.