jp_morgan_complex_martens_article_140324You know, my own personal interest in viewing articles and/or researching and/or reading stuff about anything to do with finance, and particularly, "Wall Street", is pretty close to zero. So I usually do not post this type of article.

Thankfully, others are into researching the finance world, and can see many of the various "tricks" that our wonderful big banker "friends" use to "bump up their profits"... at our expense.

Pam Martens sent me this link this morning. As I scanned to the bottom, here is what this publication of Pam's and her husband Russ', is about.

"WallStreetOnParade.com is a public interest web site operated by Russ and Pam Martens to help the investing public better understand systemic corruption on Wall Street. Ms. Martens is a former Wall Street veteran with a background in journalism. Mr. Martens' career spanned four decades in printing and publishing management."

And from this article, here are a couple of highlights (via my own "almost totally non-interested in these things" view).

"Families of young JPMorgan Chase workers who have experienced tragic deaths over the past four months, have been kept in the dark on... the fact that the bank most likely held a life insurance policy on their loved one – payable to itself.

"Banks in the U.S..., are allowed to make multi-billion dollar wagers that their profits from life insurance policies on employees will outstrip the cost of paying premiums and other fees. Early deaths help those wagers pay off.

"Notice the big penalty for banks that don't comply; they could simply lose the tax benefits."

By the way, here's a link to an earlier article from their journal, which I believe I linked to in another of this blog's posts: "As Bank Deaths Continue to Shock, Documents Reveal JPMorgan Has Been Patenting Death Derivatives".

Part of my reason for posting this is to direct others to their website, and their research and understanding. Perhaps others will find insight into some things they have been wondering about with these "big bank" institutions.

Well, that's enough from me. Here's the article, and read on into the details if you feel so drawn.

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Document: JPMorgan Chase Bets $10.4 Billion on the Early Death of Workers"

Families of young JPMorgan Chase workers who have experienced tragic deaths over the past four months, have been kept in the dark on many details, including the fact that the bank most likely held a life insurance policy on their loved one – payable to itself. Banks in the U.S., as well as other corporations, are allowed to make multi-billion dollar wagers that their profits from life insurance policies on employees will outstrip the cost of paying premiums and other fees. Early deaths help those wagers pay off.

According to the December 31, 2013 financial filing known as the Call Report that JPMorgan made with Federal regulators, it has tied up $10.4 billion in illiquid, long term bets on the death of a large segment of its employees.

The program is known among regulators as Bank Owned Life Insurance or BOLI. Federal regulators specifically exempted BOLI in passing the final version of the Volcker Rule in December of last year which disallowed most proprietary trading or betting for the house. Regulators stated in the rule that "Rather, these accounts permit the banking entity to effectively hedge and cover costs of providing benefits to employees through insurance policies related to key employees." We have italicized the word "key" because regulators know very well from financial filings that the country's mega banks are not just insuring key employees but a broad-base of their employees.

Just four of the largest U.S. banks, JPMorgan Chase, Bank of America, Wells Fargo and Citigroup hold over $53 billion in investments in BOLI according to 2013 year-end Call Reports. Death benefits from life insurance is purchased at a multiple to the amount of the investments, meaning that $53 billion is easily enough to buy $1 million life insurance policies on 159,000 employees, and potentially a great deal more. Industry experts estimate that the total face amount of life insurance held by all banks in the U.S. on their employees now exceeds half a trillion dollars.

When the General Accountability Office (GAO) looked into the matter for Congress in 2003 and 2004, it found the insidious practice of continuing the life insurance even after the employee had left the company – nullifying any ability to consider him or her a "key" to the business. The GAO wrote: "Unless prohibited by state law, businesses can retain ownership of these policies regardless of whether the employment relationship has ended." The GAO found that multiple companies held life insurance policies on the same individual.
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