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Friday, May 25, 2012


The following story was posted to The Blaze and if true, (we have no doubt that it is), is the most outrageous, unbelievable abuse of our system we have ever seen.
Using the court system, social media and well-heeled supporters have allowed this man to become a one person wrecking crew. He obviously knows how to navigate the system and to scare the Hell out of anyone he believes is an enemy.

If he were to become successful, he could put an end to most opposition to the Democratic/Progressive/Liberal side of the discussion. Can you imagine writing a blog and then having this guy call in the SWAT team and  file frivolous lawsuits against you?  He must be stopped.

Where is the news media on this? If we don't hear from them, they must believe in his tactics. Right?

Spread the word!

Conservative Tom

P.S. We apologize for the length of this posting, but the information is important to our country and its future.

MEET SOROS-FUNDED DOMESTIC TERRORIST BRETT KIMBERLIN WHOSE ‘JOB’ IS TERRORIZING BLOGGERS INTO SILENCE
  • Drug dealer, alleged child molester, and convicted perjurer, forger and Indiana Speedway Bomber (who is also believed to have played a role in the assassination of a grandmother), Brett Kimberlin, spent 17 years in prison before his ultimate re-absorption into American society
  • He started a non-profit dubbed “Justice Through Music (JTM)” that has, since at least 2005, been funded by George Soros’ Tides Foundation and Barbara Streisand among other leftists
  • Along with his associate, Kimberlin also started an organization called “Velvet Revolution” that supports the Occupy movement 
  • JTM’s goal is to use music to foster “social justice” and fight Republican “voter fraud” (like the kind George Bush allegedly used to “steal” the Florida election)
  • Any blogger — conservative and liberal alike — who has written the truth about Kimberlin has come under vicious attack by either Kimberlin or his minions, suffering death threats (veiled and unveiled), multiple lawsuits, loss of jobs and worse
  • He has filed over 100 frivolous lawsuits against anything that isn’t nailed down and somehow is being allowed to continue unchecked 
  • This story has never been reported on in the mainstream media
Brett Kimberlin: Meet the Soros Funded Domestic Who Is Terrorizing Bloggers Into Silence
Be prepared to enter an alternate universe, bizarre beyond any stretch of what you thought possible. And then keep reading, because this may be one of the most important expos├ęs published on The Blaze to date. It will explain in frightening detail what it means to speak the truth at the expense of losing all you hold dear. And will reveal how easy it has been for one convicted domestic terrorist — backed by George Soros and Barbara Streisand alike — to use the U.S. legal system, as well as less desirable channels, to silence those who have dared tell the story of one Brett Kimberlin, a.k.a. the “Speedway Bomber.”
How immutable are our First Amendment rights? Would they remain so even under the most dire conditions? There are about half a dozen bloggers who, at this very moment in time, are finding out just that, after having been subject to: death threats, blackmail, extortion, numerous frivolous lawsuits, cyber-attacks of email and social networking accounts and become the target of smear campaigns that have led to their firing until ultimately discovering that others who came before them, have turned up dead.

Move over Ayers, there’s a not-so-new domestic terrorist in town
What follows is the unbelievable yet non-fictional tale of a left-wing ex-con with an extensive rap-sheet who, since his release from prison, has led the crusade against Republican “voter fraud” while simultaneously making it his life’s mission to threaten, brutalize, shakedown, sue, slander and generally terrorize any writer — conservative and liberal alike — who dares speak plainly about his checkered past. The post is lengthy, as there is much ground to cover where Kimberlin’s past is concerned, but the information is pertinent to understanding how and why he began brutalizing bloggers with whom he disagrees. Following this background, we will review the shocking accounts of two of his latest victims.
For reasons unknown, the far-left seems to have a penchant for throwing their full-fledged support — emotional, political and financial — behind domestic terrorists (see: Bill Ayers) and their latest protege is no exception. Also known as the “Speedway Bomber,” Kimberlin set an Indiana town ablaze with a series of coordinated bombings in 1978, ultimately resulting in one man’s suicide (this was proven in a subsequent court case) after his limbs were irreparably damaged in the explosion.
Kimberlin v. White, 7 F.3d 527 (6th Cir. 1993) relates what happened to the man during the six-day bombing spree:
In the worst incident, Kimberlin placed one of his bombs in a gym bag, and left it in a parking lot outside Speedway High School. CarlDeLong was leaving the high school football game with his wife when he attempted to pick up the bag and it exploded. The blast tore off his lower right leg and two fingers, and embedded bomb fragments in his wife’s leg. He was hospitalized for six weeks, during which he was forced to undergo nine operations to complete the amputation of his leg, reattach two fingers, repair damage to his inner ear, and remove bomb fragments from his stomach, chest, and arm. In February 1983, he committed suicide.
Kimberlin was convicted of thirty three felony counts including illegal use of a Department of Defense insignia, andBrett Kimberlin: Meet the Soros Funded Domestic Who Is Terrorizing Bloggers Into Silence the Presidential Seal, both of which were used to procure the hard-to-come-by explosives used in the bombings.
While he went on to serve seventeen years in prison, Kimberlin’s time behind bars only helped him hone his skills of “persuasion” by earning a law degree, which he appears to use often and indiscriminately. The suicide victim’s widow ultimately sued Kimberlin several years later, winning a civil judgement in which she was awarded $1.6 million. He absconded from the debt, however, landing him back in prison for a spell.
But what was the motivation behind Kimberlin’s rampage? Was he railing against war, or the rich, or the evil Western empire? The answer is more twisted than one can even imagine — and oddly, isn’t political at all.
Suspected motivation 
In what ultimately became the biography of a conman — “Citizen K” — respected journalist and author Mark Singer shared the details of his bewildering journey with Kimberlin, who had actually signed on to the book thinking Singer would portray him in a favorable light. What the author discovered, however, was the twisted web of deceit in which Kimberlin dwelled. Ultimately, Singer was able to piece together much about the likely catalyst for Kimberlin’s bombing-spree.  A description of the book provides background:
This book relates a journalist’s worst nightmare: of getting deeply involved in a “big story” based on information from a single source who turns out to be a world-class liar. During the 1992 Presidential campaign Singer wrote a story for the New Yorker about the allegations by Brett Kimberlin, a former marijuana dealer then in prison for a series of bombings, that he had once sold marijuana to Vice President Dan Quayle. [...] After signing a book contract to expand the story, Singer invested more and more time, and became frustrated by holes, inconsistencies and dead ends in Kimberlin’s tale. Embroiled in a Kafkaesque mystery, Singer recounts his painstaking journalistic detective work, and his growing sense that this would be the story that got away.
Based on this detective work — supported by historical record — Singer concluded that the Speedway bombings were not politically motivated at all, but were rather meant to serve as a distraction from yet another crime that had taken place shortly beforehand.
The Indy Star reported that on July 29, 1978, Speedway resident Julia Scyphers, 65, answered a knock at her door only to find a strange man who claimed he was interested in purchasing items she had recently tried to sell at a yard sale. Scyphers let the man into her garage to show him the items and he “shot her in the head.” Her husband came out in time to see the perpetrator’s car and catch a glimpse of the man himself.
When police began looking for a motive in the Scyphers slaying, they found there’d been a recent family clash. Julia Scyphers’ daughter, Sandra Barton, had become involved with a man who seemed to Mrs. Scyphers to be inordinately close to one of Barton’s young daughters. Mrs. Scyphers told friends she was so concerned that she’d arranged for both of her granddaughters to come live with her. Whether or not Mrs. Scyphers’ fears were correct (no charges were ever filed to that effect), this incident led investigators to start looking at Brett C. Kimberlin.
Through pieces of information gathered from news reports, police records and descriptions from Singer’s book, it is suspected that Kimberlin had engaged in an inappropriate relationship with Sandra Barton’s daughter, Jessica, who was only 10-years-old when Kimberlin met her (he knew her for a number of years). Her grandmother, Julia Scyphers, had attempted to thwart the relationship in any way she could, even by allegedly sending a handyman to change the locks on her daughter’s front door. When Kimberlin discovered Scyphers’ interference, he complained to the building management that he was being “harassed” (a meme that would later become all-too familiar to Kimberlin). While evidence has ruled out that Kimberlin himself pulled the trigger, it is believed by some that an associate committed the murder at Kimberlin’s behest.
As the heat against Kimberlin began to mount in the Scyphers slaying, he arranged a series of bombings that would take police attention away from the case at hand. Ironically, Singer’s book also describes how Kimberlin, after being apprehended for the Speedway bombings, plotted foranother person to plant identical bombs around town in order to give the appearance that the suspect was still at large.
With a rap-sheet that includes forgery, perjury, drug dealing, domestic terrorism and possible murder and child molestation, the future actions of the man many consider a “sociopath” and pathological liar become less-surprising.
Brett Kimberlin: Meet the Soros Funded Domestic Who Is Terrorizing Bloggers Into Silence
Justice Through Music and Velvet Revolution
Ironically, the man whose credibility is in question now makes a “living” by calling into question, the credibility of others. Today, Kimberlin is the director and founder of “Justice Through Music (JTM),” a non-profit organization that “uses famous musicians and bands to organize, educate and activate young people about the importance of civil rights, human rights and voting.” Since 2005, JTM collected $1.8 million in contributions from an illustrious list of donors including the George Soros-funded Tides Foundation, liberal songstress Barbara Streisand and Senator John Kerry’s wife, Teresa Heinz-Kerry.
JTM claims that it has registered countless people to vote using “cutting edge technology in order to effect change through the ballot box.”
“We support the aspirations of youth worldwide to be free to express themselves, and we take a stand against oppressive regimes that suppress freedom and deprive citizens of basic human rights,” Kimberlin’s website continues.
Really?
In an article detailing Kimberlin’s “thinly veiled” tax documents, Ed Barnes expained how the 58-year-old Bethesda, Md., resident is raising a steady stream of money from the left in return for promising to put conservative bloggers out of business.
Kimberlin had, as of 2010, called for the arrest of Karl Rove, Andrew Breitbart, Chamber of Commerce head Tom Donohue, Massey Energy Chairman Don Blankenship and now, conservative bloggers Patrick Frey, Aaron Walker and others. Barnes asks if a review of tax filings for Kimberlin’s “Velvet Revolution” and “Justice Through Music” raises “troubling questions” about whether his ‘nonprofit’ operation is dedicated to public activism or is “just a new facade for a longtime con artist.”
Though neither website publicly reveals Kimberlin’s role, tax and corporate documents show that he is one of four directors who incorporated the Velvet Revolution, and that he is the registered agent for the tax-exempt, non-stock company, which is registered at his mother’s house in Bethesda.
Brett Kimberlin: Meet the Soros Funded Domestic Who Is Terrorizing Bloggers Into Silence



Velvet Revolution is Kimberlin’s other enterprise dedicated to furthering a leftwing agenda. What is perhaps most galling, however, is the description on its website:
Velvet Revolution is a term coined to describe the peaceful road to change in countries where governments ignored the inalienable rights of the people.  A few inspiring Velvet Revolutions occurred in the former Soviet Union, East Germany, Czechoslovakia, South Africa, Ukraine, Egypt, Tunisia and other countries.
It is interesting that Kimberlin mentions the Soviet Union. Is that because he is seeking to emulate its policies on free speech?
Indeed, anyone who has dared to question why a reputed terrorist is given legitimacy, a steady stream of money, and a platform with which he can influence young, impressionable voters, is repaid in spades by Kimberlin and his minions.
The shakedown  
While the above information provides background, the heart of this story lies with those who have become the target of Kimberlin’s scorn — that is to say, any blogger who has mentioned truthful elements about the ex-con’s past.
Los Angeles County Assistant District Attorney Patrick Frey who blogs under the moniker “Patterico,” started writing about Kimberlin in October of 2010 after the late conservative pundit Andrew Breitbart noted the hypocrisy of Kimberlin’s business partner, Brad Friedman, in scorning the “tactics” of James O’Keefe when he went undercover to expose ACORN voter fraud. Shortly thereafter, Frey received an email from Kimberlin threatening to sue if he did not retract his story. Since the Speedway Bomber was unable to prove why any of Frey’s entries were untrue, he decided to escalate the situation to unthinkable heights.
According to the account, Kimberlin proceeded to call Frey’s secretaries, telling them that the assistant district attorney was a “racist, a homophobe, and a stalker” and that he would be filing a restraining order against him. The convicted perjurer subsequently filed a complaint with state bar association as well, a move that was heavily publicized by Kimberlin-accomplice and Democratic consultant Neal Raushauser.
To illustrate just how sue-happy Kimberlin is, he once sued a pornographer for selling him pornography that was not provocative enough. Yes, we forgot to mention that Kimberlin was in that business too. 
That is not where it ended for Frey, however, not by a long shot. Soon, his home address, along with Google earth and satellite images of it were published on Kimberlin’s other website Occupy for Accountability.   As it turns out, a favorite tactic of the Speedway Bomber, according to those who have felt his wrath, is to stalk his “rivals,” particularly their wives, children and parents and post personal information about them, including their home address, online.  He allegedly follows the move on occasion with blog posts detailing how he fears for their lives.
While difficult to imagine, the situation gets worse.
The SWAT Team at your door 
While the evidence is thus far only circumstantial, Frey believes that based on key elements and the Kimberlin disciples involved, it is more than likely that the Speedway Bomber was behind yet another unspeakable attack — this one far worse than those that preceded it.
Essentially, a yet-to-be identified man (but one who sounds much like a Kimberlin associate, according to Frey) placed a call to law enforcement on the early morning hours of July 1, 2011, to announce that he had just shot his wife. The man then proceeded to give the operator Frey’s home address. Of course, the call was intended to make it look like Frey had just confessed to murdering his wife at his home. Just after midnight, a SWAT team descended on Frey’s doorstep, screaming at the top of their lungs for the attorney to place his hands behind his head. They arrested him and dragged him to the patrol car while simultaneously dragging his wife out of bed.
“I could have been killed,” Frey told The Blaze in an interview as he recalled the disturbing story. He explained that he was only “99% in shock” because a similar incident had happened to someone else just one week prior, and likely for similar reasons.
Three days later Frey told me that Raushauser penned a piece in the Daily Kos (from which he has since been ousted) detailing how he was engaged in a “cyber-stalking” campaign against Kimberlin.
Ultimately, Frey admitted that he is disappointed with the way the investigation unfolded as it took nearly seven months for officials to obtain copies of the phone records that would determine who in fact had placed that fateful call. In the end the case was closed rather unceremoniously.
Please listen below to the chilling audio of the call that sent a SWAT team to Frey’s door:

It is important to note that this extreme form of harassment, dubbed “SWATting” can actually get people killed.
Frey explains:
SWATting is a particularly dangerous hoax in which a caller, generally a computer hacker, calls a police department to report a shooting at the home of his enemy. The caller will place this call to the police department’s business line, using Skype or a similar service, and hiding behind Internet proxies to make the call impossible to trace. Anxious police, believing they are responding to the home of an armed and dangerous man, show up at the front door pointing guns and screaming orders.
So who perpetrated this heinous crime against Frey and his family? On his blog, the Assistant D.A. writes:
But there is circumstantial evidence suggesting who may be responsible. I met personally with the nationwide experts on swatting in December 2011: the FBI office in Dallas, Texas. They told me that swatting is an extreme form of harassment — and that swatters typically combine swatting with other forms of harassment, including: complaining to the victim’s workplace, defaming the victim online, “Googlebombing” the victim, publishing the victim’s address online, filing phony reports of criminal activity by the victim, and so forth.
He goes on to explain that all of the above forms of harassment have happened to him and other critics of Kimberlin since July 2011. “The harassment has been relentless and has occurred almost every day,” Frey writes.
“It would literally take a book to catalogue it all. What you read in this post, incredibly, is only part of it.”
Now meet Kimberlin sycophant Ron Brynaert, a self-described journalist who has taken to harrassing and threatening Frey and his wife in a rather explicit manner. Consider the following tweets from Brynaert:
Brett Kimberlin: Meet the Soros Funded Domestic Who Is Terrorizing Bloggers Into Silence
Brett Kimberlin: Meet the Soros Funded Domestic Who Is Terrorizing Bloggers Into SilenceBrett Kimberlin: Meet the Soros Funded Domestic Who Is Terrorizing Bloggers Into Silence
That looks like “journalistic intergrity” in action, doesn’t it?
On his blog, Frey notes that Brynaert has been a guest blogger at The Brad Blog, run by Kimberlin’s business partner Brad Friedman and was for years the editor of a Raw Story, a publication that has teamed up with the Brad Blog to produce Friedman’s radio show. He also claims to be friends with Friedman.
Since Frey has had conversations with Brynaert, he is familiar with the sound of his voice. While it has yet to be proven by voice recognition software (which law enforcement has thus far refused to perform) it became apparent to Frey after listening to the audio (featured above) of the erroneous murder confession, that it could very well have been Brynaert who placed the call to law enforcement.

In terms of legal recourse, the assistant D.A. said that while he could sue for defamation, he observes the failures of law enforcement and believes that the justice system — civil or criminal — will not do anything about this unless he [Kimberlin] hurts or kills someone.”
At the end of the day, what is most important to Frey is that Americans around the country discover what one terrorist is doing to silence free speech and to realize that this is not a “partisan issue.” While Kimberlin may use leftist politics to secure his cash-flow, Frey believes the bomber is apolitical, and is engaged in this behavior simply out of monetary greed and his own self-interest.
“This is a story about how someone can use this brass-knuckles reputation management by going after anyone who criticizes him.” And that should be a concern for everyone, regardless of their political bent.
For more details about Pat Frey and the unspeakable ordeal he has suffered, please visit Patterico here. 
Battling perpetual lawsuits  
Aaron Walker, who sometimes blogs as “Aaron Worthing,” is another attorney and also one of Kimberlin’s latest victims. After being tormented since last December Walker and his family only seek justice.
After providing legal advice to Seth Allen, a staunch liberal who also drew Kimberlin’s ire after writing truthfully about him, Kimberlin wrote to Walker, requesting that he ask Allen to waive the attorney-client privilege between them. This would, in Kimberlin’s mind, allow Walker to testify against Allen. When Walker — who was blogging anonymously at the time — refused, that was when Kimberlin’s vendetta began.
Inevitably, Kimberlin won a default judgement against Allen but that was not enough. “The next thing I know, he places a motion to reveal my identity,” Walker told The Blaze.
“All he wanted was my identity,” he added. In the end, Kimberlin got it and made certain that Walker’s full name, address, high school, Yale attendance, name and address of employer as well as family information was in black and white for the world to see. Walker attempted to seal the record, but each time, Kimberlin would file a motion to unseal the record.
When the two finally encountered one another after court, Kimberlin boasted that he had been successful in his goal of exposing the identity of Aaron Walker and then held up an iPad. Not knowing if it was another bomb, or intended to be used as a weapon, Walker took the iPad out of Kimberlin’s hand and kept it away until sheriff’s deputies arrived and rectified the matter.
In his trademark fashion, the bomber then twisted the story, concocting a claim that Walker had savagely “decked” him and that the skirmish was so bad, it had to be broken up by bystanders. The incident did draw courthouse security.
Kimberlin then filed second-degree assault charges against Walker that carry a sentence of up to ten years. Eventually video of the incident proved that the attorney never laid a finger on Kimberlin but it did not stop the Walkers from paying thousands of dollars in legal costs to prepare.
Thus far, the State’s Attorney, while he was encouraged to do so, has not filed charges against Kimberlin for having lied under oath about the assault.
All the while, Kimberlin has kept filing responses to unseal Walker‘s records and has even published identifying details about Walker’s home. Eerily, the Internet-terrorist has written to law enforcement about his “fear” that Walker or his neighbors might get killed.
As a result, Walker and his wife both lost their jobs. While Walker’s former employer never divulged the real reason for the termination, he believes the move was made out of fear.
“They are terrified of this guy,” Walker told me. So afraid in fact, that when his former employer thought Walker might come back to work to collect his belongings (even though he did not), they felt that major police presence was required. “They wouldn’t even let us back in to get my books.”
He said that while he understands their fear, the company’s move to let him go and not stand by an innocent person who had been through such an ordeal “was disheartening.”
Since then, Kimberlin has filed yet another harassment lawsuit, or series of suits against Walker, based on half-truths and distortions from comments taken out of context. Somehow, the court system is  ”surprisingly [allowing Kimberlin] to get away with it.”
Still, Walker vowed to push forward, and says he‘d even go to prison if he had to in his effort to stand his ground and not succumb to the slander and intimidation of someone who has made his life’s work an act, and art, of terror.
“I will take it to the Supreme Court if I have to,” the attorney said firmly.
Kimberlin, who Walker labels a clear sociopath, once threateningly warned the attorney: “I would suggest, Mr. Walker, that you just leave me alone.”
To which Walker replied, “I’ll continue to tell the truth about you.”
It is important to note that given the background and tactics involved, Frey, Walker, and other bloggers like Robert Stacy McCain are legitimately fearful for their safety and the safety of their family members. Thus far, Kimberlin has been allowed to terrorize members of the blogosphere as there has been little push-back from mainstream media or even free speech advocates. Perhaps with greater media exposure, this brazen assault on free speech will be arrested in its tracks. For more detailed accounts of Walker’s experience, please visit his blog here.

Stay tuned
Friday, May 25th, has officially been dubbed: “blog about Brett Kimberlin day.”  With this in mind we will continue coverage, as Walker and Frey are only two of the domestic terrorist’s victims, and there is more to Kimberlin’s outfits, associates, and benefactors than meets the eye.

Editor’s note: This post has been updated for accuracy and with information about Ron Brynaert. 

Tuesday, May 22, 2012

Is Gridlock Good?


Fred Thompson, writes a very thought provoking article today regarding the one idea about which all commentators  have been wringing their collective hands. That issue is "gridlock."Read the following article and tell us if you agree or not. We want to hear from you.
Conservative Tom
P.S.  We think he is on the right track.

Fiscal Gridlock
gridlock2

As you may recall, I recently wrote about the downside of cooperation and bipartisanship in Washington. Compromise, I said, in large part is what has gotten us into the fiscal mess we are in today. This, of course, goes against the grain of much of the “enlightened” mainstream commentators’ thinking. But upon reflection I felt that my analysis was somewhat incomplete. For example, don’t we need bipartisanship if we are ever going to reform entitlements and the tax code? So how does one determine when compromise is a good thing and when it’s not?
To answer this question, a couple of thoughtful columnists have recently come to the rescue. One of them is a conservative and the other is often called a liberal (though I now think that assessment is a little harsh). George Will wrote the following in the Washington Post on May 16:
Bipartisanship, the supposed scarcity of which so distresses the high-minded, actually is disastrously prevalent. Since 2001 it has produced No Child Left Behind, a counter productive federal intrusion in primary and secondary education … the Bipartisan Campaign Reform Act; an unfunded prescription drug entitlement; troublemaking by Fanny Mae and Freddie Mac; government directed capitalism from the Export-Import Bank; crony capitalism from energy subsidies; unseemly agriculture and transportation bills; continuous bailouts from and unreformed Postal Service; housing subsidies; subsidies for state and local governments; and many other bipartisan deeds, including many appropriations bills.
It’s as good a summary of the bad results of bipartisanship as I’ve seen, and I’m familiar with them because I voted the wrong way on a couple of them back in the day. (Most of the legislative mistakes I made were when I gave the federal government the benefit of the doubt as to what it could competently do.) The common denominator of all of this legislation is spending and or regulating.
So if this is the downside of bipartisanship, when is it beneficial?  Two days after the Will article David Brooks, on the op-ed page of the New York Times wrote:
Congress is capable of passing laws that give people benefits with borrowed money, but it gridlocks when it tries to impose self restraint. … Leaders today do not believe their job is to restrain popular will. Their job is to flatter and satisfy it. … Western democratic systems were based on a balance between self doubt and self confidence. They worked because there were structures that protected the voters from themselves and the rulers from themselves. Once people lost a sense of their own weakness…it became madness to restrain your own desires because surely your rivals over yonder would not be restraining theirs.
As Brooks goes on to point out, this is one reason why Europe and the U.S. are facing debt crises and political dysfunction at the same time.
So there we have it. When it comes to the easy and enjoyable, such as spending other people’s money, bipartisanship reigns. It’s when it comes to something that would actually help the country – such as restraining ourselves from running off a fiscal cliff – that gridlock raises its ugly head. Witness Obama’s reaction when Rep. Paul Ryan put a reform plan on the table.
So when your liberal friends bemoan the gridlock and the lack of bipartisanship in Washington, tell them it’s not true. Gridlock happens only when politicians are actually trying to do something responsible – which is the much rarer occasion.
-Fred Thompson

Monday, May 21, 2012

Chase, Risk and Bailouts


One of our faithful followers, David, has asked for our opinion on Jamie Dimon and Chase. At first it looked like the loss would not be large as $2 billion which is not big when you are dealing with a bank the size of Chase. However, as days have gone by and the problems in Europe have gotten worse, we are hearing loss numbers in the $6-7 Billion region. With that development, we are starting to get into some serious money as the following story illustrates.

As its losses increased and its stock price decreases, Chase is getting hit with a double whammy that although we doubt that it will endanger the bank,  will hurt it. The loss of $6-7 would nearly wipe out all its profits for the past year and the loss of valuation would make the impact much bigger than it was a week or so ago.

Will Chase require an infusion of capital? That is to be seen. Should Spain and Greece fail to live up to expectations and should France void its agreement with the Germans in relation to austerity, we could see losses increase dramatically.  

Should we infuse capital, is the next question.  That will be the toughest question that the Obama Administration will face in the upcoming months.  If the choice is to let Chase fall, Obama will be faced with letting a major financial company fail. On the other hand, if Chase gets a bailout, the American people will not vote for him. The President will be in a tough spot.

We believe that the Administration should follow the second course. It is not advisable to continue to allow banks and other companies to take irresponsible risks without having to pay the ultimate penalty--bankruptcy. Regardless of the resulting damage to the country, in the short run, the damage which comes from continuing to prop up companies who take these chances without a penalty will be much greater.  

Jamie Dimon might be the "smartest banker in the US," but on this one, it looks like he blew it. It is time for those in the boardroom to know that when a company makes bad bets, it might pay with the company's life. Without the ultimate fear, the necessary precautions that good corporate governance requires, go out the window and we will continue to have these type of stories year after year.  It is time for bad, risky decisions to go the way of the buggy whip and return to a time when banking was conservative and took reasonable risk.

Conservative Tom




JPMorgan Chase loss only going to get worse

@CNNMoneyInvest May 20, 2012: 8:50 PM ET
An overall drop in the market is exacerbating JPMorgan's losses tied to its bets on corporate bonds.
An overall drop in the market is exacerbating JPMorgan's losses tied to its bets on corporate bonds.
NEW YORK (CNNMoney) -- One thing seems clear about JPMorgan Chase's $2 billion loss. It's no longer $2 billion. It's likely much higher.
The number being bandied about now is closer to a range of $6 billion to $7 billion, according to several people working on trading desks that specialize in the derivatives JPMorgan Chase (JPMFortune 500) used to make its trades and from two sources with knowledge of the bank's positions.
JPMorgan Chase declined to comment on its trading activities. Of course, it is impossible to know with absolute certainty just how high the losses are at any given moment.
But experts said there are few scenarios in which hedge funds on the other side of the bank's giant bet will let JPMorgan Chase out of it without significantly more pain.
"The market knows roughly what [JPMorgan] has and what the sizes are," said a source with knowledge of the bank's positions.
Why have the losses grown since chief executive officer Jamie Dimon informed the public of them? The market's overall slide hasn't helped.
Since last Thursday, the U.S. and European stock markets have dropped significantly. The S&P 500 (SPX) is down roughly 3.5%, and the main European indexes are down between 4% and 6%.
JPMorgan Chase's trades were built around contracts tied to corporate bonds. Specifically, JPMorgan Chase sold huge amounts of protection on an index of 125 highly rated corporate bonds. Simply put, JPMorgan Chase's massive trade stood a better chance to pay off if the market had continued to rally.
Now as the overall market has worsened, it costs even more for JPMorgan Chase to sell protection against possible bankruptcies on corporate bonds.
Since JPMorgan Chase is basically the only one on its side of the bet, a worsening market makes it even more expensive to keep this position and more difficult to find other places to offset these losses.
JPMorgan Chase's main bet has been on an index, known as IG9, of 125 U.S. investment grade companies. Shares of three of the 125 companies -- retailer J.C. Penney (JCPFortune 500) and insurers MBIA (MBI) and Radian (RDN) -- have taken big hits since last week, driving up the cost of offering protection against a default.
Additionally, since Dimon's announcement, more hedge funds have piled into the index, further driving up the cost of selling protection.
It's clear from public data filed with The Depository Trust & Clearing Corporation that JPMorgan Chase hasn't sold any of its positions yet. The DTCC tracks trading activity and sizes of positions on the IG9 and other indexes, and there haven't been any big moves since last week.
"Whatever the size was, it's clearly not something that you can call one or two dealers and sell," said Garth Friesen, a co-chief investment officer at AVM, a derivatives hedge fund that's not involved in these trades.
As soon as it becomes clear that JPMorgan Chase is unwinding its position, it will be obvious to players on every major trading desk. Hedge funds will immediately start piling into that index and buying protection, driving up the bank's losses.
Until then, it won't cost the hedge funds much to sit and wait.
"There will be a stare-fest between the hedge funds and JPMorgan," said James Rickards, former general counsel at Long-Term Capital Management, a hedge fund that required a $3.6 billion bailout from the Federal Reserve because of its massive losses from its trading activities.
"It will cost JPMorgan an unimaginable fortune to push the spread back in their direction," he added.
But JPMorgan Chase may blink first. It could face pressure from U.S. government regulators to start selling some of its positions.
Both the Securities and Exchange Commission and the Federal Bureau of Investigation are looking into JPMorgan's trade. Dimon has also been called to testify before the Senate Banking Committee.
The bank's shareholders may grow increasingly anxious as well, which could force JPMorgan Chase's hand. Shares are down 18% nearly since the company announced the loss.
"It's not just a battle between Dimon and the hedge funds," said Rickards. "It's been JPMorgan and the regulators, the FBI, Congressional committees and stock holders. It's not clear that their tolerance for pain will be as high as Jamie Dimon."
For now, the one thing working in JPMorgan Chase's favor is the market's bet that the bank is too big too fail, making it dangerous to push too hard on the other side of its trade.
But the dangers are far greater for JPMorgan Chase.
"Part of the problem of what they were doing is that they were too big in the trade to ever be able to trade out of it," said Friesen, who is also a member of the Federal Reserve Bank of New York's advisory group To top of page