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Collateralized “Death” Obligations?

[1]

Rober­to Calvi’s Corpse: Was “God’s Banker” set­ting a trend?

Dave Emory’s entire life­time of work is avail­able on a flash dri­ve that can be obtained here. [2] (The flash dri­ve includes the anti-fas­cist books avail­able on this site.)

COMMENT: We must won­der if the late Rober­to Calvi was set­ting a prece­dent when he alleged­ly com­mit­ted sui­cide in Lon­don. (He was lat­er deter­mined to have been mur­dered, to the sur­prise of no one.)

One of the sur­re­al, almost hal­lu­ci­na­to­ry finan­cial instru­ments that were at the cen­ter of the 2008 finan­cial col­lapse were CDO’s–collateralized debt oblig­a­tions.

Both JP Mor­gan Chase and Deutsche Bank are, or have been the focal points of ongo­ing inves­ti­ga­tions into their oper­a­tions.

Now, two execs, one for­mer and one active, have alleged­ly com­mit­ted sui­cide. The mor­tal­i­ty rate among Lon­don based bank­ing exec­u­tives has been par­tic­u­lar­ly high in recent years.

We won­der if the high mor­tal­i­ty rate, the ongo­ing cap­i­tal trou­bles and legal inves­ti­ga­tions plagu­ing the firms may be relat­ed to these deaths.

Both JP Mor­gan Chase and Deutsche Bank are pri­ma­ry focal points of the Forex fraud inves­ti­ga­tion.

Are we look­ing at col­lat­er­al­ized “death” oblig­a­tions?

“Ex-Deutsche Bank Man­ager Found Dead in Appar­ent Sui­cide” by Belin­da Gold­smith and Thomas Atkins; Reuters; 1/28/2014. [6]

EXCERPT: William Broeksmit, a for­mer senior man­ager at Deutsche Bank with close ties to co-Chief Exec­u­tive Anshu Jain, has been found dead at his home in Lon­don in what appears to have been a sui­cide.

Jain and the bank’s oth­er co-CEO Juer­gen Fitschen announced Broeksmit’s death in an inter­nal mail to Deutsche Bank employ­ees.

When asked about the death, London’s Met­ro­pol­i­tan Police issued a state­ment say­ing a 58-year-old man had been found hang­ing at a house in South Kens­ing­ton on Sun­day after­noon and been pro­nounced dead at the scene. Police declared the death non-sus­pi­cious.

Broeksmit, a U.S. nation­al, was an instru­men­tal founder of Deutsche’s invest­ment bank and one many bankers, includ­ing Jain, who joined Germany’s flag­ship lender from Mer­rill Lynch in the 1990s, when Deutsche launched plans to com­pete on Wall Street.

Broeksmit was also a prin­ci­pal actor in Deutsche’s efforts to unwind its riski­er posi­tions and to reduce the size of its bal­ance sheet in the wake of the glob­al finan­cial cri­sis.

His death comes at an uncom­fort­able junc­ture for Jain and Fitschen, whose reign has been dogged by poor results and legal trou­bles since they took over from Josef Ack­er­mann in 2012.

...

The two CEOs are expect­ed to defend their reform record at the bank’s annu­al news con­fer­ence on Wednes­day. Last week, they revealed that lit­i­ga­tion and restruc­tur­ing costs had pushed Deutsche to a sur­prise loss in the fourth quar­ter of 2013.

CLOSEST ALLY

Broeksmit, who worked as head of risk and cap­i­tal opti­mi­sa­tion, was viewed as one of Jain’s clos­est allies and a key play­er in the bank’s attempts to recov­er fol­low­ing the finan­cial cri­sis.

Jain sought to have Broeksmit join the man­age­ment board as head of risk man­age­ment in 2012. But in a major set­back for both men, Ger­man reg­u­la­tor Bafin blocked the appoint­ment, say­ing Broeksmit lacked expe­ri­ence lead­ing large teams.

Bafin was not imme­di­ately avail­able for com­ment. The Bun­des­bank, which also over­sees Deutsche, declined to com­ment.

Broeksmit worked along­side Jain at Mer­rill Lynch before join­ing Deutsche in 1996 as part of group of rough­ly 100 bankers who, along­side Edson Mitchell, formed the core of Deutsche’s new invest­ment bank­ing busi­ness.

Mitchell, one the bank’s most pow­er­ful exec­u­tives, died in a plane crash in 2000.

“UPDATE 3‑JP Mor­gan IT Exec­u­tive Plunges to Death at Bank’s Lon­don HQ” by Costas Pitas and Lau­ra Noo­nan; Reuters; 1/28/2014. [7]

EXCERPT: A JP Mor­gan tech exec­u­tive fell to his death from the U.S. bank’s 33-storey tow­er in Lon­don’s Canary Wharf finan­cial dis­trict on Tues­day in what British police said was a “non-sus­pi­cious” inci­dent.

Police were called to the glass sky­scraper at 8:02 GMT, where a 39-year-old man was pro­nounced dead at the scene after hit­ting a low­er 9th-floor roof. Wit­ness­es said the body remained on the roof for sev­er­al hours.

Lon­don police said no arrests had been made and the inci­dent was being treat­ed as non-sus­pi­cious at this ear­ly stage.

A source famil­iar with the mat­ter con­firmed the deceased was Gabriel Magee, a vice pres­i­dent with the JP Mor­gan’s cor­po­rate and invest­ment bank tech­nol­o­gy arm, who had been an employ­ee since 2004. . . .

. . . . Though the details of Tues­day’s inci­dent are still unclear, occa­sion­al sui­cides by peo­ple work­ing in Lon­don’s big banks have pro­voked crit­i­cism of the demands placed on some finan­cial ser­vices work­ers.

A Bank of Amer­i­ca exchange man­ag­er jumped in front of a train and anoth­er man jumped from a sev­enth-floor restau­rant, both in 2012. A Ger­man-born intern at Bank of Amer­i­ca died of epilep­sy last year in Lon­don. . . .

“Rus­sell Invest­ments Chief Econ­o­mist Duek­er Found Dead” by Zachary Trac­er, Noah Buha­yar and Jeff Kearns; Bloomberg; 1/31/2014. [3]

Mike Duek­er, the chief econ­o­mist at Rus­sell Invest­ments, was found dead at the side of a high­way that leads to the Taco­ma Nar­rows Bridge in Wash­ing­ton state, accord­ing to the Pierce Coun­ty Sheriff’s Depart­ment. He was 50.

He may have jumped over a 4‑foot (1.2‑meter) fence before falling down a 40– to 50-foot embank­ment, Pierce Coun­ty Detec­tive Ed Troy­er said yes­ter­day. He said the death appeared to be a sui­cide.

Duek­er was report­ed miss­ing on Jan. 29, and a group of friends had been search­ing for him along with law enforce­ment. Troy­er said the econ­o­mist was hav­ing prob­lems at work, with­out elab­o­rat­ing. Duek­er was in good stand­ing at Rus­sell, said Jen­nifer Tice, a com­pany spokes­woman. She declined to com­ment on Troyer’s state­ment about Dueker’s work issues.

“We were deeply sad­dened to learn today of the death,” Tice said in an e‑mail yes­ter­day. “He made valu­able con­tri­bu­tions that helped our clients and many of his fel­low asso­ciates.”

Duek­er worked at Seat­tle-based Rus­sell for five years, and devel­oped a busi­ness-cycle index that fore­cast eco­nomic per­for­mance. He was pre­vi­ously an assis­tant vice pres­i­dent and research econ­o­mist at the Fed­eral Reserve Bank of St. Louis.

He pub­lished dozens of research papers over the past two decades, many on mon­e­tary pol­icy, accord­ing to the St. Louis Fed’s web­site, which ranks him among the top 5 per­cent of econ­o­mists by num­ber of works pub­lished. His most-cit­ed work was a 1997 paper titled “Strength­en­ing the case for the yield curve as a pre­dic­tor of U.S. reces­sions,” pub­lished by the reserve bank while he was a researcher there.

Pol­icy Meet­ings

Duek­er worked at the reserve bank from 1991 to 2008, start­ing as an entry lev­el research econ­o­mist, then advanc­ing to senior econ­o­mist, research offi­cer, and assis­tant vice pres­i­dent, accord­ing to Lau­ra Gir­resch, a spokes­woman.

He helped the bank’s pres­i­dent pre­pare for Fed­eral Open Mar­ket Com­mit­tee pol­icy meet­ings and wrote and edit­ed for eco­nomic pub­li­ca­tions, she said. Duek­er served as edi­tor of the reserve bank’s research pub­li­ca­tion, Mon­e­tary Trends, and also was an asso­ciate edi­tor of the Jour­nal of Busi­ness and Eco­nomic Sta­tis­tics, Gir­resch said.

“He was a val­ued col­league of mine dur­ing my entire tenure at the St. Louis Fed,” said William Poole, who was pres­i­dent of the reserve bank from 1998 to 2008. “Every­one respect­ed his pro­fes­sional skills and good sense.” . . . .

“A Rash of Deaths and a Miss­ing Reporter – With Ties to Wall Street Inves­ti­ga­tions” by Pam Martens; Wall Street Jour­nal; 2/3/2014. [4]

In a span of four days last week, two cur­rent exec­u­tives and one recent­ly retired top rank­ing exec­u­tive of major finan­cial firms were found dead. Both media and police have been quick to label the deaths as like­ly sui­cides. Miss­ing from the reports is the salient fact that all three of the finan­cial firms the exec­u­tives worked for are under inves­ti­ga­tion for poten­tially seri­ous finan­cial fraud.

The deaths began on Sun­day, Jan­u­ary 26. Lon­don police report­ed that William Broeksmit, a top exec­u­tive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kens­ing­ton sec­tion of Lon­don. The day after Broeksmit was pro­nounced dead, Eric Ben-Artzi, a for­mer risk ana­lyst turned whistle­blower at Deutsche Bank, was sched­uled to speak at Auburn Uni­ver­sity in Alaba­ma on his alle­ga­tions that Deutsche had hid $12 bil­lion in loss­es dur­ing the finan­cial cri­sis with the knowl­edge of senior exec­u­tives. Two oth­er whistle­blow­ers have brought sim­i­lar charges against Deutsche Bank.

Deutsche Bank is also under inves­ti­ga­tion by glob­al reg­u­la­tors for poten­tially rig­ging the for­eign exchange mar­kets – an action sim­i­lar to the charges it set­tled in 2013 over its traders’ involve­ment in the rig­ging of the inter­est rate bench­mark, Libor.

Just two days after Broeksmit’s death, on Tues­day, Jan­u­ary 28, a 39-year old Amer­i­can, Gabriel Magee, a Vice Pres­i­dent at JPMor­gan in Lon­don, plunged to his death from the roof of the 33-sto­ry Euro­pean head­quar­ters of JPMor­gan in Canary Wharf. Accord­ing to Magee’s LinkedIn pro­file, he was involved in “Tech­ni­cal archi­tec­ture over­sight for plan­ning, devel­op­ment, and oper­a­tion of sys­tems for fixed income secu­ri­ties and inter­est rate deriv­a­tives.”

Magee’s par­ents, Bill and Nell Magee, are not buy­ing the offi­cial sto­ry accord­ing to press reports and are plan­ning to trav­el from the Unit­ed States to Lon­don to get at the truth. One of their key issues, which should also trou­ble the police, is how an employ­ee obtains access to the rooftop of one of the most­ly high­ly secure build­ings in Lon­don.

Nell Magee was quot­ed in the Lon­don Evening Stan­dard say­ing her son was “a hap­py per­son who was hap­py with his life.” His friends are equal­ly mys­ti­fied, stat­ing he was in a hap­py, long-term rela­tion­ship with a girl­friend.

JPMor­gan is under the same glob­al inves­ti­ga­tion for poten­tial involve­ment in rig­ging for­eign exchange rates as is Deutsche Bank. The firm is also said to be under an inves­ti­ga­tion by the U.S. Senate’s Per­ma­nent Sub­com­mit­tee on Inves­ti­ga­tions for its involve­ment in poten­tial mis­con­duct in phys­i­cal com­modi­ties mar­kets in the U.S. and Lon­don.

One day after Magee’s death, on Wednes­day, Jan­u­ary 29, 2014, 50-year old Michael (Mike) Duek­er, the Chief Econ­o­mist at Rus­sell Invest­ments, is said to have died from a 50-foot fall from a high­way ramp down an embank­ment in Wash­ing­ton state. Again, sui­cide is being pre­sented by media as the like­ly cause. (Do peo­ple hold­ing Ph.D.s real­ly attempt sui­cide by jump­ing 50 feet?)

...

Accord­ing to a report in the New York Times in Novem­ber of last year, Rus­sell Invest­ments was one of a num­ber of firms that received sub­poe­nas from New York State reg­u­la­tors who are prob­ing the poten­tial for pay-to-play schemes involv­ing pen­sion funds based in New York. No alle­ga­tions of wrong­do­ing have been made against Rus­sell Invest­ments in the mat­ter.

The case of David Bird, the oil mar­kets reporter who had worked at the Wall Street Jour­nal for 20 years and van­ished with­out a trace on the after­noon of Jan­u­ary 11, has this in com­mon with the oth­er three tragedies: his work involves a com­modi­ties mar­ket – oil – which is under inves­ti­ga­tion by the U.S. Senate’s Per­ma­nent Sub­com­mit­tee on Inves­ti­ga­tions [8] for pos­si­ble manip­u­la­tion. The FBI is involved in the Bird inves­ti­ga­tion.

Bird left his Long Hill, New Jer­sey home on that Sat­ur­day [9], telling his wife he was going for a walk. An inten­tional dis­ap­pear­ance is incom­pat­i­ble with the fact that he left the house wear­ing a bright red jack­et and with­out his life-sus­tain­ing med­i­cine he was required to take dai­ly as a result of a liv­er trans­plant. Despite a con­tin­u­ous search since his dis­ap­pear­ance by hun­dreds of vol­un­teers, local law enforce­ment and the FBI, Bird has not been locat­ed.

When a series of trag­ic events involv­ing one indus­try occur with­in an 18-day time­frame, the sta­tis­ti­cal prob­a­bil­ity of these events being ran­dom is remote. Accord­ing to a num­ber of media reports, JPMor­gan is con­duct­ing an inter­nal inves­ti­ga­tion of the death of Gabriel Magee. Giv­en that JPMor­gan, Deutsche Bank and Rus­sell Invest­ments are sub­jects them­selves of inves­ti­ga­tions, a more seri­ous, inde­pen­dent look at these deaths is called for.

“Argen­tine Bank­ing Sys­tem Archives Destroyed By Dead­ly Fire” by Tyler Dur­den; zerohedge.com; 2/5/2014. [5]

While we are sure it is a very sad coin­ci­dence, on the day when Argenti­na decrees lim­its on the FX posi­tions banks can hold and the Argen­tine Cen­tral Bank’s reserves account­ing is ques­tioned pub­li­cal­ly, a mas­sive fire — killing 9 peo­ple — has destroyed a ware­house archiv­ing bank­ing sys­tem doc­u­ments. As The Wash­ing­ton Post reports, the fire at the Iron Moun­tain ware­house (which pur­port­ed­ly had mul­ti­ple pro­tec­tions against fire, includ­ing advanced sys­tems that can detect and quench flames with­out dam­ag­ing impor­tant doc­u­ments) took hours to con­trol and the sprawl­ing build­ing appeared to be ruined. The cause of the fire wasn’t imme­di­ate­ly clear — though we sug­gest smelling Fer­nan­dez’ hands...

We not­ed yes­ter­day that there are major ques­tions over Argenti­na’s reserve hon­esty...

While first print is pre­lim­i­nary and sub­ject to revi­sion, the size of recent dis­crep­an­cies have no prece­dent. This sug­gest that the gov­ern­ment may be attempt­ing to man­age expec­ta­tions by tem­porar­i­ly fudg­ing the “esti­mate ” of reserve num­bers (first print) while not com­pro­mis­ing “actu­al” final report­ed num­bers. If this is so, it is a dan­ger­ous game to play and one like­ly to back-fire.

Dur­ing a bal­ance of pay­ments cri­sis — as Argenti­na is under­go­ing — such manip­u­la­tion of offi­cial sta­tis­tics (and one so crit­i­cal for mar­ket sen­ti­ment) is detri­men­tal to the need­ed con­fi­dence build­ing around the tran­si­tion in the FX regime.
And today the gov­ern­ment decrees lim­its on FX hold­ings for the banks...

Argentina’s cen­tral bank pub­lished res­o­lu­tion late yes­ter­day on web­site lim­it­ing fx posi­tion for banks to 30% of assets.

Banks will have to lim­it fx futures con­tracts to 10% of assets: res­o­lu­tion

Banks must com­ply with res­o­lu­tion by April 30
And then this hap­pens...

Via WaPo,

Nine first-respon­ders were killed, sev­en oth­ers injured and two were miss­ing as they bat­tled a fire of unknown ori­gin that destroyed an archive of bank doc­u­ments in Argentina’s cap­i­tal on Wednes­day.

The fire at the Iron Moun­tain ware­house took hours to con­trol...

The destroyed archives includ­ed doc­u­ments stored for Argentina’s bank­ing indus­try, said Buenos Aires secu­ri­ty min­is­ter Guiller­mo Mon­tene­gro.

The cause of the fire wasn’t imme­di­ate­ly clear.

Boston-based Iron Moun­tain man­ages, stores and pro­tects infor­ma­tion for more than 156,000 com­pa­nies and orga­ni­za­tions in 36 coun­tries. Its Argenti­na sub­sidiary adver­tis­es that its facil­i­ties have mul­ti­ple pro­tec­tions against fire, includ­ing advanced sys­tems that can detect and quench flames with­out dam­ag­ing impor­tant doc­u­ments. . . .

“There are cam­eras in the area, and these videos will be added to the judi­cial inves­ti­ga­tion, to clear up the motive of the fire and col­lapse,” Mon­tene­gro told the Diar­ios y Noti­cias agency.