- Spitfire List - http://spitfirelist.com -

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.