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JPMorgan Chase Spends $500 Million On a Data Center
1sockchuck writes "JPMorgan Chase spends $500 million to build a data center, according to CEO Jamie Dimon. That figure places the firm's facilities among the most expensive in the industry, on a par with investments by Google and Microsoft in their largest data centers. Dimon discussed the firm's IT spending in an interview in which he asserts that huge data centers are among the advantages of ginormous banks. Dimon also offered a vigorous defense of the U.S. banking industry. 'Most bankers are decent, honorable people,' Dimon says. 'We're wrapped up in all this crap right now. We made a mistake. We're sorry. It doesn't detract from all the good things we've done. I am not responsible for the financial crisis.'"
Ya... they're sorry; sorry all the way to the bank!
Wait...
It doesn't detract from all the good things we've done.
Can I get a line item listing of these "good things"?
brandelf -t FreeBSD
Don't piss on my leg and tell me it's raining.
'We're wrapped up in all this crap right now. We made a mistake. We're sorry. It doesn't detract from all the good things we've done. I am not responsible for the financial crisis."
Actually, it *is* your fault, and it *does* detract from everything you've done.
It's like a daycare provider saying "Sorry that we sold your kids' organs. It seemed like a good investment. But it shouldn't detract from the great job we were doing before that!"
Banks are supposed to MAKE money, not lose it. And they lost money on a MASSIVE scale due to incompetence and especially greed. Everything they do is tainted, forever.
Yeah, and serial killers are always described as real nice people by their neighbors.
Sorry, Jamie: your company has become largely a parasite. For the average American, you provide no more benefit than 10 banks 1/10th your size: when you get so big, you have negative economies-of-scale.
But your salary is dictated by being big.
If you were serious about preventing such disasters in the future, you'd reform your compensation schemes and endorse restoring Glass-Steagal.
Test your net with Netalyzr
Apart from the normal everyday fractional-reserve loans from the Federal Reserve Bank, JPMorgan probably owes close to $0. I'm assuming you were referring to the $25 billion in bailout money, which was apparently paid in full.
You do not have a moral or legal right to do absolutely anything you want.
When JPMorgan is busted up into regional banks -- some of which do investment banking, the others FDIC insured savings & loans -- will they be able to share this server farm?
I have not once opened a Chase bank account, but through mergers and acquisitions they owned 5 of my accounts at one time. Easily the worst bank I have ever had to deal with. But now I know where all my interest charges and late fees went to.
A funny side note...Capital One has done the same thing to me, they now own 3 of my accounts. I hope they're an easier bank to work with if something goes wrong.
reinstitute Glass-Stegall, preventing conglomerates of investment banks with commercial lenders backed by government-insured savings and checking accounts. And the assembling of massive coast-to-coast financial supermarkets like Bank of America and Citibank should never have been approved by Federal regulators under the Clinton and Bush administrations.
Dimon and JPMC actually proves the rule. After the 2008 banking crash and TARP fiasco, Dimon was anointed as proof that not every big bank CEO was a bad egg. (Although JPMC accepted TARP money, they did so because Henry Paulson asked them to, not because they necessarily needed it). Jamie Dimon, said John McCain and many others, was old school and took his responsibilities to the world economy and banking industry seriously.
Obviously, not seriously enough in the face of the non-ending quest for superior returns and mind-blowing take home pay.
He was still scum. And these bankers are laundering their drug money. This guy is trying to redefine decent and honorable. "Mistake" I like that.
“He’s not deformed, he’s just drunk!”
I am not responsible for the financial crisis.
No raindrop feels it's responsible for the flood.
Instead of ranting about how it's not his fault, why didn't he just repeatedly mutter phrases about 'Big Data' and 'Cloud Infrastructure' to the reviewer?
"I am not responsible for the financial crisis."
No, but the people who work for you were. And you're supposed to be in charge.
deleting the extra space after periods so i can stay relevant, yeah.
'Most bankers are decent, honorable people,'
Being decent and honorable isn't worth shit if the institution they work for is monstrous.
That's what it boils down to, at the end of the day. They internalised the profits and externalised the losses as best they could. They would have blown that bubble up for eternity if they could have, and paid no heed to the consequences. They want every cent you have, no less. Regulation kept them in chains, and now those chains are broken.
What we've witnessed is 30 years of large financial institutions gradually being allowed to do exactly what the fuck they want. Naturally, the monster devoured so much, so greedily, and took such monumental risks that it took merely a few years of true excess for it to ignite the biggest world slump since 1929. It didn't learn from then, it didn't repent or change its ways, and you can be sure as hell that it hasn't learned now. The devastation it wrought will happen again and again, simply because destruction is all it knows.
In light of that grim reality, who gives a toss how decent they are as individuals.
So does this mean I can now use punctuation marks in my password? Seriously, you can't do this for online banking at Chase.
"We were a port of safety in the storm."
“It’s a free. Fucking. Country.”
This article really makes me angry. Who does this support other than the IT industry that supplies them with 500 Million in servers, networking equipment & infrastructure?
What is this data center going to do? A grad student could design a decent database system for trades and banking. So they now have a 500 million $ data center, are they now going to use that scrape a few more milliseconds off there HFT's or the associated algorithm's? Are they going to figure out the optimal market strategy to beat there competitors? They can't possibly have enough data to fill something like that, so it has to computation power, right?
How does this contribute to society other than support an electric company? Don't give me liquidity bullshit.
Separate your banking from investing and then we can talk about how "banks" like this isn't a plague on society. /rant
No one person is. The financial crisis was built by a huge number of people.
But he did contribute. Part of the financial crisis is the lack of regulation in the industry. The London Whale incident proved we're not quite past it. Mr. Dimon sure as hell lobbied for less regulation.
I liken regulation to maintenance on your heart. The parallel is... your heart rhythm is surprisingly similar to the general market health. There are inputs (you're sick, you're running you're sleeping... vs. general economic news, P/E ratios, etc) and even feedback. It works most of the time. I wouldn't want to be on an EKG all day. You're not gonna put a pacemaker in me to regulate my heart-rate for the odd chance i may need it some day. Its a waste of the machine and my time.
But... every once in a while a heart can get out of whack. You get arrhythmia, and you need to shock it back to normal. My grandmother has a pacemaker. She'd be dead now if it wasn't for that. She also had a heart attack, luckily enough she was in the hospital when it happened, so she's ok. By the "never regulate" crowd's wisdom, they'd say "well, there are so many people's hearts that work fine that a pacemaker is never needed, it a complicated surgery that just gets in the way" she'd not have a pacemaker, and they'd assume she'd magically adjust.
So, we need to strike the balance. Too much regulation/heart shocking kills the market/patient. But, many people see the normal market/healthy heart and say "hey, we'll never need regulation, it's wasted money". They say, don't even have the doctor, don't even have the defibrillator. Well, then when the market shock comes, they're unprepared, and we all die. Or in this case, we came in in the last minute with the shock, too late, and the patient has limped along. And half the country states that the problem was the defibrillator, that somehow the heart attack patient would have magically come back all on their own.
Yeah ProPublica is wrong. It's called an accounting trick. Borrow money from the government in loan #2, and then pay back the government on loan #1 (TARP). General Motors pulled the same schenanigans when it claimed to "pay back" the loans, but in fact is still deep in debt to the government.
It's reminiscient to how a certain president (I'll let you guess) claimed to "put 100,000 more cops on the street". In reality the law said 100,000 cops or 100,000 cop-equivalents... like new computers. Most departments spent the money on computers and only hired an additional ~500 actual cops.
When you listen to a politician or CEO or marketer you have to realize they are not lying to you. Instead they are redefining words on the fly (a "cop" is not really a cop... could be a computer), or omitting crucial information (we paid TARP, but we borrowed money to do it).
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
That is what you usually find behind these projects.
As to "we made a mistake", if that were all it was, why are those few bad apples not in prison and stripped of their fortunes? You let it happen on your watch, you are just as guilty as these criminals!
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Remind me again how many "too big to fail" banks/finance firms/etc. have been broken up since 2007?
Do you have problem concentrating? ADHD?
NAKED shorts, as in - nothing was borrowed to sell.
MY OTHER COMMENTS
In GM's case, yes, it was an accounting trick. In JP Morgan's case, Goldman's Case, and in the case of several other banks, it's not. All of the big banks were forced to take loans from TARP; many of them didn't want to. It's widely believed that JP Morgan was among the banks that did not need or want the loans, and has therefore almost certainly paid them all back.
If you don't believe me, please, prove me wrong. Provide some evidence that JP Morgan still owes the government money, even on gross. (On net, I would be willing to bet they are owed money, due to treasury holdings).
I hate grammar Nazi's.
[citation needed]
Specifically, I'm wondering which government program (or anybody else, for that matter) provided the funds for loan #2? I doubt it'd be the Federal Reserve Bank, which wouldn't lend out that much money in the first place (hence necessitating the bailouts) without more cash being in the JPM's reserves.
In fact, JPM's corporate debt is at its lowest since the bailout, regardless of the source.
That's okay... you can feel free to keep ranting about politics if it makes you feel better.
You do not have a moral or legal right to do absolutely anything you want.
But regulations are bad!
Some regulations are bad. How often do we geeks criticize regulations/law/policies addressing the internet, computers, or other tech areas? What makes you think the US Congress does a better job in the domain of banking and finance than they do in the domain of technology?
There is nothing inherently wrong with wanting to reform regulations. The problem is that reforming regulations can be done as poorly as creating and implementing regulations.
Goldman (and JP Morgan?) don't owe the government anything because they were simply gifted enough money to stay afloat, free and clear. This was done by the government paying AIGs debts to Goldman, even though they were unregulated, non-FDIC arrangements. In other words, the banking industry set up a scapegoat (AIG) to receive bailouts for it and then die, which it did. So Goldman and the others get their cake ($$$ with 9 zeros) and eat it too (carping about how they never wanted and didn't need TARP).
The "Community Reinvestment Act" doesn't require loans to poor credit risks.
They got a fair interest rate. They borrowed $25B, and paid it back 7 months and 20 days later. The revenue to the government was $1.7 B.
It was preferred stock with a 5% dividend, with warrants attached. This basically means the banks sold stock to the government with a required, 5% dividend. The government also received warrants, which allow them to purchase additional common stock at a predetermined price (These warrants were dilutive, that is, existing shareholders pay for the government's profit when they are exercised). The banks "repaid" the loans by buying back the preferred stock. The government was then left with the ability to buy shares of the banks at a discount if their stock performed well (If the share price was greater than the exercise price of the warrants, the government would purchase the shares at a discount).
TARP was certainly not a sweetheart deal. Bernanke and Paulson (Not Geithner) sat in a room and basically said they were going to offer the banks the loans, but it was all or nothing. If anyone refused to take the loans, no banks would be able to borrow. Any bank that had refused would have gone down in history as "The bank that vetoed the bailout." Payback was also forcibly delayed. The idea was that if half of the banks took loans and half didn't, the market would panic, selling the banks that took loans and buying the banks that didn't. This would have caused the bailout to fail immediately, and, in fact, have the opposite of the desired effect.
I guess to answer your question; yes, I have an opinion.
I hate grammar Nazi's.
http://www.merriam-webster.com/dictionary/ginormous
http://artofeloquence.com/unwords/
The first use of Ginormous was in 1948 as British “military forces’ slang”. It’s a blend of gigantic and enormous and refers to something extremely large or gigantic in size. Ginormous is a word that is currently acceptable to use, but only in informal conversation. It is considered a bit too childish a word to use in formal or business settings.
last i checked, slashdot is not a formal or business setting. it's a troll farm. arguing that point is childish.
insensitive clod overlords obligatory xkcd car analogy russian reversals whoosh pedant fanbois ftfy in 3...2...1..PROFIT
That dastardly Obama and his accomplice, George W. Bush, who signed it into law in December of 2008 before Obama was in office. The union vote would have certainly gone to the Republicans had Obama not intervened!
The auto bailout was stupid, and although Bush had little to no choice, (Why veto a bailout that's going to get signed a month later, and cost more because of the wait?), the idea that it was to secure the union vote when signed into law AFTER Obama was elected but BEFORE he took office is absurd. The Democrats had the union vote already, and they'll have it this year, too. No action necessary. The Republicans don't even want the union vote. Yes, additional, larger bailouts were approved afterwards by Obama, but again, he already had their votes, and would still have them now even if he didn't bail out the automakers.
I hate grammar Nazi's.
The Fed ALWAYS extends short-term loans via the discount window. The Fed gave preferential rates because they had incentives that the private lenders did not -- to lower rates without regard for profit. This was a big story when it came out because everyone screamed "$7.7 trillion" when it was really more like $77 Billion in overnight loans, every night for 100 days (Not real numbers, but the math is the same. $ * days = $7.7 trillion, $7.7 trillion / days = average daily on-loan balance. At NO point did the government have $7.7 trillion at risk). These loans were to stimulate lending at the banks, lending is how banks make their money, so of course, the banks profited from this lending. It was a legitimate story, but the numbers were overblown for dramatic effect, something I would not expect from Bloomberg, and they took some heat for it.
I hate grammar Nazi's.
Was this money "conjured" up from states 51 through 58?
Shhhh! No one must speak of the Stealth States.
The case of AIG created all sorts of systematic and regulatory trouble. More questions were raise than answered in the handling of AIG.
That $500 million price tag tells me one thing - someone is making a killing !
Muchas Gracias, Señor Edward Snowden !
I happen to know personally that JPM didn't have any interest in the government money (who wants government debt?) and didn't need it (they didn't get into subprime stuff) but they agreed that it was necessary to take it to prevent a panic. They paid it back in full as soon as they were allowed to.
There's a lot of hatred at banks around here, and most of it is fair. But frankly JPM isn't one of them. They're even in favor of tougher (and substantive!) regulations because the uncertainty of crashes hurts them as much as the rest of us.
I have developed a truly marvelous proof of this comment, which this signature is too narrow to contain.
Having lived in Michigan in 2008, I can offer some insight into those million disappearing jobs. They're real. They're almost all in the northern Midwest, in the supply chains heading into Detroit. Machine shops in the area are commonly contracted out for a year at a time making a single set of parts for a car, with full expectation of getting a new contract when that one's filled. Around the massive part plants, other dependent industries grow to serve the hundreds of workers at the big plant - restaurants, grocery stores, strip malls... anything a worker would be likely to stop at on his way home from work.
While the idea that a single car company's reorganization would directly affect that many jobs is indeed absurd, the indirect jobs are just as dependent on Detroit's stability. One lost contract at a small plant can put a few thousand people out of work, and most of them aren't comfortably over the union's safety net. Those contracts aren't exactly easy to come by, either, so if a major manufacturer like GM or Chrysler has to back out of their contracts, it could easily be a few years before the plant could start up again.
You do not have a moral or legal right to do absolutely anything you want.
Quite the opposite, the CRA (of 1977!,) requires
CRA lending needed to be done "consistent with safe and sound operation." In 1999, banking regulators issued guidance concerning sub-prime lending and made the point that CRA lending needed to be responsible -- well underwritten, well priced, and understandable by the borrower.
Also
With respect to performance, Canner and Bhutta did three types of analysis. First, looking at mortgages originated between January 2006 and April 2008, they found that sub-prime and Alt-A loans originated in zip codes with incomes just below the level that "counts" for CRA purposes performed slightly better than those originated in zip codes with incomes just above the CRA level. They also looked at the performance of first mortgages originated under the affordable-lending programs of NeighborWorks America, most of which counted for CRA purposes, and found that these loans had delinquency rates lower than sub-prime or Federal Housing Administration loans, and foreclosure rates lower even than prime loans. Finally, they noted that only about 30 percent of foreclosure filings in 2006 took place in CRA-eligible zip codes. link
That's right, tightly regulated lenders making first mortgages under the CRA had a lower foreclosure rate than largely unregulated lenders making other types of mortgage loans including prime loans. Blaming the CRA for the foreclosure crisis is the reddest of red herrings and allows the true culprits (independent mortgage originators and their enablers in the securitization arms of the big banks and the credit rating agencies) to walk away scott free.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Allowing GM to default would have been extremely painful in Michigan; there's no doubt about that. The pain in Michigan would be offset in other parts of the country, and the net would ultimately be positive. But even with the bailout, things in Michigan are bad. The government should have let GM go through bankruptcy and funded make work programs in Michigan while GM got its house in order (And, likely, got absorbed by another auto manufacturer). Let the free market deal with corporations. When corporations fail, people lose jobs, and wealth is redistributed, naturally, to those who can best use it, namely other, more efficient corporations. In the mean time, the government should be using excess tax dollars (You know, from raising taxes when things are going well, to offset tax cuts in lean times) to fund welfare benefits for those who fall victim to the natural business cycle.
I hate grammar Nazi's.
"(they didn't get into subprime stuff)"
According to Reuters, in 2007 JPM was involved in subprime lending: "JPMorgan's first-quarter subprime mortgage originations, through Chase Home Finance, jumped 11 percent to $3.02 billion, according to Inside Mortgage Finance." So your knowledge may be more personal than reliable. And as of 2012, according to other sources, is still involved in Credit Default Swaps so there is reason to continue distrusting banks.
Do you hear of any US banks that want Glass-Steagall reinstated? No? Banks want regulations that protect them with a facade of trust, not restrict them from unlimited salaries and shareholder profits. But hey, at least they'll be hiring some database and network admins.
On the one hand, I agree... Michigan was screwed to begin with, and no less screwed now.
On the other hand, that's a lot of folks whose lives depend on having constant access to that wealth, regardless of where it's distributed.
Michigan effectively put all its eggs in one basket without realizing it. Nobody ever thought that all the Detroit car companies would be failing at once without something else in the area taking their place.
You do not have a moral or legal right to do absolutely anything you want.
Dimon is "sorry", yet pretends that he did "good things"? WTF!!! That's a joke, right?
Perhaps he's sorry that, as one of the biggest crooks in the world, he didn't go to jail? Or maybe he's sorry about the wash trading he did, and that he got only a 30k fine, for manipulating the crude oil markets? Or probably, he is sorry for JP-Morgan naked short selling on the Silver market? Or for emitting more bonds of Silver than they physically have? Or...
Come on, we all know what these data centers are for. They are for doing high frequency trading. It's been a long time that we all know such trades are destroying more wealth than it creates.
Such declaration is simply outrageous. We're tired of the financial terrorists. None have been punished, yet destroying jobs and lives by the millions, and proves of that accumulating. This one day will stop, once the general public understands what is going on. They'd better have strong necks when that day comes, because probably, their head will go off, just like in the French revolution.
In the mean time, since the people have lost their power over this disgusting "elite", everyone should play on the same game, and buy (physical) silver coins. Not only this is a very good investment, especially considering today's record low, but this also has the side effect of crashing JP-Morgan, since (as I wrote above) they did very dangerous bets, and already lost billions. As Max Keiser puts it: "GO GO! Silver liberation army!"
JP Morgan will soon go the way of Enron... They are engaged in multiple accounting fraud, and it already showed with their bad bets on Silver.
I bet they do. But how do you determine that they're reporting the actual financial state of the company when the regulators and they have a common interest in representing the company as being healthier than it actually is?
Somebody works or JP Morgan.....
Huh? They are a publicly traded company. They have financial reporting, and a lot of it, too.
So was Enron
Knowledge = Power
P= W/t
t=Money
Money = Work/Knowledge so the less you know the more you make
So, when I read that [JP Morgan is] "in favor of tougher (and substantive!) regulations", one may wonder what this means.
It means exactly what you hint at. It's meaningless talk to convince a target audience of properly educated intellectuals. It's fake regulations, lobbied and created by the banking industry. A financial industry which has repeatedly demonstrated, on local and foreign economies, it's systemic skill in taking from the many to give to the few.
What's needed? Among addressing the issues you raises (speculative investments), perhaps also more small local banks and no multinational corporations which are too big to control. It's what the 99 Percenters, Occupy Wall Streeters, and others are working toward.
Wtf, how is everyone paying the same tax rate "real capitalism"? Tax fairness is a completely normative component of economics. And besides, a "flat tax" that everyone pays the same rate is NOT fair in any way. I would be completely screwed if I had to give up half of my income. Warren Buffet? Not so much.
I hate grammar Nazi's.