Open Letter to J.P. Morgan Chase, Citigroup, Bank of America, Capital One, et al

Per your request, the following is an explanation as to why I am closing my Chase Checking Account.

I was not pleased that you intended to sharply increase the interest rate on my credit card inherited by Chase from WAMU to 22.9%--which is why I closed that account in 2009 prior to the increase taking effect. Evidently, you must think that all your customers are completely clueless about financial affairs. Chase charges exorbitant & constantly increasing fees & rates during a period when the Fed is holding interest rates near 0% (actually negative when adjusted for inflation) "for an indefinite period of time".

Thus while Seniors earn almost nothing on their painfully accrued savings, the Bernanke Federal Reserve caters to and rewards institutions like yours that almost destroyed the world's economy--and still may do so.

It must be very pleasant to have the ability to borrow hundreds of millions of dollars at the Federal Reserve discount window @ 3/4 % & immediately lend the same monies back to a supposedly hapless (but in reality not) Fed @ 3 1/4% (10 year T-Bond)-a completely riskless transaction which locks in untold profits! It's probably also quite agreeable for Chase & its ilk to pay next to nothing for deposits-- less than 0.25% for Fed Funds (overnight bank-to-bank lending rate) & savings accounts & nothing at all for Demand Deposits-DD's-(checking accounts).

And rather than lending these funds to small businesses in an attempt to help revive a moribund economy, commercial banks like Chase are choking off credit by raising rates & tightening lending standards.

And this after gorging yourselves at the taxpayer trough of unlimited "Fed favors" during the financial meltdown.

These outrages continue despite recent putative financial "reform" legislation--which was hopelessly watered down thanks to the army of Congressional lobbyists the banking & credit card "industries" employ.

Your operation would impress even Tony Soprano!

You don't break legs--but you greedy and unrepentant parasites DO ruin lives utilizing legalized usury.

A Federal government that was truly populist would indict all of the large commercial banks as criminal enterprises under the RICO (Racketeering) Statutes.

I have therefore transferred my business to a financial institution not based in the U.S. & that consequently has NOT taken ANY taxpayer monies and/or guarantees & subsequently announced obscene profits a la J.P. Morgan Chase, Capital One Bank, Citigroup, et al. And it even pays nominal interst on DD's!


P.S. Please explain to this writer, Mr. Chase Chairman Jamie Dimon, why I should pay down the balances on my two closed Chase Credit cards--interest rate 15.9 %--which both Chase & failed WAMU Bank tried to raise to 22.9 % ?! (An action only averted by my closing both accouts).

Uhmmm..Go get the money from Mr. Bernanke. He'll just print or borrow it. He is an associate of Tony Soprano. You see, he likes to confiscate the income of Seniors like me, too. Then he gives it to you, Mr. Dimon. It's the "American way".

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Coming soon: The ultimate "thermonuclear" option Seniors can employ vs. the Banks, Credit Card Companies & Health Care Providers--BANKRUPTCY. How it actually IMPROVES rather than DAMAGES your credit and why. And what does it mean to be "Judgment-Proof"?

For an in-depth discussion of U.S. bank profits, please follow this link:

http://www.wsws.org/articles/2009/apr2009/bank-a18.shtml

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DISCLAIMER:

MrKen is NOT a registered financial advisor & any opinions, suggestions or strategies explained are based on his own experiences and knowledge. Readers of this blog should consult their own financial advisors, accountants and/or brokers before taking any action explicitly or implicitly recommended or recounted by this writer.
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Stock Picks for this Major Bear Market

MrKen has recently returned to trading stocks, as he has recently retired (62) and now has the free time to study and trade the market. Happily, I am showing @ a 15% profit for the January/February period in a most challenging investment environment. Here are the 3 long positions I currently have:

Coeur d’Alene Mines Corporation (NYSE:CDE) -- silver, gold, lead & zinc
Hecla Mining Company (NYSE: HL) -- silver, gold, lead & zinc
Stillwater Mining Company (NYSE: SWC) -- palladium, platinum & other metals

Almost all of the profit has been from HL; SWC was only purchased on 2/29. CDE has risen modestly in the Jan/Feb period.

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My short pick is: (but do not have an actual position at present)

Citigroup Inc (NYSE:C) -- financial products & services

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The rationale for these positions are both technical & fundamental:

TECHNICAL: The long positions have very high relative strength rankings (RS) as indicated in IBD (Investors Business Daily). The short pick has an extremely weak RS ranking. As discovered years ago by Edward O. Thorp (The Relative Strength Concept of Common Stock Forecasting--now out of print), stocks that are sharply above their 200-day moving average (MA) tend to outperform other stocks that have weaker rankings, with the converse being true for issues sharply below their 200 day MA.

FUNDAMENTAL: Silver, gold, platinum & palladium are soaring due partially to the decline in the dollar to record lows against the euro, yen & basket of 16 currences--and partially to favorable demand-supply considerations.

The greenback's slide is being caused mainly by the weak U.S. economy and the Fed's decision to "reflate" (print lots & lots of money) in order to avoid a sharp economic contraction (the dreaded 'R' word).- {More on this in a later post}-

Silver is beginning to outperform gold and most likely will actually benefit from the recently announced contemplated sales of gold by the IMF. Silver may be thought of as the "poor man's gold". Platinum, palladium & rhodium are also benefiting from power outages in South Africa (78% of world platinum productioncomes from South Africa) due to electrical infrastructure problems. These are not expected to be rectified until 2012!

And now on to my specific picks:

In 2007, Hecla Mining produced 5.6 million ounces of silver at an average total cash cost of negative $2.81 per ounce, after by-product credits. The company also has significant tax credits at its disposal.

Coeur d’Alene Mines had 2007 cash costs of $3.97 per ounce of silver. Coeur has no silver or gold production hedged.

Stillwater Mining- The precious-metals miner reported a $14 million loss for 2007 on essentially flat revenue and experienced labor problems. But 'The Motley Fool' notes that--

"How many of the companies you own have roughly doubled in 2008? None? You must not be on board the Stillwater Mining (NYSE: SWC) express. Homegrown Stillwater, which is going into 2008 with a minimal amount of hedges remaining on its platinum output. Although the company is predicting a roughly 10% rise in per-ounce cash costs, its margins ought to be magnificent."

Citigroup Inc. - Commodities, with their transparent pricing and liquidity, are the exact opposite of the toxic products that Citigroup and its ilk have produced. CDO's, sub-prime mortgages & tens of millions in trading losses are what you get if you try to 'bottom fish' this dog. OPCO analyst Meredith Whitney, who correctly predicted a cut in Citigroup's dividend back in October, last week indicated that C could fall to 16 or lower on more writeoffs. A great short!

Disclaimer:

All ideas, opinions, and/or forecasts, expressed or implied, are for informational purposes only and should not be construed as a recommendations to invest, trade and/or speculate in the markets. Any investments, trades and/or speculations made in light of the ideas, opinions and/or forecasts expressed or implied herein, are committed at your own risk, financial or otherwise.

MrKen is NOT a registered Investment Advisor & therefore NONE of the above discussion should be taken as investment advice. It is the writer's personal opinion ONLY, except where specific cites from financial publications & professional analysts are given.

As indicated above, MrKen at the time of this posting has long positions in CDE, HL & SWC.