Want to read Slashdot from your mobile device? Point it at m.slashdot.org and keep reading!


Forgot your password?

JPMorgan Chase Spends $500 Million On a Data Center 275

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.'"
This discussion has been archived. No new comments can be posted.

JPMorgan Chase Spends $500 Million On a Data Center

Comments Filter:
  • Re:Huh. (Score:4, Informative)

    by Sarten-X ( 1102295 ) on Monday August 13, 2012 @06:00PM (#40978113) Homepage

    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 [propublica.org].

  • Re:Line Item (Score:2, Informative)

    by Anonymous Coward on Monday August 13, 2012 @06:33PM (#40978433)

    Holy shit you're a brainwashed idiot.

    1) Nobody makes money making sub-prime loans. It's trivial for any idiot to understand that loaning money to people who can't pay it back is a dumb idea.
    2) The only reason anyone did offer sub-prime loans was because either a) they knew they could sell it to the government (Fannie and Freddie) for a profit, or b) they were forced to by the Fed's regulations requiring a certain percentage of all loans be high risk loans to poor people who were buying houses far bigger than they could afford.
    3) Most of those loans were initially offered by the thousands upon thousands of real estate loan companies that sprung into existance due to the artificial market created by the Fed, not by the huge banks you've been brainwashed into hating. If you're old enough you will remember when there was a home loan business on every damn corner in every town and city.
    4) The banks that still held sub-prime loans when the market crashed lost their pants. Yeah they may have owned a lot of people's houses, but those houses were worth a whole lot less than the money still owed on the loan, so how is it a good thing from any bank's point of view to "own" someone?

  • by kraut ( 2788 ) on Monday August 13, 2012 @06:53PM (#40978621)

    Banks have a lot of data, and they need to do a lot of calculations on it. Simples.

    And having a big data centre full of computers isn't going to help you with latency (i.e. HFT), it's for storage and throughput. E.g. to revalue your derivatives positions, run stress scenarios, risk analysis, regulatory reporting (from the general reporting you get the impression that Wall Street is completely unregulated; in fact, it's more the opposite).

    How does this contribute to society other than support an electric company? Don't give me liquidity bullshit.

    Liquidity is only bullshit until it dries up.

  • Re:Line Item (Score:3, Informative)

    by Anonymous Coward on Monday August 13, 2012 @07:29PM (#40978927)

    "And how is the bank going to make a profit when the loan is underwater? The best that the bank can do in that situation is to recover the loan principle."

    Or never hold the loan in the first place. Mortgage-backed securities = The method by which known bad loans can be packaged up and sold off on the open market to investors, who are told what a great value they are.

    Banks generally don't hold loans anymore. They hold servicing rights, which is the money skimmed off you every month when you make a mortgage payment. It's a transaction fee, nothing more. The loans themselves are held by institutional investors.

    Summary: Loan brokers originated crappy loans they knew would default, and got their commission for doing so. Banks packaged the crappy ones into nice packages and called them "Awesome Investment Super Duper Grade" which were then sold to the duped investors. Risks to banks - zero. Until the entire financial market began to collapse. Oops.

    Corporate karma. Too bad we spared them nearly all of the pain they had rightfully coming.

  • Re:Line Item (Score:5, Informative)

    by rtb61 ( 674572 ) on Monday August 13, 2012 @07:32PM (#40978957) Homepage

    Corporate executives on ludicrous bonus schemes make shit loads of money on loans destined to fail, in fact that was the whole problem. Immediate bonuses being paid all the way up and down the corporate executive line for shit loans, all schemed from the top down by psychopaths, who didn't care how much money their company lost, as they were all in a cosy conspiratorial relationship to protect each other from outside view.

    Thanks to the whole principle of disposable labour, you now have disposable companies. At the highest levels it's all about squeezing out the maximum amount of money out of companies. From dirty off-shore off-balance sheet transactions, that while allowing the companies to cheat on taxes also allow those corporate executives to play all sorts of games with those funds, to cross company conspiratorial schemes to push around funds for no other reasons other than running up executive bonuses.

    Pay close attention. It's not really companies corrupting the politics any more, it's corporate executives using company funds to corrupt politicians and government agencies, getting legislation rewritten not so much to benefit corporations but more targeted at generating more income for corporate executives regardless of the consequences for companies. Psychopaths in suits, they are every where at the top executive level.

  • Re:We're Sorry... (Score:5, Informative)

    by tooyoung ( 853621 ) on Monday August 13, 2012 @08:29PM (#40979477)
    Sorry to hitchhike on a top thread, but in case anyone came here for interesting discussion regarding a $500 million data center, there is not a single comment below dealing with the topic. Just partisan bickering about TARP, etc.
  • Re:Huh. (Score:4, Informative)

    by NemosomeN ( 670035 ) on Monday August 13, 2012 @08:46PM (#40979695) Journal
    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.
  • Re:Huh. (Score:4, Informative)

    by Sarten-X ( 1102295 ) on Monday August 13, 2012 @10:09PM (#40980419) Homepage

    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.

  • by afidel ( 530433 ) on Monday August 13, 2012 @10:46PM (#40980625)

    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.


    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 [prospect.org]

    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.

Adding features does not necessarily increase functionality -- it just makes the manuals thicker.