JPM, Epstein and the Virgin Islands

The Loopholes in the Epstein Bill

Maybe if new Jeffrey Epstein files come to light, the nation’s biggest bank might finally be held accountable.

Chances are you’ve heard the news. On his Truth Social site last night, the president changed course: “House Republicans should vote to release the Epstein files, because we have nothing to hide…”

The Wall Street Journal’s front-page assessment: “It was a sharp reversal for Trump, who had sought for months to deter Republicans from supporting the measure. But a last-minute push wasn’t getting results, officials said, and risked calling even more attention to the matter as Trump seeks to calm voter anxiety over the cost of living.”

The Journal understates the scale of the reversal: The Epstein files were a proximate cause of the longest “partial government shutdown” in U.S. history.

Now a measure sponsored by Reps. Thomas Massie (R-Kentucky) and Ro Khanna (D-California) appear set to win enough Republican votes to pass the House.

In theory, it would force the Justice Department’s hand to release all records related to Epstein, the late financier and sexual predator.

In practice, however, the bill contains two enormous loopholes — big enough to ensure that the dirtiest laundry might never be exposed.

The bill gives sole discretion to the U.S. attorney general to withhold or redact materials that “contain personally identifiable information of victims” or that could lead to an “unwarranted invasion of personal privacy” of victims.

“This almost gives carte blanche to Pam Bondi to withhold whatever she wants, on the grounds of protecting ‘victims’,” writes independent reporter Michael Tracey — “because a huge universe of records are obviously going to have some nexus with the identifying information of purported ‘victims’.”

In addition, the bill permits certain records “to be kept secret in the interest of national defense or foreign policy,” again at the sole discretion of the attorney general.

“This means any records which bear on the involvement of intelligence agencies could be perpetually hidden, per the criteria set forth by Khanna and Massie,” Tracey writes.

“It’s silly. This bill would not give people the disclosure they want. In fact, it would provide additional justification for the government to continue thwarting disclosure.”

That said, in a best-case scenario, the depth of Epstein’s relationship with JPMorgan Chase would finally be revealed for all the world to see.

As we chronicled throughout 2023, the government of the U.S. Virgin Islands sued JPM — asserting that the bank not only “turned a blind eye” to Epstein’s activities but that it “actively participated in Epstein’s sex-trafficking venture from 2006–2019.”

Which is even more shocking than it sounds, because JPM supposedly dumped Epstein as a client in 2013.

(The Virgin Islands asserted jurisdiction over the case because Epstein’s private island was located southeast of Saint Thomas.)

The pretrial documents also alleged JPM facilitated Epstein’s withdrawals of physical cash — far beyond the $10,000 threshold that banks are required to report to the U.S. Treasury — “while also being aware that Epstein paid his underage sexual assault victims in cash.”

Alas, the Virgin Islands government agreed to settle the case for a $75 million payment from JPM — about 0.18% of the bank’s revenue the previous quarter.

But the story doesn’t end there. Read on…

JPM, Epstein and the Virgin Islands

Everything about the settlement was hinky — and illustrated a too-cozy relationship between Epstein and leading Virgin Islands politicians.

“We would have lots more details about Epstein's political network if the JPMorgan-U.S. Virgin Islands lawsuit continued,” tweeted independent reporter Lee Fang last summer.

“That litigation revealed how Epstein bribed exemptions from the sex offender list, paid off elites for tax exemptions & law enforcement leniency, Epstein's emails with former Israeli prime ministers and Wall St bankers and much more.

“But the US Virgin Islands governor fired the attorney general leading that lawsuit and rapidly settled the case. Who is the US Virgin Island's Attorney General now? Gordon Rhea, the attorney for the Epstein estate.”

(We’ll let that sink in for a moment before the next jaw-dropper…)

This past weekend brought an even more stunning revelation: During a congressional hearing in 2019, it appears Epstein was feeding questions via text message to the Virgin Islands’ delegate to the House.

Democratic Del. Stacey Plaskett cannot cast votes — but she can and does take part in committee hearings — often quite vocally.

In February 2019, the House Oversight Committee was questioning Michael Cohen, the lawyer known as Trump’s “fixer” during the president’s first term. This was six months before Epstein’s death in custody.

Text messages from Epstein’s estate released by the committee last week show that Epstein and Plaskett were texting each other while the hearing was in progress. At one point, Cohen brought up the name of a Trump aide, Rhona Graff.

Epstein: Cohen brought up RONA - keeper of the secrets

Plaskett: RONA?? Quick I’m up next is that an acronym

After Plaskett peppered Cohen with questions — including one about Rhona Graff — Epstein texted, “Good work.”

The Washington Post was first to unearth the text exchanges from the newly released documents. But the aforementioned Lee Fang says the paper’s article omitted essential context…

Also missing is the fact that Plaskett — first elected in 2014 — now serves on the House Intelligence Committee. Amazing how that works, no?

One can only hope that additional Epstein disclosures will shed light on any chummy arrangements between Virgin Islands politicos and JPMorgan Chase.

As a reminder, JPM admitted to five federal felony counts 2014–2020 — everything from manipulating the price of precious metals to JPM’s shady dealings with the notorious fraudster Bernie Madoff.

(JPM did business with Madoff for the same reason it did business with Epstein: Both men delivered wealthy new clients to the bank.)

But being JPM means never having to say you’re sorry. Its share price has appreciated 166% in the last five years — spanking both the S&P 500 and the Nasdaq. Go figure…

Year-End Rally Hits an Air Pocket

“No need to sugarcoat it… It’s ugly out there!”observes Paradigm chart hound Greg Guenthner.

“Investors were hoping for a classic holiday season melt-up heading into the final stretch of 2025. Instead, we’re watching key market segments melt down.”

Thursday was especially concerning — a 1.6% drop in the S&P 500 and a 2.3% slide for the Nasdaq. Greg’s state of play now…

• “The S&P 500 has wiped out its November advance, and the news is quickly flipping bearish
• “The odds of a Fed rate cut in December are now near 50/50, down from 92% just weeks ago
• “And the tailwinds that powered markets higher are shifting, with the most speculative corners feeling it first.”

For the moment, Greg figures this is a short-term pullback. For confirmation, he’s watching QQQ, the big Nasdaq 100 ETF — which plunged below its 50-day moving average on Thursday. Next target: The 100-day moving average around $585. “A strong bounce off this spot could spell the end of this pullback move.”

Greg is also eyeing the crypto space because it trades in tandem with many tech stocks. Here, he’s watching for a Bitcoin bounce off $92,000.

“The $100K level is an important psychological area for Bitcoin,” he says. “The less time it spends below this round number, the better chance it has to ignite a stronger rip that everyone chases.”

For the moment, the jury’s still out.

After a flat day Friday, the major U.S. indexes are just barely in the red — the S&P 500 at 6,725. (For perspective, that’s down 2.4% from its record close on Oct. 29.)

As for those levels Greg’s watching, the QQQ is little moved at $610. Bitcoin languishes a little under $94K.

Precious metals are mixed — gold slightly in the red but still easily over $4,000. Silver’s in the green, its grip on the $50 handle looking firmer and firmer. Congratulations are in order for PRO-level readers of Rickards’ Strategic Intelligence: On Friday, Dan Amoss urged them to take 470% gains on GLD, the big gold ETF — an impressive gain for just over four months.

Elsewhere in the commodity complex, crude is little moved — just over $60.

The big scheduled events this week are Nvidia’s earnings on Wednesday afternoon and the September job figures (delayed by the shutdown) Thursday morning.

The Hemp Industry’s Death Penalty

It’s one of those backroom deals that makes Capitol Hill such a sleazy place — and it could wipe out a $20 billion industry.

As noted here last Wednesday, the bill to reopen the government includes a provision to ban scads of hemp products that were legalized during the first Trump administration in 2018.

There was no debate, no discussion — just a couple of paragraphs slipped in last-minute. In theory, it was “for the children” — preventing the distribution of certain products containing THC, the active ingredient in cannabis.

But the THC concentration set by the bill is so low as to outlaw at least 95% of CBD and CBN products that have come on the market since 2018 — stuff that can’t get you high but that does offer relief to kids with epilepsy, veterans with PTSD and seniors with chronic pain.

“This could not come at a worse time for our farmers,” Sen. Rand Paul (R-Kentucky) writes in an Op-Ed for the Louisville Courier Journal.

“Costs have increased while prices for crops have declined. Farm bankruptcies are rising. For many farmers, planting hemp offered them a lifeline. Hemp can be used for textiles, rope, insulation, composite wood, paper, grain and in CBD products, and growing hemp helped farmers to mitigate the losses they’ve endured during this season of hardship…

“Hemp products aren’t the only things being targeted — it’s also the hemp plants themselves. The bill changes the current Farm Bill definition of hemp plants from .3 delta-9 THC to .3 total THC. In other words, crops already in the ground would be declared illegal. This rips the rug out from under American farmers, whose investments will be stripped away from them.”

It appears that Paul’s fellow Kentuckian — the on-his-way-out and not-always-with-it Mitch McConnell — is a prime mover behind this change.

McConnell was all for legalizing hemp in 2018. But a strategic campaign contribution by the alcohol industry might have brought about a change of heart.

Booze sales are down in recent years, which may or may not have something to do with the availability of hemp products.

In any event, internet sleuths have found McConnell collected a $73,000 contribution from William Street. He’s a former executive with Brown-Forman Corp. (BF) — the Louisville-based maker of Jack Daniel’s and Korbel, among other brands.

Coincidentally or not, BF’s share price rose 5.6% in the days before last week’s vote.

The ban is not immediate: “Congress just set a 365-day timer for updated, common-sense hemp regulations,” says an email from Charlotte’s Web, a maker of hemp products.

“The Appropriations Act includes a one-year window before any restrictions take effect - a critical opening to bring balanced, science-based regulation to a category that has been asking for it for a decade.”

[Editor’s disclosure: I am a Charlotte’s Web customer. The “Stay Asleep” CBN gummy I take from time to time will be banned absent further legislation.]

“I was able to force a vote in the Senate to remove the hemp ban,” says Sen. Paul — “and while this effort was not successful on the first attempt, it will not be the last word.”

To be continued…

Mailbag: Good Help Is Hard to Find

After noting last week that “quality of labor” is becoming a huge problem for small business, several readers wrote in to discuss the possible reasons. One in particular we want to spotlight today…

“My husband and I own and run a mom and pop HVAC business in northeast Ohio. We both work in the field installing and repairing heaters and AC units. We have no helpers. I occasionally use my sons or grandsons when we need help, but they know nothing about the trade and have their own jobs.

“The reason we have to work like this started in 2020. We had a couple laborers that worked with us and we were teaching them the trade as they worked. One was full-time and three were part-time. When the free money started flowing, they quit and we never heard from them again.

“Afterward we have made numerous attempts at hiring new laborers. We can’t afford to hire skilled workers. Our prices would skyrocket, and we serve the lower-end clients who can’t afford big company prices. So we won’t go that route.

“Anyway, we have found that people don't want to work. They want an outrageous amount of hourly wage… $30 was the cheapest. They have no knowledge, skills or tools for the trade. Most have no transportation. They also only want to work certain hours on certain days. No weekends or holidays.

“They demand certain things, like one guy demanded mental health days whenever he felt he needed one. One lady wanted us to pay her boyfriend to ‘tag along’ in case it was too hard for her. Remember this would just be for a laborer job while learning the trade. There are more ridiculous demands I won't bother you with.

“My experience tells me these people don't really want to work for the money they make. They don't want to get calloused hands, dirty clothes, busted knuckles or sore bodies but they want big money.

“With our clientele that we strive to help out, we barely made $30 an hour after paying expenses. Our model of paying attention for an unskilled job, while learning the skills to make a better wage is apparently outdated. We won’t and can’t pay what people want for unskilled labor.

“So we will just keep doing it our way. We make it work. Too close to retirement to change it. Not that I would pay a useless person to do nothing at a higher wage anyway.

“Just my experience. Thank you.”

Dave: And thank you for sharing. More replies tomorrow…