J.P. Morgan and Its 'Victims' -- Review & Outlook, The Wall Street Journal

With Tuesday's $13 billion settlement with J.P. Morgan over the sale of mortgage-backed securities, the Justice Department has finally solved the mystery of the financial crisis. Turns out that the bankers did it—to each other, and even to themselves.

We've been critical of this government plundering of a bank that did not need a bailout in 2008, but we defy anyone to follow the logic of Tuesday's Morgan agreement. 

In Justice's press release, U.S. Attorney for the Eastern District of California Benjamin Wagner describes "credit unions, banks and other investor victims" who bought mortgage-backed securities that included "toxic" loans. The government claims that Morgan ripped off other financial institutions when it sold them bundles of mortgages. But the alleged victims include institutions where the government has separately accused managers of their own mortgage misdeeds. 

Another problem with this settlement is that even though the government says that institutional investors were the victims, much of the $13 billion is going elsewhere.

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