Bloomberg News revisits JPMorgan Chase’s screwing of Jefferson County, Alabama, as the county debates whether to file for bankruptcy because of awful deals its politicians made after getting millions of dollars in bribes from JPMorgan:

JPMorgan Chase & Co. (JPM)’s Charles LeCroy said the key to landing bond deals in Jefferson County, Alabama, was finding out whom to pay off. In one example, that meant a $2.6 million payment to Bill Blount, a local banker and longtime friend of County Commissioner Larry Langford.

“It’s a lot of money, but in the end it’s worth it on a billion-dollar deal,” LeCroy told a colleague in 2003, according to a complaint filed by the Securities and Exchange Commission.

That’s because in the $2.9-trillion market for state and local government debt, where 80 percent of all financings are negotiated in private, conflicts of interest prevail. While Langford and Blount are in jail, LeCroy is fighting an SEC action. JPMorgan, which provided most of the toxic debt that devastated Jefferson County, has suffered no loss of business as the nation’s third-largest underwriter of municipal bonds, according to data compiled by Bloomberg…

“As an outsider looking in, it just certainly appears to me that JPMorgan ravaged this county,” said Robert Brooks, a finance professor at the University of Alabama in Tuscaloosa and the author of a textbook on derivatives. “They convinced Jefferson County to pursue a strategy they never would have followed to generate a lot of fees.”

And:

Jefferson County’s financing shows how Wall Street peddled complex bond-and-derivative deals that backfired on taxpayers, from small Pennsylvania school districts to California’s state government. Banks may have charged $20 billion in hidden fees on the derivatives alone, Andrew Kalotay, a New York-based financial consultant who specializes in such agreements, told an SEC hearing in Jefferson County last month. The agreements allowed lenders to earn fees that were rarely, if ever, disclosed, while exposing municipalities to unexpected increases in borrowing costs.

Yet while JPMorgan’s deals denuded Jefferson County, the company has emerged with its municipal-debt underwriting business unscathed. During the past two years, public officials from California to Massachusetts hired the New York-based bank to arrange $64.7 billion of bond offerings, making it the third- largest underwriter in the market for state and local securities, according to Bloomberg data.

— On the Recession Watch, consumer confidence plunged to the lowest level in thirty-one years. Yep, lower than during the bleak days of the 2008-2009 crash.

That is the lowest number since, gulp, May 1980. We should watch what consumers do instead of what they say, and retail sales in July weren’t terrible. But confidence numbers this low are not a good sign.

The Journal’s Mark Gongloff:

We should watch what consumers do instead of what they say, and retail sales in July weren’t terrible. But confidence numbers this low are not a good sign.

And this is a must-watch WSJ interview of Nouriel Roubini on the economic problems, what caused our deficits, and why the financial system is still unstable:

— The Mirror Mail on Sunday made a giant boo-boo this week reporting that Société Générale and UniCredit might collapse, the Journal reports.

The paper, a sister publication of the widely-read U.K. tabloid The Daily Mail, did not say whose fears are rising. It cited no sources. Read literally, the story could be correct: somebody, somewhere is more afraid about the fate of these two banks than before.

But the article clearly gave the impression that SocGen and UniCredit are on the verge of collapse. Banks tend to get upset when journalists write these kinds of articles. On Tuesday, presumably after some vigorous complaining, the Mail Online published an “apology”: SocGen is not in fact on death’s door.

Yikes.

You might want to have some solid sources—or even one source, period— if you’re going to say giant banks may collapse—particularly in the midst of a mini-panic.