Tag: ek Politics

If you happen to be a terrorist and drug syndicate money laundering operation.

Where is Judiciary Chairman Patrick Leahy on Big Bank Crimes and Obama?

Monday, December 17, 2012

Matt Stoller, Naked Capitalism

Last week’s big revelation on banking is that it is now official Department of Justice policy under Obama that big banks and their executives are above the law. HSBC was caught laundering money for both terrorists and drug dealers, and DOJ officials told the New York Times that they would not prosecute the bank under money laundering statutes, lest the financial system be destabilized. This was shocking, but consistent with policy made explicit by DOJ’s Head of Criminal Division Lanny Breuer back in September.

One key question is why it is that Judiciary Chairman Patrick Leahy, a former prosecutor, is utterly unwilling to do any investigation or oversight into this critical policy question? Leahy runs the Judiciary Committee in the Senate, and it would be impossible to find a more obvious topic for that committee to address. It’s not that there isn’t interest in the Senate. Senator Chuck Grassley, a Republican, and Senator Jeff Merkley, a Democrat, both blasted Eric Holder for this decision.

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Eliot Spitzer is also outraged, and said that Breuer should be “gone tomorrow”. Matt Taibbi penned a diatribe. Rep. Brad Miller called for the big banks to be broken up (which is something Neil Barofsky argued was necessary in order to prosecute these banks in the interview I did with him a fw weeks ago). The rationale from the other side doesn’t hold water. The argument is that a guilty verdict would cause the bank to lose its charter, which means it could not operate in the United States. DOJ officials would not even bring a case under the bank secrecy act, which would carry a much less severe penalty. Even if we accept this rationale, there is still no reason not to prosecute the individuals at HSBC who helped launder this money.

This isn’t just an Obama administration policy, it also belongs to Congress. Judiciary Committee Chairman Patrick Leahy, by doing no oversight, has consented to this policy framework. He has to date said nothing about the dramatic policy implied in the HSBC decision. Yet, last May, Leahy gave a pat on the back to FBI Director for doing a better job regarding fraud. The FBI and the Justice Department, he said, “have also worked hand in hand with us to make great strides toward more effective fraud prevention and enforcement.”

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So at this point, it’s worthwhile to ask, when the US government has explicitly defied Congress’s will and put big bank executives above the law, where is Chairman of the Judiciary Committee Patrick Leahy?

For the past week news has been exploding out of the London Inter Bank Offered Rate fraud.

LIBOR is (supposedly) the interest rate a small group of very large London Banks charged each other for short term (overnight or 24 hour) loans to each other.  This number was not constant from day to day or even from institution to institution, for instance Peter Bank might loan Paul Bank X amount at a rate of Y while John Bank might loan W amount at a rate of Z.  Paul Bank might accept a loan from either Peter Bank or John Bank with no particular preference for the lowest cost and no actual transaction might take place at all.

These ‘potential’ trades were reported to the British Bankers Association who sampled and normalized them to come up with a number, LIBOR, that allegedly represented the typical cost of money to the most credit worthy companies.

Since all other companies were, by definition, less credit worthy their cost for borrowing was higher and frequently formalized in contracts for actual loans as LIBOR + some amount that represented how much less credit worthy (riskier) they were.

Fair enough.

But it doesn’t stop with loans, LIBOR + risk was used to value many other financial products including pretty fancy and complicated derivatives and foreign exchange transactions.  The problem was that LIBOR was not only as entirely fictional as I am, but it was also thoroughly corrupt with the divisions of the Banks in charge of providing the data on which it was based co-operating to manipulate the value to benefit their own transactions in ways that are not obviously transparent.

It’s easy to understand how in the dark days of the financial crisis Banks liked to pretend they were more solvent and credit worthy than they actually were, but it had been commonly calculated fraudulently for years before that.

Some details of this practice are now emerging in a series of regulators’ reports, settlements, and (as unlikely as it seems) prosecutions.

Bloomberg News pursued these documents through reporting and public information requests and published an article last week that attracted a lot of attention.  It’s kind of long so I’ve excerpted a small portion below.  The title is Secret Libor Transcripts Expose Trader Rate-Manipulation but the URL says “Rigged LIBOR With Police Nearby Shows Flaw Of Light Touch”.  The “Police Nearby” simply refers to the fact that one of the most notorious trading desks where this crime occured happened to be very close to a police station.  Of more significance is “Shows Flaw Of Light Touch” which is a regulatory strategy advocated by Alan Greenspan and other Chicago School economists who argued that actual government supervision of the operations of these very large Banks wasn’t necessary because honesty could be assumed since according to their now discredited theories there was no advantage in cheating.

Pretty damn bad.

What Chained CPI Means, and Why a Cut in a Time of Inadequate Social Security Benefits Makes No Sense

By: David Dayen, Firedog Lake

Monday December 17, 2012 2:45 pm

Let’s just make clear what chained CPI is all about. The idea here is that you should not measure the cost of living simply based on the consumer price index, and then raise the costs accordingly with the rise in prices. Instead, economists say, you have to account for the substitution effect in response to price shifts. When someone cannot afford steak, maybe they buy more chicken, the theory goes. By “chaining” the CPI to account for the substitution effect, you’re really shrinking the inflation in the index, because you’re assuming that the individual will spend less by changing their lifestyle. As a result, cost of living adjustments based on a chained CPI will rise more slowly that COLAs based on an unchained one.

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(T)he idea of chaining medical treatment, as if you can just substitute a hip replacement with something cheaper, is silly. Overtreatment does exist, but the concept of a senior citizen shopping for cheaper medical care is actually kind of cruel.

Shifting to CPI-E would actually reflect the real costs of seniors, and would have their cost of living adjustment keep up with their actual needs. But of course, that’s not the goal of public policymaking. It’s to “save money,” in this case at the expense of the elderly, particularly those over the age of 80.

Chained CPI only makes sense if you think Social Security benefits and the cost of living adjustment are currently adequate enough for seniors. The fact that 15.1% of seniors are in poverty, according to the newest measure, shows that this is not at all the case. We need higher, not lower, Social Security benefits, as retirement security outside of the program withers. But adequacy is not the goal of those who want to slash benefits. And Democratic enablers call it something they can “live with.” Obviously none of them are 80 or older.

Obama’s Latest Fiscal Slope Offer: I’m Missing the Part Where Republicans Give Up Something

By: David Dayen, Firedog Lake

Tuesday December 18, 2012 6:00 am

From where I’m standing, this is a deal for the President to break his promise on tax rates, allow half of the fiscal slope to go forward, probably cut as much as 2% from GDP in 2013, and enact permanent benefit cuts to Social Security (and other government benefits) as well as unspecified cuts to health care programs, in exchange for…

1. a routine extension of unemployment insurance;
2. no more than $50 billion in infrastructure, probably less;
3. a permanent extension of things Congress does annually like clockwork (making them permanent is good public policy, but doesn’t functionally change much);
4. the chance to do this again in two years.

Meanwhile, Republicans give up tax rates that were going up anyway, an unemployment extension that they have yet to fail to pass, and a bit of infrastructure. That’s it, in exchange for cuts that will put discretionary spending well below traditional levels, cut Social Security benefits and basically ensure smaller government through caps and cuts.

More on Chained CPI, the Benefit Cut for Social Security on the Table in Fiscal Slope Discussions

By: David Dayen, Firedog Lake

Tuesday December 18, 2012 6:45 am

First of all, this is a benefit cut of about 0.3% a year, as Dean Baker points out. He adds that “This loss would be cumulative through time so that after 10 years the cut would be roughly 3 percent, after 20 years 6 percent, and after 30 years 9 percent.” Actually if we started using chained CPI in 2002, we’d be 3.6% behind today. That’s well over $1,000 a year, and the situation grows worse over time. So the greatest impact would be on the oldest seniors, which happens to correlate with the poorest.

If you think that senior citizens have had it too good for too long, getting that sweet sweet cost of living adjustment to make them unfairly wealthy, then maybe you think chained CPI is a solid idea. If you think that the highest expense for a senior is medical costs, that seniors don’t exactly comparison shop when they need medical care, that they cannot substitute along those lines, and that a cost of living index that features that substitution effect prominently doesn’t correspond to the real costs seniors face, well, you would be right.

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(A)s supporter of a Social Security deal Kevin Drum says, adopting chained CPI for Social Security by itself is a terrible deal. Even if all of the savings from it get plowed back into reducing the long-term income gap, it doesn’t do enough by itself to eliminate that. It reduces the trust fund gap by about 1/3. Which means that fiscal scolds would still be clamoring for a deal to “fix” Social Security, and the fact that the solutions were entirely on the benefit side this time around won’t matter. This is just an invitation to more cuts down the road.

Paul Krugman tries to rationalize and bargain and basically gives a lifeline to cutting these benefits, at a time when senior poverty is on the rise. Ask yourself: are Social Security benefits, which average around $13,000 a year, currently adequate to serve this population, especially when 40% of seniors rely on it for over 90% of their income? Is the solution to 15.1% of seniors in poverty to cut their benefits slowly over time? Should the centerpiece of a deal to reduce the budget contain a benefit cut to a program that has its own dedicated funding stream and no budgetary impact?

UPDATE: First, Krugman has a new post up, saying he is now “marginally negative” on the deal after being “marginally positive.” He ignores the $800 billion in extra budget cuts in the deal.

Also, if anything I undersold the impact of chained CPI, since it would affect federal employee benefits that are tied to COLA, like postal workers.

Here is what Atrios (trained economist BTW) says-

To The Phones

White House

202-456-1111

Your senators

Your House member.

No cuts to Social Security.

Gaius Publius @ Americablog offers this helpful digest-

What are we protecting?

We’re protecting three social insurance programs. These are:

    ■ Social Security

    ■ Medicare

    ■ Medicaid

What are we protecting them from? Anything that:

    ■ Reduces benefits

    ■ Turns the program from insurance to welfare (which only the “deserving” have access to)

How are these programs being threatened?

As near as I can tell, these are the threats. Note to foxes – this is the hands-off list. Each of these seven items is a benefit cut:

Social Security

    1. Raising the retirement age

    2. Chained CPI instead of current COLA

    3. Means-testing benefits

Medicare

    4. Raising the eligibility age

    5. Increasing Part B premiums

    6. Increasing “cost-sharing”

Medicaid

    7. Shifting costs to the states by any means, such as “federal blended rate,” etc.

Serious People Could be Seriously Embarrassed: Why It’s Important that We Not Go Off the "Fiscal Cliff"

Dean Baker, CEPR

Friday, 14 December 2012 09:51

Much of the media has spent the last month and a half hyping the impact of the “fiscal cliff,” the tax increases and spending cuts that are scheduled to take effect at the end of the year. They have been warning of a recession and other dire consequences if a deal is not struck by December 31st. As we are now getting down to the final two weeks and the prospect that there will not be a deal becomes more likely, many in the media are getting more frantic.

What they fear is yet another huge embarrassment, if people see the deadline come and go and the economy doesn’t crash and the world doesn’t end.

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In other words, if January 1, 2013 comes and there is no deal, we will likely see that the Serious People were again out to lunch. This will be yet another blow to the credibility of the people who are telling us that we have to cut Social Security and Medicare and do all sorts of other things that somehow always seem to have the effect of hurting the poor and middle class.

Of course many may say that the Serious People have recovered from past humiliations. After all, how long did it take them to get over the fact that not one of them was able to see the $8 trillion housing bubble whose collapse wrecked the economy? And there can be little doubt that they will quickly rewrite the history so that none of them was actually issuing the dire warnings we keep hearing about the fiscal cliff.

But some people will remember, and there will always be people rude enough to bring up past mistakes. So the Serious People really do have a lot at stake here. If we go past January 1 and there is no deal, they will be very unhappy.

Crafting a boom economy

By: Jim VandeHei and Mike Allen, Politico

December 11, 2012 04:35 AM EST

What is striking, though, is that if you put everyone from President Barack Obama and Senate Majority Whip Dick Durbin to House Speaker John Boehner and Portman on truth serum, they basically agree: Washington could set the economy on a very safe course, if not on fire, through a half-dozen policies that are not partisan.

The country’s most influential CEOs, who have been meeting with Obama and congressional leaders on these very topics, are telling them if they do some or all of this, investment, market growth and jobs will quickly follow.

Bank of America CEO Brian Moynihan said long-term commitments to measures such as tax reform and trade would provide a “certainty premium” that would help bring corporate cash off the sidelines. “If we can just allow people to keep their confidence up by getting some of these issues off the table,” he said, “you would see the economy grow and momentum continue to build, and unemployment continue to ease down, and housing starts [go] up and housing prices [go] up. All that will continue to build on itself.”

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Officials largely agree Congress should cut domestic spending, including a nice chunk out of defense, because the budget is bloated, outdated and often designed to placate specific lawmakers or defense contractors. But it will take entitlement changes, which both sides say are inevitable, to get U.S. debt levels where they need to be, which in turn plays into investment into everything from U.S. companies to Treasury bills.

“The critical problem is entitlement reform, and if taxes even have to go up to get an entitlement deal done, that still solves the vast majority of the issue,” said Kenneth Griffin, who founded Citadel LLC, a hedge fund, and is worth an estimated $3 billion. He is a Republican.

Nearly every lawmaker and staffer will tell you privately that they know the Social Security retirement age needs to go up, the rate of growth of benefits needs to be slowed on a sliding scale that protects the poor, the cap on income subjected to the tax that finances the program needs to rise and the rich should get smaller or no payout from the program.

They will also tell you Medicare, which is on pace to be insolvent in 12 years, is a much, much bigger mess and threat to long-term economic vitality – and much harder to solve. Yes, the rich need to get smaller benefits, but that is almost meaningless in terms of fixing it. Ultimately, many Americans will have to get less generous benefits that start to kick in at an older age – and those changes need to start a decade from now. Otherwise, the math simply doesn’t work.

Delusions of Wisdom

Paul Krugman, The New York Times

December 11, 2012, 3:33 pm

In said (above) piece they talk to various Very Serious People, and divine the insider consensus on What Must Be Done – which mainly seems to involve, naturally, cutting Social Security and Medicare while reducing corporate tax rates.

What I find remarkable about this piece is that after everything that has happened these past five years or so, Jim VandeHei and Mike Allen still take it for granted that these people actually know what they’re talking about; the whole premise of the article is that the insiders really do have the key, not just to good policy, but to achieving a dramatic rise in the growth rate.

Now, they don’t tell us everyone they talked to; but I think we can safely assume that, with few exceptions, the insiders in question:

• Believed that financial deregulation was a great idea, because bankers had really learned to manage risk
• Did not believe that there was a housing bubble
• Insisted that budget deficits, even in a depressed economy, would send interest rates soaring any day now
• Insisted that austerity measures would promote recovery, not hurt it, because of the confidence fairy

…

The whole theme of the Politico piece is that great things would happen if only the insiders could override all this messy democracy stuff. But the real lesson is that those insiders are not only self-dealing, but profoundly ignorant and wrong-headed. It’s too bad that so many journalists still can’t see that.

Why is Washington Obsessing About the Deficit and Not Jobs and Wages?

Robert Reich

Thursday, December 13, 2012

So why are we debating how to cut the deficit when we should be debating how best to use the cheap money we can borrow from the rest of the world to put more Americans to work?

Because too many Democrats inside and outside the Beltway have ingested the deficit cool-aide that the “serious people” on Wall Street have serving for two decades.

And the President has been all too willing to legitimize their deficit obsession by freezing federal salaries, appointing a deficit commission, and, now that the election is over, going back to deficit-speak.

A month after the election Obama was on Bloomberg Television saying business leaders need “a deal on long-term deficit reduction” before they’ll increase hiring.

That’s just not true. Before they’ll increase hiring they need customers.

Triumph of the Will gave Riefenstahl instant and lasting international fame, as well as infamy. Although she directed only eight films, just two of which received significant coverage outside of Germany, Riefenstahl was widely known all her life. The propaganda value of her films made during the 1930s repels most modern commentators, but many film histories cite the aesthetics as outstanding. The Economist wrote that Triumph of the Will “sealed her reputation as the greatest female filmmaker of the 20th century”.

Zero Dark Thirty: CIA hagiography, pernicious propaganda

Glenn Greenwald, The Guardian

Friday 14 December 2012 10.03 EST

In US political culture, there is no event in the last decade that has inspired as much collective pride and pervasive consensus as the killing of Osama bin Laden.

This event has obtained sacred status in American political lore. Nobody can speak ill of it, or even question it, without immediately prompting an avalanche of anger and resentment. The news of his death triggered an outburst of patriotic street chanting and nationalistic glee that continued unabated two years later into the Democratic National Convention. As Wired’s Pentagon reporter Spencer Ackerman put it in his defense of the film, the killing of bin Laden makes him (and most others) “very, very proud to be American.” Very, very proud.

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The fact that nice liberals who already opposed torture (like Spencer Ackerman) felt squeamish and uncomfortable watching the torture scenes is irrelevant. That does not negate this point at all. People who support torture don’t support it because they don’t realize it’s brutal. They know it’s brutal – that’s precisely why they think it works – and they believe it’s justifiable because of its brutality: because it is helpful in extracting important information, catching terrorists, and keeping them safe. This film repeatedly reinforces that belief by depicting torture exactly as its supporters like to see it: as an ugly though necessary tactic used by brave and patriotic CIA agents in stopping hateful, violent terrorists.

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(T)he idea that Zero Dark Thirty should be regarded purely as an apolitical “work of art” and not be held accountable for its political implications is, in my view, pretentious, pseudo-intellectual, and ultimately amoral claptrap. That’s true for several reasons.

First, this excuse completely contradicts what the filmmakers themselves say about what they are doing. Bigelow has been praising herself for the “journalistic” approach she has taken to depicting these events. The film’s first screen assures viewers that it is all “based on first hand accounts of actual events”. You can’t claim you’re doing journalism and then scream “art” to justify radical inaccuracies. Serwer aptly noted the manipulative shell-game driving this: “If you’re thinking of giving them an award, Zero Dark Thirty is ‘history’; if you’re a journalist asking a question about a factual error in the film, it’s just a movie.”

Second, the very idea that this is some sort of apolitical work of art is ludicrous. The film is about the two most politicized events of the last decade: the 9/11 attack (which it starts with) and the killing of bin Laden (which it ends with). George Bush got re-elected running on the former, while Obama just got re-elected running on the latter. It was made with the close cooperation of the CIA, Pentagon and White House. Everything about this film – its subject, its claims, its mode of production, its implications – are political to its core. It does not have an apolitical bone in its body. Demanding that political considerations be excluded from how this film is judged is nonsensical; it’s a political film from start to finish.

Third, to demand that this movie be treated as “art” is to expand that term beyond any real recognition. This film is Hollywood shlock. The brave crusaders slay the Evil Villains, and everyone cheers.

While parts of the film are technically well-executed, it features almost every cliche of Hollywood action/military films. The characters are one-dimensional cartoons: the heroine is a much less interesting and less complex knock-off of Homeland’s Carrie: a CIA agent who sacrifices her personal life, disregards bureaucratic and social niceties, her careerist interests, and even her own physical well-being, in monomaniacal pursuit of The Big Terrorist.

Worst of all, it does not challenge, subvert, or even unsettle a single nationalistic orthodoxy. It grapples with no big questions, takes no risks in the political values it promotes, and is even too fearful of letting upsetting views be heard, let alone validated (such as the grievances of Terrorists that lead them to engage in violence, or the equivalence between their methods and “ours”).

There’s nothing courageous, or impressive, about any of this.

Do the defenders of this film believe Riefenstahl has also gotten a bad rap on the ground that she was making art, and political objections (ie, her films glorified Nazism) thus have no place in discussions of her films? I’ve actually always been ambivalent about that debate because, unlike Zero Dark Thirty, Riefenstahl’s films only depicted real events and did not rely on fabrications.

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Do defenders of Zero Dark Thirty view Riefenstahl critics as overly ideological heathens who demand that art adhere to their ideology? If the KKK next year produces a superbly executed film devoted to touting the virtues of white supremacy, would it be wrong to object if it wins the Best Picture Oscar on the ground that it promotes repellent ideas?

I have a very hard time seeing liberal defenders of Zero Dark Thirty extending their alleged principles about art to films that, unlike this film, are actually unsettling, provocative and controversial. It’s quite easy to defend this film because it’s ultimately going to be pleasing to the vast majority of US viewers as it bolsters and validates their assumptions. That’s why it seems to me that the love this film is inspiring is inseparable from its political content: it’s precisely because it makes Americans feel so good – about an event that Ackerman says makes him “very, very proud to be American” – that it is so beloved.

TransCanada Keystone Pipeline Temporarily Halted in Texas

By Laurel Brubaker Calkins, Business Week

December 11, 2012

Michael Bishop, who granted TransCanada an easement across his property in Nacogdoches County, obtained a temporary restraining order from Texas County Court at Law Judge Jack Sinz on Dec. 7. The order blocks the company from working on Bishop’s property for two weeks while allowing work on other sections of the pipeline to proceed.

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Bishop, a 64-year-old chemist who owns a biofuels company, claims the Keystone pipeline is only permitted to carry crude oil that is liquid under normal atmospheric temperatures and pressure. Bitumen is “solid at atmospheric temperature and pressure and must be diluted for transport via pipeline,” he said in his complaint.

The U.S. Internal Revenue Service ruled last year that crude oil isn’t the same as tar sands, and that “tar sands oil” isn’t subject to the U.S. excise tax on petroleum, Bishop said in his complaint. He said TransCanada has “intentionally misled and misrepresented” the nature of its product to regulators, landowners and the public in order to obtain permits and eminent domain rights to push its project through.

“It is also a fact that the firm used coercion and intimidating tactics to obtain the property in question and that acting on the validity of their claim, I settled under duress,” Bishop said in an affidavit filed with his request for a restraining order.

Bishop said in a phone interview today that TransCanada didn’t try to negotiate with him before survey crews trespassed on his 20-acre property near Nacogdoches, located about 100 miles northeast (161 kilometers) of Houston, a year ago.

Judge temporarily halts Keystone XL pipeline in Texas

By Molly Hennessy-Fiske, Los Angeles Times

December 11, 2012, 11:38 a.m.

The decision came after Michael Bishop, 64, a retired paramedic and chemist in East Texas, filed a lawsuit arguing that TransCanada lied to him and other landowners, promising that the Keystone XL pipeline would transport crude oil, not tar sands oil.

“What they’re calling tar sands oil is not oil by anyone’s definition,” Bishop told The Times, adding that he’s worried the pipeline’s proposed contents might contaminate his land. “I’m very concerned about a leak. They need to pull the permit, go back and re-register this on the federal level as a hazardous-material pipeline and see if they can get it permitted then.”

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Environmentalists have converged on East Texas to protest the pipeline’s construction, arguing that if it leaks or spills, tar sands oil could cause dangerous contamination. Groups such as Tar Sands Blockade have protested at construction sites and highlighted the cases of landowners, including Bishop and Eleanor Fairchild, an East Texas great-grandmother arrested after a protest with actress Daryl Hannah on her property in October.

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President Obama encouraged construction of a portion of the pipeline from Oklahoma to Texas, but rejected a presidential permit for construction earlier this year, suggesting that the company reroute the pipeline to avoid areas in Nebraska that environmentalists argue should be protected. Howard said the company has proposed a new route for that portion of the pipeline and was awaiting approval from state officials.

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Bishop, a libertarian former Marine, initially fought the company’s attempt to condemn his land — 20 acres in the town of Douglass, about 160 miles north of Houston — but eventually settled with the company a month ago because he could not afford the hefty lawyers’ fees of more than $10,000.

He said he contacted environmental groups, but no one would help him bring a lawsuit against the company. So he bought a law book and decided to proceed by himself, filing suit in Austin against the Texas Railroad Commission, the state agency that oversees pipelines. He argued that it failed to properly investigate the Keystone XL pipeline and protect groundwater, public health and safety.

Joe Lieberman’s sad send-off

By Dana Milbank, Washington Post

Dec 13, 2012 01:53 AM EST

As Lieberman plodded through his speech, thanking everybody from his wife to the Capitol maintenance crews, a few longtime friends trickled in.

In came John Kerry (Mass.), who bested him in the 2004 Democratic presidential primaries and then, like many Senate Democrats, endorsed Ned Lamont, who tried to oust Lieberman from his Senate seat in 2006.

In came Susan Collins (Maine), Lieberman’s Republican counterpart on the Homeland Security Committee, whom Lieberman supported over a Democrat in her 2008 reelection.

In came GOP iconoclast John McCain (Ariz.), who was close to naming Lieberman as his vice presidential running mate in 2008 – which would have made Lieberman the first man on both a Democratic and a Republican national ticket.

…

And so it was a man with few political allies who bid the chamber farewell. “I regret to say as I leave the Senate that the greatest obstacle that I see standing between us and the brighter American future we all want is right here in Washington,” he said.

BuhBye.

You too Dana.

Merry ek’smas.

Some think I’m an unrelievedly gloomy storm crow, an albatross if you will who never shows his face except to taunt from behind a mask.

Well, that’s very true.

Still even I occasionally run across something that reminds me I really ought to get my clothes out of the dryer.

Sea Shepherd buys anti-whaling ship from Japan

Justin McCurry in Tokyo, The Guardian

Tuesday 11 December 2012

“We have four ships, one helicopter, drones and more than 120 volunteer crew from around the world ready to defend majestic whales from the illegal operations of the Japanese whaling fleet,” said Sea Shepherd’s founder, Paul Watson.

…

To compound Japan’s embarrassment, the 184ft vessel was previously moored in Shimonoseki, home to the country’s Antarctic whaling fleet, after being retired by the meteorological agency in 2010.

In its past incarnation as the Seifu Maru, the ice-strengthened vessel’s duties included gathering data on ocean currents for Japan’s north Pacific whaling fleet, according to Sea Shepherd.

Paul Watson is a bail jumping fugitive arrested in Germany and wanted by INTERPOL for endangering whalers.

In February, the whaling fleet was called back to port early with just one-fifth of its planned catch following clashes with activists.

The Sam Simon’s skipper, Lockhart MacLean, said he hoped to intercept the whaling fleet’s factory ship before a single whale was killed. “The goal is to find the factory ship, the Nisshin Maru, and to pin the bow of this ship on the stern of that factory ship throughout the duration of the campaign, and send them home without any whales killed,” he told Reuters.

“We’re confident we can seriously impact their whale quota. This year all four of their harpoon ships are going to be tied up by our four ships, and the goal is that no harpooning can be done.”

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A clause in the International Whaling Commission’s 1986 ban on commercial whaling allows Japan to kill almost 1,000 whales each year for what it calls “scientific research”.

The meat is sold to restaurants and supermarkets, although the public’s waning appetite for the delicacy has created a huge stockpile of unsold produce.

HSBC’s $1.9 Billion Settlement and the Men on the Hill

By Pam Martens, Wall Street On Parade

December 11, 2012

Today, the U.S. Department of Justice and multiple other U.S. regulators will tie all that up with a tidy red bow for a settlement of $1.921 billion; a small nick in HSBC’s profits of $22 billion last year. HSBC released a statement saying it was “profoundly sorry.”

During the July 17 Senate hearing on HSBC, Subcommittee Chairman, Carl Levin, questioned Chistopher Lok, the former head of global banknotes at HSBC Bank USA, about internal emails from HSBC that the Senate had in its possession.

In the first email, a subordinate tells Lok that a proposed bank customer has a “know your customer” profile that “documents various allegations of fraud, internal control weaknesses, and the FBI investigation into terrorist financing…” The colleague was inquiring if a special security status should be placed on this account.  Lok responds in an email: “…this is such a large bank hence malfeasance is expected” and recommends no special security status.

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• HSBC Bank USA, N.A., known as HBUS [pronounced H-Bus] functions as the U.S. nexus for HSBC’s worldwide network. HSBC has 7,200 offices in more than 80 countries and 2011 profits of $22 billion; HBUS has 470 branches across the United States with 4 million customers. HBUS provides accounts to 1,200 other banks including more than 80 HSBC affiliates.
• In 2010, HSBC was cited by its federal regulator, the Office of the Comptroller of the Currency (OCC), for multiple severe anti-money laundering deficiencies, including a failure to monitor $60 trillion in wire transfer and account activity; a backlog of 17,000 unreviewed account alerts regarding potentially suspicious activity.
• HBUS offered correspondent banking services to HSBC Bank Mexico, and treated it as a low risk client, despite its location in a country facing money laundering and drug trafficking challenges. The Mexican affiliate transported $7 billion in physical U.S. dollars to HBUS from 2007 to 2008, outstripping other Mexican banks, even one twice its size, raising red flags that the volume of dollars included proceeds from illegal drug sales in the United States.
• Foreign HSBC banks actively circumvented U.S. safeguards at HUBS designed to block transactions involving terrorists, drug lords, and rogue regimes. In one case examined by the Subcommittee, two HSBC affiliates sent nearly 25,000 transactions involving $19.4 billion through their HBUS accounts over seven years without disclosing the transactions’ links to Iran.
• HBUS provided U.S. dollars and banking services to some banks in Saudi Arabia and Bangladesh despite links to terrorist financing.

Justice Department outlines HSBC transactions with drug traffickers

By Peter Finn and Sari Horwitz, Washington Post

Published: December 11

“HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries,” Assistant Attorney General Lanny A. Breuer said at a news conference in New York on Tuesday.

One of the world’s largest banks, HSBC has its headquarters in London and $2.5 trillion in assets. It earned nearly $22 billion in profits in 2011.

Breuer said that between 2006 and 2010, the Sinaloa Cartel in Mexico, the Norte del Valle Cartel in Colombia and other drug traffickers laundered at least $881 million in illegal narcotics trafficking proceeds through HSBC.

“These traffickers didn’t have to try very hard,” Breuer said. “They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.”

The illicit money was submerged in the billions of dollars of transfers that flowed between HSBC’s Mexican and American affiliates. In many cases, the illicit cash was generated by drug sales in American cities, smuggled to Mexico and deposited at HSBC there. Then it was wired back to an account at HSBC in the United States as clean money. In other cases, bulk cash was deposited and converted into local currency, a process called the Black Market Peso Exchange by investigators.

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“If these people aren’t prosecuted, who will be?” asked Jack Blum, a Washington attorney and a former special counsel for the Senate Foreign Relations Committee who specializes in money laundering and financial crimes. “What do you have to do to be prosecuted? They have crossed every bright line in bank compliance. When is there an offense that’s bad enough for a big bank to be prosecuted?”

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In deciding not to prosecute now, Breuer said the Justice Department considered “the collateral consequences,” including the possible effects on the worldwide financial system if HSBC’s ability to operate was ruined by criminal conviction.

“If you prosecute one of the largest banks in the world, do you risk that people will lose jobs, other financial institutions and other parties will leave the bank, and there will be some kind of event in the world economy?” Breuer said in an interview.

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HSBC was also accused of allowing Iran, Sudan, Cuba and other countries subject to U.S. sanctions to move hundreds of millions of dollars through the U.S. financial system in violation of U.S. law.

“On at least one occasion, HSBC instructed a bank in Iran on how to format payment messages so that the transactions would not be blocked or rejected by the United States,” Breuer said. Payment instructions sometimes included a notation saying “do not mention Iran,” U.S. officials said.

HSBC affiliates in Europe and the Middle East also “systematically altered transaction information to strip out any reference to Iran and characterized the transfers as between banks in approved jurisdictions,” according to a July report by the Senate permanent subcommittee on investigations.

The subcommittee report said an outside auditor hired by HSBC’s U.S. affiliate found 25,000 undisclosed transactions involving Iran. And the report said that HSBC conducted business with Saudi and Bangladeshi banks suspected of having links to terrorism.

HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering

By BEN PROTESS and JESSICA SILVER-GREENBERG, The New York Times

December 10, 2012, 4:10 pm

Some prosecutors at the Justice Department’s criminal division and the Manhattan district attorney’s office wanted the bank to plead guilty to violations of the federal Bank Secrecy Act, according to the officials with direct knowledge of the matter, who spoke on the condition of anonymity. The law requires financial institutions to report any cash transaction of $10,000 or more and to bring any dubious activity to the attention of regulators.

Given the extent of the evidence against HSBC, some prosecutors saw the charge as a healthy compromise between a settlement and a harsher money-laundering indictment. While the charge would most likely tarnish the bank’s reputation, some officials argued that it would not set off a series of devastating consequences.

A money-laundering indictment, or a guilty plea over such charges, would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.

Despite the Justice Department’s proposed compromise, Treasury Department officials and bank regulators at the Federal Reserve and the Office of the Comptroller of the Currency pointed to potential issues with the aggressive stance, according to the officials briefed on the matter. When approached by the Justice Department for their thoughts, the regulators cautioned about the effect on the broader economy.

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HSBC’s actions stand out among the foreign banks caught up in the investigation, according to several law enforcement officials with knowledge of the inquiry. Unlike those of institutions that have previously settled, HSBC’s activities are said to have gone beyond claims that the bank flouted United States sanctions to transfer money on behalf of nations like Iran. Prosecutors also found that the bank had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi banks tied to terrorist groups.

HSBC was thrust into the spotlight in July after a Congressional committee outlined how the bank, between 2001 and 2010, “exposed the U.S. financial system to money laundering and terrorist financing risks.” The Permanent Subcommittee on Investigations held a subsequent hearing at which the bank’s compliance chief resigned amid mounting concerns that senior bank officials were complicit in the illegal activity. For example, an HSBC executive at one point argued that the bank should continue working with the Saudi Al Rajhi bank, which has supported Al Qaeda, according to the Congressional report.

Despite repeated urgings from federal officials to strengthen protections in its vast Mexican business, HSBC instead viewed the country from 2000 to 2009 as low-risk for money laundering, the Senate report found. Even after HSBC’s Mexican operation transferred more than $7 billion to the United States – a volume that law enforcement officials said had to be “illegal drug proceeds” – lax controls remained.

HSBC, too big to jail, is the new poster child for US two-tiered justice system

Glenn Greenwald, The Guardian

Wednesday 12 December 2012 05.14 EST

It all changes radically when the nation’s most powerful actors are caught breaking the law. With few exceptions, they are gifted not merely with leniency, but full-scale immunity from criminal punishment. Thus have the most egregious crimes of the last decade been fully shielded from prosecution when committed by those with the greatest political and economic power: the construction of a worldwide torture regime, spying on Americans’ communications without the warrants required by criminal law by government agencies and the telecom industry, an aggressive war launched on false pretenses, and massive, systemic financial fraud in the banking and credit industry that triggered the 2008 financial crisis.

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It really is the case that this principle is now not only routinely violated, as was always true, but explicitly repudiated, right out in the open. It is commonplace to hear US elites unblinkingly insisting that those who become sufficiently important and influential are – and should be – immunized from the system of criminal punishment to which everyone else is subjected.

Worse, we are constantly told that immunizing those with the greatest power is not for their good, but for our good, for our collective good: because it’s better for all of us if society is free of the disruptions that come from trying to punish the most powerful, if we’re free of the deprivations that we would collectively experience if we lose their extraordinary value and contributions by prosecuting them.

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The New York Times Editors this morning announced: “It is a dark day for the rule of law.” There is, said the NYT editors, “no doubt that the wrongdoing at HSBC was serious and pervasive.” But the bank is simply too big, too powerful, too important to prosecute.

That’s not merely a dark day for the rule of law. It’s a wholesale repudiation of it. The US government is expressly saying that banking giants reside outside of – above – the rule of law, that they will not be punished when they get caught red-handed committing criminal offenses for which ordinary people are imprisoned for decades. Aside from the grotesque injustice, the signal it sends is as clear as it is destructive: you are free to commit whatever crimes you want without fear of prosecution. And obviously, if the US government would not prosecute these banks on the ground that they’re too big and important, it would – yet again, or rather still – never let them fail.

But this case is the opposite of an anomaly. That the most powerful actors should be immunized from the rule of law – not merely treated better, but fully immunized – is a constant, widely affirmed precept in US justice. It’s applied to powerful political and private sector actors alike. Over the past four years, the CIA and NSA have received the same gift, as have top Executive Branch officials, as has the telecom industry, as has most of the banking industry.

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Having different “justice systems” for citizens based on their status, wealth, power and prestige is exactly what the US founders argued most strenuously had to be avoided (even as they themselves maintained exactly such a system). But here we have in undeniable clarity not merely proof of exactly how this system functions, but also the rotted and fundamentally corrupt precept on which it’s based: that some actors are simply too important and too powerful to punish criminally. As the Nobel Prize-winning economist Joseph Stiglitz warned in 2010, exempting the largest banks from criminal prosecution has meant that lawlessness and “venality” is now “at a higher level” in the US even than that which prevailed in the pervasively corrupt and lawless privatizing era in Russia.

Having the US government act specially to protect the most powerful factions, particularly banks, was a major impetus that sent people into the streets protesting both as part of the early Tea Party movement as well as the Occupy movement. As well as it should: it is truly difficult to imagine corruption and lawlessness more extreme than having the government explicitly place the most powerful factions above the rule of law even as it continues to subject everyone else to disgracefully harsh “justice”.

What about ‘Nobel Prize‘ don’t you understand?

The panel everyone is talking about.

Transcript of Part 1

Transcript of Part 2

A Brief Note on Mary Matalin– “The briefer the better, I’d say.”