By J. Iddhis Bing, 99GetSmart
Chronicle of the Time When We All Went Mad: The Bankers Grab The Prosecutors By The Cojones, The Coward Who Could Have Saved Greece, The Economist’s Nightmare, And A Shameless Promo For Myself
And so, like the revolving mechanisms of an old mantelpiece clock, each playing his part without a clue how the whole gizmo works, we tumble into yet another new year. It’s way past midnight, the empty bottles of champagne are scattered around the floor and we begin again, full of resolution that things will be different this time. The old music, however, continues to play on and so, like the inebriated gangsters they are, the bankers continue at their folly, which is nothing less than pushing the world over the cliff, leaving us behind, as a friend put it, on “the scorched earth of their stampede to Mammogeddon.” Someone is tugging on our sleeve and telling us it’s time to go home. But we’re lost, the streets are a maze and we have no idea where the subway is.
Could we live in a world in a world without banks? Heretical idea. A few years ago the legendary French footballer Eric Cantona – he who once said that a striker’s goal ought to be as beautiful as a poem by Rimbaud – suggested a solution to our problem: everyone should just withdraw their money from the banks. What came next, he didn’t say. And in any case, compliant governments would rescue their pals by printing more money and delivering it in dump trucks to HQ at high speed. And yet…
The game will go on for a while yet, even if economists tell us it can’t. They have their own night-thoughts, and I’ll get to that, too. Meanwhile the small countries are pulverized, raped of their resources, strangled. Business as usual. For a few details on that, see my columns onGreece and the fundraiser on Indiegogo . My friend François Fleury spent months in and near the Congolese diamond mines, and as good as his photographs are, it’s this quote from a Congolese miner that comes to mind now: “We are cursed because of our gold. All we do is suffer. There is no benefit to us.”
Shall we check in to see how our banker brethren are doing? On Wednesday December 4th the European Union leveled penalties of €1.7bn on seven banks in the Libor-Euribor-Yen rate fix. The banks named were Barclays, UBS, the Royal Bank of Scotland, Deutsche Bank, Société Générale and two American banks, Citigroup and JP Morgan. Morgan plans to fight the charges. According to their regulatory filings, they’ve set aside $23 billionfor just such occasions.
At nearly the same moment in the U.S., the Justice Department stepped forward to announce that they had “reached settlement” in a different case, reaching settlement being a fancy way of saying, No Trial. Everyone wants to avoid going to trial; not only does it cost you thousands of billable hours in legal fees but all sorts of unpleasant things can come out when prosecutors start asking questions. And yet there’s something very strange about this “settlement.”
Lanny Breuer is now Assistant Attorney General, and he made the announcement in the HSBC case, specifically the laundering Mexican and Colombian drug money. Lanny Breuer… the name rings a bell, doesn’t it? Longtime Clinton pal. How’d he get to be Assistant AG in charge of criminal activities? But let’s stay with the case.
English HSBC, frequently referred to as a “banking giant,” or simply “venerable,” has confessed to accepting billions of dollars of deposits from Colombian and Mexican drug cartels (among others), which, as you’ve probably already guessed, violates a few minor inconveniences they choose to overlook, the Bank Secrecy Act and Trading With the Enemy Act among them.
The Justice Department heralded the settlement as a record. $1.9 billion. One analyst took out his pencil and calculated that that equals five weeks income for the bank.
How did they do it? Breuer admitted that drug dealers would “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.” No one noticed. Maybe all the tellers at that Mexico City branch should be fired.
There will be no prosecutions. But Breuer did mention that, “As a result of the government’s investigation, HSBC has . . . “clawed back” deferred compensation bonuses given to some of its most senior U.S. anti-money laundering and compliance officers, and agreed to partially defer bonus compensation for its most senior officials during the five-year period of the deferred prosecution agreement.”
It gets better. America’s very own Pravda, the New York Times, reported that “Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in theprocess, endanger the financial system.” HSBC has already had to clean house: most of its senior management has been replaced. Or rather, they ran out the back door at high speed, hoping no one ever remembers their name.
Matt Taibbi, in his column, argues that, while thousands languish in jail on minor drug charges, this settlement reveals just how hollow America’s massive War Against Selected Illicit Substances really is. But it reveals something else as well: just how close the connections are between the banks and our governments. We’ve all watched as Morgan CEO Jamie Dimon gets the kid-glove treatment in Congress. But here the government had the banks within their grasp on the most serious charges, ones that relate not only to drugs and trading with the enemy but which, if pursued, might lead to the cash nexus of terrorism, the illegal weapons industry… and they backed off, for reasons we are left to surmise: “For surely the bankers would have talked.” Instead they gave up five week’s pay and shuffled the board room. Would the world have ceased to exist if HSBC was no more? No one apart from the U.S. Justice Department thinks so. One is left to wonder just what all this has to do with Hillary Clinton’s chances in 2016.
Beppe Grillo called our current politicos “zombies.” You may or may not agree.
In the next Chronique I’ll take a close look at the incredible exchange between the IMF and the finance ministers of Greece and Germany, a chess move that not only determined the short-term fate of Greece but which almost no one has written about. It’s an eye-opening episode that reveals the human reality behind the politics and to be perfectly shameless about it, I’ll post the story here on Ground Report as soon as I have 700 in the kitty on Indiegogo, the crowdfunding site. Over 7,000 people read my last piece on the banks, for which I’m grateful and not a little amazed. If each of you kicked in 1 big fat dollar, I’d be writing this column from Athens. So go toIndiegogo, toss in a fiver and you can read the inside story about the finance ministers here in a few day’s time. Let’s just call this an experiment in interactive livelihood.
For now I leave you with this, courtesy of an economist who not only has a heart but writes coherently about the world, too. (I’ll leave him unnamed for now.) After a long exegesis on the state of things, he broke down and told me what goes on his head after the lights go out: “I honestly think the revolutions on a grand scale will be sparked this spring and the summer will be a hot one.” It’s not something to look forward to but there it is. He crunched the numbers, analyzed the ratio of debt to GDP and when he laid his head on the pillow, that’s what he saw. Maybe we all do, maybe the bankers do, too, maybe they’re thinking, “Why the hell doesn’t anyone stop us?” when they turn out the lights.
See you then.
J Iddhis Bing