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Mainstream Media Finally Awakens to the Fact that Big Banks Are Criminal Enterprises

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7534252614 dc24534f4a b Even the Mainstream Media Finally Awakens to the Fact that Big Banks Are Criminal Enterprises

Image by William Banzai

Alternative financial media have noted for years that:

  • As Nobel prize winning economist Joseph Stiglitz noted years ago:

“The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with.

 

The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”

Now – with the slap on the wrist of giant HSBC for laundering huge sums of drug money (the Guardian points out that “the sum represents about four weeks’ earnings given the bank’s pre-tax profits of $21.9bn last year”) – even the mainstream press is starting to catch on.

The New York Times notes:

Congressional hearings exposed weaknesses at the Office of the Comptroller of the Currency, the national bank regulator. In 2010, the regulator found that HSBC had severe deficiencies in its anti-money laundering controls, including $60 trillion in transactions and 17,000 accounts flagged as potentially suspicious, activities that were not reviewed. Despite the findings, the regulator did not fine the bank.

 

During the hearings this summer, lawmakers assailed the regulator. At one point, Senator Tom Coburn, Republican of Oklahoma, called the comptroller “a lap dog, not a watchdog.”

A New York Times editorial argues:

It is a dark day for the rule of law. 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 the process, endanger the financial system. They also have not charged any top HSBC banker in the case, though it boggles the mind that a bank could launder money as HSBC did without anyone in a position of authority making culpable decisions.

 

Clearly, the government has bought into the notion that too big to fail is too big to jail. When prosecutors choose not to prosecute to the full extent of the law in a case as egregious as this, the law itself is diminished. The deterrence that comes from the threat of criminal prosecution is weakened, if not lost.

 

***

 

Even large financial settlements are small compared with the size of international major banks. More important, once criminal sanctions are considered off limits, penalties and forfeitures become just another cost of doing business, a risk factor to consider on the road to profits.

 

***

 

According to several law enforcement officials with knowledge of the inquiry, prosecutors found that, for years, HSBC had also moved tainted money from Mexican drug cartels and Saudi banks with ties to terrorist groups. Those findings echo those of a Congressional report, issued in July, which said that between 2001 and 2010, HSBC exposed the American “financial system to money laundering and terrorist financing risks.”

As the New York Times correctly points out:

If banks operating at the center of the global economy cannot be held fully accountable, the solution is to reduce their size by breaking them up and restricting their activities — not shield them and their leaders from prosecution for illegal activities.

The Washington Post writes that its not just HSBC:

A string of august names in global banking — Credit Suisse, Lloyds Bank, ABN Amro, ING Bank and now HSBC — have reached settlements in the past couple of years with the U.S. government for billions of dollars in tainted transactions. These investigations have revealed that weaknesses in the financial system lay not with the so-called hawala brokers of Karachi, Pakistan, but the bespoke bankers of London, Amsterdam and Geneva, and their American affiliates.

 

***

 

The settlement drew criticism that HSBC had escaped lightly, given the gravity and scale of the crimes.

 

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?”

The Guardian notes:

“Steal a little,” wrote Bob Dylan, “they throw you in jail; steal a lot and they make you a king.” These days, he might recraft the line to read: deal a little dope, they throw you in jail; launder the narco billions, they’ll make you apologise ….

 

***

 

The dealings had been flagged up to HSBC bosses by an anti-money laundering officer, but to no avail – the dirty business continued.

 

***

 

[A couple of years ago, when Wachovia was busted for laundering drug money,] no one from Wachovia went to jail – and, said Woods at the time of the settlement: “These are the proceeds of murder and misery in Mexico, and of drugs sold around the world. But no one goes to jail. What does the settlement do to fight the cartels? Nothing. It encourages the cartels and anyone who wants to make money by laundering their blood dollars.”

 

***

 

Wachovia was not the first, neither will HSBC be the last. Six years ago, a subsidiary of Barclays – Barclays Private Bank – was exposed as having been used to launder drug money from Colombia through five accounts linked to the infamous Medellín cartel.

 

***

 

And the issue is wider than drug-money. It is about where banks, law enforcement officers and the regulators – and politics and society generally – want to draw the line between the criminal and supposed “legal” economies, if there is one.

 

***

 

No one was sanctioned under criminal law last month when the ING bank was fined $619m for illegally moving billions of dollars into the US banking system….

 

***

 

A foremost trainer of anti-money laundering officers in the US is Robert Mazur, who infiltrated the Medellín cartel during the prosecution and collapse of the BCCI bank in 1991, and who tells the Observer that “the only thing that will make the banks properly vigilant to what is happening is when they hear the rattle of handcuffs in the boardroom“.

 

***

 

People don’t like to ask how close the banker’s finger is to the trigger of the killer’s gun,” says Woods.

 

But in this newspaper – when we revealed the original “cease and desist” order against HSBCthe former head of the UN Office on Drugs and Crime, Antonio Maria Costa, posited that four pillars of the international banking system are: drug-money laundering, sanctions busting, tax evasion and arms trafficking. [indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis.]

The response of politicians is to cower from any serious legal assault on this reality, for the simple reasons that the money is too big (plus consultancies to be had after leaving office). The British government recruits a former chairman of HSBC as trade secretary just as the drug-laundering scandal breaks.

 

***

 

The notion of any dichotomy between the global criminal economy and the “legal” one is fantasy. Worse, it is a lie. They are seamless, mutually interdependent – one and the same.

The Guardian reported last year:

“Wachovia’s blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations,” said Jeffrey Sloman, the federal prosecutor. Yet the total fine was less than 2% of the bank’s $12.3bn profit for 2009. On 24 March 2010, Wells Fargo stock traded at $30.86 – up 1% on the week of the court settlement.

 

The conclusion to the case was only the tip of an iceberg, demonstrating the role of the “legal” banking sector in swilling hundreds of billions of dollars – the blood money from the murderous drug trade in Mexico and other places in the world – around their global operations, now bailed out by the taxpayer.

Huffington Post writes:

The message this is sending is if you want to engage in money laundering, make sure you’re doing it within the context of your employment at a bank,” [University of Notre Dame law professor Jimmy Gurulé, a former assistant U.S. Attorney General and former Undersecretary for Enforcement for the U.S. Treasury Department] said in a phone interview. “And don’t go small. Do it on a very large scale, and you won’t get prosecuted.”

 

It’s essentially telling the executives in these institutions crime pays,” Neil Barofsky, former Special Inspector General for the Troubled Asset Relief Program, the government’s bailout program, told CNN. “Go ahead, do whatever you want to do, enjoy your profits, and the worst thing that happens, well, you have some fines that really make up a couple of weeks of profits that you lose.”

Barofsky explains:

DOJ’s actions with regards to HSBC are … downright terrifying for weakening the general deterrence for megabanks, both foreign and domestic, which could rationally interpret yesterday’s actions as a license to steal.

 

***

 

Yesterday’s action now spikes the punch with a new toxin, confirmation that criminal penalties are off the table, leaving a worst-case scenario of a fine totaling far less than even a single quarter’s earnings. Given the potential profits of criminal behavior and the unlikelihood of personal consequences for the executives directing it, the message is clear: Crime pays. This will inevitably lead to more reckless risk-taking that will further undermine systemic stability and lead to an even greater financial meltdown down the road.

Matt Taibbi notes:

When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC’s Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn’t protect the banking system, it does exactly the opposite. It terrifies investors and depositors everywhere, leaving them with the clear impression that even the most “reputable” banks may in fact be captured institutions whose senior executives are in the employ of (this can’t be repeated often enough) murderers and terrorists. Even more shocking, the Justice Department’s response to learning about all of this was to do exactly the same thing that the HSBC executives did in the first place to get themselves in trouble – they took money to look the other way.

(Taibbi also notes that the failure to prosecute HSBC shows that the war on drugs is a joke. He’s right; and see this).

The top Wall Street fraud expert – William Black – confirms:

Public reports of the results of the government investigations of HSBC describe a bank that has been a criminal enterprise for at least 15 years. The current settlement addresses only three of the many scandals HSBC has committed over that time period. HSBC is a recidivist of epic proportions, but the Obama and Cameron governments have failed to prosecute HSBC or any of its officers. When powerful corporations and their controlling officers grow wealthy through massive frauds and do so with impunity from criminal sanction integrity and justice are eaten away. Effective financial regulation, supervision, and prosecutions are essential to “free” financial markets. When cheaters prosper honest firms are driven from the markets, a point that the Nobel Laureate George Akerlof explained in his famous 1970 article on markets for “lemons.” He described a “Gresham’s” dynamic in which bad ethics drove good ethics from the marketplace.

BBC points out that we will end up paying for the banks’ sins:

The point, as the Governor of the Bank of England said recently, is that banks may not have adequate capital to absorb the full financial cost of all the punishment being meted out for banks’ past sins.

 

And as you will be tired of hearing, capital is expensive. And when banks are obliged to raise more of it, the burden falls initially on investors and subsequently on customers – who are forced to pay more for banking services to reward the providers of the capital.

 

Or to put it another way, we are all punished when banks are found guilty.

Senators Slam Department of Justice

Congress is almost entirely bought and paid for.

But even so, Democratic Senator Merkley just wrote a letter slamming the Department of Justice:

Assistant Attorney General Lanny Breuer highlighted just how brazen the violations were, with traffickers depositing “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 window.” Sanctions violations were equally deliberate, with the bank intentionally stripping information from transactions to avoid detection. Yet despite these clear and blatant violations, the Department of Justice refused to bring criminal charges against the bank, relevant employees, or senior management.

 

Indeed, Mr. Breuer stated yesterday that in deciding not to prosecute, the Department considered the “collateral consequences” of its decision on the financial system. Mr. Breuer stated “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?” The HSBC decision comes on the back of deferred prosecution agreements with Standard Charter Bank and ING Group related to similar charges.

 

***

 

I am deeply concerned that four years after the financial crisis, the Department appears to have firmly set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically important financial institution. This “too big to jail” approach to law enforcement, which deeply offends the public’s sense of justice, effectively vitiates the law as written by Congress. Had Congress wished to declare that violations of money laundering, terrorist financing, fraud, and a number of other illicit financial actions would only constitute civil violations, it could have done so. It did not.

 

***

 

Drug cartels are also increasingly connected to terrorism. According to the Drug Enforcement Administration, 39 percent of State Department-designated foreign terrorist organizations (FTOs) have “confirmed links” to the drug trade, as of November 2011.  The consequences to U.S. national security for violations involving terrorism financing … are obvious and severe. Congress deemed criminal law the appropriate tool for punishing and deterring actions that have such serious and damaging public consequences.

 

***

 

According to the U.S. Sentencing Commission, jail time is served by over 96 percent of persons that plead or are found guilty of drug trafficking, 80 percent of those that plead or are found guilty of money laundering, and 63 percent of those caught in possession of drugs. As the deferred prosecution agreement appears now to be the corporate equivalent of acknowledging guilt, the best way for a guilty party to avoid jail time may be to ensure that the party is or is employed by a globally significant bank. The Department’s deferred prosecution agreements may offer something in the way of promises of future compliance, but they look sorely lacking in justice and accountability.

Merkley also notes that failing to criminally prosecute bank crimes makes the “too big to fail” problem even worse:

Refusing to prosecute on the grounds of financial stability is also troubling from the perspective of ending “too big to fail.” The Dodd-Frank Wall Street Reform and Consumer Protection Act, which declared some institutions to be systemically important financial institutions subject to tougher regulation, did not declare that those institutions would be exempt from criminal prosecution. Indeed, the Dodd-Frank Act explicitly created new authority to permit a failed institution to be wound down safely, without impacting financial stability. If a financial institution, because of its criminal actions, ultimately fails, that may indeed be precisely the consequence that justice and accountability demand, and which is so necessary to deterring future illegal behavior. I am deeply concerned that the Department’s continuing application of deferred prosecution agreements on the grounds of financial stability runs contrary to the intent of Congress and undermines the accountability to the rule of law that is so fundamental to a healthy, functioning free market economy.

In a separate letter, Republican Senator Chuck Grassley also slammed the justice department:

The Department has refused to prosecute any individual employees or the bank responsible for these crimes. This troubling lack of real enforcement will have consequences for the health of our economy and the safety and prosperity of the American people.

 

***

 

Despite the fact that this is a “record” settlement, for a bank as gigantic as HSBC this is hardly even a slap on the wrist. It only amounts to between 9 and 11% of HBSC’s profits last year alone, and is a bare fraction of the sums left unmonitored. Additionally, the DPA states that “at least $881 million in drug proceeds” entered the U.S. financial system, but how much more remains undiscovered? Did HSBC profit from the DPA because it actually made more than $1.92 billion by providing services to drug kingpins and terrorists? The American people may never know, because you have declined to prosecute.

 

Even more concerning is the fact that the individuals responsible for these failures are not being held accountable. The Department has not prosecuted a single employee of HSBC—no executives, no directors, no AML compliance staff members, no one. By allowing these individuals to walk away without any real punishment, the Department is declaring that crime actually does pay. Functionally, HSBC has quite literally purchased a get-out-of-jail-free card for its employees for the price of $1.92 billion dollars.

 

There is no doubt that the Department has “missed a rare chance to send an unmistakable signal about the threat posed by financial institutions willing to assist drug lords and terror groups in moving their money.” One international banking expert went as far as to argue that, despite the “astonishing amount of criminal behavior” from HSBC employees, the DPA is no more than a “parking ticket.” A former banking regulator added that it is “mind-boggling” how the Department believes that “you can have a financial system and allow this kind of impunity.” Future bank employees with a choice between following the law or profiting from illegal activities will have been taught the lesson that they will never face prison time for their actions. Consequently, this DPA does little to discourage future lawbreakers, and leaves the U.S. financial system highly vulnerable to exploitation by drug cartels and terrorists.

 

The Department’s inexcusable reluctance to prosecute is the continuation of a failed policy allowing lawbreakers to escape justice. In a letter to the Department on March 9, 2012, I noted that the Department had “brought no criminal cases against any of the major Wall Street banks or executives who are responsible for the financial crisis” …. As others have repeatedly warned, failing to prosecute individuals or banks when they have committed crimes will result in perverse incentives and ultimately undermine the integrity of the U.S. financial system and economy.

 

The United States is already seeing the results of these failed policies. Past settlements with large banks prove that they do nothing to change what appears to be a culture of noncompliance for some businesses. In March 2010, the Department arranged a then-record $160 million deferred prosecution agreement with Wachovia based on its laundering of more than $110 million from Colombian and Mexican drug cartels. Officials at the time stated that “blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.” In this case, a bank escaped with a record monetary settlement and a conspicuous absence of individuals behind bars. If the story sounds eerily similar, that’s because it is. It happened again with HSBC.

 

Make no mistake, the Department’s refusal to prosecute individuals or the bank directly threatens the safety of Americans. After evidence revealed Wachovia’s involvement with money-laundering, one whistleblower stated, “[i]t’s simple: if you don’t see the correlation between the money laundering by banks and the 30,000 people killed in Mexico, you’re missing the point.” HSBC’s criminal actions have no doubt enabled similar violence in Mexico by supporting the very cartels now terrorizing Mexican civilians. This violence often spills over the border into American cities ….

 

As the Ranking Member of the Senate Judiciary Committee, I have an obligation to ensure that the executive branch is fully, fairly, and effectively enforcing the law. But what I have seen from the Department is an inexplicable unwillingness to prosecute and convict those responsible for aiding and abetting drug lords and terrorists. I cannot help but agree with an editorial in the New York Times that “the government has bought into the notion that too big to fail is too big to jail.”

 

 

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Sun, 12/16/2012 - 23:22 | 3070084 Water Is Wet
Water Is Wet's picture

Good post.  Tyler's about the most famous adversarial journalist around currently.

Sun, 12/16/2012 - 22:00 | 3069881 Zer0head
Zer0head's picture

Dearest Shoom:

Thanks for the epistle, is there a short and concise version?

Sun, 12/16/2012 - 23:33 | 3070099 Radical Marijuana
Radical Marijuana's picture

Sorry Zer0head, there are no shorter versions. Unlike the cat, your avatar, that simply says "Ack" ... everything I say only gets longer and longer ... since I mainly write for my own amusement ...

P.S.

I find it amusing how about the only thing we seem to know for sure about the past of President Obama is that period of time when he was smoking lots and lots of cannabis, and his group's favourite pet word for that has now entered the language as a widely known nick name for doing that.

Sun, 12/16/2012 - 19:45 | 3069514 tip e. canoe
tip e. canoe's picture

yup, if the MSM is pushing this meme all of a sudden, there is a purpose behind it.   capital controls a'comin?

Mon, 12/17/2012 - 00:02 | 3070171 optimator
optimator's picture

Adam Lanza’s mother Nancy was a‘survivalist’ who believed the world was on the verge of violent, economic collapse.  His father isTax Director and Vice President of Taxes at GE Energy Financial Services. 

Mon, 12/17/2012 - 13:29 | 3071421 tip e. canoe
tip e. canoe's picture

the major descrepancies list:

http://www.veteranstoday.com/2012/12/17/questions-about-the-connecticut-...

though until i see any evidence to the contrary, the LIBOR connection smells like well poison to me.

Sun, 12/16/2012 - 19:05 | 3069450 Radical Marijuana
Radical Marijuana's picture

The original principles of punitive damages, or exemplary damages, going back in the English law court cases for a few Centuries, where obvious common sense. People can not be allowed to keep any profit from deliberately breaking the law, or else the law will deliberately be broken.  The principles of punitive damages were repeatedly outlined in many court cases. For a couple hundred years, at least, the precedential decisions were stating the obvious: a fine that is less than the amount of money made from deliberately breaking the law becomes nothing more than a license fee, or a cost of business, to continue to deliberately break the law.

Indeed, not even jail sentences are enough, unless those are an adequately meaningful deterrent, since people could still calculate that going to jail for a while was nevertheless worth the profit to be made from committing the crime. The ideas regarding what deterrence must be are OBVIOUS COMMON SENSE, and those ideas were repeatedly stated in many court cases, for Centuries. However, what has actually happened is that the courts have also become too corrupt, and so have been deliberately ignoring the basic ideals of justice. THAT DELIBERATE IGNORANCE OF THE RULE OF LAW IS FOUND IN CONSTITUTIONAL CASES. It became particularly ridiculous that the general taxpaying population was required to pay the fines caused by the dishonesty of individual government officials, who deliberately violated the law.

I had a court case about the uses of political contributions in which that happened:

I spent ten years on that case, during which time I read all the leading court authorities on punitive damages. In the end, in that case, the "punishment" the court ordered was merely tokenism.

The basic principle is "THERE IS NO RIGHT WITHOUT A REMEDY." When the remedies deliberately ignore the principles of punitive damages and deterrence, then the idea that one has "rights" is nothing but a cruel joke. The entire system, throughout every aspect of it, has been systematically corrupted. The whole system is terminally corrupt, as far as I can tell, since it is like a terminal illness, which has become too severe and too wide-spread to be possible to cure. We are looking at the decline and fall of civilization. The long games of political processes are so totally rigged, that they are practically tilted to be a vertical cliff. Those in power get to make the rules of the game, and can unilaterally change those rules. Those in power get to appoint the referees of that game, and those in power pay those referees. Although the "rule of law" is a great ideal, in the real world it has been reduced to being nothing but bullshit!

Indeed, if one actually studies these matters long and hard enough, then one has to abandon all of the false fundamental dichotomies that our system pretends to be the ideals upon which it is supposed to be based. To face the real social facts is to understand that there IS a combined money/murder system, and that the best organized criminals actually control the world. The biggest gangsters are the banksters. They already effectively control the puppet politicians, who get elected by enough of the masses of muppets.

IF we are scientific about the social reality, then there can be no doubt that money is backed by murder, and that the debt controls depend on the death controls. Civilization is, and must necessarily be, operated according to the principles and methods of organized crime. All solutions to the real social problems based on ideals about "truth" or "justice" or "liberty" are merely more of the same old bullshit, which assist the biggest bullies to continue to get away with their runaway triumphant frauds.

After realizing several decades ago that our monetary system was basically insane, and working upon that problem since then, I have developed a series of deeper paradigm shifts in political science to use to talk about these problems, and what their real solutions should be ... However, I expect the vast majority of people to deliberately ignore those ideas. I expect that the current systems of runaway triumphant frauds will continue to be ineffectively opposed by reactionary revolutionaries, who promote the same old impossible ideals, which actually enable the frauds to rationalize and justify themselves.

This article by George Washington was a good summary of how even the mass media can no longer so easily ignore the degree to which the biggest gangsters are the banksters, and that they have effectively taken control of the governments. However, the genuine solutions to these runaway problems should be paradigm shifts, to stop using false fundamental dichotomies to understand these things. We should start using unitary mechanisms to understand what is really happening.

MONEY IS BACKED BY MURDER. The only way to make democracy work would be to democratize the death controls. We have to understand the degree to which the privatization of the control over the money supply was due to the privatization of the death controls. The main historical manifestations of that were the assassinations of politicians that could not be bribed or intimidated. With that as the central core of the achievement of the methods of organized crime taking control over the political processes, everything else followed. We now have the powers of "We the People" almost 99%+ already privatized. Collectively, the banksters are trillionaire mass murderers.  However, it is useless to retreat to psychology to explain that, unless one puts that psychology inside of the bigger ecological context.

Human beings necessarily operate as gangs of robbers in their environment. Civilization was the growth of bigger and bigger gangs. There are no fundamental dichotomies between people. Governments are the best organized public gangs of criminals, and behind them are now the banksters, as the best organized private gangs of criminals. Human laws are legalized lies, backed by legalized violence. There is never going to be any better resolution of these real runaway problems as long as we continue to rely upon the transcendental poetry about "truth, liberty, justice or the rule of law" to provide us with guidance, unless we radically transform how we understand those concepts.

However, of course, I see that that is extremely unlikely to actually happen, since it would require a prodigious series of political miracles to see enough people think differently enough about politics to make that possible. That is why I continue to presume that the established systems of runway triumphant frauds will eventually collapse into chaos, since they can not be fixed within their own frame of reference. Indeed, the only apparent way that we could develop new ideas are through the processes of the current runaway triumphant frauds driving themselves too mad, through too much of their own "success" eventually causing them to go through psychotic breakdowns, causing genocidal wars, along with democidal martial law. At present, those appear to be the ONLY ways that enough of the mainstream morons, the masses of muppets, misled by the mass media, are going to be forced to think enough, to finally have new enough ideas. Those are the most probable ways that we will actually develop different death controls, to deal with the runaway debt insanity situations. The only other genuine alternatives must be better death controls, through higher consciousness making a greater use of information. That is the essential reality of the problem with the banksters controlling the governments, in the ways that they do today.

Mon, 12/17/2012 - 08:32 | 3070726 Liberty2012
Liberty2012's picture

I disagree about needing chaos to create something new. Chaos would likely create long term collapse.

Return to principles is key. Standing by the individual. Truth starts with each individual. We all learn and know things a little bit differently. Everyone speaks truth, even when it looks like they are not. It's a matter of discovering their perspective.

The dishonest money system erodes value. Slowly at first, faster later.

Truth, justice and law are not irrelevant. They are jus currentlyt being ignored. That cannot last. We need to stand ready to use them to prevent a complete collapse of civilization.

Christian values reflect the values required for individual freedom. Love and truth are very nearly the same thing. You can't really have one without the other. Life requires both as a foundation.

Mon, 12/17/2012 - 02:13 | 3070417 honestann
honestann's picture

Pretty sick, isn't it?  Those of us who bothered to work all the way through it end up finding the unavoidable state of human beings --- total losers, totally clueless, and utterly incapable of operating their own consciousness.  And it seems the number of exceptions, the number of humans who decide to be honest with themselves and work to understand the nature of reality (including human beings), appears to be in the hundreds or perhaps thousands... out of 7 billion.

Since 99.9999% of humans are clueless and easily manipulated by the predators-that-be, it is pointless to hope for a widespread solution.  This might be the first realization that those of us in the 1-in-a-million club need to identify.  Forget organization, forget information campaigns, forget any solution that requires more than a dozen people (at most) to implement.

What does this mean, in practical terms?

Well, one general approach is to evade as much of the consequences of a predator-dominated world as we can.  This can take multiple forms.  Some might just continue to live in conventional locations, keep their mouths shut, stay away from as many of the predator-dominated places and actions, and try to live out their lives with minimal impact from the predators-that-be and predator-class.  Perhaps that's what most of us 7,000 or so are doing (assuming 1-in-a-million is a reasonably accurate estimate).

Another approach is similar, but much more effective, albeit costly and/or involved to implement.  I refer to moving to the extreme boonies somewhere and creating a self-sufficient lifestyle.  I moved away from the USSA over 3 years ago, and spent most of my life savings to implement this at a cost of about $350K, plus a huge investment of time and effort.  I don't see how this can be done for much less than $250K, unless someone is comfortable living in a dwelling created from a 40-foot box or a cave, so some will not have the financial capability, some will not be willing to live in the boonies, and some simply won't invest the time, effort and research required.  I will note that the predators aren't currently paying any attention to people who live 20~200 km from the nearest human being, so one really can live without the predators this way (for how many more decades I cannot be entirely certain, but possibly many).

One fringe approach is to privately develop some breakthrough technology that makes it possible to entirely [or almost] evade the predators and "regular folks" (because they are programmed by the predators to drag everyone else into the slime with them).  One version of this approach is to make a breakthrough that makes it feasible to escape into outer space, which the predators cannot control.  At first it might seem the predators can control someone in outer space, and certainly movies like StarWars make it seem that way, but in fact is it possible to be essentially impossible to find (in the asteroid belt for instance), and the cost and energy required to chase after anyone would be vastly more than any taxes or loot they could collect.  I am working with a few others on a breakthrough technology that will lead to this result.  Another less secure alternative might be living under the ocean floor somewhere, though any earth-based solution is necessarily a temporary one.  Other breakthrough technologies might be defensive ones, but I personally prefer not to even consider anything remotely like military technology, because that paints a bullseye on your forehead if the predators find out, and a shooting war is the last thing any rational being would want to encourage or experience.  Sadly, I think it is certifiable insanity to consider any actions that liberate the planet at large.  Not only do they not deserve it, most humans actively cherish their dishonesty, and accept authoritarianism to the core of their being.

Yes, it is incredibly dismal to identify the state of reality.  Nonetheless, it is a fact that predators rule the earth now.  They could have been stopped decades ago, but they were not stopped, and now no way exists to stop them, reverse the trend, or even slow them down a bit.  It has been "game over" and "beyond the point of no return" for quite some time now, at least 2 or 3 decades.

The fundamental history of mankind has been the story of predators versus producers.  Incredibly, producers inherently have a much stronger hand.  Unfortunately, the producers are not honest with themselves, and so they get and remain suckered by the endless deceptions predators deploy to dominate.  Plus, compared to predators, producers are freaking wimps!  They refuse to identify what is right in front of their faces, and they refuse to do anything about it.  The predators are leaders, and almost all producers are followers and outright wimps in comparison.  They might talk the talk, but they certainly do not walk the walk, except in extremely rare cases.

My message to you, apparently one of the 1-in-a-million, is to stop looking for or considering approaches that require the understanding or participation of more than a few indivduals.  The case is closed on human beings --- they are a waste of protoplasm, and certainly an extreme waste of consciousness.  The only solutions that have a chance are individual ones, or very small scale ones.  Look for ways to benefit yourself and any other of the 1-in-a-million club.  Otherwise, don't bother, because it is pointless and self-destructive.

Mon, 12/17/2012 - 13:41 | 3071449 tip e. canoe
tip e. canoe's picture

ann, your points are well taken, but would respectfully suggest that's a bit more than one-in-a-million, maybe more like one-in-a-thousand, 7 mill across the globe?   still, not the best odds when considering traditional approaches.

and here's a crew that did what you suggest on much less than $250K:
https://www.youtube.com/watch?v=91pBFyLWIx4

as far as space is concerned, how do we know for certain that certain eleetches are not already out there?   have you heard of the "breakaway civilization" hypothesis?   not sure how much of it is valid, but probably worth at least considering if you're planning a jump out of orbit.

me, i'm sticking here on the land with the flora & fauna and letting the universe flow where it needs to go whether "i" like it or not.

Wed, 12/19/2012 - 08:41 | 3074098 honestann
honestann's picture

I suspect one-in-a-thousand has some notion, but only one-in-a-thousand of them manages to avoid having one or another "killer" idea or belief that incapacitates and nullifies their ability to see and act beyond the endless BS that pervades most every modern environment.

I watched the whole video you linked to, and must say I very much admire and respect those folks, and what they're doing.  At the same time, I personally would not do things their way, because it contradicts my personality too much.  While I have done a lot of projects "from the ground up" and with extremely few resources, those were scientific and technological projects, not grubbing around in the dirt until I manage to create a self-sufficient living.  However, do understand that I consider this a plus for them, and a minus for me (an admission of weakness).

I should have been clear about what I meant by $250K~$350K.  That is to flat out buy everything you need to establish a comfortable self-sufficient existence in the extreme boonies.  This more-or-less means, no need to build anything yourself.  I must admit that I am a "spoiled brat" in some ways.  While I have always been super-frugal and have owned very few "toys" that most people have and take for granted, I do demand a clean, comfortable, uncluttered and reliable lifestyle... and have no tolerance for kludge and low-quality "junk".  So I'm "half good" and "half bad" (or "expensive").  Call me a minimalist, but the little I do own must be clean, quality, [ultra]-modern and reliable.

In other words, I pretty much purchased everything I needed to erect this self-sufficient living, and didn't have to live in poverty for 10 or 20 years to bootstrap up from nothing like those folks in the video have done.  Even so, I had to move everything to the location, had to drag it off the [rented/borrowed] truck (sometimes with rolling-micro-crane type equipment that I didn't really know how to operate), get it to the place I wanted to install it, then wire/plumb it up and so forth.  So even buying all the high-tech self-sufficiency equipment brand new, it still took me about 3 months to get myself set up, and over 1 year to completely finish every element.

So when I say $250K tor $350K, I mean what a spoiled westerner would need to spend.  Since I'm a wimpy girl, I do assume most guys or couples or families could do all the grunt work that I did to set myself up.  In a few but not many situations I had to get people to help me.  In retrospect, I might have been able to do 100% without help, but only after figuring out how to accomplish certain tasks in the process of doing them.

I haven't heard the term "breakaway civilization", but it sounds like what I and others have in mind for eventual space travel.  I don't have any confidence in any large-scale endeavor, because a predator will always arise and convert that "civilization" into another hell-hole for the amuzement of the predators (thereby breeding more predators and eventually lots more parasites).  I am now convinced that only individuals and small groups can avoid this fate.

Though we do plan to "exit stage outer space", the breakthrough technology we are implementing to get us there has nothing to do with outer space... not directly, anyway.  Nonetheless, our technology is probably the fastest way for small-groups of individuals to actually get themselves into outer-space in a safe, reliable, permanent way.

As an aside, in the 5 years I travelled the planet (off-and-on) searching for the best "extreme boonies" for me, I met some incredibly amazing people in places like the high andes and elsewhere who have been self-sufficient for 50,000 to 100,000 years since they found their way to the americas from who-knows-where.  Most of these people, typically in very small villages (that really are more like extended family groups after tens of thousands of years) have never had a penny in their entire lives!

These people are extremely impressive.  And they are the most friendly and wonderful people I met in my travels once I got to know them.  On the surface, they and I appear polar opposites.  I'm the ultra-high-techie, and they're zero-tech ancient peoples (though more precisely they simply have their own very different but very impressive brand of technology that requires nothing but rocks, plants, animals and items found in their environment).  Yet we respected each other so much for the traits we shared (but most folks do not)... mostly just plain simple honesty and benevolence.  That's pretty much all that matters, really.

Mon, 12/17/2012 - 11:41 | 3071128 moondog
moondog's picture

Self-sufficiency is certainly a good place to start. Your message of hopelessness for the human race is depressing, albeit accurate.

Here's to hoping a more advanced, benevolent race helps us along....cheers.

Tue, 12/18/2012 - 04:45 | 3074081 honestann
honestann's picture

My point was, you, I, and anyone who firmly decides to be and remain honest, ethical, productive and benevolent can be that "advanced, benevolent race".  The chances that any ET will arrive is infintesimal, and frankly, if they did arrive and were benevolent, they would not help because benevolent does not mean "helping dishonest, destructive, wacko insane chimps".

Or put another way, the human race as a whole is utterly hopeless, but certain individual human beings are not.  The key is to focus on those who are not.  Trying to convince "the masses" is absolutely impossible at this late date in history (and perhaps always was).

Sun, 12/16/2012 - 23:18 | 3070075 Vendetta
Vendetta's picture

excellent mini-dissertation.  I remember very distinctly certain things that I have read in media that were written in the 70's thru this year that struck me as utterly weird and non-sensical and these articles 'explaining' why this or that happened in the 'markets'.  The kicker was these writings were from 'well respected' authors/writers/bloviators.  It was tough shedding my previous fairly tightly held belief systems in order to see the truth that was really behind it all.  It was painful in fact.  It is for this reason, from my own experience that I like to quote:

"Make the lie big, make it simple, keep saying it, and eventually they will believe it."  

Once people 'believe' in something, it is not a trivial matter to get people to question their own beliefs and thus, herd mentality is born even if it is running straight for a cliff.  That cliff was hit in 2008, now its just wallowing around in the full blown monetary quagmire.

Mon, 12/17/2012 - 11:20 | 3071068 GCT
GCT's picture

RM great comments and GW spoton.

Society has always been predicated on violence.  Society will move forward even if it collapses for a time on the same predication.  Often times we want to think we are above the animal kingdom when we are actually the top predator on the planet.  Just take a look at the backing of the dollar as the world reserve currency.  Step out of line and our full military might will be breathing down your neck taking out whatever is necessary to continue to be the world's reserve currency.  It is all based on violence.  We do not need to totally destroy a country or win the actual war.  Just screw it up enough to maintain our lead and keep our people happy.

Governments and military organizations were and are formed for one thing only.  They are formed to stop others from taking what you got.  When they are strong enough they go off and take from others.   Nothing new will happen until somewhere, some place in the future we either destroy ourselves or we wake up to one world order with one world government that can in the blink of an eye take out populations that interfere with their world view.  Of course it will require weapons design that do not cause lingering effects on nature's system.  Nukes will not accomplish this.  Most likely some space based system will come along to accomplish this.

My prediction is we will fuck the planet up, destroy most of the worlds population and the planets ability to heal itself and those that remain will linger and die. Few humans will remain and the process will begin anew. Unless we really get stupid and blow the whole planet up!    

Sun, 12/16/2012 - 18:23 | 3069371 Tenshin Headache
Tenshin Headache's picture

The really discouraging part is that the Justice Department, by virtue of their failure to prosecute, is essentially an accessory. Assuming, of course, that crimes have actually been committed.

I would think that the rank and file, most of whom take their oaths seriously, don't care much for A.G. Holder.

Mon, 12/17/2012 - 12:32 | 3071246 Winston Churchill
Winston Churchill's picture

The DoJ has moved to being an active conspirator after the fact, not a mere accessory.

bagHolder will go down as the most corrupt USAG in history.

Public hanging,drawing ,and quartering is way to good for him.

Sun, 12/16/2012 - 19:05 | 3069443 CH1
CH1's picture

the rank and file, most of whom take their oaths seriously

If they took their oaths seriously, they would quit.

They are judging themselves, right now.

Sun, 12/16/2012 - 18:22 | 3069366 q99x2
q99x2's picture

Got the biggest crimminal Eric Holder running the show. It's revolution time buddy.

Sun, 12/16/2012 - 18:09 | 3069335 Tombstone
Tombstone's picture

This is what it looks like in a socialist utopia.  The media is a fraud, licking the boots of big government and the banks are free to destroy any sense of morality and confidence in the banking system. 

Sun, 12/16/2012 - 18:19 | 3069327 NuYawkFrankie
NuYawkFrankie's picture

Re Mainstream Media finally wakes up....

 

The official rags of the Criminocracy -The Jerusalem Post (aka NY Times) and Pravda On The Potomac (Wash Post) - waking up (after their benefactors $13Trillion taxpayer heist and Lord knows how much in global drug-raketeering...)  getting relgion all of a sudden and being Shocked! Shocked! Shocked! ???

Yeah right... sure thing... whatevvvvvvahhh......

Sun, 12/16/2012 - 18:04 | 3069313 Widowmaker
Widowmaker's picture

Awaken maybe, but not before hitting snooze with another 3 decades of omission.

MSM seeking truth, let alone print it.  Sounds like Mayan toothpaste

OT:  Assault rifle sales are about to explode.  Nothing says Merry Christmas like a full metal smoking jacket.

Sun, 12/16/2012 - 17:39 | 3069272 Duke Dog
Duke Dog's picture

Excellent as always:)

Sun, 12/16/2012 - 17:35 | 3069265 naiverealist
naiverealist's picture

Obviously, the CIA is and has been laundering its drug/terror/arms monies through HSBC.

Sun, 12/16/2012 - 17:24 | 3069245 sgt_doom
sgt_doom's picture

Sorry, forgot to mention, "Great blog post, GW!!!!"

Sun, 12/16/2012 - 17:23 | 3069239 sgt_doom
sgt_doom's picture

Sweet Déjà Vu 

From the Wall Street Seventeen to the LIBOR Sixteen, the history of the banking cartel

 

(It's called a criminal conspiracy, stoopid!   And yes, Virginia, conspiracies do exist!)

 

The LIBOR Sixteen

The LIBOR rate fixing, which has finally received a bit of publicity, is truly mind-boggling enormous in the extent of the global thievery involved.  An outstanding explanation can be found at this link below:

 

http://www.nomiprins.com/thoughts/2012/7/15/the-real-libor-scandal-by-pa...

 

but suffice to say, the effects cover everything from structured finance loans favoring private equity leveraged buyout firms (the private banksters), to mortgage rates and ARMs, interest rate swaps and an extraordinary gamut of financial products too extensive to list here.

 

Even the Queen of England has made mention of it:

 

The Queen Of England Asks Economists – ‘Why Did Nobody Notice?’

 

http://www.youtube.com/watch?feature=player_embedded&v=dZN00RkKTRA

 

The "official" authorities in London are finally acting, as some are also in the USA.  Some analysts are now mentioning that this rate fixing not only goes back some years in the past decades but may go back to the early 1990s.

 

But does it really just begin there?  Was it simply one discrete event, as those clueless pundits, who can never locate their own genitals, would have us believe once again, along with those weapons of mass destruction in Iraq?

 

The Wall Street Seventeen 

In the aftermath of the Great Crash of 1929 and the Great Depression, a number of intensive congressional investigations took place.  Some would later explain how Rockefeller secretly shipped oil to the Nazis, the financial connections between the Mellons, du Ponts and I.G. Farben and the Third Reich, Morgan's financing of the fascist Mussolini's invasion of Libya (oil resources), etc., but one would be most important, the TNEC study (The National Economic Committee study), which would uncover the extreme concentration of corporate control by a select number of banks.

 

http://en.wikipedia.org/wiki/Temporary_National_Economic_Committee

 

This study eventually led to an antitrust lawsuit against 17 Wall Street banks (U.S. v. Morgan et al.), alleging a criminal conspiracy among those banks dating back to 1915.

 

http://en.wikipedia.org/wiki/United_States_v._Morgan_et_al.

 

This is a most interesting date, as that was the year when the super-rich in American really began moving their wealth and ownership and investment instruments over to foundations and trusts which had been accorded tax-exempt status (to effectively hide their wealth and owernship, and for tax evasion and avoidance), along with other financial changes, in legislation passed in 1913, along with the Federal Reserve Act, the 16th Amendment (allowing for collection of taxes to repay interest from private loans to gov't due to the Federal Reserve Act), and the oil depletion allowance.

 

The antitrust suit was dismissed, thanks to the Eisenhower administration coming to power and replacing the antitrust team with others who would perform in a most lackadaisical manner.

 

Now, please don't assume that the 17 banks were owned by 17 separate entities; there was quite a bit of concentration there as well.

 

While the names of the banks have changed, and consolidation has taken place, the overall ownership remains essentially the same, and it's called a "cartel"  --- and a criminal conspiracy.

 And let us not forget that recondite fact that when Nixon went to China in the early 1970s, he was accompanied by David Rockefeller, who would then establish banking operations in Beijing, and Moscow, in 1973, the height of the Cold War, no less!

 

The Debt Creators 

In response to the global mega-rigging of financial markets, the debt creators, erroneously referred to as highly productive "wealth creators" ad nauseum (by those aforementioned pundits), have amassed their wealth by the gargantuan creation of debt and debt instruments, which they sold, and then socialized said debt --- moving it into the public sector, and claiming the masses must experience never-ending austerity to pay off their debt.

 

An excellent article by Mijin Sha at Demos partially illustrates this point:

 

http://www.demos.org/publication/why-washington-reducing-deficit-instead...

 

 

Some interesting links:

 

http://www.huffingtonpost.com/2012/07/11/libor-rate-scandal_n_1664737.ht...

 

http://dissidentvoice.org/2009/03/wright-patmans-prescription-for-healing-the-cancerous-us-banking-system/

Sun, 12/16/2012 - 17:11 | 3069221 e-recep
e-recep's picture

they are pulling the good cop/bad cop trick. don't fall for it. they are the same shit.

Sun, 12/16/2012 - 17:08 | 3069215 Catullus
Catullus's picture

I agree that fraud is th basic business model of fractional reserve banking, but money laundering is decidedly not fraud. Fraud is criminal or civil misrepresentation. When you claim property that is not yours, that's fraud. When act as if you own property that is not yours to dispose of, that's fraud. When you represent yourself as being or having something that you -are/do not, that's fraud.

Money laundering is simply not identifying clearly the source of money. It is not a crime under natural law. It harms no one. And quite frankly it's no one's business where you got money or property. Even if that means you let criminals move money around freely, it should not be a crime. Money laundering is only a crime in police states where the government blames any and everyone associated in any way with a criminal as a criminal themselves. And further, the state and statists only get pissed about money laundering because they can't clearly identify whether income taxes are owed on it or not. Get rid of income taxes and no one gives a shit where you got your money from.

So you're making a leap here that says the economy can't recover until fraud is prosecuted and the fact that HSBC (one of the only real ex-pats banks for Americans) doesn't keep the tightest records on their clients' money. The government is pissed at HSBC because they didn't get theirs and they basically charged HSBC what would have been withheld taxes.

Associating money laundering with terrorism is a dangerous supposition. It is to say that people who want to not clearly identify the way in which they acquired money must themselves be terrorists. Someone Saying "it's none of your fucking business" is not a suspected terrorist.

Sun, 12/16/2012 - 17:45 | 3069288 Radical Marijuana
Radical Marijuana's picture

I would consider the "fraudulent" aspect of money laundering is that the big banks are deliberately changing dirty money into clean money. They do not honestly state that they are doing that, at the time they are doing it. Rather, they only partially admit that, years later, when they are finally forced to do so, in order to settle for a small fine, as "punishment."  Money laundering is a fraud because it is NOT admitted to be money laundering, but rather is misrepresented to be a legal transaction.

Sun, 12/16/2012 - 18:48 | 3069420 Catullus
Catullus's picture

That's a circular argument. 

"Money laundering is a fraud because it is NOT admitted to be money laundering, but rather is misrepresented to be a legal transaction."

If you don't define money laundering as a "illegal", then there's no way to misrepresent it, then therefore not fraud under your logic. 

I'm saying that money laundering and fraud are two different and distinct things.  Fraud is not money laundering.  And Money laundering is not fraud. 

What's more is that HSBC didn't commit money laundering, they just didn't adequately record the source of their clients' money.  So the "crime" as defined by the government seems to be not telling the government that other people may be committing other crimes with the money that's coming into the bank.  It's the "crime" of not keeping accurate records of your clients.  Totally arbitrary.

Sun, 12/16/2012 - 19:28 | 3069484 Radical Marijuana
Radical Marijuana's picture

Fraud is generic dishonesty, one a sliding scale from knowing what one says is false, to willfull blindness, where one knows that one should investigate, but deliberately does not do so, because one does not want to discover the truth. The big banks that take hundreds of billions of dollars in cash and launder it probably know that that money must have been dirty, and yet, they deliberately are blind, and deliberately continue to not investigate. In my opinion that fits within the generic definition of fraudulence. I believe that the big banks must know that they are laundering dirty money, or they must suspect, and then deliberately do not try to find out. Wink, wink, nod, nod ...

Of course, the systems were deliberately set up so that the programs that were supposed to stop money laungering became the main back doors to enable that to happen. The laws against money laundering are routinely applied to the smaller players. The biggest banks pick which criminals to covertly work with, and which to report to the authorities, and those banks appear to do that on the basis of how much money they will make from laundering the dirty money. Look at the contradictions between applying the money laundering laws some of the time, against some of the smaller players, compared to not doing so against the bigger players, and then, in that context, the fraudulence of the biggest banks becomes clearer.

Anyway, in the overall context what is more important is not that there are laws against money laundering, which the biggest banks selectively disregard, and the government lets them get away with a token fine for having done that, rather, what is MOST IMPORTANT was the ways in which the entire banking system is LEGALIZIED FRAUD!!!

The ways that the banksters were able to corrupt governments, to pass laws to legalize counterfeiting by the banks, (i.e., fractional reserve banking, etc.) and then, those governments FORCE everyone to accept that runaway fraudulence, through being required to pay taxes in legal tender, are the ASTRONOMICALLY SIZED FRAUDS.

Compared to that, keeping the biggest banks going, especially in 2008, through laundering the cash from illegal drugs, was trivial. 

It is an interesting sematic question whether or not fraud is fraud, after it is "legalized." My common sense view is that privatizing the power to make money out of nothing, as debts, is the most astonishing FRAUD there has ever been. That is the heart of our entire financial system today ... global electronic fiat money, backed by atomic bombs. The irony there is that perhaps even the credible threats to back up that financial fraud with weapons of mass destruction is also "fraudulent." It is the most sublime semantic argument to ask whether threatening to back up robbery with weapons is "fraudulent" when those are mass destruction weapons, that will kill almost everyone, including those who are threatending to use them?

Sun, 12/16/2012 - 22:21 | 3069930 Catullus
Catullus's picture

I'm glad you just made up a definition for fraud.  But in non-fantasy land, people generally have to lie TO SOMEONE in order for it to be considered fraud.  And that misrepresentation has to result in harm, sometimes called a "tort".  Not investigating the source of someone's money or not keeping records of who your clients are or what their tax IDs are is NOT dishonest because you're not lying to anyone.  You're just not asking a question that's none of your business.  There's nothing fraudulent about that

 

Sun, 12/16/2012 - 23:02 | 3070034 Radical Marijuana
Radical Marijuana's picture

Catullus, you asset that "I'm glad you just made up a definition for fraud."

Actually, I have spent many, many hours in the law library, reading on the subject of "fraud." I won a court case were I had actually proven that the government was dishonest, and I received punitive damages for that (as a comment I posted below provides the link to.)  Therefore, I am NOT just making up a definition for fraud. I am referring to that which one can find in many legal textbooks on that topic, which cite hundreds of court cases as their sources. ... As I understand it, the laws against money laundering impose a duty on banks to not do that. Your notion that the banks have no duty in that regard seems strange to me. IF there we no laws against money laundering, then what you are saying might make sense. However, there ARE! Those laws get applied to lots of people!  The point of this article was that the big banks rather routinely get away with breaking those laws, and even after that is proven, they can settle for a relatively trivial fine.

Sun, 12/16/2012 - 23:17 | 3070065 Catullus
Catullus's picture

Feel free to link To something that defines fraud as a generic dishonesty. I've certainly never seen it defined that way.

And I've never seen heard of anyone who practices law to mistake fraud and money laundering. They are separate and distinct.

And it seems pretty clear from my original post that I'm talking not about du jure legality of money laundering, but rather the legitimacy of such laws. They are arbitrary in their substance and no one should be surprised when they are arbitrarily applied.

I'd love to see an example of a money laundering case from any time prior to 1950. Since money has been in existence, it's a little amazing that only over the 50 years has "laundering" been an issue.

Mon, 12/17/2012 - 00:06 | 3070174 Radical Marijuana
Radical Marijuana's picture

Catallus, the standard definitions of fraud are simply dishonesty for the sake of gain. It was not clear to me from your original post that you were "talking not about du [sic] jure legality of money laundering, but rather the legitimacy of such laws."  I must agree that those ideas are on different levels. I agree that the existence of those laws are on a different logical level than the question of whether such laws should exist at all, and whether people should or would feel obliged to obey such laws. However, the point is that governments HAVE created those laws, and they ARE routinely applied, and it HAS become common that the biggest banks enjoy a relative impunity to violate those laws against money laundering.

The Wikipedia article on money laundering says:

Today, most financial institutions globally, and many non-financial institutions, are required to identify and report transactions of a suspicious nature to the financial intelligence unit in the respective country. For example, a bank must verify a customer's identity and, if necessary, monitor transactions for suspicious activity. This is often termed as KYC – "know your customer". This means, to begin with, knowing the identity of the customers, and further, understanding the kinds of transactions in which the customer is likely to engage. By knowing one's customers, financial institutions will often be able to identify unusual or suspicious behavior, termed anomalies, which may be an indication of money laundering.

My point is that those laws impose a duty on banks. Banks that do not do that are breaking those laws. I cannot believe that big banks can launder hundreds of billions of dollars, and not wonder where it came from, especially since the law says that they are supposed to try to find out.  Whether or not such laws should exist, the point of this article was that the biggest banks can get away with breaking those laws, either absolutely, by never being caught, or relatively, by making many times more profit than the financial fines or penalities that they are required to pay, after they get caught.

The banks have imposed upon them a duty, and for them to blatantly disregard that duty is surely some sort of dishonesty, and since they make a profit from their money laundering, and since they are being dishonest, or wilfully blind, they ARE "fraudulent" in the ways that they report, or do not report upon transactions that the law imposes a duty upon them to report. Therefore, I would repeat that their behaviour seems generic "fraud" to me. I agree with you that without those laws, then the banks would have no duty, and therefore, would not be "fraudulent" when they did not do that duty. The banks were only dishonest for their own gain in the context of operating AFTER there were laws against money laundering, in ways that did not obey those laws.

However, it is probably a waste of time to beat this issue to death anymore. The main thing I have learned during several decades of work on these topics is that the "truth" is mostly irrelevant anyway. The whole world is ACTUALLY controlled by huge lies, backed by lots violence, while evidence, or logical arguments, tend to do nothing to change that, except when that evidence or logical argument can be used to tell better lies, or to back that up with more violence.

Mon, 12/17/2012 - 02:15 | 3070421 Catullus
Catullus's picture

And the KYC rule was imposed upon the banks from the US Patriot Act. A reactionary and illegitimate piece of legislation that has given the government the authority to rob anyone in the US of their civil liberties. You seem to take "it is what it is" approach to it. That doesn't make it just.

Fraud is not known as generic dishonesty. That's about as broad of a definition as I've ever seen. Next time a 5 year old lies to their teacher, I suppose we should jail the child for fraud. Any man or woman cheating on their spouse is also a fraudulent deviant. Your broad definition can be used as a tool of the state to oppress even everyday behaviors.

So thanks for opening up a whole new avenue for a corrupt federal prosecutor to interpret the laws and even further punish the rest of us. I have a suggestion for your decades of "research", since "truth" [sic] doesn't matter, burn all it. It doesnt matter anyway.

Mon, 12/17/2012 - 06:15 | 3070571 OldPhart
OldPhart's picture

Fraud must be proved by showing that the defendant's actions involved five separate elements: (1) a false statement of a material fact,(2) knowledge on the part of the defendant that the statement is untrue, (3) intent on the part of the defendant to deceive the alleged victim, (4) justifiable reliance by the alleged victim on the statement, and (5) injury to the alleged victim as a result.

Don't see any of that applying to money laundering other than the bank saying they just didn't know.

http://legal-dictionary.thefreedictionary.com/fraud

Mon, 12/17/2012 - 09:37 | 3070850 DOT
DOT's picture

A shareholder may see the actions as a very good instance of fraud as some of the monies generated by the laundering go to pay off thegovernment (via fines) and the balance to the bonus pool. Does any one her e think the top level of bank leadership does not know? For the civil side a tort is necessary. Not so for the criminal prosecution. The harm has perviously been defined and is imbodied in the criminal act.

Mon, 12/17/2012 - 10:39 | 3070969 DOT
DOT's picture

Please ignore this post as the contributor had not yet imbibed of coffee. On a Monday, no less !

Thank-you.

Sun, 12/16/2012 - 17:13 | 3069219 George Washington
George Washington's picture

The terrorism is separate from laundering drug money.  Government investigators found that HSBC helped facilitate funding of SAUDI TERRORISTS... Maybe including some who had a hand in 9/11.

Mon, 12/17/2012 - 02:07 | 3070408 lewy14
lewy14's picture

Had a hand in 9/11?

I keep reading that was an inside job... some blogger named George Washington keeps telling me that.

Sun, 12/16/2012 - 18:58 | 3069434 Catullus
Catullus's picture

When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC’s Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn’t protect the banking system, it does exactly the opposite. It terrifies investors and depositors everywhere, leaving them with the clear impression that even the most “reputable” banks may in fact be captured institutions whose senior executives are in the employ of (this can’t be repeated often enough) murderers and terrorists. Even more shocking, the Justice Department’s response to learning about all of this was to do exactly the same thing that the HSBC executives did in the first place to get themselves in trouble – they took money to look the other way.

I disagree completely.  Taibbi is using a sleight of hand with the English language.  The fact that clients of HSBC may have ties to what the US calls terrorists does not "terrify" other investors and depositors.  It's a cute platitude, but nothing more. 

A bank gets paid to take deposits and change money.  Not recording the actions of their clients to the exact specifications of the US government spooks is not "taking money to look the other way."  It's called normal banking operations.  It would be like saying "if the bank or telecom company doesn't spy on behalf of the government, they are complicit in terrorism."  It's a stretch of the imagination.

Sun, 12/16/2012 - 23:15 | 3070057 formadesika3
formadesika3's picture

+1

I couldn't get your green arrow to work but you're absolutely correct.

This is just a distraction. The real criminal activity is central banking operations.

Sun, 12/16/2012 - 17:33 | 3069264 johnQpublic
johnQpublic's picture

Saudi terrorists ...lol

a wholey owned subdivision of the CIA

Sun, 12/16/2012 - 17:27 | 3069253 sgt_doom
sgt_doom's picture

True, but the money laundering for drug cartels involves many peripheral vileness, such as murder-for-hire (assassins) of labor organizers and protesting workers, and protesters, in South America, as well as human trafficking, sex slave trafficking, etc.

Quite a bit of terrorism to many.....

Sun, 12/16/2012 - 17:24 | 3069242 Kali
Kali's picture

I would call drug cartels terrorists.  Ask your Mexicans or Columbians about that.  But, yes, laundering money for terrorists is one of the age-worn tools of these psychopaths.

Sun, 12/16/2012 - 17:29 | 3069258 Freddie
Freddie's picture

Well remember Clinton and Mena, AR and the word that daddy Bush was involved.  When I saw how chummy Poppy became with Bill and later GW - I knew they were Yale/Harvard cartel.  Yale was founded with Chinese opium profits.   Obam is another one.

Sun, 12/16/2012 - 17:08 | 3069213 nickt1y
nickt1y's picture

Why do sickos shoot school children when bankers are so much more deserving? Their name would live forever and they would be hailed as a hero.

Sun, 12/16/2012 - 20:28 | 3069647 FeralSerf
FeralSerf's picture

There are suggestions that this is part of another obstruction of justice by our criminal bankers that don't care who gets hurt as long as they're not inconvenienced.

Mass shootings connected to LIBOR testimony. 

 

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