Laundering $800 Mil in Drug $, How Did HSBC Execs Avoid Jail?

[brickcitybrother]

To add insult to injury... Here is an interesting article from alternet.org

Are Big Banks a Bunch of Organized Criminal Conspiracies?

February 27, 2013
Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn't we seize their assets, just like we do to drug cartels?

Let's examine their sorry record of deceit and deception that has surfaced in just the past two months:

Loan Sharking

You want to get really, really pissed off? Then read "Major Banks Aid in Payday Loans Banned by States [3]" by Jessica Silver-Greenberg in the New York Times (2/23/13). In sickening detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500 percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent. See the list [4].)

The big banks, however, don't make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim's bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate.

Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the first place.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent [5]of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations [6] limiting fees on debit and credit cards have cost banks billions of dollars.

Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury. Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims' accounts. So impoverished single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest rate that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.

For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com [7] and a $700 loan from Advancemetoday.com [8] in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.

Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.

Let's be clear: JPMorgan Chase, the big bank that supposedly is run oh-so-well by Obama's favorite banker, Jamie Dimon, is aiding, abetting and profiting from screwing loanshark victims.

What possible justification could anyone at Chase have for being involved in this slimy business? The answer is simple: profit. Dimon and company can't help themselves. They see a dollar in someone else's pocket, even a poor struggling single mom, and they figure out how to put it in their own. Of course, everyone at the top will play dumb, order an investigation and then if necessary, dump some lower-level schlep. More than likely, various government agencies will ask the bank to pay a fine, which will come from the corporate kitty, not the pockets of bank executives. And the banks will promise -- cross their hearts -- never again to commit that precise scam again.

(Update: After the publication of Jessica Silver-Greenberg's devastating article, Jamie Dimon "vowed on Tuesday to change how the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers’ checking accounts," according to the New York Times [9]. Dimon called the practices "terrible." In a statement, the bank said, it was “taking a thorough look at all of our policies related to these issues and plan to make meaningful changes.”)

Money Laundering for the Mexican Drug Cartels and Rogue Nations

HSBC, the giant British-based bank with a large American subsidiary, agreed on Dec. 11, 2012 to pay $1.9 billion in fines for laundering $881 million for Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel. The operation was so blatant that "Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller's window to deposit cash on a daily basis," reports Reuters [10]. They also facilitated "hundreds of millions more in transactions with sanctioned countries," according to the Justice Department [11].

Our banks got nailed as well. "In the United States, JPMorgan Chase & Co, Wachovia Corp and Citigroup Inc have been cited for anti-money laundering lapses or sanctions violations," continues the Reuters report. My, my, JPMorgan Chase, the biggest bank in the U.S. sure does get around.

And the penalty? A fine (paid by the HSBC shareholders, of course, that amounts to 5.5 weeks of the bank's earnings) and we promise – honest -- never to do it again.

Too Big to Indict?

Wait, it gets worse. Why weren't criminal charges filed against the bank itself? After all, the bank overtly violated money laundering laws. This was no clerical error. The answer is simple: "Too big to Indict," [12] screams the NYT editorial headline. You see federal authorities are worried that if they indict, the bank would fail, which in turn would lead to tens of thousands of lost jobs, just like what happened to Arthur Anderson after its Enron caper, or like the financial hurricane that followed the failure of Lehman Brothers. So if you're a small fish running $10,000 in drug money, you serve time. But if you're a big fish moving nearing a billion dollars, you can laugh all the way to your too-big-to-jail bank.

Fleecing Distressed Homeowners

The big banks, in collusion with hedge funds and the rating agencies, puffed up the housing bubble and then burst it. Nine million workers, due to no fault of their own, lost their jobs in a matter of months. Entire neighborhoods saw their home values crash. Tens of millions faced foreclosure.

The big banks, which were bailed out and survived the crash, sought to foreclose on as many homes as possible, as fast as possible. Hey, that's where the money was. In doing so they resorted to many unsavory practices including illegal robo-signing of foreclosure documents. When nailed by the government, the big banks agreed to provide billions in aid for distressed homeowners. Were they finally forced to do the right thing? Not a chance. (See "Homeowners still face foreclosure despite billion in aid" NYT 2/22 [13].)

The big banks, despite what they say in their press statements, found a convenient loophole in the government settlement. The banks began forgiving second mortgages, and then foreclosing on the first mortgage. That's a cute maneuver because in a foreclosure, the bank rarely can collect on the second mortgage anyway. So they're giving away something of no value to distressed sellers and getting government credit for it. Just another day at the office for our favorite banksters.

The Indictments Go On...

I could write a book about all the ways in which banks and their hedge fund cousins have turned cheating into a way of life. (In fact, I just did: "How to Earn a Million Dollars an Hour: Why Hedge Funds Get Away With Siphoning off America's Wealth [14]. Here's the AlterNet interview [15]. )

JPMorgan Chase, Citigroup and Goldman Sachs have been fined over a billion dollars for creating and selling mortgage-related securities that were designed to fail so their hedge fund buddies could make billions. And then we've got the recent LIBOR scandal where the biggest banks colluded to manipulate interest rates for fun and profit.

It's not about good people or bad people running these banks and hedge funds. It's the very nature of these institutions. That's what they do. They make big money by doing what the rest of us would call cheating. As the record clearly shows, they cheat the second they get the chance.

What kind of institution would loanshark, money launder, fix rates, game mortgage relief programs, and produce products designed to fail? Answer: An institution that should not exist.

Nationalize Now and Create State Banks

There are about 20 too-big-to fail banks which have been designated "systematically significant." These should be immediately nationalized. Shareholder value should be wiped out because these banks are repeatedly violating the law, including aiding and abetting criminal enterprises. All employees should be placed on the federal civil service scale, where the top salary is approximately $130,000.

Can the government run banks? Yes, if we break up the big banks and turn them over to state governments so that each state would have at least one public bank. (North Dakota has a strong working model.) The larger states would have several public state banks. But never again would we allow banks to grow so large as to threaten our financial system and violate the public trust. Let FDIC regulate the state banks. They're actually good at it.

(We'd also have to do something about the shadow banking industry -- the large hedge funds and private equity firms. Eliminating their carried-interest tax loophole and slapping on a strong financial transaction tax would go a long way toward reining them in.)

Won't the most talented bankers leave the industry?

Hurray! It can't happen soon enough. It's time for the best and the brightest to rejoin the human race and help produce value for their fellow citizens. Let them become doctors, research scientists, teachers or even wealthy entrepreneurs who produce tangible goods and services that we want and need. What we don't need are more banksters.

Isn't This Socialism?

We already have socialism for rich financiers. They get to keep all of the upside of their shady machinations and we get to bail them out when they fail. This billionaire bailout society is now so entrenched that our nascent economic recovery of the last two years has been entirely captured by the top 1 percent. Meanwhile the rest of have received nothing. Nada. (See "Why Is the Entire Recovery Going to the Top One Percent? [16]")

I know, I know, people say, "Next time, just don't bail them out!" Meanwhile, they get to rip us off, day in and day out, until the next crash? No thanks. Put them out of business now. If you have a better idea, let's hear it.
Source URL: http://www.alternet.org/corporate-ac...l-conspiracies
Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/les-leopold-0
[3] http://www.nytimes.com/2013/02/24/bu...ml?hp&_r=0
[4] http://www.lectlaw.com/files/ban02.htm
[5] http://www.pewstates.org/research/re...ns-85899452131
[6] http://topics.nytimes.com/topics/ref...nyt-classifier
[7] http://loanshoponline.com/
[8] http://advancemetoday.com/
[9] http://www.nytimes.com/2013/02/27/bu...l?ref=business
[10] http://www.reuters.com/article/2012/...8BA05M20121211
[11] http://www.justice.gov/criminal/pr/s...h-1212111.html
[12] http://www.nytimes.com/2012/12/12/op...to-indict.html
[13] http://www.nytimes.com/2013/02/22/bu...pagewanted=all
[14] Amazon.com: How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America's Wealth (9781118239247): Les Leopold: Books@@AMEPARAM@@http://ecx.images-amazon.com/images/I/51XoYZA-6dL.@@AMEPARAM@@51XoYZA-6dL
[15] http://www.alternet.org/just-what-do...ion-bucks-hour
[16] http://www.huffingtonpost.com/les-le...b_2742092.html

[robertlouis]

I agree. What I don't understand is that if a private citizen was engaged in similar activities, he or she would be arraigned before a court, and if found guilty, sentenced to a considerable jail term, and possibly have your assets seized, but if you're a bank, you pay a fine - which affects your shareholders, not you - and everyone's happy.

Corporations are treated differently, banks indulged even more than others.

But hey, that's capitalism for ya.

[fivekatz]

I agree. What I don't understand is that if a private citizen was engaged in similar activities, he or she would be arraigned before a court, and if found guilty, sentenced to a considerable jail term, and possibly have your assets seized, but if you're a bank, you pay a fine - which affects your shareholders, not you - and everyone's happy.

Corporations are treated differently, banks indulged even more than others.

But hey, that's capitalism for ya.

It is quite ironic that corporations want to be treated as though they were individuals where it suits them but work to insure that they aren't held to that standard when it does not suit them.

This week while not as splashy as the filibuster over drone policy between testimony from the AGOUS and the head of SEC and the under-Secretary of Treasury the government basically admitted that they were afraid to prosecute HSBC not because they did not have a case but because they felt that a prosecution could lead to chaos in the financial markets.

So now we have Too Big to Jail along with Too Big to Fail. And honestly the regulation of finance is greater in the US than the UK, so this is not just a US problem by any means.

[robertlouis]

It is quite ironic that corporations want to be treated as though they were individuals where it suits them but work to insure that they aren't held to that standard when it does not suit them.

This week while not as splashy as the filibuster over drone policy between testimony from the AGOUS and the head of SEC and the under-Secretary of Treasury the government basically admitted that they were afraid to prosecute HSBC not because they did not have a case but because they felt that a prosecution could lead to chaos in the financial markets.

So now we have Too Big to Jail along with Too Big to Fail. And honestly the regulation of finance is greater in the US than the UK, so this is not just a US problem by any means.

Meanwhile in the UK, Cammo the Clown and Smug Git of the Year Osborne are trying to preserve bankers' obscene bonuses. Heaven help us all. Wish we had an Elizabeth Warren here in the UK.

[an8150]

[quote=hippifried;1283286]

I don't care when you posed anything. There was no question, & still isn't. Your memetic assumptions don't mean anything to me. The only implication is the absurdity of your contention that you have a clue. I'm not impressed. But hang in there. I'm already old. Maybe some day I'll start getting senile & you can try again to convince me that "printing" has something to do with the money supply.

You're funny.

[an8150]

[quote=Stavros;1283494]

I note that you have not answered my point about the alternatives to find to free markets, when free markets fail them.

As for mass murder, this could become mere sophistry, if, for example, I was to argue that there never was socialism or communism in the USSR but a form of 'state capitalism' as argued by Tony Cliff and others -you should also know that the Second World War in the USSR is known as the 'Great Patriotic War' which in itself is a reflection of the Nationalism that dominated the USSR from Stalin onwards -why wasn't it called the 'Great Communist War'?? Leonard Shapiro wasn't the only scholar to point out that one autocracy in Russia was replaced by another -indeed, the Autocracy, Orthodoxy and Nationalism of the late Imperial state -the Autocracy of the Tsar, the Orthodoxy of the Church, and the Nationalism of the Russians -was replaced with the Autocracy of the Communist Party, the Orthodoxy of 'Marxism-Leninism' (which is intellectually a fig-leaf for a system called 'democratic centralism' on which basis you have a centrally planned economy), and the Nationalism which is the same as it was before.

On this basis, all the deaths that were caused by Stalin and Mao were due to deformed forms of Capitalism, of which system you occupy but another lunatic fringe.

So just because your lunatic fringe can claim to be smug because you have never occuped a position of power from which to slaughter millions, does not let you off the hook with regard to the history of capitalism, and the invasions that took place from North America to South America and the Caribbean, all in the name of Capitalism: if you take a more moderate figure of 90 million first nations in present day Canada and the USA, and add in those who lived in the Caribbean Islands and the Inca, Maya and other civilisations living in the Central and Southern Americas you exceed 100 million without breaking a sweat, not a record to proud of, but integral to the growth of free markets.

As with the Middle East and the Pacific Islands, with British rule in the Indian sub-Continent and particularly eastern and Southern Africa, moral economies where land ownership and land use was for the use and enjoyment of communities, had to be replaced by individual land ownership for the benefit of markets. This was not a voluntary transition -the Iroquois, the Algonquin, the Apache, the Sioux (like the Kikuyu and the Maasai) lived lives that prevented the emergence of free markets -how many westerns that concern the 'rights' of white settlers to build their homesteads in the west are predicated on the presentation of the 'Indians' as 'savages' who threaten this free market capitalism? And how were they dealt with? They were murdered.

Land owership as private property in the Northern Americas is integral to the history of mass murder and slavery. Deal with it.

We have lived in a modern world system since at least 1400, mass murder has been caused by Religion, Politics, Economics, Resentment and so on, and for you to create a hierarchy based on nothing more than your own prejudice is a desperate attempt to pretend that regimes claiming to be Communist were worse than any other, with the dishonourable exception of Nationalism Socialism -unless you see Hitler's ideology as a deformed form of Socialism in which case...

Well you learn something new every day. I had no idea that the privateers and freebooters of the early modern Spanish kings, much less Victorian gringo imperialists, were in fact righteous practitioners of the libertarian non-aggression principle.

On the other hand, I'd thought you were right with your earlier observation, that in fact people like me have never been in a position from which to slaughter millions. I'd go further, and observe that it would be anathema to libertarian feeling. Omelettes and eggs form no part of our moral compass.

I liked your idea that Stalin and Mao killing millions people is also down to free market capitalists. That took balls and, I should imagine, a straight face. It's the sort of claim that'll get half way round the world before the truth gets its boots on, so well done (btw, I refer you to your earlier comments directed at what you perceived to be my refusal to see that the world is closer than I imagine to the way I might wish; physician heal thyself, if your claim is that Soviet Russia or Maoist China weren't really communist).

The notion of 'market failure', incidentally, is in my view a disingenuous name for economic egalitarianism.

[an8150]

Meanwhile in the UK, Cammo the Clown and Smug Git of the Year Osborne are trying to preserve bankers' obscene bonuses. Heaven help us all. Wish we had an Elizabeth Warren here in the UK.

It would be ironic if our rulers decided to shut down one of these supposedly all-important arteries of (inter)national economies not because they were bust and because bailouts are wrong in principle, but instead because they are said to have handled money on behalf of those who deal in illicit substances. On the other hand, on our rulers' internal logic, not altogether inconsistent.

[an8150]

To add insult to injury... Here is an interesting article from alternet.org

Are Big Banks a Bunch of Organized Criminal Conspiracies?

February 27, 2013
Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn't we seize their assets, just like we do to drug cartels?

Let's examine their sorry record of deceit and deception that has surfaced in just the past two months:

Loan Sharking

You want to get really, really pissed off? Then read "Major Banks Aid in Payday Loans Banned by States [3]" by Jessica Silver-Greenberg in the New York Times (2/23/13). In sickening detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500 percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent. See the list [4].)

The big banks, however, don't make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim's bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate.

Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the first place.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent [5]of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations [6] limiting fees on debit and credit cards have cost banks billions of dollars.

Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury. Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims' accounts. So impoverished single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest rate that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.

For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com [7] and a $700 loan from Advancemetoday.com [8] in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.

Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.

Let's be clear: JPMorgan Chase, the big bank that supposedly is run oh-so-well by Obama's favorite banker, Jamie Dimon, is aiding, abetting and profiting from screwing loanshark victims.

What possible justification could anyone at Chase have for being involved in this slimy business? The answer is simple: profit. Dimon and company can't help themselves. They see a dollar in someone else's pocket, even a poor struggling single mom, and they figure out how to put it in their own. Of course, everyone at the top will play dumb, order an investigation and then if necessary, dump some lower-level schlep. More than likely, various government agencies will ask the bank to pay a fine, which will come from the corporate kitty, not the pockets of bank executives. And the banks will promise -- cross their hearts -- never again to commit that precise scam again.

(Update: After the publication of Jessica Silver-Greenberg's devastating article, Jamie Dimon "vowed on Tuesday to change how the bank deals with Internet-based payday lenders that automatically withdraw payments from borrowers’ checking accounts," according to the New York Times [9]. Dimon called the practices "terrible." In a statement, the bank said, it was “taking a thorough look at all of our policies related to these issues and plan to make meaningful changes.”)

Money Laundering for the Mexican Drug Cartels and Rogue Nations

HSBC, the giant British-based bank with a large American subsidiary, agreed on Dec. 11, 2012 to pay $1.9 billion in fines for laundering $881 million for Mexico's Sinaloa cartel and Colombia's Norte del Valle cartel. The operation was so blatant that "Mexican traffickers used boxes specifically designed to the dimensions of an HSBC Mexico teller's window to deposit cash on a daily basis," reports Reuters [10]. They also facilitated "hundreds of millions more in transactions with sanctioned countries," according to the Justice Department [11].

Our banks got nailed as well. "In the United States, JPMorgan Chase & Co, Wachovia Corp and Citigroup Inc have been cited for anti-money laundering lapses or sanctions violations," continues the Reuters report. My, my, JPMorgan Chase, the biggest bank in the U.S. sure does get around.

And the penalty? A fine (paid by the HSBC shareholders, of course, that amounts to 5.5 weeks of the bank's earnings) and we promise – honest -- never to do it again.

Too Big to Indict?

Wait, it gets worse. Why weren't criminal charges filed against the bank itself? After all, the bank overtly violated money laundering laws. This was no clerical error. The answer is simple: "Too big to Indict," [12] screams the NYT editorial headline. You see federal authorities are worried that if they indict, the bank would fail, which in turn would lead to tens of thousands of lost jobs, just like what happened to Arthur Anderson after its Enron caper, or like the financial hurricane that followed the failure of Lehman Brothers. So if you're a small fish running $10,000 in drug money, you serve time. But if you're a big fish moving nearing a billion dollars, you can laugh all the way to your too-big-to-jail bank.

Fleecing Distressed Homeowners

The big banks, in collusion with hedge funds and the rating agencies, puffed up the housing bubble and then burst it. Nine million workers, due to no fault of their own, lost their jobs in a matter of months. Entire neighborhoods saw their home values crash. Tens of millions faced foreclosure.

The big banks, which were bailed out and survived the crash, sought to foreclose on as many homes as possible, as fast as possible. Hey, that's where the money was. In doing so they resorted to many unsavory practices including illegal robo-signing of foreclosure documents. When nailed by the government, the big banks agreed to provide billions in aid for distressed homeowners. Were they finally forced to do the right thing? Not a chance. (See "Homeowners still face foreclosure despite billion in aid" NYT 2/22 [13].)

The big banks, despite what they say in their press statements, found a convenient loophole in the government settlement. The banks began forgiving second mortgages, and then foreclosing on the first mortgage. That's a cute maneuver because in a foreclosure, the bank rarely can collect on the second mortgage anyway. So they're giving away something of no value to distressed sellers and getting government credit for it. Just another day at the office for our favorite banksters.

The Indictments Go On...

I could write a book about all the ways in which banks and their hedge fund cousins have turned cheating into a way of life. (In fact, I just did: "How to Earn a Million Dollars an Hour: Why Hedge Funds Get Away With Siphoning off America's Wealth [14]. Here's the AlterNet interview [15]. )

JPMorgan Chase, Citigroup and Goldman Sachs have been fined over a billion dollars for creating and selling mortgage-related securities that were designed to fail so their hedge fund buddies could make billions. And then we've got the recent LIBOR scandal where the biggest banks colluded to manipulate interest rates for fun and profit.

It's not about good people or bad people running these banks and hedge funds. It's the very nature of these institutions. That's what they do. They make big money by doing what the rest of us would call cheating. As the record clearly shows, they cheat the second they get the chance.

What kind of institution would loanshark, money launder, fix rates, game mortgage relief programs, and produce products designed to fail? Answer: An institution that should not exist.

Nationalize Now and Create State Banks

There are about 20 too-big-to fail banks which have been designated "systematically significant." These should be immediately nationalized. Shareholder value should be wiped out because these banks are repeatedly violating the law, including aiding and abetting criminal enterprises. All employees should be placed on the federal civil service scale, where the top salary is approximately $130,000.

Can the government run banks? Yes, if we break up the big banks and turn them over to state governments so that each state would have at least one public bank. (North Dakota has a strong working model.) The larger states would have several public state banks. But never again would we allow banks to grow so large as to threaten our financial system and violate the public trust. Let FDIC regulate the state banks. They're actually good at it.

(We'd also have to do something about the shadow banking industry -- the large hedge funds and private equity firms. Eliminating their carried-interest tax loophole and slapping on a strong financial transaction tax would go a long way toward reining them in.)

Won't the most talented bankers leave the industry?

Hurray! It can't happen soon enough. It's time for the best and the brightest to rejoin the human race and help produce value for their fellow citizens. Let them become doctors, research scientists, teachers or even wealthy entrepreneurs who produce tangible goods and services that we want and need. What we don't need are more banksters.

Isn't This Socialism?

We already have socialism for rich financiers. They get to keep all of the upside of their shady machinations and we get to bail them out when they fail. This billionaire bailout society is now so entrenched that our nascent economic recovery of the last two years has been entirely captured by the top 1 percent. Meanwhile the rest of have received nothing. Nada. (See "Why Is the Entire Recovery Going to the Top One Percent? [16]")

I know, I know, people say, "Next time, just don't bail them out!" Meanwhile, they get to rip us off, day in and day out, until the next crash? No thanks. Put them out of business now. If you have a better idea, let's hear it.
Source URL: http://www.alternet.org/corporate-ac...l-conspiracies
Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/les-leopold-0
[3] http://www.nytimes.com/2013/02/24/bu...ml?hp&_r=0
[4] http://www.lectlaw.com/files/ban02.htm
[5] http://www.pewstates.org/research/re...ns-85899452131
[6] http://topics.nytimes.com/topics/ref...nyt-classifier
[7] http://loanshoponline.com/
[8] http://advancemetoday.com/
[9] http://www.nytimes.com/2013/02/27/bu...l?ref=business
[10] http://www.reuters.com/article/2012/...8BA05M20121211
[11] http://www.justice.gov/criminal/pr/s...h-1212111.html
[12] http://www.nytimes.com/2012/12/12/op...to-indict.html
[13] http://www.nytimes.com/2013/02/22/bu...pagewanted=all
[14] Amazon.com: How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America's Wealth (9781118239247): Les Leopold: Books
[15] http://www.alternet.org/just-what-do...ion-bucks-hour
[16] http://www.huffingtonpost.com/les-le...b_2742092.html

On a website dedicated to sybaritic enjoyment of a rare and venal pleasure, I am surprised to see so many commenters exercised by the ingestion of narcotics.

[an8150]

One of the interesting features of capitalism is that it is not a system to live and let live. If others do not want to play, sooner or later they are seen as the enemy, antagonized and forced to participate. One of the critiques of the black book of Communism in the link posted by an8150 is that the death toll put at the feet of the Communists does not take into account the number of deaths caused by the West's forceful opposition to Communism, by proxy or otherwise.

Reading your post made me think back to Animal Farm and how little of that brilliant book I remember. But I think some of the critique of Communism has been that if people will not accept true equality, this leads to a special class of elites who will seize power and then act with impunity. So maybe some would argue that authoritarianism is the inevitable consequence of imposed equality, where people can only actualize themselves by attaining power within the party. I think many of the more communal societies you reference are a good counterpoint. The highly centralized, scary bureaucracy in the Soviet Union was not an inevitable result of lack of private ownership. It was but one manifestation.

A propos your claim that capitalism isn't a system to live and let live, weren't you arguing, a comment or two back, that in a system of pure free markets, the 99% of losers would gang up on the winners?

[fivekatz]

No shock here, JP Morgan kept shareholders in the dark regarding losses from reckless gambling according to Senate committee. Of course they are too big to fail, too big to jail and even too big to prosecute. The mind boggling part of this is that it all took place well after the 2008 meltdown...


WASHINGTON — A Senate panel on Thursday issued a scathing assessment of JPMorgan's $6.2 billion trading loss last year. The investigation found that bank officials ignored growing risks and hid losses from investors and federal regulators.

Officials at JPMorgan understated the trading losses to federal examiners by hundreds of millions of dollars and dismissed questions raised about the trading risks, according to the report from the Senate Permanent Subcommittee on Investigations.

The report suggests that key executives, including CEO Jamie Dimon, were aware of huge losses at the bank, even while they were downplaying the risks publicly. The report also blames federal regulators for lax oversight that allowed the nation's largest bank to pile up risky bets.

On Thursday, JPMorgan acknowledged it made mistakes but rejected any assertions that it concealed losses or risks. A spokesman declined to comment directly on the accusation that Dimon knew of the trading loss in April.

"While we have repeatedly acknowledged mistakes, our senior management acted in good faith and never had any intent to mislead anyone," JPMorgan said in a statement Thursday. "We know we have made many mistakes ... . We have taken significant steps to remediate these issues and to learn from them."

Sen. Carl Levin, D-Mich., the subcommittee's chairman, said the probe showed "many, many failures" at the bank, some of them "serious and indeed egregious."

The committee will question bank officials and regulators Friday at a hearing on the trading loss.


In April, news reports said a trader in JPMorgan's London office known as "the whale" had taken huge risks that were roiling the markets. Dimon immediately dismissed the reports as a "tempest in a teapot" during a conference call with analysts.

But in May, Dimon acknowledged that the bank had lost roughly $2 billon. And during testimony to a separate Senate panel in June, Dimon said the bank showed "bad judgment," was "stupid" and "took far too much risk."

The figure was later revised to more than $6 billion.

JPMorgan executives said publicly that the trades were made for the purpose of hedging against risk. An internal report at the bank blamed traders in the London unit for trying to hide the size of the loss and not keeping bank executives informed.

But the Senate report says executives inaccurately said the trading decisions were based on a long-term strategy and that the trading positions were fully transparent to regulators. And, it says there is evidence that Dimon and other key executives had information in April about the operation's huge and complex portfolio, as well as its losses for three straight months.

The bank "gambled away billions of dollars through risky and exotic trades, then intentionally hid its losses from investors and the public, showing complete disregard for risk management procedures and regulatory oversight," Sen. John McCain of Arizona, the subcommittee's senior Republican, said Thursday.

The loss came less than four years after the 2008 financial crisis and hurt the reputation of bank that had come through the crisis know for taking fewer risks than its competitors. Three employees in the London office were fired – two senior managers and a trader. And Ina Drew, the chief investment officer overseeing the bank's trading strategy, resigned.

Drew will be among several witnesses Friday. So will former Chief Financial Officer Douglas Braunstein, who is accused in the Senate report of misleading investors during the April conference call.