25 May 2015

Update no.701

Update from the Heartland
18.5.15 – 24.5.15
To all,

Ireland became the world's first nation-state to legalize non-heterosexual marriage by popular vote, when voters approved a proposed constitutional amendment.  The vote in Ireland was impressive on several levels: 60% voter turnout, 42 of 43 jurisdictions approved the constitutional amendment; and 61% of those who voted, favored the change.   One day, We, the People, of this Grand Republic will respect the personal, private choices of other citizens.  While the vote in Ireland is encouraging, why does a citizens fundamental right to privacy and freedom of choice necessitate a popular vote?  Progress by jerks, I suppose.

News from the economic front:
-- The Gross Domestic Product (GDP) of Japan grew 2.4% in annualized terms in 1Q2015, an improvement from a revised 1.1% expansion in 4Q2014.  The unexpected growth was driven by household and business spending – an indication that the world's 3rd largest economy is starting to fire up again.
-- The Wall Street Journal reported U.S. Federal Reserve officials are trying to make sense of the 1Q2015 economic slowdown.  Many members of the policy board believed temporary factors were holding the economy back.  Further, before they lift rates, they want to be confident growth is on track, unemployment will keep falling, and inflation will gradually rise toward their 2% goal.  The prevailing opinion three weeks ago doubted they would be ready to raise short-term interest rates by midyear.

London Inter-Bank Offered Rate (LIBOR) Debacle [552]:
-- Well . . . things seem to be poppin’ now with respect to penalties and punishment of international banks consequent to the LIBOR debacle (and the foreign exchange rate manipulation scandal).  Perhaps, it was the confirmation of Attorney General Loretta Lynch [697] that convinced the banks to take their pain – such as it is – and move on; or, perhaps, it was the Justice Department action voiding the 2012 agreement with Swiss bank UBS [700].
-- UBS became the latest global bank to plead guilty to crimes related to foreign-exchange rate manipulation in the United States, for which the bank received fines of US$545M, after authorities probing the manipulation tore up a three-year-old LIBOR agreement with the bank [700]. 
-- UBS will plead guilty to wire fraud and pay a further US$203M fine related to the LIBOR case.  In addition, UBS will pay a US$342M penalty to the U.S. Federal Reserve, for "engaging in unsound business practices," related to its foreign-exchange business.
-- UBS is one of several big banks, including Barclays, J.P. Morgan Chase, Citigroup and Royal Bank of Scotland (RBS) that are expected to settle probes into manipulation of foreign-exchange markets with U.S. authorities.
-- Five global banks have agreed to pay US$5.6B in combined penalties and will plead guilty to criminal charges to resolve a long running U.S. investigation into whether traders at the banks colluded to move foreign currency rates in directions to benefit their own positions.  Four of the banks – J.P. Morgan Chase, Barclays, RBS, and Citigroup – will plead guilty to conspiring to manipulate the price of U.S. dollars and euros. The fifth bank – UBS AG – received immunity in the antitrust case, but will plead guilty to manipulating the LIBOR benchmark and will pay an additional, as yet unspecified, LIBOR-related fine.
-- So we don’t lose focus . . . the infamous 16, involved, international banks are:
  • ·      Barclays [UK] – US$454M fine [550]; Singapore sanctions [600]; three charged {Johnson, Mathew, Contogoulas} [636]
  • ·      Bank of America [U.S.] – Singapore sanctions [600]
  • ·      BTMU [Japan] – Singapore sanctions [600]
  • ·      Citigroup [U.S.] – Singapore sanctions [600]
  • ·      Credit Suisse [Switzerland] – Singapore sanctions [600]
  • ·      Deutsche Bank [Germany] US$654M LIBOR profit [578]; set aside €500M (US$641M) for LIBOR liability [589]; Singapore sanctions [600]
  • ·      Lloyds TSB [UK] – fined US$370M [659]
  • ·      HSBC [UK] – Singapore sanctions [600]
  • ·      HBOS [UK]
  • ·      JPMorgan Chase [U.S.] – Singapore sanctions [600]
  • ·      Norinchuckin [Japan]
  • ·      Rabobank [Netherlands] – fined €774M (£663M, US$1.06B); CEO resigned; 30 others censured [620]; three charged {Robson, Thompson, Motomura} [631]
  • ·      RBC [Canada]
  • ·      RBS [UK] – £390M (US$612.6M) in fines, 21 employees involved [582]; Singapore sanctions [600]
  • ·      UBS [Switzerland] – US$1.5B fine, two charged {Hayes, Darin} [575]; Singapore sanctions [600]
  • ·      West LB [Germany]

Added to the list by the Monetary Authority of Singapore [600]:
  • ·      ING [Netherlands] Singapore sanctions [600]
  • ·      BNP Paribas [France] Singapore sanctions [600]
  • ·      Crédit Agricole [France] Singapore sanctions [600]
  • ·      DBS [Singapore] Singapore sanctions [600]
  • ·      Oversea-Chinese Banking Corporation [Singapore] Singapore sanctions [600]
  • ·      Standard Chartered [UK] Singapore sanctions [600]
  • ·      United Overseas Bank [Singapore] Singapore sanctions [600]
  • ·      Australia and New Zealand Banking Group Ltd. [Australia] Singapore sanctions [600]
  • ·      Macquarie [Australia] Singapore sanctions [600]
  • ·      Commerzbank [Germany] Singapore sanctions [600]

Others involved:
  • ·      R.P. Martin Holdings Ltd. [UK] – two charged {Farr, Gilmour} [583]
  • ·      ICAP [UK] fined US$87M + three executives charged {Read, Wilkinson, Goodman} [615]

I trust none of us will lose sight of what these banks have done.  Lest we forget!

Continuation from Update no.699:
“One misunderstanding here. I did not think the shooters in Garland, Texas, were set up. I was pointing out that this event appeared to be an ordinary law enforcement event. What I question is the ‘terrorist’ arrests prior to the ‘art’ show event.”
My reply:
            Thank you for the clarification.
            Re: prior ‘terrorist’ arrests.  We should question every arrest and especially ‘terrorist’ arrests, as those are very serious charges.  To address your implied concern, we need to see the evidence to make the judgment.  Intelligence Community (IC) and Law Enforcement (LE) should infiltrate bad and potential bad groups; that is their job.  If you have a specific instance you are concerned about, we can discuss it to expand this topic.
 . . . with another follow-up:
“The problem with your statement is that you assume the spies do their jobs with some level of common sense and/or integrity. That contradicts history. Back when they were suppressing opposition to the Vietnam disaster, their lists of ‘radicals’ included such threats as the Boy Scouts. There are documented instances of organizations they created or took over for the purpose of ‘finding’ dangerous radicals. Nowadays they focus more on finding individuals vulnerable to being radicalized and providing them with resources for improbable attacks on whatever is handy. Underwear bombs and shoe bombs arise from the same feverish, Hollywood-influenced mentality that tried and failed to assassinate Fidel Castro with cigars and such things.”
 . . . and my follow-up reply:
            Surely, you are not suggesting the IC and/or LE planned, enabled or somehow assisted Richard Reid [22.12.2001] or Umar Abdulmutallab [25.12.2009]?
            I have no hope of dissuading you from your rather negative view of the IC.  I can only say, I have more than one stint in the IC, and I do not share your assessment.  Further, I respectfully suggest, you are confusing political decisions with the conduct of the IC.  The people who are the IC are good professionals, doing their bests to execute the directions they are given by their politician overseers.  Let’s put any blame where it properly belongs.

Comments and contributions from Update no.700:
Comment to the Blog:
“Congratulations to Aspen Shae on finishing high school! In my experience, college was more interesting and offered less silly rules and more mature company.
“I did not understand the point of the amendment to the Atomic Energy Act of 1954. ‘Direct and innocuous’ is an unusual combination of adjectives but does not clarify the intent or predicted effect of the amendment. In any case, if it turns on the intent of Congress, the effect will be to oppose President Obama in any possible way.
“The largest Eurozone economies are growing, however slowly. That does not mean we have finished with the stresses of unequal growth, absent social services, or national unrest in Europe.
“The signs of life in the high-finance regulatory community (i.e., the Justice Department) are the most important part of this week's report, and they bring hope. Revisiting LIBOR, setting aside the anemic settlement, and seeking something close to justice seem to me to signal a change of attitudes that could restore governance of the United States to the people. That will be necessary before we can correct the many other harms done by the oligarchy currently in the saddle.”
My response to the Blog:
            Re: Aspen.  Thank you.  We hope she has a similar experience in college.
            Re; IRI nuclear deal review.  Amendment to the Atomic Energy Act of 1954 was simply the vehicle to express their concern and to make their demand.  The Atomic Energy Act of 1954 was the seminal legislation in the U.S. to control nuclear proliferation and especially weaponization technology, so what little we know about the IRI deal falls under that general purview.
            Re: unequal growth.  Well said and agreed.
            Re: LIBOR.  Again, agreed, which is one reason I try to track these inch-stones on the journey.  Corporate penalties are simply nowhere near as effective as criminal prosecution, conviction and punishment of the perpetrators.  We need more of these guys in prison.

My very best wishes to all.  Take care of yourselves and each other.
Cap                 :-)