Johan Nylander — Chinese banks, HSBC caught up in huge money laundering scam

Several of China’s state-controlled banks, as well as HSBC’s Hong Kong branch, have allegedly processed hundreds of millions of US dollars from a vast money-laundering operation run by Russian criminals with links to the Russian government and the spy agency FSB.

Documents obtained by the Organized Crime and Corruption Reporting Project show that at least US$20 billion was moved out of Russia between 2010 and 2014 in a vast criminal operation called “The Global Laundromat”....

Asia Times
Chinese banks, HSBC caught up in huge money laundering scam
Johan Nylander

Wolf Richter — Congress: “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable”

The US House of Representatives today released the results of its three-year investigation – hampered along the way by the Department of Justice and the Department of the Treasury – into why HSBC and its executives weren’t prosecuted.

Empirical evidence has told us for years that in the US a bank and its executives cannot be prosecuted if the bank is big enough. We’ve come to call this type of bank “Too Big to Jail.”

Empirical evidence has also told us that a bank can do essentially whatever it wants to, given that, if caught, it may have to pay a fine that then becomes just part of the cost of doing business. Wall Street doesn’t care about fines. They’re “extraordinary items” that banks and analysts systematically exclude from their “ex-items” per-share earnings.
Fines matter under GAAP reporting. But they don’t matter in the rosy picture that Wall Street paints of the banks. And so they don’t matter.

But now comes the House Financial Services Committee and offers evidence beyond our “empirical evidence”: a 288-page report, “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable.” And below is the Committee’s galling summary. Enjoy!

Wolf Street
Congress: “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable” 

Wolf Richter 

Mica Rosenberg — Top U.S. officials rejected push to prosecute HSBC: lawmakers' report

Senior U.S. Department of Justice officials overruled internal recommendations to prosecute global bank HSBC Holdings Plc for money-laundering violations because of concerns about the stability of the financial system, according to a congressional report released on Monday.…

Business Insider
Top U.S. officials rejected push to prosecute HSBC: lawmakers' report
Mica Rosenberg | Reuters

HSBC forecasts lower dollar in 2016, as I did months ago

HSBC is now forecasting the U.S. dollar to decline in 2016. I made this call months ago.

They're catching on to some of the arguments I made here and also some of the things that I teach in my Forex course. Namely, that rising interest rates are bearish, not bullish, for the dollar. (I'm not sure  they really understand why, however.)

Anyway, I am building a short dollar position at the current time. This trade would have been doing much better right now were it not for all the China related panic and falling commodity prices, but people are buying dollars for all the wrong reasons, I feel.

Patience is the key, here.

John Helmer — Cyprus, Russian Fraud Investigations Close In On Leonid Lebedev – Us Banks Accused Of Money Laundering

Documents uncovered in Cyprus reveal that three banks based in New York – Citibank, Bank of America, and HSBC – were engaged by Imperium Services Ltd., a Cyprus trustee company, to receive Lebedev’s cash and open deposits for a Cyprus entity he called North Sintez International Trust. At opening, Citi (below, left) was holding $98.4 million of Lebedev’s money; Bank of America (right), $17.9 million; and HSBC of New York, $33.4 million.

In their originating transactions with North Sintez, and in their subsequent payments of interest on these funds, the American banks appear to have violated US money-laundering laws and regulations. The banks also appear to have failed to uncover evidence that Lebedev was obliged to report his income to the US Internal Revenue Service. According to unverified sources, the 59-year old Lebedev, who emigrated from Russia to the US in his twenties, and lived there in the 1980s and early 1990s, held a US passport between September 2001 and September 2011.…

Pretty sordid all around. What else is new at the top.

Dances with Bears
Cyprus, Russian Fraud Investigations Close In On Leonid Lebedev – Us Banks Accused Of Money Laundering
John Helmer

Ambrose Evans-Pritchard — HSBC fears world recession with no lifeboats left

Stephen King from HSCB warns that the global authorities have alarmingly few tools to combat the next crunch, given that interest rates are already zero across most of the developed world, debts levels are at or near record highs, and there is little scope for fiscal stimulus.

"The world economy is sailing across the ocean without any lifeboats to use in case of emergency," he said.

In a grim report - "The World Economy's Titanic Problem" - he says the US Federal Reserve has had to cut rates by over 500 basis points to right the ship in each of the recessions since the early 1970s. "That kind of traditional stimulus is now completely ruled out. Meanwhile, budget deficits are still uncomfortably large," he said....

The US cannot easily launch a fresh New Deal. Public debt was just 38pc on GDP when Franklin Roosevelt took power in 1933, and there were few contingent liabilities hanging over future US finances.

Looks like all we can afford is depression, and, of course, war.

But not to worry, economics is a science.

HSBC's Mr King says the global authorities face awful choices if the world economy hits the reefs in its current condition. The last resort may have to be "helicopter money", a radically different form of QE that injects money directly into the veins of economy by funding government spending.

It is a Rubicon that no central bank wishes to cross, though the Bank of Japan is already in up to the knees.

Lots of data on the global economy in the article though.

Telegraph
HSBC fears world recession with no lifeboats left
Ambrose Evans-Pritchard

Don Quijones — Guess Who’s Designing Europe’s New Tax System?

Spoiler warning. HSBC.

Wolf Street
Guess Who’s Designing Europe’s New Tax System?
Don Quijones

William K. Black — HSBC CEO: My Pay Was so Outrageous I Had to Use Tax Havens to Hide it from My Peers

Greetings from Quito [Ecuador], where I will be spending four months teaching at IAEN about effective regulation and building ties with UMKC. 

The latest twists on the latest HSBC tax evasion and tax avoidance scandal is that it has come out that Stuart Gulliver, HSBC’s head, put his money where his mouth wasn’t. He personally used double tax havens – Panama plus Switzerland – to hide his income and wealth from view because his pay was so outrageous that even other HSBC executives would have been outraged by it.

How bizarre is that!

New Economic Perspectives
HSBC CEO: My Pay Was so Outrageous I Had to Use Tax Havens to Hide it from My Peers
William K. Black | Associate Professor of Economics and Law, UMKC

William K. Black — The City of London is so Criminogenic That It Boggles Even Its Banking Apologists

Forget Wall Street as the global bad guy. The City is worse. Wall Street actually conducts its worst deals there because the rules and regulators are even laxer. The leaders of the UK have concluded that finance is really the only game they have left and to loose financial hegemony would be disastrous for Britain. So most anything goes.
New Economic Perspectives
The City of London is so Criminogenic That It Boggles Even Its Banking Apologists
William K. Black | Associate Professor of Economics and Law, UMKC

ICIJ — Banking Giant HSBC Sheltered Murky Cash Linked to Dictators and Arms Dealers

Team of journalists from 45 countries unearths secret bank accounts maintained for criminals, traffickers, tax dodgers, politicians and celebrities 

Secret documents reveal that global banking giant HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws. 

The leaked files, based on the inner workings of HSBC’s Swiss private banking arm, relate to accounts holding more than $100 billion. They provide a rare glimpse inside the super-secret Swiss banking system — one the public has never seen before. 

The documents, obtained by the International Consortium of Investigative Journalists via the French newspaper Le Monde, show the bank’s dealings with clients engaged in a spectrum of illegal behavior, especially in hiding hundreds of millions of dollars from tax authorities. They also show private records of famed soccer and tennis players, cyclists, rock stars, Hollywood actors, royalty, politicians, corporate executives and old-wealth families.

These disclosures shine a light on the intersection of international crime and legitimate business, and they dramatically expand what’s known about potentially illegal or unethical behavior in recent years at HSBC, one of the world’s largest banks.…

“The offshore industry is a major threat for our democratic institutions and our basic social contract,” French economist Thomas Piketty, author of Capital in the Twenty-First Centurytold ICIJ. “Financial opacity is one of the key drivers of rising global inequality. It allows a large fraction of top income and top wealth groups to pay negligible tax rates, while the rest of us pay large taxes in order to finance the public goods and services (education, health, infrastructures) that are indispensable for the development process.”

ICIJ

Banking Giant HSBC Sheltered Murky Cash Linked to Dictators and Arms Dealers

Gerard Ryle, Will Fitzgibbon, Mar Cabra, Rigoberto Carvajal, Marina Walker Guevara, Martha M. Hamilton and Tom Stites

Big time financial fraudsters going to jail!

No it's not Jamie Dimon or Lloyd Blankfein or anyone from Bank of America or HSBC. It's Real Housewives' stars Joe and Theresa Giudice. The both took a plea and one of them (probably Joe) will be spending the next 3-4 years in jail.

For fraud.

Now please square that in your head against the massive, decade-long (or longer) frauds, money laundering and illegal market manipulations of the major banks--WHO ADMITTED TO THESE THINGS.

Not a single banker is going to jail, but a couple of two-bit reality TV stars? Yep, they're getting locked up.

Shows you how corrupt (and bought) the system is.

Matt Taibbi — Outrageous HSBC Settlement Proves the Drug War is a Joke

Matt is on the case.

If you've ever been arrested on a drug charge, if you've ever spent even a day in jail for having a stem of marijuana in your pocket or "drug paraphernalia" in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me.

Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who's ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a "record" financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

The banks' laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC's Mexican branches and "deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows."

This bears repeating: in order to more efficiently move as much illegal money as possible into the "legitimate" banking institution HSBC, drug dealers specifically designed boxes to fit through the bank's teller windows.

Rolling Stone
Outrageous HSBC Settlement Proves the Drug War is a Joke
Matt Taibbi

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.

It doesn't take a genius to see that the reasoning here is beyond flawed. 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.

And not only did they sell out to drug dealers, they sold out cheap. You'll hear bragging this week by the Obama administration that they wrested a record penalty from HSBC, but it's a joke. Some of the penalties involved will literally make you laugh out loud.

Real Housewives' fraud charges a travesty

It's a travesty when two of the stars of Bravo's "Real Housewives of New Jersey" face 50 years in prison for fraud, when HSBC, BofA, Goldman, JP Morgan and other Wall Street banks can commit massive fraud, nearly bankrupt the entire global financial system, and nothing happens.

Teresa and Joe Giudice are facing 50 years in prison for falsifying loan documents dating back to 2001 to 2008, in addition to lying about their financial condition when they filed for bankruptcy several years ago. The two have been indicted on 39 counts of fraud and face major prison time. Read here.

Meanwhile, HSBC is caught laundering billions in illicit money, BofA fraudulently foreclosed on homeowners and took away their homes, Goldman admits to fraud and Jamie Dimon is in flagrant violation of Sarbannes-Oxley with his "tempest in a teapot" whale trade, yet nothing happens.

What a travesty.