World View: Outrage Grows U.S. Did Not Jail Anyone at HSBC Bank

This morning's key headlines from

  • Outrage grows that U.S. did not jail anyone at HSBC bank for money laundering
  • President Obama gives tear-filled statement about Newtown school shooting
  • U.S. will send 400 troops with Patriot systems to Turkey-Syria border
  • Russia supplies Syria with supersonic Iskander missiles to counter Patriots

Outrage grows that U.S. did not jail anyone at HSBC bank for money laundering

HSBC - The World's Laundry Bank (ZeroHedge)
HSBC - The World's Laundry Bank (ZeroHedge)

HSBC, a bank headquartered in Britain, with huge presence in the United States, settled with the Department of Justice on Thursday over money-laundering charges that supported a breathtaking array of international criminal and terrorist activity -- including drug cartels in Mexico and Colombia and illegal financial transactions for terrorists in Iran, Sudan, Myanmar and Libya. HSBC violated the Bank Secrecy Act and the Trading with the Enemy Act, involving hundreds of thousands of transactions that laundered billions of dollars. According to the DOJ statement:

"HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries. The record of dysfunction that prevailed at HSBC for many years was astonishing."

HSBC was essentially the central banker for the criminal world, laundering huge flows of money supporting criminal activities and terrorism around the world. But as we know, the Obama administration Department of Justice under Eric Holder adamantly refuses to prosecute any banker, no matter how big or obvious the crime, because bankers make such huge financial contributions to their campaigns. In this case, HSBC was given a slap on the wrist -- a fine representing about a week's worth of profits. No one is going to jail.

What excuse is the DOJ giving for not sending anyone to jail? According to several reports, the DOJ is saying that sending someone from HSBC to jail would destabilize the entire banking system. The only thing it would destabilize is political contributions to the politicians.

Financial writer Mike Taibbi is furious:

"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."

As I've pointed out a number of times, we're seeing a repeat of 1930s Germany, where respectable people were gangsters, and gangsters were treated as respectable people.

As usual, many Gen-Xers as usual are supporting the DOJ decision not to send anyone from HSBC to jail. Here's possibly the sleaziest defense of all from one of the sleaziest Gen-X economists, Felix Salmon:

"[I]t’s important to put HSBC’s crimes in context. The United States, in its role as global hegemon and guardian of the world’s only real reserve currency, has unapologetically taken the opportunity to use its economic power to push its geopolitical agenda. For instance, if you’re an Iranian business and you want to do business in dollars, the US is determined to make your life as difficult as possible. The US might have no jurisdiction over Iranian businesses, but it does have jurisdiction over nearly all the important banks in the world, since it’s impossible to be a global bank without having some kind of presence in the US. And — as Argentina is finding out right now in its court case against Elliott Associates — if you want to send dollars around the world, you basically have to send them through the USA.

To put it another way, the laws that HSBC broke were laws designed to bolster the international standing of the US relative to Iran and other countries: they were geopolitically motivated, and the intended target was not the international banking system, with which the State Department has no particular beef, but rather countries the State Department doesn’t like."

This is probably the epitome of the most sickening Gen-X stupidity. But what I found interesting is that there are dozens of comments following Salmon's article, and almost every one is contemptuous of Salmon. Here a sample:

"What a piece of krap.

The Government could have prosecuted individuals without destroying HSBC as an Institution.

When you launder money for terrorists and murderers and drug cartels, you should be out of business. Your executives should be prosecuted.

Were you paid by HSBC to write this article?"

There were so many comments like this, that Salmon had to add an "update" paragraph to his article, saying that it would be OK to prosecute executives. The problem with this feeble attempt to save his reputation is that his reasoning about the U.S. being an evil global hegemon picking on poor little Iran applies to the executives as well. What a pathetic piece of work!

But I'm actually taking heart from all this. You have dozens of comments expressing the highest contempt for Salmon and his article. Many of these commenters, possibly most, are Gen-Xers themselves, and I take this as a hopeful sign that Gen-Xers are finally beginning to realize that the moral values and ethics promoted by the World War II survivor generations weren't so full of shit after all. It appears that the Gen-Xers are finally learning some hard lessons. Maybe, just maybe, there's hope for Generation-X after all. U.S. Department of Justice and Mike Taibbi (Rolling Stone) and Felix Salmon (Reuters)

President Obama gives tear-filled statement about Newtown school shooting

President Obama, who through his silence condones, supports and encourages violence by union thugs, on Friday gave a tear-filled statement saying that violence in schools has to end, "regardless of politics." CBS NY

U.S. will send 400 troops with Patriot systems to Turkey-Syria border

US Secretary of Defense Leon Panetta paid a surprise visit to US troops at Nato's Incirlik Air Base in Adana, Turkey, and authorized the dispatch of two Patriot anti-missile system batteries to Turkey, to be deployed on Turkey's border with Syria. In addition, 400 U.S. soldiers will be sent to Turkey's border with Syria to operate the Patriot systems. Germany and the Netherlands have also authorized their own Patriot systems to be deployed to Turkey, with supporting troops. The U.S. now has ground troops in Jordan and Turkey on Syria's border, as well as an aircraft carrier fleet in the Mediterranean near Syria's coast. Zaman (Istanbul)

Russia supplies Syria with supersonic Iskander missiles to counter Patriots

Russia has sent to Syria a shipment of Iskander ground to ground missiles, which travel at hypersonic speed of over 1.3 miles per second (Mach 6-7), and which can't be traced or destroyed by the Patriot system. This is considered a "game changer," and is forcing a re-evaluation of the entire American and Nato strategy toward Syria and the Mideast. Pravda (Moscow) and Debka

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