Other Arliss Podcasts

The After Show is an hour long and my segment generally starts at about the 35 minute point during the podcast. You will quickly find that I often have much more in the notes than I can get to during the podcast. Please use the menu below to jump to your area of interest and then click on the episode title for the audio link.

• What is money and how does that relate to Scotland and the upcoming vote for independence?
• The Astonishing Story of the Federal Reserve on 9-11
• Will & Arliss on the CRomnibus Federal Spending Appropriations
Ashes, Ashes, Russia Falls Down
Dynamic Scoring = Math vs Republican Math
Currency War or Common Sense?
Bankers and Fraud


14.8.14What is money and how does that relate to Scotland and the upcoming vote for independence?


11.9.14The Astonishing Story of the Federal Reserve on 9-11

This was written into an extremely lengthy and detailed post for DailyKos. The post and an excellent discussion thread can be found here.


12.12.14Will & Arliss on the CRomnibus Federal Spending Appropriations

  • Reinstating bank bailouts for derivatives
    • Jamie Dimon (of JP Mrgan Chase) personally made calls
    • Citicorp wrote it – literally
    • death knell for Dodd-Frank
    • removes provision that banks isolate their derivatives gambling
    • Dems say that have more $$ for enforcement budgets altho e SEC and the Commodity Futures Trading Commission
  • Soldiers (except flag officers) receive a whopping 1% raise
  • Sexual Assault in the Military programs receive $25M more and Sen Gellibrand plans to push harder to expand that
  • Veterans
    • $159.1B allocated
    • $209M new for costs associated with adding medical staff and expanding facilities
    • VA Inspector General is getting $5M increase
  • The Government Printing Office is now the Government Publishing Office
  • Prohibiting marjuana in DC
    • blocks Justice from interfering with state-level medical marijuana laws
    • prohibits DEA from interfering with industrial hemp production
  • In a victory for the potato lobby, white potatoes have been added into the WIC program…and the program has been cut by $93M
  • No lightbulb restrictions
  • The Sage-Grouse is banned from the Endangered Species list but BLM gets $15M to “conserve” habitats
  • Railroad inspections to increase with additional funding
  • Education Department loses $133M (out of $70.5B) but no funding for common core
  • Pouring (more) big donor money back into elections
    • page 1599 of a 1603 page bill
    • guts McCain-Feingold
    • changed limit from $32,400 to $324,000
    • for use by parties in committees for conventions, building expenses and election recounts
    • a couple could give up to $1,296,000 in a two year election cycle
    • intended to re-energize the strength of the parties vs super PACs
    • on the good side, we will be able to get names
  • Pension raids made legal
    • private pension plans will have the power to cut benefits already earned
    • alters the 1974 Employment Retirement Income Security Act
    • gov’t insured plans cover over 10M Americans
    • many of the private plans are either unfunded or underfunded
    • Ex: Teamsters’ Central States Fund has 410,000 members and an estimated $22B gap (current and future retirees) – all investment decisions made by an investment firm, not the Board
    • Plans lost est 30% of value in GFC
    • Plans have paid $250M to financial firms just in the last 5 years
  • Trucking industry (thank you Sen. Susan Collins, R-Maine)
    • easing restrictions on the “weekend” break from two nights to one
    • driver fatigue remains the leading cause of crashes
  • Funding for the EPA is being gutted
    • Big Ag’s farm ponds will be exempted from clean water rules
    • budget cut by $60M over last year
    • budget cut 21% since 2010
    • staffing will be cut to lowest level since 1989
  • non-existant ACORN defunded
  • Michelle Obama’s healthy school lunch initiative defunded
    • ketchup is once again a vegetable
    • sodium standards are relaxed pending “additional scientific studies”
  • Freezing salaries of senior political appointees (including Biden)
  • HHS is directed to make it clear which Obamacare plans cover abortion services
  • No ACA funding for the IRS, the Center for Medicare and the Center for Medicaid
    • Also cuts the funding for the Independent Payment Advisory Board (which will end up ADDING to the deficit)
  • Withholds funding for the gov’t of Afghanistan until “certain conditions are met”
  • $5B to fight Islamic State
  • CDC gets an increase of $42.7M plus $30M to fight Ebola (as part of $5.4B provided across several agencies)
  • NIH receives a $150M increase (especially fo Alzheimer’s and brain research)
  • Egypt – allocatin is subject to “democracy and human rights conditions”
  • Ends funds for the Palestinian Authority if it joins the UN without an agreement with Israel
  • Embassies
    • $5.4B for increased security, more than Obama requested and enough to implement the Benghazi Accountability Review Board recommendations
    • still no money for new embassy in London
  • Gabriella Miller kids First Act (Eric Cantor’s signature legislation) paid for by slashing funding for political conventions
    • funds pediatric research
  • FDA receives $37M increase
    • to fund Food Safety Modernization Act and increased inspections
  • Guantanamo Bay
    • still can’t be closed and prisoner transfers are limited to other countries
    • banned from building or buying a facility in the US
  • Homeland Security only funded through February (so there)
    • but DHHS has $948M for unaccompanied children program
  • IRS budget slashed by $345.6M


18.12.14Ashes, Ashes, Russia Falls Down

  • A year ago all the buzz around Russia was around the upcoming Sochi Olympics (which were a massive $50bn financial burden for the country) and the Russian economy was growing at a rate between 1.5 and 2%.
  • Now the ruble is in free fall – the first time Russia has ever admitted a recession
    • Tuesday, December 16 Russia lost its economic war against the West
    • dropped 12% Monday
    • has lost 50% against the dollar just this year
    • stock market fell 25% in one day this week
    • Russian corporations are more likely to default on debts
    • “an unrecoverable spiral” – economist Carl Weinberg
    • Central Bank of Russia (CBR) has hiked its interest rate to 17% in an effort to prop up the ruble against other currencies
      • but this will make consumer and business loans out of reach for everyone
      • the Central Bank has already spent more than $90B trying to defend the Ruble
      • Russian banks have amassed $192B of debt in foreign currencies, primarily dollars and Euros
      • has enormous reserves, due to oil, and is not in immediate danger of defaulting on loans and could repay them all (currently)
      • banks are not even lending to each other
  • Unlike the US economy, the Russian economy is a one trick pony. It’s all about oil and gas.
    • comprises more than 50% of the income for the government
  • OPEC’s new oil strategy
    • Russia has planned for $100/barrel average but the reality as of today is $56.47/barrel
    • has refused to cut its production quotas and is continuing to flood the market with oil
    • OPEC has said it is not “afraid” of $40/barrel
    • oil at $60/barrel will cause Russian economy to contract by 4%
    • effects small US producers
    • effects shale oil producers in the US and Canada
    • may prevent Keystone XL because train and trucking will be too expensive so cutting Keystone will have an effect
    • cuts deeply into Russian success
  • Rising tension between the US, the EU/NATO and Russia rose in January
    • Ukraine crisis created fragility as concerns rose among investors and they started to abandon ship even before Russia annexed Crimea (in March)
    • Then in June the Malaysian Airlines flight was shot down over the Ukraine
  • Economic sanctions and the privately imposed versions of the same increasingly began to squeeze down
    • More sanctions are to come, this week, from the US
    • Russia retaliated by banning food imports from US, Canada, Australia and Europe
    • Russia relies on imports for 25% of its milk, dairy products and fruit
    • the banned EU products alone are worth about $7B annually
    • the Russian imports ban will add about 1.9% to the already 7.5% level of inflation
    • price of bread is rising and people are holding staples
    • Western banks refused to make new loans
    • Western investors disappeared
    • Capital outflow estimated to be $125B this year and at least $100B next (according to official, notoriously low, forecasts)
      • citizens either already have or are converting their Rubles into other currencies
    • Sanctions sealed off Russian energy and weapons exports from their normal markets
  • The ruble was being rapidly devalued as inflation rose
    • food prices shot up
    • six months ago the exchange rate was 34 rubles for a dollar
    • this last Saturday it was 57 rubles to the dollar and by Tuesday it was 61.14
    • anyone holding rubles has lost half the value
  • Russian economy could contract as much as 5% in 2015 which is comparable to the great crisis of 1998
  • In late November Putin said, “These events in the currency market which we see now in Russia are not at all connected to the fundamental reasons and factors.” derp!
    • Putin is still pumping trillions into modernization of the military
    • his approval rating remains 82%
    • many Russians are out buying appliances and electronics because they will go up so much in price over the short term
    • On Tuesday Apple put a stop to on-line sales in Russia
    • so far Putin and the press have been successful in blaming the crisis on the West
    • Putin could increase operations in the Ukraine in order to distract the people
    • Putin could opt to renege on all foreign debt which would bite Wall Street
  • Putin’s press conference (3hrs 15min long, he took 50 questions)
    • no change on Ukraine and the invasion is their fault, “It’s impossible to destroy spiritual unity between us.”
    • says Western governments are declaring “economic war” against Russia in a clumsy lunge at “regime change” and, basically, if we go down we’ll drag you down with us
    • he says that in a couple of years Russia will be back on track
    • market forces are pushing Russia to diversify its economy
    • wants to meet with oil oligarch Vladimir Yevtushenkov
    • “Do we fight for sovereignty or let the Russian bear be stuffed?”

• The Fed FOMC announced, on Wednesday, that it would remain “patient” and will keep the FFR at current levels and that it would maintain its current policy of “accommodation” meaning that the Fed will continue to be taking an active role


22.1.15Dynamic Scoring = Math vs Republican Math (this aired live but the podcast was never posted by Netroots Radio)

  • You don’t have to be an acolyte of Arthur Laffer to believe that lower income tax rates will cause people to work at least a little harder and pay a little more to the Internal Revenue Service, helping to offset the revenue lost from the tax cut.”  – Peter Coy, Bloomberg Businessweek
  • House passed it on Tuesday, 6 January by a vote of 234-172 on party lines
  • Dynamic Scoring isn’t about how much things cost it is about how we evaluate how much things cost and including that flying leap estimates in the bill’s official cost to the Treasury
  • Scoring has been a data-based function performed by the (theoretically) unbiased Congressional Budget Office (CBO) to determine the cost of a piece of tax or spending legislation in a manner which is “accurate, consistent, fair and impartial,”  including but not limited to:
    • effect on deficit
    • effect on revenues
    • effect on unemployment
    • relatively predictable changes in behavior (increase in minimum wage, increase in legal immigration)
  • Static Scoring does not take into consideration the effect on the entire economy including any monetary/macroeconomic implications; Static Scoring essentially treats all legislation as if it only had microeconomic effects; this is done so that legislation can be compared “apples to apples” as a way of limiting vast and generally unknowable variables
    • CBO likes to provide a wide range of potentials that take into account different variables
  • Dynamic Scoring imposes, via legislation, the disproven notion that tax cuts always grow the economy and requires the prediction of the macroeconomy up to many years into the future
    • President George HW Bush called it “voodoo economics”
    • Senator Bernie Sanders says, The Republicans have hatched a plan to force the CBO to cook the books and paint a rosy picture of the benefits of trickle-down economics. He further said, “The purpose of dynamic scoring is to conceal–not reveal…” and finally, “That means counting the chickens before they hatch.
    • Example of Republican Math:  tax cut of X to the top 1% and to major corporations will grow the economy by X+Y and because the economy is now larger taxes of X will be returned to the Treasury so the tax cut “really” cost nothing
    • will ease the passage of tax cuts by showing a smaller that reality effect (objects in mirror are SMALLER than they appear)
    • JD Alt, writing on NEP, “…if the US federal household wanted to buy seeds for the federal household garden, it is required to deduct from its budgetary calculation the cost of the seeds but is not allowed to add to its budgetary calculation the value of the tomatoes and cucumbers that will grow from the seeds it intends to plant–nor is it allowed to assign a value to the nutritional benefits…
    • Paul Ryan (new Chair of Ways and Means) calls it “reality-based scoring” and we all know that Republicans call all things by their opposite
    • first step in GOP attack on the entire tax code
  • Dynamic Scoring applies only to tax bills so bills for infrastructure spending, which have large and mostly knowable macroeconomic benefits, will still be scored using Static Scoring – so now we will be hearing comparison of apples to spider webs
  • Per Steven Benen of Maddowblog quoting Shaun Donovan, Dir of OMB, “injecting bias into a broadly accepted, non-partisan scoring process that has existed for decades. As a result, it could allow Congress to adopt legislation that increases Federal deficits, while masking its costs.
  • Dynamic Scoring is an invention of politicians, it is purely politics, economists, even conservative economists, are in agreement that it is not reality
  • Dynamic Scoring and MMT
    • the biggest problem with Dynamic Scoring as far as MMT is concerned is, of course, that it reiterates the false concept that taxes pay for anything at all ever
      • legislators will argue about how and when tax will be paid for not WHY they should be paid at all
    • all tax bills have an economic overhead, they function to slow the economy, so there is some economic activity that does not happen in the private sector based upon the public sector reabsorbing the taxes, different kinds of taxes put a different overhead load on different parts of the private sector
      • personal income tax cuts are generally shown to have more positive economic impact, short-term, than corporate tax cuts
      • slowing the economy of the 1% versus slowing the economy of the 99%
      • sales taxes, for instance, cause more breaking than do inheritance taxes
      • perhaps one of the values of dynamic scoring is that it might, MIGHT push forward a conversation about the relative score of tax increases and cuts
  • Here are some of the specific problems with Dynamic Scoring
    • as the time horizon for any policy lengthens the inability to accurately reflect unforeseeable external drivers increases dramatically
    • Jason Furman, writing for The Center on Budget and Policy Priorities “Over the past 25 years, actual revenues in a given year have averaged $150B (in today’s terms) above or below the revenue levels that CBO predicted a year in advance.
    • underestimate the true cost of tax cuts by overestimating the macroeconomic upside
    • in the 1990’s fell well below expectations even though those years followed a decade of substantial tax cuts
    • Case in point:  Kansas (drastic cuts in 2012)
    • Case in point: the economic melt-down known as the George W Bush Presidency and the 2001 Heritage Foundation projection that the Bush tax cuts would pay off the national debt!!!
    • June O’Neill, who was appointed to run the CBO in 1995 when both houses were controlled by the GOP, DS “presents innumerable problems”
    • GOP has already said they will not reappoint current CBO Director Douglas Elmandorf at the end of January
    • Best summed up by Bruce Bartlett, economist for The Great and All-Seeing Reagan, now says DS “is not about honest revenue estimating. It’s about using smoke and mirrors to institutionalize Republican ideology into the budget process.
    • DS will force the CBO and the JCT to make assumptions beyond the scope of the legislation
    • the biggest problem with DS is that it takes the focus of legislation off of people and puts the priority on money…only
      • Dynamic Scoring gives no value to investment (in people, infrastructure, the environment)
      • no value in lessening inequality
    • the fundamental lag in market behavior prevents the direct insight into policy changes
    • CBO practices do already include some of the most predictable aspects of dynamic scoring for major legislation (immigration reform, Affordable Care Act)
    • boils down to assumptions that are strictly a matter of belief, an ideological agenda
    • the “Kerflooey Problem” a constraint in computer modeling that will not allow a projection to have a variable that goes to infinity (or in the case on an economy, to be infinitely unstable); the model comes back with a null value
  • Both the CBO and the Joint Committee on Taxation (JCT) agree that Dynamic Scoring will create a drag on overall economic growth
    • once again, the 99% are paying for the increased wealth of the 1%
    • CBO, JCT and a vast majority of academic researchers have determined that tax cuts are NOT accompanied by equivalent tax-re-uptake (or by spending reductions)
    • studies show that tax cuts return about 10% of the cost to the Treasury
    • Paul Ryan’s current plan is one that will cut taxes for millionaires by an average of $200,000 and the money saved will be rained down on the heads of the 99%; personally I recommend buying rain gear and preparing for yellow “rain” because that it the only kind of trickle-down we are ever going to see


12.2.15Currency War or Common Sense?

  • Currency War
    • when there is a lengthy recession gov’ts tend to blame other governments
    • “China did it, whaaaaa!”
    • calls for protectionism or currency wars (better solution would have been to pressure China to increase wages thereby increasing imports)
    • recession is always the result of gov’t failing to use fiscal policy as much as needed
    • misses the point that the real issue in the EZ is a slide toward recession
    • essentially thought of as pushing unemployment “overseas” = begger-thy-neighbor
    • term coined by Guido Mantega, Brazilian Minister of Finance in 2010
    • when a country has high unemployment and wants export-led growth (instead of fiscal policy driven growth) lowering the exchange rate is considered advantageous
    • for emerging economies it can help them to acquire foreign exchange reserves to buffer future financial crisis
    • but devaluation makes interest payments on foreign debt more expensive (if denominated in foreign currency) can also discourage foreign investors
    • currency wars are generally targeted against another currency but unless the warring economy is a large one the effect gets diluted
    • the infamous Dominique Srauss-Kahn, of the IMF, has said, “using currencies as weapons is not a solution and it can even led to a very bad situation. There is no domestic solution to a global problem.”
    • any existing currency war is switching from the € to the $
    • Fed is now saying that it will NOT raise interest rates in the first half of the year
      • $ is being fueled by low oil prices, the fall of currencies in Russia (ruble is down by 50%), Mexico and the many other OPEC countries
      • Canada, Japan & Singapore are all manipulating their currencies against the dollar as well
  • MMT take
    • external (foreign) deficits drain aggregate demand from the economy and budget deficits add demand
    • (Private Savings-Private Investment) + (Taxes – Gov’t Spending) – (Exports – Imports) = 0
    • OR (Exports – Imports) = (Private Savings – Private Investment) – (Gov’t Spending – Taxes)
    • SO if there is a trade deficit and a federal balanced budget then the private sector has to carry a deficit!; problem solved with federal deficit 🙂
      • private savings is a “time machine” – current purchases are delayed for future
      • there is no such thing as a public/federal surplus
    • Common wisdom is that depressing currency increases exports but historically has not always been the case because of so many other external factors (b/w 2005 and 2008 the Chinese Yuan appreciated and the US still bought more, up for $US205 to $US268
    • there is nothing inevitable about a trade deficit being associated with a budget deficit
    • a currency that operates on a peg is constrained in its ability to use the monetary system in the public interest
    • CRITICALLY:  MMT also takes a different view on trade to that outlined in mainstream economics textbooks. Imports are benefits to a nation while exports are a cost. The mainstream position is that imports are somehow bad and too many of them is worse and exports are virtuous. Exports involve a nation giving up its resources to another nation so the citizens in the latter can enjoy them. That is a cost. Imports are the opposites. – Bill Mitchell
    • limiting access to cheap imports reduces the quality of life of citizens
    • no one forces a consumer to purchase an import
    • Also, the nation with the strongest currency has the upper hand (more imports) but this is contrary to the way most economists think, fiscal policy can be used to target aggregate demand and employment
  • The Swiss Franc 
    • aka the swissie abbreviated CHF (Confoederatio Helvetica franc) by banks or Fr by businesses
    • legal tender in Switzerland, Liechtenstein as well as parts of Italy and Germany
    • Swiss National Bank (SNB) announced on 15 January that it was “dropping the peg”
      • between September 2011 and 15 January 2015 the CHF had been tightly pegged to the €
        • 1 € / 1.2CHF
        • some say the Swiss are starting a currency war but isn’t dropping the peg really their surrender?
      • also dropped interest rates from -0.25 to -0.75 (depositor pays the bank!)
      • dropping the peg with no warning caused hedge funds to take large losses
      • to the Swiss public imports cheaper but exports slower
      • SNB expects Swiss gov’t to use fiscal policy to drive employment
      • allowing the Fr to float eliminates the artificially low valuation of the Fr
      • Swiss stock market fell sharply
      • CHF, like US bonds, has long been considered a safe haven asset
      • investors flocking to the CHF between 2009 and 2011 dramatically pushed up the value of the swissie thereby driving up the cost of Swiss exports
      • Switzerland has the highest exports as a % of GDP ratio in the world
        • Switzerland 73% of GDP
        • South Korea  54%
        • Germany  46%
        • China  27%
        • Japan  16%
        • US  14%
      • in order to maintain the peg the SNB purchased large amounts of € to “sop them up”
        • SNB acknowledged that it had the capacity to produce unlimited Fr as needed
        • became very hard as the EZ entered deflation
        • would have become untenable with ECB QE which begins in March
        • QE will flood a LOT more €s into the system and cause the SNB to have to print a lot more swissies
        • SNB as $480bn of foreign currency, mostly €, which is the equivalent of 70% GDP
        • Swiss population are angry about the lg foreign currency reserves, fearing inflation
        • BUT Swiss inflation is too low so concern is not realistic
        • more likely to have played into the decision is ongoing devaluation of the € (12% in 2014) & the SNB did not want to be tied to Brussels decision makers anymore
        • Swiss feel their sovereignty was compromised by being tied to the €
        • the Swiss could operate with permanent negative capital with no harm done to themselves
        • reality – EZ in a deflationary spiral so less attractive as a trading partner while US more
        • deflation in the EZ undermines business investment on capital equipment, buildings, luxury goods etc and households defer purchases fearing unemployment
        • cheaper Fr will lower cost of exports & make Swiss even more competitive in US which comprises 21% of current exports & India
          • buyers of Swiss luxury goods are more likely to be in Beijing than Berlin
    • Denmark is being pressured regarding the peg of their krone to the €
      • very different situation
      • peg has existed for three decades
      • krone floats in a =/- 2.25 band around a target of 7.46038 krone to €
      • Danish central bank has said it is holding firm for now but is in a heightened state of alert, may adjust their peg but will not drop it
      • Danes place HIGH value on central bank credibility so will only adjust if there is no realistic choice (but, again, MMT advocates free float b/c adds flexibility and toolbox)
  • ECB Quantitative Easing (thanks to Claire Jones at FT for much of this info)
    • announced in November of 2014
    • QE is different than devaluation because instead of currency being used to buy currency, currency is used to buy bonds thereby increasing the money supply for the domestic economy
    • will buy at least €60bn in bonds
    • Japan was the first country to use QE and the US just finished a long and massive QE
    • US QE was widely criticized (China, Germany, Brazil) saying US was not considering effect on emerging economies (absorbing too much inflow capital)
    • plan to go from March 2015 to September 2016 or as long as it takes to reach 2% inflation
    • will buy government bonds, asset-backed securities but not corporate bonds
    • Germans opposed so ECB agreed that national central banks would assume responsibility for losses
      • at Davos Merkel complained that QE would lessen the urgency for structural reforms/austerity
    • risk-sharing on 20% of assets, primarily those issues by EZ institutions purchased by central banks
    • one EZ finance minister said, “the problem with purchases by national central banks is that it sending a signal that the eurozone is not moving in the direction of greater metallization of debt, something that will be necessary in the longer term for a successful single currency.
    • ECB is also improving terms of its longer-term refi operations & cutting interest rates (but not for Greece)
    • QE increases “domestic” liquidity and that can be seen to be increasing imports (even at a higher cost) so it can be viewed both positively and negatively in terms of the balance-of-trade
  • Germany
    • workers have suffered from stagnant wages
    • lack of productivity growth (lower than in 2007 & lowest among almost all developed nations)
    • infrastructure is in terrible condition and no investment is being made (like here)
    • massive surplus has come at the cost of the public (so they are pissed at Greece! (and Spain)
    • in reality, the problem is not between countries, it is between classes; like here
    • per Michael Pettis; “An awful lot of Europeans have understood the crisis primarily in terms of differences in national character, economic virtue, and as a moral struggle between prudence and irresponsibility. This interpretation is intuitively appealing but it is almost wholly incorrect….
    • German and Dutch lenders are largely responsible for the bubble liquidity in Spain and Goldman Sachs did Greece in (it’s a little too convenient to think that consumers in Greece, Italy, Spain, Portugal and Ireland all randomly decided to go on spending sprees at the same time)
    • all the pressure on the size of debt doesn’t matter because once the economies recover investors will rush back in despite debt load


13.2.15 – Bankers and Fraud (latest developments)

  • HSBC is either accused of or proven to have participated in laundering money for or providing tax avoidance for:
    • drug cartels (esp Sinaloa)
    • illegal arms running
    • blood diamonds (bigger windows)
    • major corruption in the United States, Kenya, Malta, Guinea, Saudi, Nigeria, Sierra Leone, Kazakistan, Lithuania, Ukraine, South Africa, Italy
    • tax avoidance in US, UK, France, Spain, Australia, Italy
    • doping of cyclists in Spain
  • Hervé Falciani (Fal c ani)
    • “the Lagarde list of tax avoiders”; estimated to be 130,000 accounts on list
    • period of list 2005 – 2007
    • 30,000 of those accounts appear to control ₤78bn
    • worked 10 yrs for HSBC Private Bank Suisse
    • technical analyst developing computer programs to adapt to laws and changes in laws
    • currently living in Spain with police bodyguard
    • Spain has refused to extradite to Switzerland
    • So far countries have recovered taxes:
      • France  ₤188m
      • Spain  ₤220m
      • UK  ₤135m
      • Australia ₤15m
    • HSBC was led during this period by (now) Lord Green, trade minister in the House of Lords
    • Clinton Foundation received $81m from those on list
    • Loretta Lynch has said bank could face tax-evasion charges in US
    • Belgian court considering arrest warrants
    • Spanish gov’t is also considering legal action
  • HM Revenues & Customs (HMRC) & Serious Fraud Office (SFO) & Financial Conduct Authority (FCA)
    • along with London police
    • being strongly pressured to investigate and prosecute
    • HMRC initially looked in to 150 people but only prosecuted three
    • problems related to basing a case on stolen information
    • off-shoring of assets
    • have to be able to prove the case “another way”
  • City of London, which actively recruited bank operations with minimal/non oversight
  • US bank lobbyists have concern about progressives & public but not the Obma administration
    • following the public fervor whipped up by progressives after the Cromnibus eased the Dodd-Frank regulation of the $700T derivatives market
    • b/c a rallying cry for Sen Warren, Sen Sherrod Brown, Cogresswoman Maxine Waters, even Nancy Pelosi
    • White House has reversed course and is “vowing” to defend Dodd-Frank
    • it is only a small thing but “It is not necessary to hope in order o persevere.” – William K Black
    • HSBC laundered billions for drug cartels, aided Iran in evading US sanctions (possibly in developing a nuclear weapon) and aided Hezbolla, al Qaeda & Hammas
    • • 13,000 – 15,000 suspicious wire alerts/mo monitored by 4 people (now expanded to 430)
  • HSBC one of largest originators of fraudulent mortgage loans via Household Finance
    • then Treasury Sec Tim Geithner opposed criminal prosecution
    • fear of bringing down a Systemically Dangerous Institution (SDI) would topple across economy
  • Control Fraud create a Gresham Dynamic (nobel Laureate in Economics George Akerlof)
    • criminal enterprise in which the people that control a seemingly legit enterprise use it as a weapon to defraud
    • these weapons are the greatest enemy of “free” markets
    • conrol frauds cause greater economic losses than all other forms of property crime combined
    • Gresham Dynamic prevents truly legit enterprises from being competitive in the environment
    • City of London became a criminogenic environment due to the Gresham Dyamic
    • “too big to prosecute” – per US Ass’t Att’y Gen Lanny Breuer (head of criminal division)
    • SDI’s are bailed out by gov’t so insurmountable advantage over smaller enterprises

date – title

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