All the Plenary's Men [2017] - "The Definitive HSBC Scandal Documentary"

“The King can do no wrong.”

—William Blackstone, Commentaries on the Laws of England

“When the president does it, that means that it is not illegal.”

—Ex-President Richard Nixon, interview with David Frost

The question at bar is why the U.S. Department of Justice has failed to prosecute any too-big-to-fail banks or—more importantly—their bankers, even for admitted crimes.

It’s a crucial question, because after eight straight years of unremitting prosecutorial failure, it looks very much as if a select group of top banks can, in fact, do no wrong. If that’s the case, then our constitutional republic isn’t merely in trouble. It's dead.

A person or group of people who satisfy Blackstone’s criterion for ultimate sovereign power—the power to commit crimes with impunity—can’t exist in a nation where the law reigns supreme. And yet here we are a decade after the financial crisis began in earnest, and not one TBTF bank executive has gone to jail.

Legally, the TBTF banks are indistinguishable from the King, since the power to commit crimes with impunity swallows all other sovereign powers; such a power isn’t even supposed to exist in the U.S., and yet it does.

Moreover, since there can’t be two kings in a kingdom, the entire U.S. government, from the president on down, is just one of the King’s men under this formulation of power. The real job of the U.S. government, then, isn’t to represent the will of the people at all, it’s to do the King’s bidding. A nation that isn’t governed by law is governed by instead by a king—it’s one or the other—and the president’s inferiority to such an above-the-law sovereign was confirmed over 40 years ago with Nixon’s ouster. The president, unlike the King, answers to the law (despite Nixon's opinion).

Now, you may say that while the TBTF banks might arguably have the de facto power of the King, that’s a far cry from wielding such power formally (i.e., having de jure criminal immunity).

The reply to that objection is set forth in this film, “All the Plenary’s Men,” which is a sequel to “The Veneer of Justice in a Kingdom of Crime.”

Another objection, raised by the DOJ itself, is that it HAS prosecuted TBTF bankers, citing cases like that of Raj Rajaratnam. These cases, however, in fact reveal the DOJ acting on behalf of the criminal global banking cartel.

On that score, the DOJ’s abysmal track record is by now so extensive and so thorough that it’s possible to spot legal patterns in the DOJ’s protracted miscarriage of justice, and, as you’re about to see, those patterns are very deeply disturbing indeed. What’s been going on cuts right past a garden variety constitutional crisis like Watergate straight to a crisis of sovereignty.

The backdrop for all of this is HSBC’s exoneration in December of 2012 for laundering money for drug dealers and terrorists, about which the House Financial Services Committee issued a report in July of 2016. Whether it was due to the political circus in town at the time, or to the Republican authorship of that report (albeit without dissent), it didn’t get nearly the scrutiny it deserved.

You see, prosecutors working on the HSBC case were actually going to indict the bank, but they got overruled, and HSBC and its team of criminals skated. The story of how exactly that reversal came about reveals, if not the King himself, then certainly many of the King’s top men.

Make the coffee extra strong before viewing. Lots of ground gets covered, quickly.

And don’t mothball those pitchforks and torches just yet.

* * * *
Pre--release interviews (chron order):

http://www.davejanda.com/guests/john-titus/sunday-april-9-2017 (Operation Freedom with Dr. Dave Janda)

https://www.youtube.com/watch?v=LAbYFmhmpg4 (Shadow of Truth with Rory Hall and Dave Kranzler)

http://www.tfmetalsreport.com/podcast/8304/a2a-john-titus (TF Metals Report with Craig Hemke)

https://www.youtube.com/watch?v=CjyqbfyUOp0 (X22Report Spotlight with Dave)

LIBOR to end in 2021

Libor Funeral Set for 2021 as FCA Abandons Scandal-Tarred Rate

By

Suzi Ring

27 luglio 2017, 10:00 CEST 27 luglio 2017, 14:30 CEST

https://www.bloomberg.com/news/articles/2017-07-27/libor-to-end-in-2021-as-fca-says-bank-benchmark-is-untenable-j5m5fepe 

• Bank lending no longer ‘sufficiently active’ to sustain Libor
• FCA’s Bailey says decision not linked to past manipulation

Andrew Bailey, chief executive officer at Financial Conduct Authority, explains the decision to end Libor in 2021 in favor of a more-reliable system. He speaks with Bloomberg's Francine Lacqua on 'Bloomberg Surveillance.' (Source: Bloomberg)

Libor, the nearly 50-year-old global borrowing benchmark that became a byword for corruption, is headed for the trash heap of history.
The U.K. Financial Conduct Authority will phase out the key interest-rate indicator by the end of 2021 after it became clear there wasn’t enough meaningful data to sustain the benchmark that underpins more than $350 trillion in securities, Andrew Bailey, the head of the regulator, said in a speech Thursday at Bloomberg’s London office.
The end of the London interbank offered rate, or Libor, is welcome on many levels for regulators. It was tied to some of the banking industry’s biggest scandals, leading to about $9 billion in fines and the conviction of several bankers for manipulating the rate. Relying on the opinions of industry insiders to set the daily estimates based on interbank lending -- some in markets that saw fewer than 20 transactions annually -- was unacceptable, Bailey said.
"Libor is trying to do too many things: it’s trying to be a measure of bank risk and it’s trying to substitute for interest-rate risk markets where really it would be better to use a risk-free rate," said Bailey in an interview with Bloomberg News before the speech. "It’s had to come to a conclusion."

Bailey said setting a firm schedule will help banks and finance companies manage the transition from Libor, which is behind securities including student loans and mortgages.
Read more: What Is Libor and Why It Will Soon Be History
The benchmark is the average rate a group of 20 banks estimate they’d be able to borrow funds from each other in five different currencies across seven time periods, submitted by a panel of lenders every morning. Its administration was overhauled in the wake of the scandal, with Intercontinental Exchange Inc. taking over from the then-named British Bankers’ Association with the aim of making the rate more transaction-based.
But the 58-year-old Bailey said the market supporting Libor -- where banks provide each other with unsecured lending -- was no longer "sufficiently active" to determine a reliable rate and alternatives must be found. For one currency and lending period there were only 15 transactions in 2016, he said.

Read more: QuickTake: Broken Benchmarks

Serious Question

"The absence of active underlying markets raises a serious question about the sustainability of the Libor benchmarks," said Bailey, who is widely seen as a candidate to be the next governor of the Bank of England. "If an active market does not exist, how can even the best run benchmark measure it?"
The search for a new benchmark may lead to tighter swap markets, lower rates and richer attorneys as contracts need to be rewritten and adjusted to remove Libor.
“The impact of this decision from the FCA is to put uncertainty into all Libor-based swap rates,” said Peter Chatwell, head of European Rates Strategy at Mizuho International Plc in London. “The market will need guidance as to what a replacement could be and this will lead to increased volatility and possibly reduced liquidity in the near term.”
The FCA only started regulating Libor in 2013, the same year legislation was passed making it a criminal offense to take any misleading action in relation to financial benchmarks.
Read more: Why Replacing Libor Isn’t Easy
The FCA chief said the regulator has spent a lot of time persuading banks to continue submitting rates, something the agency has the power to enforce, but the lack of liquidity makes this impossible to maintain and leaves it open to manipulation.
However, he told Bloomberg Thursday the proposed change didn’t excuse the abuse of the benchmark that has seen five former bankers jailed in the U.K. and a number of others convicted in the U.S.
"The issues that we’re dealing with today do not in any sense excuse or mitigate what went on," Bailey said. "Those who say that this demonstrates that what went on in the past is somehow understandable because the system was broken, I’m afraid that is not an argument that this justifies at all."
The FCA has spoken to the panel banks over recent months about ending the use of Libor and how much time it would take to wind-down, Bailey said. While it would be tough, most said it could be done in four or five years, and the FCA has asked banks to continue submitting rates until the end of 2021.

Push from Authorities

Bailey said he could see a situation where there is more than one benchmark, with some including bank credit risk while others exclude that data. While discussions with banks and other users of Libor are at early stages, he said it may take a “push” from authorities to move the process forward at times.
“We’ve had no conversations about using capital tools,” Bailey said in response to questions after his speech. “But you can take it for granted that if we don’t see the progress that we need to see to hit this time scale, then in the broader sense there will be a ‘push’ from authorities.”
The development comes as a number of groups have been considering alternatives to Libor.

Bank of England Governor Mark Carney said earlier this month that Libor is no longer suitable. The central bank said in April that a swaps-industry working group had proposed replacing Libor in contracts with the Sterling Overnight Index Average, or Sonia, a near risk-free alternative derivatives reference rate that reflects bank and building societies’ overnight funding rates in the sterling unsecured market.
The bank had no further comment when contacted on Thursday.
Concerns have mounted in the euro area over Euribor, the benchmark interest rate for $180 trillion a year of intra-bank lending, as banks pull out of rate-setting panels in the wake of the Libor-rigging scandal. The European Central Bank acknowledges the shortcomings of the mechanism but wants the financial industry to take the lead in finding a solution.
In June, a U.S. government body, the Alternative Reference Rates Committee, recommended replacing Libor with a new, broad Treasuries repo rate, linked to the cost of borrowing cash secured against U.S. government debt.
Switzerland is replacing its own key swaps rate, TOIS, with a new benchmark on Dec. 29.
Asked whether this transition away from Libor should have happened earlier, Bailey said it would have been hard to predict five years ago that the world would still be in an environment of quantitative easing and low interest rates.
"I’m not criticizing the reforms, they were done with good intent and with a view that the market would return," Bailey told Bloomberg. "We are where we are."
— With assistance by Jill Ward, Paul Gordon, and Luca Morreale

#Business News

July 28, 2017 / 4:08 PM / 7 hours ago

EU explores account freezes to prevent runs at failing banks

Francesco Guarascio

https://www.reuters.com/article/us-eu-banks-deposits-idUSKBN1AD1RS?il=0

European Central Bank (ECB) headquarters building is seen in Frankfurt, Germany July 20, 2017.Ralph Orlowski

 

BRUSSELS (Reuters) - European Union states are considering measures which would allow them to temporarily stop people withdrawing money from their accounts to prevent bank runs, an EU document reviewed by Reuters revealed.

The move is aimed at helping rescue lenders that are deemed failing or likely to fail, but critics say it could hit confidence and might even hasten withdrawals at the first rumors of a bank being in trouble.

The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits at Banco Popular contributed to the collapse of the Spanish lender.

It also come amid a bitter wrangle among European countries over how to deal with troubled banks, roughly a decade after a financial crash that required the European Central Bank to print billions of euros to prevent a prolonged economic slump.

Giving supervisors the power to temporarily block bank accounts at ailing lenders is "a feasible option," a paper prepared by the Estonian presidency of the EU said, acknowledging that member states were divided on the issue.

EU countries which already allow a moratorium on bank payouts in insolvency procedures at national level, like Germany, support the measure, officials said.

"The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge," a person familiar with German government's thinking said.

To cover for savers' immediate financial needs, the Estonian paper, dated July 10, recommended the introduction of a mechanism that could allow depositors to withdraw "at least a limited amount of funds."

Banks, though, say it would discourage saving.

"We strongly believe that this would incentivize depositors to run from a bank at an early stage," Charlie Bannister of the Association for Financial Markets in Europe (AFME), a banking lobby group, said.

The Estonian proposal was discussed by EU envoys on July 13 but no decision was made, an EU official said. Discussions were due to continue in September. Approval of EU lawmakers would be required for any final decision.

Insured Deposits

The plan, if agreed, would contrast with legislative proposals made by the European Commission in November that aimed to strengthen supervisors' powers to suspend withdrawals, but excluded from the moratorium insured depositors, which under EU rules are those below 100,000 euros ($117,000).

Under the plan discussed by EU states, pay-outs could be suspended for five working days and the block could be extended to a maximum of 20 days in exceptional circumstances, the Estonian document said.

Existing EU rules allow a two-day suspension of some payouts by failing banks, but the moratorium does not include deposits.

The Commission, which declined to comment on the discussion, had previously excluded insured deposits from the scope of the moratorium tool fearing it "may have a negative impact on market confidence," according to a press release published in November.

Many states supported a suspension of payouts only during the so-called resolution of a failing bank - the process which imposes losses on lenders' investors and possibly also uninsured depositors, while preserving the continuity of the banking activities, the document said.

Most countries opposed bolder plans for an early moratorium.

Additional reporting by John O'Donnell in Frankfurt; Editing by Richard Balmforth and Alexander Smith

Is a crisis looming for central banks?

Bank of Italy Feels People Shouldn’t Create Their Own Currencies

Posted on 2:00 pm July 18, 2017 Author JP BuntinxCategories Bitcoin, Bitcoin News

http://www.newsbtc.com/2017/07/18/bank-italy-feels-people-shouldnt-create-currencies/

Contrary to what people may assume, scriptural Euros are accepted as a form of payment.

Over the past few years, we have seen multiple new cryptocurrencies emerge. The vast majority of these coins have no inherent value whatsoever. In fact, one could argue the developers of such currencies have made quite a bit of money from their projects. The Bank of Italy now warns the public about not issuing their own currencies moving forward. Quite an intriguing development, considering the local banks are struggling to find money.

Anyone in the world can issue their own currency these days. That is, assuming they want to issue a cryptocurrency or an Ethereum-based token. There is very little coding knowledge required these days as well. A lot of cryptocurrencies simply copy features from other coins to keep things “fresh”. Moreover, the code for currencies such as Bitcoin and Litecoin is fully open-sourced. This means anyone can copy it, make some minor changes, and issue their own currency. That doesn’t mean anyone will use it or pay money for it, though.

Bank of Italy Doesn’t Want Consumers to Create Value

The Bank of Italy is particularly concerned about this trend. While creating cryptocurrencies is just one potential threat, central banks have bigger things to worry about. Scriptural euros are being issued by citizens as we speak. This method allows any European citizen to autonomously create Euros through their own accounting records. It is virtually the same as what banks are doing, but without printing additional currency. This “created” money can effectively be used to relieve existing debts.

Contrary to what people may assume, scriptural Euros are accepted as a form of payment. Facebook seemingly accepts this currency for advertisement payments. That is quite unusual, as citizens aren’t supported to create a new currency. Then again, there is nothing preventing them from doing so. The Bank of Italy is quite concerned for obvious reasons. If people can create their own money and it is accepted by merchants, banks have no added value. So far, it appears Italian citizens have created over 1 billion scriptural Euros since October of 2016.
Regardless of how people feel about scriptural Euros, the Bank of Italy issued a warning. Creating new currencies out of thin air is a grave concern. Scriptural euros should not be dismissed as a fad either. While there is a lot of misconception regarding these scriptural coins, they are a legitimate form of payment if enough people accept it. Scriptwriting is, in theory, only allowed to authorized parties. Then again, Italy shows it can be done, which sets a rather intriguing precedent.

Published by

JP Buntinx

JP is working hard to bring more credibility to the Bitcoin and blockchain news industry. Outside of being Europe Editor at Newsbtc, JP is also an active writer for the website, and does not shy away from letting his opinion be heard. View all posts by JP Buntinx

Amelia Tomasicchio

JUL 25, 2017 

Banca D’Italia Vs. Scriptural Euros: Prelude Against Bitcoin?

https://cointelegraph.com/news/banca-ditalia-vs-scriptural-euros-prelude-against-bitcoin

A few days ago Banca d’Italia - Italian Central Bank - published a press release about the creation of the so-called scriptural euros.

Banca d’Italia explained it received a few documents by its customers that attest the autonomous creation of scriptural euros and the use of these amount of money for paying debts or providing payment transactions or issuing credit certificates from the Bank of Italy itself.
This communication comes after fake news that the network has spread about the conviction that European citizens can create currency to pay their debts by sending a simple document from a certified electronic mail to their creditors. The currency created with this process is called scriptural euros.

Banks actually used this kind of accounting currency just before the Euro adoption. At that time, banks were authorized to open accounts in euros and to transact with the currency even if it was not yet in the pockets of Union citizens.

Banca d’Italia explains:

“Taking these initiatives, even in limited numbers, combined with the presence on the web of references to the economic theory of which they are applied, makes it necessary to publish some clarifications in order to avoid dangerous misunderstandings.”

The theory of the autonomous creation of scriptural currency, drawing from the conception of collective property of coins, comes to affirm the possibility for every single citizen to create their own autonomously "scriptural" coins through the accounting records of the amount corresponding to the sum due.

Some advocates of these ideas, active on the web, provide specific modules to be used for the creation of "scriptural euros" and for the communication of the alleged payment to be addressed to creditors and to the Bank of Italy.
So, through this document, Banca d’Italia wants to warn citizens against the creation of this kind of euros, a process that can be only done by banks and financial banks and not by private individuals.

Scriptural euros and Bitcoin

The real concern behind this Banca d’Italia’s document is the possible implication related to digital currencies.
Because the document quoted that only banks have the power to issue money, the danger that this warning may also be applied to cryptocurrencies ​​is not to be underestimated:

“It should be remembered that the provision of payment services through scriptwriting is an activity allowed by law only to authorized persons, such as banks, money institutions and payment institutions.”

That said, we have to remember that Agenzia delle Entrate - the Italian governmental agency that enforces the financial code of Italy - released a few documents related to the legality of Bitcoin, comparing it to a foreign currency, so probably we don’t have to worry about the Bank of Italia’s recent statement.

Debate on money creation at the ECB

“Money from nothing” – my newspaper article translated into English

German daily newspaper Die tageszeitung published my article on money creation last weekend (here). This is the translation from German into English (also available as a pdf):
(Translation of http://www.taz.de/!5422477/ by Dirk Ehnts, author)
https://econoblog101.wordpress.com/2017/07/07/money-from-nothing-my-newspaper-article-translated-into-english/

Debate on money creation at the ECB

Money is created from nothing

The consequences are shocking. The mainstream view of economics is wrong – says German central bank Deutsche Bundesbank. This is a revolution.
Modern capitalism is impossible without money. We do not exchange goods against goods, but we buy goods with money. The interesting question for economics is hence: where is money coming from? The Bundesbank has now delivered an answer that is revolutionary: money is created from nothing – by booking processes inside banks. This may sound abstract at first, but the consequences are far-reaching. The Bundesbank says that the mainstream theory in academic economics is wrong. Millions of students at universities learn a fairy tale.
This fairy tale is spread by, for instance, Gregory Mankiw, whose textbook „Macroeconomics“ has sold millions of copies and is widely used at German universities. For Mankiw, banks are just middlemen, called intermediaries: they allegedly get money from savers that they then pass on to other customers.
This idea might sound reasonable, but has little to do with reality. Banks do not need savers to extend loans. They are not intermediaries, but create money by themselves. The Bundesbank says that unequivocally. The prose is a bit awkward, nevertheless it is worthwhile to read the main passage: „If a bank extends a loan, she books the credit to the customer connected to the loan as his deposit […] This refutes a widely held erroneous view in which the bank acts as an intermediary in the moment of lending, in which loans can only be funded by deposits that the bank has received from customers before.“ Harvard professor Gregory Mankiw with his theory of intermediation, so says Bundesbank, subscribes to „a widely held erroneous view“.

New money is born

Words like credit or deposit sound complicated, but one can imagine money creation like a scoreboard in a football stadium: first goals are scored, then the scoreboard is adjusted accordingly.
This is how banks, work, too: first, the bank signs a loan contract – and then the money is added to the client’s account. The money did not exist before, it is created through the extension of a loan.
Let us assume, that a customer applies for a loan of a thousand euros to buy a used car. Then the bank tops up his account. Done. New money is born. When the client repays the thousand euros – the money is gone again.
This insight has enormous consequences, because the Bundesbank says: the relationship between debts and savings is rather different from the view of the „Swabian housewife“. This figure of speech, which is generally known, thinks that saving is always good – and debs are to be avoided. The German language also suggests that loans are evil. The German word for debt – Schulden – instantly reminds one of the idea of moral sin – moralische Schuld. Who takes out loans is quickly regarded as disreputable.

 Two practical questions

As the Bundesbank has shown, loans are the driver of the economy. Without them we would have neither investment nor economic growth. Only when loans are taken out savings can be created. The world of the Swabian housewife is turned topsy-turvy: savings are accommodating items, seen from macroeconomic accounting.
Let’s stay with the banal example or a car purchase. When someone borrows a thousand euros to buy a used car – then money is created, which then is transferred to the seller, who now has additional savings of a thousand euros. These savings were created from nothing just like the loan. Or, in economese: The debt of one person are the financial wealth of another.
Two practical questions remain: If banks do not need savings to extend loans – why do we save at all? And why, at least in the past, high rate of interest were paid for savings deposits, if these are essentially superfluous?
To start with the savings: most Germans do know instinctively why they would like to save some money. They make provisions for the future. They save to buy a house, for old age or to finance their kids’ education. Firms also like to save. Profits only arise if income is higher than expenditure.

The Germans are saving

Households and firms hence save even when interest rates are low or zero. We can see this phenomenon now: Whereas many banks offer negative interest rates or raise account fees, the Germans continue undauntedly.
This leads us to the second question more urgently: why are there interest rates in the first place, if savings takes place anyway – and banks do not need those savings to extend loans?
The interest rate is a brake for credit creation and inflation. If money is created from nothing through the issuance of loans, then theoretically an infinity of money could be pumped out into the world. When people consume and invest without limited, at some point all factories and workers will be busy, and inflation starts to rise.
This is when central banks intervene: They raise the interest rate as soon as high inflation seems to occur. With interest rates rising, taking out more loans will not be attractive. Money creation is stopped for the time being.

What follows from this?

The Bundesbank has entered history books with her account of money creation – in Germany. Truth is, other central banks were quicker. The Bank of England wrote on her homepage in 2014 how money is created from nothing.
What follows from this politically? The Bundesbank remains silent on this issue. However, it is obvious that finance minister Schäuble’s „policy of a black zero“ – a balanced government budget – is just as wrong as the austerity policies of the Eurozone.
Recalling the Bundesbank’s presentation: Savings can only be created when loans are extended. Debt and wealth belong together. But this reality is ignored by most Germans and their finance minister. They rather trust their guts: They would absolutely like to save – but also reduce their public debt. That does not work. If Schäuble saves and avoids any creation of debt he prevents his citizens from building up new wealth.
It’s even worse in the Eurozone: The crisis countries are forced to slash their government spending and are supposed to not incur any new debts but pay off old ones. This also will not work.

Schäuble should start to borrow

Where do incomes come from which are needed to repay the debts? Who repays debts in matter of fact is saving. But savings can only exist if someone increases his debts.
Mainstream economists often mock this statement by claiming that it would be nonsense to fight a debt crisis with new debts. It may be paradox, but this is how the world of money works, as the Bundesbank has explained to us.
ECB president Mario Draghi, an experienced central banker, has understood much earlier than the Bundesbank that new public debts are needed. No speech, in which he does not call on the economically stronger Eurozone countries, mostly Germany, to engage in fiscal policy. What means is: Schäuble should finally take out new loans. There are enough investment projects worthy of financing. Everybody agrees that the internet is the economic future – yet powerful internet connections are lacking in many locations in Germany.
Also, there now is a brand-new investment project, which is mandatory: all university libraries need new textbooks on macroeconomics. Mankiw and the other mainstream economists have finally been paid off, since the Bundesbank spoke its mind.

A COMMENT BY 

DIRK EHNTS
works at the chair for macroeconomics at Technical University Chemnitz with a specialization on international economic relations. Routledge published his book „Modern Monetary Theory and European Macroeconomics“ in 2016.