Financial fuckery thread

[Cain]

Forgot to mention this one:

So there was this guy who repeatedly claimed that his wife's division of HypoVereinsBank was smuggling cash into Switzerland for the benefit of its wealthy, tax-evading private clients. He even pressed charges with the Bavarian police but nobody took it at all seriously, although he named 24 of the clients and their advisors at HVB and gave details of the Swiss bank accounts. Eventually, he was arrested for assaulting her.

Well, you can't condone this kind of behaviour.

Unusually, he was sent to a secure psychiatric hospital, and has been there ever since, while HVB surfed the bubble and sank in the crash. Had he been found guilty, he might not have done time at all. No, stop. Going by the account here, he was held responsible, but acquitted on the grounds of diminished responsibility and sent to the funny farm because he thought HVB was crooked, a belief that only a madman could apparently hold.

And now it turns out he was...right in every detail, even if he accused another figure in the case of being on the side of the bankers because he lived next door to one. HVB's private clients operation was hugely involved in tax evasion, and yes, carloads of raw cash were driven to Switzerland, to be paid into accounts with codenames like "Monster". The original file on the case has been shredded. And HVB's internal audit knew as long ago as 2003.

Now, although the state minister of justice is getting support from the top, this isn't stopping the taxman from working down the list, reminding those on it that an arrangement could always be made for those who voluntarily choose to settle their outstanding debts.

And if that wasn't good enough, with its distinct Jimmy Savile flavour, a sinister lobbyist hacks into the Ministry of Health's e-mail on behalf of one of Germany's most powerful interest groups...the pharmacists.

[ñͤͣ̄ͦ̌̑͗͊͛͂͗ ̸̨̨̣̺̼̣̜͙͈͕̮̊̈́̈͂͛̽͊ͭ̓͆ͅé ̰̓̓́ͯ́́͞]

Forgot to mention this one:

So there was this guy who repeatedly claimed that his wife's division of HypoVereinsBank was smuggling cash into Switzerland for the benefit of its wealthy, tax-evading private clients. He even pressed charges with the Bavarian police but nobody took it at all seriously, although he named 24 of the clients and their advisors at HVB and gave details of the Swiss bank accounts. Eventually, he was arrested for assaulting her.

Well, you can't condone this kind of behaviour.

Unusually, he was sent to a secure psychiatric hospital, and has been there ever since, while HVB surfed the bubble and sank in the crash. Had he been found guilty, he might not have done time at all. No, stop. Going by the account here, he was held responsible, but acquitted on the grounds of diminished responsibility and sent to the funny farm because he thought HVB was crooked, a belief that only a madman could apparently hold.

And now it turns out he was...right in every detail, even if he accused another figure in the case of being on the side of the bankers because he lived next door to one. HVB's private clients operation was hugely involved in tax evasion, and yes, carloads of raw cash were driven to Switzerland, to be paid into accounts with codenames like "Monster". The original file on the case has been shredded. And HVB's internal audit knew as long ago as 2003.

Now, although the state minister of justice is getting support from the top, this isn't stopping the taxman from working down the list, reminding those on it that an arrangement could always be made for those who voluntarily choose to settle their outstanding debts.

And if that wasn't good enough, with its distinct Jimmy Savile flavour, a sinister lobbyist hacks into the Ministry of Health's e-mail on behalf of one of Germany's most powerful interest groups...the pharmacists.

Ho ho hee hee ha ha!

[Cain]

Oh ho ho, look at this

http://www.guardian.co.uk/world/2013/jan/21/vatican-secret-property-empire-mussolini

Few passing London tourists would ever guess that the premises of Bulgari, the upmarket jewellers in New Bond Street, had anything to do with the pope. Nor indeed the nearby headquarters of the wealthy investment bank Altium Capital, on the corner of St James's Square and Pall Mall.

But these office blocks in one of London's most expensive districts are part of a surprising secret commercial property empire owned by the Vatican.

Behind a disguised offshore company structure, the church's international portfolio has been built up over the years, using cash originally handed over by Mussolini in return for papal recognition of the Italian fascist regime in 1929.

Since then the international value of Mussolini's nest-egg has mounted until it now exceeds £500m. In 2006, at the height of the recent property bubble, the Vatican spent £15m of those funds to buy 30 St James's Square. Other UK properties are at 168 New Bond Street and in the city of Coventry. It also owns blocks of flats in Paris and Switzerland.

The surprising aspect for some will be the lengths to which the Vatican has gone to preserve secrecy about the Mussolini millions. The St James's Square office block was bought by a company called British Grolux Investments Ltd, which also holds the other UK properties. Published registers at Companies House do not disclose the company's true ownership, nor make any mention of the Vatican.

Surprising?  Fascist money, the Vatican, dodgy banking arrangements and secrecy go together like peas and carrots.

Or have people forgotten who Roberto Calvi is?

Also of interest:

British wartime records from the National Archives in Kew complete the picture. They confirm Profima SA as the Vatican's own holding company, accused at the time of "engaging in activities contrary to Allied interests". Files from officials at Britain's Ministry of Economic Warfare at the end of the war criticised the pope's financier, Bernardino Nogara, who controlled the investment of more than £50m cash from the Mussolini windfall.

Nogara's "shady activities" were detailed in intercepted 1945 cable traffic from the Vatican to a contact in Geneva, according to the British, who discussed whether to blacklist Profima as a result. "Nogara, a Roman lawyer, is the Vatican financial agent and Profima SA in Lausanne is the Swiss holding company for certain Vatican interests." They believed Nogara was trying to transfer shares of two Vatican-owned French property firms to the Swiss company, to prevent the French government blacklisting them as enemy assets.

Earlier in the war, in 1943, the British accused Nogara of similar "dirty work", by shifting Italian bank shares into Profima's hands in order to "whitewash" them and present the bank as being controlled by Swiss neutrals. This was described as "manipulation" of Vatican finances to serve "extraneous political ends".

This is charmingly naive, however:

While secrecy about the Fascist origins of the papacy's wealth might have been understandable in wartime, what is less clear is why the Vatican subsequently continued to maintain secrecy about its holdings in Britain, even after its financial structure was reorganised in 1999.

I mean, does anyone with any historical awareness really think Vatican complicity in fascist movements ended with the deaths of Hitler and Mussolini?  Does anyone really believe that Vatican money has not been put to "good" use during the unstable years in Italy, or in shoring up anti-Communist movements in South America?

[LMNO]

Would the Catholic obsession with Fascism have anything to do with Reich's idea of the psychology of repression?

[Cain]

Possibly.  IANAP, however.

I suspect it has more to do with them both being afraid of the modern world in general and Communism in particular, though.

[Junkenstein]

http://en.starafrica.com/news/zimbabwe-has-217-in-the-bank-finance-minister.html

After paying public workers' salaries last week, the balance in cash-strapped Zimbabwe's government public account stood at just $217, Finance Minister Tendai Biti said Tuesday.

"Last week when we paid civil servants there was $217 (left) in government coffers," Biti told journalists in the capital Harare, claiming some of them had healthier bank balances than the state.

"The government finances are in paralysis state at the present moment. We are failing to meet our targets."

Zimbabwe's economy went into free-fall at the turn of the millennium, after President Robert Mugabe began seizing white-owned farms.

[Cain]

http://www.bloomberg.com/news/2013-01-28/libor-lies-revealed-in-rigging-of-300-trillion-benchmark.html

For years, traders at Deutsche Bank AG, UBS AG, Barclays, RBS and other banks colluded with colleagues responsible for setting the benchmark and their counterparts at other firms to rig the price of money, according to documents obtained by Bloomberg and interviews with two dozen current and former traders, lawyers and regulators. UBS traders went as far as offering bribes to brokers to persuade others to make favorable submissions on their behalf, regulatory filings show.

Members of the close-knit group of traders knew each other from working at the same firms or going on trips organized by interdealer brokers, which line up buyers and sellers of securities, to French ski resort Chamonix and the Monaco Grand Prix. The manipulation flourished for years, even after bank supervisors were made aware of the system's flaws.

"We will never know the amounts of money involved, but it has to be the biggest financial fraud of all time," says Adrian Blundell-Wignall, a special adviser to the secretary-general of the Organization for Economic Cooperation and Development in Paris. "Libor is the basis for calculating practically every derivative known to man."

[Junkenstein]

Nice find, this was a stunning bit of self awareness:

Some former regulators say they were surprised to learn about the scale of the cheating. "Through all of my experience, what I never contemplated was that there were bankers who would purposely misrepresent facts to banking authorities," says Alan Greenspan, chairman of the U.S. Federal Reserve from 1987 to 2006. "You were honorbound to report accurately, and it never entered my mind that, aside from a fringe element, it would be otherwise. I was wrong."

[LMNO]

And yet, no arrests, and no breaking up the institutions.



TOO BIG TO PROSECUTE.

[Mesozoic Mister Nigel]

And yet, no arrests, and no breaking up the institutions.



TOO BIG TO PROSECUTE.

Bit of a pickle we've got ourselves in, isn't it?

[Cain]

US economy shrank by 0.1%.

THANKS A LOT, OBAMA

[Cain]

lol, chavez

http://www.bloomberg.com/news/2013-01-30/chavez-s-681-bond-returns-buoy-goldman-andes-credit-correct-.html

ince taking office in 1999, Hugo Chavez has spread his socialist revolution in Venezuela by seizing more than 1,000 companies. For bondholders that stuck by him, he's also delivered returns that are double the emerging- market average.

The 681 percent advance, equal to 14.7 percent annually, has enriched investors from OppenheimerFunds Inc. to Goldman Sachs Asset Management LP that counted on Chavez's willingness to siphon the country's oil wealth to pay its creditors in the face of start-stop growth and falling reserves. While his policies drove away enough investors to keep Venezuela's borrowing costs over 12 percent on average during his tenure, or 4 percentage points higher than those of developing nations, he's never missed a bond payment.

"This is a really great high-income and high-total-return investment for your portfolio," said Sara Zervos, an emerging- market debt manager at New York-based OppenheimerFunds, which oversees $176 billion in assets and has invested in Venezuelan notes for more than a decade. "Chavez hasn't done a lot of good for his country, but he has the objective to service the bonds. Our interests are aligned."

[Mesozoic Mister Nigel]

  Gotta love it!

[Junkenstein]

http://www.bbc.co.uk/news/business-21348719

Nothing new, just more reminding you all that still no one is thinking about criminal charges here.

[Cain]

Matt Taibbi on the new head of the SEC:

I was shocked when I heard that Mary Jo White, a former U.S. Attorney and a partner for the white-shoe Wall Street defense firm Debevoise and Plimpton, had been named the new head of the SEC.

I thought to myself: Couldn't they have found someone who wasn't a key figure in one of the most notorious scandals to hit the SEC in the past two decades? And couldn't they have found someone who isn't a perfect symbol of the revolving-door culture under which regulators go soft on suspected Wall Street criminals, knowing they have million-dollar jobs waiting for them at hotshot defense firms as long as they play nice with the banks while still in office?

I'll leave it to others to chronicle the other highlights and lowlights of Mary Jo White's career, and focus only on the one incident I know very well: her role in the squelching of then-SEC investigator Gary Aguirre's investigation into an insider trading incident involving future Morgan Stanley CEO John Mack. While representing Morgan Stanley at Debevoise and Plimpton, White played a key role in this inexcusable episode.

More here.

Also here.

It's certainly strange that White has to qualify the idea that bringing cases is a positive thing in a government official – that bringing cases is a "positive thing . . . to a point." Can anyone imagine the future head of the DEA saying something like, "For a prosecutor, bringing drug cases is a positive, to a point?"

One would think that even a defense firm would value a regulator with an aggressive rep -- after all, a tough lawyer is a tough lawyer. What this testimony shows is that what is valued instead in this rarefied community of millionaire lawyers (where one can easily "get a reputation") is a talent for political calculation, and a sensitivity to what may or may not hamper one's ability to "function in the private sector." What they're looking for is someone who, when sitting in the regulator's seat, does the job, but doesn't live the job, if you catch the distinction.

Given that White has already made this move from enforcement to defense once, and given that we now know that she knows that firms like hers value regulators who can avoid creating "resentment in the business community" and retain their ability to "function in the private sector," I think it's safe to expect that White's SEC will take very good care to bring cases, but only "to a point."

Just another day in Wall Street.