Too Big to Govern?

Following the 2008 crisis, there was a guttural outcry from the public, demanding that the so-called “banksters” be brought to justice. Much to their chagrin, repercussions for those making the decisions that brought the economy to its knees have been few and far between. At the time, the general excuse was that, while many of these figures had made decisions that could be characterized as unethical, they were not criminal decisions in nature.

Cold comfort for those who lost everything.

But today, we have to come to terms with the fact that even when a law is broken, the banksters are still above the law. The New York Times put it simply:

State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.

The response to the (justified) outrage which met this announcement was that it’s a “record” settlement. That “record” is being met by “partially deferred” bonuses for the executives of the bank. Looks like Mrs. Executive will be getting one less mink coat this Christmas. Bummer.

Welcome to the world where “too big to fail” has become “too big to govern.” If someone NOT at a bank had been found guilty of funding terrorists and drug traffickers, their indictment would be heralded as a massive victory in the expensive and frequently ineffective war on drugs. Matt Taibbi put it this way:

They’re now saying that if you’re not an important cog in the global financial system, you can’t get away with anything, not even simple possession. You will be jailed and whatever cash they find on you they’ll seize on the spot, and convert into new cruisers or toys for your local SWAT team, which will be deployed to kick in the doors of houses where more such inessential economic cogs as you live. If you don’t have a systemically important job, in other words, the government’s position is that your assets may be used to finance your own political disenfranchisement.

On the other hand, if you are an important person, and you work for a big international bank, you won’t be prosecuted even if you launder nine billion dollars. Even if you actively collude with the people at the very top of the international narcotics trade, your punishment will be far smaller than that of the person at the very bottom of the world drug pyramid. You will be treated with more deference and sympathy than a junkie passing out on a subway car in Manhattan (using two seats of a subway car is a common prosecutable offense in this city). An international drug trafficker is a criminal and usually a murderer; the drug addict walking the street is one of his victims. But thanks to Breuer, we’re now in the business, officially, of jailing the victims and enabling the criminals.

Maybe this would be easier to swallow if it wasn’t coming on the heels of shady behavior in the MFGlobal crisis, the LIBOR scandal and more. Maybe the news wouldn’t taste quite as bitter if President Obama wasn’t considering the appointment of number one bank insider Jamie Dimon as Treasury Secretary.  But the track record on justice for those involved in financial services is just disheartening. Sell exotic mortgages to unqualified people? Engage in illegal robo signing of mortgage documents? Manipulate the main rate (LIBOR) many bank products rely on to set their own lending rates? Bundle junk mortgages at the request of a hedge fund who is shorting them and turn around and sell them to your other customers? Launder Mexican drug cartel money to the tune of $9 billion? No big deal – just have a checkbook ready, and you’ll be free as a bird. And we wonder where the vitriol in movements like Occupy Wall Street comes from…

The point is, this is a blatant and nauseating show of preferential treatment to the benefit of banksters once again. And there’s no way to sugar coat it.

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

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