How Allowing Money Laundering Keeps Our Bubblicious Finance Afloat

Last June, Bloomberg did a long story on the Deferred Prosecution Agreement that Wachovia negotiated with DOJ. As “punishment” for helping Mexican drug gangs to launder more than $363 billion  through casas de cambios for three years, Wachovia had to pay $50 million fine and a $110 million forfeiture of the proceeds that were clearly from drug gangs.

In my post on Bloomberg’s article last year, I compared the size of this business (plus some other illegal ones Wachovia engaged in) to how much Wachovia was losing in mortgage shitpile.

So $373 billion in wire services (some of which were surely legal), $4 billion in bulk cash services, and some portion of $47 billion in digital pouch services (again, some of which is surely legal and may pertain to remittances). Compare those numbers to the $40 to $60 billion or so in Wachovia subprime losses Wells Fargo ate when it took over Wachovia. Was Wachovia laundering money for drug cartels because it was so badly exposed in mortgage-backed securities, or was it so heavily involved in products that could be used for money laundering just for fun?

It sure looked to me like Wachovia was covering this up–and berating their own money laundering guy who kept pointing to these transactions–because they were so deep in the shitpile.

The Guardian just did its own long story on this (h/t NC) that, among other things, confirms my suspicion there was a connection between the shitpile and the money laundering.

At the height of the 2008 banking crisis, Antonio Maria Costa, then head of the United Nations office on drugs and crime, said he had evidence to suggest the proceeds from drugs and crime were “the only liquid investment capital” available to banks on the brink of collapse. “Inter-bank loans were funded by money that originated from the drugs trade,” he said. “There were signs that some banks were rescued that way.”

Of course, it almost certainly wasn’t just drug lords. Our banks were almost certainly overlooking other dubious cash transfers during this time, from oil dictators to the mob to illegal corporate gains.

And we couldn’t prosecute such money laundering, the Guardian article suggests, because doing so would have hastened the collapse of the bubble.

  1. phred says:

    Hmmm, so did we bail out the banks in order to help cover-up their criminal activity as well as their fraud?

  2. PeasantParty says:

    Watchoverya has many problems to this day and continuing. If we at any time in the past 25 years had a real system of checks and regulation our economy would not have fallen.

    America was intentionally raided and all institutions looked the other way while it was happening.

  3. PeasantParty says:

    Oh yeah, I forgot to add that this is the exact reason they are fighting the legalization of pot. It would cause them to lose too damn much money!

  4. HelenaHandbasket says:

    Not only is our lifestyle unsustainable, but our prosperity is illusionary:

    – banks profit via ‘dirty’ money
    – millionaires and billionaires are created through war racketeering
    – pornography is responsible for making the web profitable and innovative
    – governments succeed by deceiving their populations
    – media empires expand by misinforming their audiences

  5. mafr says:

    I saw an article about this, it boggled my mind. and yet, it doesn’t seem to matter much. hard to figure.

    I have a question?

    what are reasonable estimates of the value of drug trafficking for the entire world?

    what percent of the economic activity of the world’s economies is drugs/people smuggling/pornography/counterfeiting/fake software and consumer products/illegal arms trading ?

    what are the main places where this money goes back into the system?

    The money has to go somewhere. any ideas?

    • readerOfTeaLeaves says:

      Thanks so much for this post, EW!
      As you saw from your prior thread, I was absolutely sputtering with exasperation when I landed on that Guardian article last night. (And boy, howdy, the Guardian is putting the ‘journo’ back in journalism these days!)

      mafr, I think you’d have to go poking around odd databases and public records (OECD data, UN data, World Health Org data) to gather the pieces to answer your question.

      I did a simpler thing on a comment over at Yves’ Smith’s Naked Capitalism post on this topic of the Wachovia money laundering. It is always bad form to copy or paste **any** comment from another blog, but I hope that in this one instance, EW will overlook it.

      Begin with the fact that the Wachovia money laundering total that the Guardian reports — just for Mexican drug laundering — is $378.4 billion (probably between 2003-8).

      Basically, I went to the US Census and found a 2009 report on state government expenditures. A quick scurry through that report turned up these gems:

      “…Sales and gross receipt taxes were the predominant tax sources for state governments, totaling $342 billion and 47.9 percent of total taxes in 2009.” (p. 3) So that’s not total state revenue, only the biggest chunk.

      “…The combined total spent by US state governments *on education* in 2009 was $567 billion.” (p. 5) (Note that this amount includes federal grant money, so this is the total spent, not simply the total covered by state taxes.)

      Just using those two figures, if you divide that $378.4 billion that Wachovia was laundering for a period of very few years, it is a larger sum than the total reported income to *all* 50 states generated by sales and gross revenue taxes. Think about what that means. Even if you divide that $378.4 billion into fifths and distribute it over 5 years, Wachovia was laundering enough money in a single year to cover the same amount of money as about half the states were collecting in sales tax revenues.

      Wachovia was laundering enough money to pay for the entire state education expenditures of probably 2/3 or more of the US states.

      And NO ONE went to jail.
      And Wachovia is now ‘free and clear’.

      Looks to me like the drug lords had to prop up the TBTF banks with ‘liquidity’ because they needed to keep their money-laundering outlets functioning. They sure as hell didn’t do it to be charitable. How else were they going to turn their pesos into dollars on such a massive scale? Pure self interest on their part, but aided and abetted by Hank Paulson, et al.

      Mind boggling.

      But Boosh and Cheney were keeping us safe. Uh-huh.

      • mafr says:

        yes, watch out, those terrorists are gonna get us.

        thanks for the information. strange that it is somewhat difficult to find anything.

    • captjjyossarian says:

      Yeah, good questions.

      One estimate is that Drugs alone account for roughly 1% of global GDP. UN estimate of US$321.6 billion in 2005

      And it seems that the local farmers see very little of this money: ” Russia’s Federal Narcotics Service estimated the value of Afghanistan’s current opium crop at $65 billion. Only $500 million of that vast sum goes to Afghanistan’s farmers, $300 million to the Taliban guerrillas” (Salon)

      1% doesn’t sound too bad till you consider that it’s pure profit falling into the hands of a small set of middlemen. And the world GDP only grows a couple percent a year. So I wonder if it’s a bit like saying that the drug mafia captures half of all economic growth in the world every year. Compounding every year, at least back to the early 1970’s.

      Did we invaded Afghanistan because they stopped poppy cultivation?

  6. EternalVigilance says:

    Anyone seen any articles comparing the monetary cost to society of the drug trade vs. the Wall Street derivatives trade?

    I’d say that on a financial basis (the only basis our religion of Capitalism allows), the true mortal danger to society is clearly the bankers.

    So I expect we’ll being seeing a government-led “War on Wall Street” real soon now…right? Right? Bueller? Bueller?

    • PJEvans says:

      I’ve heard other stories about banks refusing to be held responsible for counterfeits that they’ve handed out to unsuspecting customers. I guess we’re all supposed to check them ourselves. (I’ve gotten not-quarters in rolls I’ve bought at banks: a franc, a Canadian quarter, a couple of nickels – no excusing those! – and a slug. (Except for the nickels, they were about the same size and weight as actual quarters.)

  7. workingclass says:

    There are countless leaches attached to the bounty resulting from the prohibition of plant based drugs. The biggest ones are Wall Street, The prison industrial complex and the C.I.A..

    Then there are the cops and judges and lawyers and prosecutors and parole and probation officers. The testing and “treatment” industries. The pharmaceutical companies. And finally the army of “criminals” that grow, process and distribute the drugs.

    The money is supplied of course by the end users and the taxpayers.

    The war on drugs, besides ruining the lives of millions wrongly incarcerated and their children and families, proved that Americans will give up their freedoms without a fight. It led to the militarization of our police and laid the foundation for our Police/Surveillance State. The war on drugs was training wheels for the “GWOT”.

    I don’t think Nixon knew that he was creating a monster that would grow, mutate and destroy the country. I think he was just a prick that hated hippies. But our financial and political (and military) institutions are now addicted to prohibition. They will never give it up voluntarily.

  8. EternalVigilance says:

    And we couldn’t prosecute such money laundering, the Guardian article suggests, because doing so would have hastened the collapse of the bubble.

    “We” never prosecute anyone. The law exists only to protect and serve the needs of the powerful. As such the decision to prosecute is always a political one.

    Since the bankers, the priests of money, are the most powerful group in western society, as a group they will never be prosecuted – for anything.

  9. barne says:

    Players dug in very cleverly, with lots of doomsday poison pill booby traps carefully prepared over the years so that nobody dares to touch anything.

    “It’s just the way of the world! But let’s plan to get together over the coming years, in Cannes and Geneva and on the yacht, and by golly we’ll see if we can’t come up with something to make things a little better.”

    • readerOfTeaLeaves says:

      It certainly makes one wonder just whose secrets Bradley Manning is charged with spilling. Clearly, someone wants revenge, and some way to ensure their secrets will remain hidden.

      I also think EW’s past work, as well as this post, make a solid case that much of the bubble was created by drug and oil money entering the banking system. (I’ve long had a hunch this was part of the problem, but it’s interesting to watch the evidence mount.)

  10. jdmckay0 says:

    Scott Horton had short interview 3/24 w/Michael Hirsh, (among other things) author of a book I’ve read & recommend: Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street.

    Short description: he chronicles shifting influences setting US Economic direction going back to Reagan era, largely a momentum shift to WS. He describes so many economists/financial folks who got everything right about what went wrong, all who were marginalized and excluded from the (mostly) FED policymakers & their circles, responsible for overseeing/regulating etc. all this stuff.

    He describes, in detail, Greenspan’s adherence to Ann Randian ideas… borne of his tight relationship w/her.

    A partial snippet, on BO’s role in all this:

    6. What did Obama fail to fix in the financial system and the economy?

    The president proudly called the new Dodd-Frank law “the toughest financial reform since the one we created in the aftermath of the Great Depression.” What Obama left unsaid was that his administration had argued against many of the toughest amendments in the bill. And Wall Street, in the end, didn’t complain about it all that much. The biggest firms knew that much of what their powerful lobbyists had failed to block or water down in the bill could be taken care of later on. They’d still be able to influence the vast set of rules on capital, leverage, and other financial issues that would be written by regulators. Led by Summers and Geithner, Obama’s economic team resisted almost every structural change to Wall Street—in particular, Volcker’s plan (initially) and Arkansas Senator Blanche Lincoln’s idea to bar banks from swaps trading. The administration’s program for getting underwater mortgage holders out of trouble was far too modest—and even that is in danger of obliteration by the new Republican-led House.

    Obama’s aides claimed they were only making necessary compromises, placating the Republicans and centrist Democrats they needed to pass the law. And they did stand firm on creating a strong Consumer Financial Protection Bureau. But by midsummer of 2010, the Volcker rule that Obama finally backed was so full of exemptions—allowing banks to invest substantially in hedge and equity funds—that even Volcker expressed dismay. The new law effectively anointed the existing banking elite, possibly making them even more powerful. The major firms got to keep the biggest part of their derivatives business in interest-rate and foreign-exchange swaps. (JPMorgan, Goldman Sachs, Citigroup, Bank of America, and Morgan Stanley control more than 95 percent, or about $200 trillion worth, of that market.)

  11. transparait says:

    “Last summer, I made a presentation called “How the Money Works on Organized Crime” to a wonderful group of about 100 people at an annual conference for a spiritually focused foundation in Philadelphia. This is a group of people who are committed to contributing to the spiritual evolution of our culture.

    After walking through the various Sam and Dave dilemmas with Sam’s SLIM PERCENTAGE profits sugar business and Dave’s BIG PERCENTAGE profits drug business, as well as the intersection between the stock market and campaign fundraising and narco dollars for about an hour, I asked the group what would happen to the stock market if we decriminalized or legalized drugs?

    The stock market would crash, they said.

    What would happen to financing the government deficit if we enforced all money-laundering laws? Since most of the bank wire transfers are batched and run through the New York Federal Reserve Bank, this should not really be that hard, right?

    Their taxes might go up. Worse, yet, their government checks might stop, they said.

    I then asked them to imagine a big red button at the front of the lectern. By the power of our imaginations, if they pushed that button they could decriminalize narcotics trafficking and stop all money laundering in the United States.

    Who would push the button?

    It turns out that in an audience of approximately 100 people committed to spiritually evolve our society that only one person would push the button. Upon reflection, 99 would not. I asked why.

    They said that if they pushed the button, their mutual funds would go down and their government checks might stop.

    I commented that what they were proposing is that an entire infrastructure of people continue to market narcotics to their children and grandchildren to ensure that their mutual and pension funds stay high in value.

    They said, yes, that’s right.

    Which is why I say that America is not addicted to narcotics as much as it is addicted to narco dollars.”

    • EternalVigilance says:

      Which is why I say that America is not addicted to narcotics as much as it is addicted to narco dollars.

      Well, addiction is addiction is addiction. It’s the search for something to fill the emptiness one feels (at both the personal and collective level) inside. It’s secondary whether that emptiness is filled with socially stigmatized things like alcohol or drugs or sex or food, or things for which one is socially rewarded, like religion and work and power and money (the true religion of the West). The important thing is to recognize addiction is a spiritual search.

      So America is addicted – to pretty much everything – because America is the culmination of 4,000+ years of elevating man to the status of God. Those millennia have indeed elevated man, but at the price of disconnection from everything that’s outside of oneself.

      It’s that spiritual disconnection that drives all our money and drugs and computers and internet use.

      That’s also the largest reason why the U.S. is involved militarily in the Middle East – it’s the return home, the ouroboros eating its tail, the return of the hero to the beginning of the journey. The two halves, one which left to elevate itself as God, the other which stayed to elevate God over itself, again becoming one.

      So to me the most helpful way to see money and drugs is to recognize money is a just another drug.

      And the way to treat addiction isn’t simply with denial or puritanical judgment, but with compassion and strong boundaries to direct the addict and ourselves to that for which we’re truly searching.

      Poor rich bastards – and there but for the grace of God go I.

  12. JohnLopresti says:

    Виктор Бут (Viktor Bout) was still in business in 2008; grand jury indictment, bitmap 38 pp., unsealed copy undated approximately February 2010 (~1.6 MB); see also accompanying article. A current Google search appears to show the trial is docketed in SDNY for September 2011. I thought of this only based on the unexpected sorts of innovative financing linkages unearthed by the Church committee in the Iran-Contra scandal.

  13. Tina O says:

    Empy, you are just…precious. And Bmaz, despite what you may think of me I believe you are incredibly smart, principled and wickedly funny, as well the rest of commenters here!

    • jdmckay0 says:

      good article… well, not good, but accurate.

      I live in New Mexico, couple hundred miles from the border. Juarez is nearest “portal” crossing (near El Paso). Juarez has become a war zone, terrorized (literally) by the cartel transport folks. (from memory) somewhere on the order of 12k people have been killed there in +/- last 24 months.

      I got an infection in upper gum about 3 years ago, thought it was just a sore gum. 10 days later, all my upper teeth started falling out. We (wife & I, many friends) had been going to a dentist there for years… outstanding care (better then here) and anywhere from 10-40% cheaper then “ours”. In particular, I could never have afforded implants here. Down there, whole job for about $8k.

      Problem… I got about 1/2 way through… all the surgery for jaw implants (separate from teeth) were done. Then they killed my dentist. And a few others as well.

      Juarez was a nice little town… clean, safe, nice restaurants and shops, wonderful locals. Now… I don’t know anyone who will even go there.

      And an anecodote… from your link:

      But, as numerous investigations by American and Mexican journalists have revealed, there is strong evidence of collusion between the Mexican Army and the Juarez and Sinaloa drug cartels. A former Juarez police commander told NPR in May that “the intention of the army is to try and get rid of the Juarez cartel, so that [Joaquin “El Chapo” Guzman] Chapo’s [Sinaloa] cartel is the strongest.”

      The cosy relations among the world’s biggest banks, drug trafficking organizations and the U.S. military-intelligence apparatus is not however, a new phenomenon. What is different today is the scale and sheer scope of the corruption involved. As Michel Chossudovsky points out,

      “This trade can only prosper if the main actors involved in narcotics have “political friends in high places.” As legal and illegal undertakings are increasingly intertwined, the dividing line between “businesspeople” and criminals is blurred. In turn, the relationship among criminals, politicians and members of the intelligence establishment has tainted the structures of the state and the role of its institutions, including the military.” (The Global Economic Crisis: The Great Depression of the XXI Century, Montreal:Global Research, 2010, pp. 195-196)

      Me/family lived in San Diego for 3 years, though ’91. If memory serves, in ’90 there was an “incident” in Tijuana. W/in a block or so of the city’s police station, there was a major gun fight. One side was Tijuana police, behind a line of their own cars… doors open for protection against flying bullets. On the other side… Mexican “Federales”, with their cars similarly arranged.

      News presented this as a “disagreement” as to who was supposed to get the local drug money. I don’t recall who one that one.

  14. Gitcheegumee says:

    This thread brings to mind the very strange story of Allen Stanford. It would be hard to find,other than Goldman Sachs or Bernie Madoff,a case where the regulators were more willingly deaf,dumb and blind,than those from from Miami,Florida,charged with overseeing Stanford’s financial hijinks.(In fact the state of Florida cut him a special deal in 1998 to sell financial investments ,the only one of its kind,IIRC.)

    I have not seen reference to Stanford using Wachovia,as he set up his own “banks”.However a couple of interesting points might be made:

    1.)On September 17,2008,Michael Mukasey announced that 175 alleged Gulf Cartel members were arrested in both the US and Italy.

    2.)According to Wiki, the FBI and other agencies began conducting an investigation on Stanford,in 2008, for alleged money laundering in Mexico for the Gulf Cartel–the same year of the above Cartel arrests.

    The Wiki entries for both Stanford and the Gulf Cartel are interesting, but there is something about the Stanford case that tells me there is WAY more than is being told….or will ever be made public.

    • readerOfTeaLeaves says:

      Oh, I’m sure you are correct about the Stanford case; we’ll never know. And if we did know, could we get our heads around it?
      It might be of passing interest to recall at what point Jeb Bush was elected governor of Florida, but IIRC it was 1998, just in time to fix those voting roles for his bro. So it’s interesting to note 1998 financial-legal hijinks down in Florida, which we should all recall was a central hub of overpriced homes. Coinkydink…?

      jdmackay @28, that’s quite a tale.
      I’ve started checking in on the Exiled, although I can’t stand to look at some of the pictures. They’ve had a few reports about the Mexican drug wars that contain perceptive little odd details. Good to know Wachovia was helping those drug lords ‘build their business models’, eh?

      Can’t wait to see what Tom D at the US Chamber of Commerce comes up with to claim this is all just capitalist innovation. Wheeeee!

      • Gitcheegumee says:

        Talk about coinkydink, I searched Stanford and Wachovia again,and found out that the whistleblower in the Wachovia case,Martin Woods, and another man,Charles Rawl, who blew the whistle on Stanford,were guest speakers last May in South Beach Miami.

        The title of the presentation at the Ritz Carlton?

        “Whistleblowing Damaged our Careers:Stories of Employees Who blew the Whistle on Wachovia and Stanford Financial Group.”

      • Gitcheegumee says:

        Please read the series “The Data Beast” I mentioned upthread.

        Of particular interest is the fact that in ’98, aggregated software related to federally insured mortgage information was seized,according to the first installment in the Data Beast series.

        Secondly, another Fitts’ piece,dated 2002,is fascinating re intersection of mortgage market and MIC :

        “The Real Deal:Hitting on HUD” 8/12/02

        (Fitts was former HUD lead financial advisor,among other positions in finance.)

  15. emptywheel says:

    For those who weren’t around when I last pitched it, I really recommend you pick up Treasure Islands, which comes out on the 12th. Between that and Moises Naim’s Illicit, they show how much a part of globalization these illicit flows of money (and in Naim’s case, goods) are.

    Shaxson will be at FDL for a book salon on April 30.

  16. Gitcheegumee says:

    Let;s not forget that BOA was reported to have been a bank of choice for money laundering also.

    BOA branches in Brownsville,Texas,Atlanta and Chicago were used for the deposit of illicit funds,and the BOA in Oklalhoma City was used for the purchase of 3 planes that carried tons of cocaine as cargo.

  17. jdmckay0 says:

    I read that article multiple times, same w/link by mafr @ 25.

    I’m really shocked. Not surprised, but shocked.

    Idea, as stated in both article, that some of these banks needed that money to stay afloat after housing bubble… sheesh. And the exact same planes hauling coke as doing renditions… sheesh.

    And from same Tom Burghardt article:

    And to make matters even more intriguing from a parapolitical perspective, after searching through FAA records Hopsicker discovered that the Gulfstream II business jet “was owned by a secretive Midwestern media baron and Republican fund-raiser, who had a business partner who, incredibly, owned the other American drug plane, the DC-9, recently busted in Mexico.”

    Throughout BushCo’s tenure, so many things, one after another… watching their erosion of most anything standing in the way of thieves refilling rep coffers… they routinely, *routinely* exceeded my mind’s ability to imagine worst case scenarios.

    This is another one of those.

    I’ve generally not been a black helicopter guy. But I don’t know… seeing this stuff, then state legislature after state legislature passing the same absurd bills cutting biz taxes and whacking teachers and such… it’s the same way things happened w/Bush: eg. repubs get their talking points in backrooms somewhere, then come out of the woodwork all burping up the same schpeel.

    As utterly destructive coke is to humans, to see that utterly inconsequential in both the biz practices… but worse, in legal systems inability and/or unwillingness to confront it…

    This is somewhere well beyond moral hazard… some other very, very dark place.

    Not good.

  18. jdmckay0 says:

    We live less then a mile from Kirtland AFB in Albuquerque. Said to be 2500 nukes there. After it became clear Bush wasn’t going to find WMD’s in Iraq, there were signs in front yards all over here:

    WMD(s) found:
    Iraq: 0
    Albuquerque: 2500

    Anyway, there is a main thorough fare, Gibson Blvd, that goes east/west along the north border of Kirtland. Everyone I know has been laughing, large part because of underlying truth of the metaphor, at a billboard on Gibson directly adjacent to the AFB put up a local Credit Union:

    Would you trust your banker to pack your parachute?

    One other thing.

    Credit unions are supervised by the National Credit Union Admin (NCUA). There are, for all practical purposes, to the credit unions what the FDIC is to Banks. They provided same $100/200k CD/Money market guarantees as FDIC directly after the mortgage bond collapse.

    In any event, I hardly saw this mentioned anywhere:

    NCUA Suing Banks Over Mortgage-Backed Securities Sold to Corporates

    In short, they are going after JPMorgan for recovery of full losses from purchased AAA mortgage bonds. Interesting to me this hardly got any ink… saw it inside B or C section of WSJ a couple weeks ago.

  19. croghan27 says:

    Throughout BushCo’s tenure, so many things, one after another… watching their erosion of most anything standing in the way of thieves refilling rep coffers… they routinely, *routinely* exceeded my mind’s ability to imagine worst case scenarios.

    Profoundly scary to think that Bush was more in touch with the essential elements of the economy than given credit. As a Texan in the oil business (he failed at sports)he must have been aware of some narco dollar floating in there.

    As you say, jdmckay0, looking at it this way ‘does a lot of ‘esplain’in’.

    • readerOfTeaLeaves says:

      On a lite note, there’s a recent Bollywood movie in which Anil Kapoor (who you may know as the game show host in “Slumdog Millionaire”) is a Mumbai mobster. He and another mobster are in a heated conversation about who’s ‘don’ is bigger and badder, and they keep working their way up the pyramid until one of them says, “My don works for The King Don”, and the other guy gets all bug-eyed and says, “George W Bush?!” and they both shudder.

      When even Bollywood takes for granted that GWBush and his admin were the legalizing, militarized arm of organized crime, well… it’s a ‘tea leaf’.

      More seriously, I doubt that anyone will be able to do the legwork and the detailed kind of sleuthing that might connect Jeb Bush’s work in Florida with things like Wachovia’s Miami branch, and Stanford’s protection from the SEC. It would be quite surprising if there weren’t a number of intersections.

    • jdmckay0 says:

      Profoundly scary to think that Bush was more in touch with the essential elements of the economy than given credit.

      I have no idea what he knew.

      What I do know is he/his admin allowed various industry bigs to occupy WH office space, again and again, to write their industry’s desired legislation. Then full force of WH influence ushered said bill through (at the time) repub congress. Over, and over, and over.

      Oil/Energy, financial, Pharma… over and over.

      Marcy wrote about some of it here. At one point, when I just stopped tracking it, I had bookmarked something beyond 220 such incidents. WRT finance, Bush got in front of the cameras about 3 months before public became aware of mortgage bond meltdown (many, many saw it coming by ’05 or sooner) and said (from memory): “The economy is strong.”

      So whether he knew or not… who knows. Katrina, Iraq & “detainees”… often looked to me like, really, he just didn’t give a rip. Given his long history enabling/supporting cronyism as Texas gov., I often thought that’s why powers that chose & promoted him for prez did so, ’cause he just didn’t give a shit.

      In Obama, however, the disappointment is even more profound… he’s just stayed the course. Stayed the fucking course. Seeing what’s happening now in the Koch Bros. bought & paid for state legislatures, eg: just pass through bots continuing this process in big way from another angle (states), I’ve found myself wondering if Murdoch and company didn’t just let BO get elected knowing it was a worthwhile distraction from all this state corruption being laid in place… ‘en masse.

      Who knows… whatever.

      I’m 55. Had a pretty good couple careers, done ok. Really started paying close attention to inner workings of politics during 2k prez election and recounts… like something really, really baaaad was going on (just like a lot of others I think). I was right.

      At this point, I don’t think any of it’s fixable. At every level, courts, DOJ, fed institutions… all of it is saturated w/corruption. All of it.

      Last midterm is first national election in my adult life which I didn’t vote. I don’t think it’s fixable. Even the handful of decent lawmakers… they just don’t have a handle on things. And to the extent they do, they have no avenues to execute whatsoever.

      I will say this: the disconnect between governance, laws, institutions… everything government could/should do, it’s off the rails by magnitudes, and getting worse. A nation that can’t tell the truth about anything is in big trouble.

      That would be us, IMO.

      It seems to me also, at best, “progressives” document it all to some extent, but that’s all. It’s like the dominoes are all set up and keep falling. So we look back and say: “Oh look, somebody ran the table w/those dominoes.” Then we look forward, and see the exact same thing about to happen. So we say: “Oh look, those damn SOB’s are about to run those dominoes again.” (wrenching of teeth and all.)

      And progressives are right about that too.

      But that’s all.

      So for me, it’s helpful to know the environment. And since 2k, it’s gotten much, much more hazardous, more toxic. The US, really, is breeding ground and incubator for white collar crooks… that’s our moniker now, IMO. Not much useful science, not much creative thought… much less policy about challenges facing us, just corruption motivated by nothing but desire to acquire and get control of dollars.

      That’s all. It’s cannibalistic at this point, just concentrating ownership of resources amongst a very few, who largely have built all kinds of firewalls to both protect and insure anonymity. And this, they have convinced America, is “building wealth.”

      Just consider ENERGY… the functioning of delivery, generation of ENERGY here. We’ve gone though ENRON, yet no course corrections whatsoever.

      Scientifically, humanity knows some things. On a macro level, we know that the sun… in one 24 hr cycle, delivers enough of it to power humans energy needs for a month. We also know how to capture and utilize enough of that to get the job done, right now. We could do that.

      Yet, a small group of people, having concentrated massive $$ from the dirtiest, most inefficient energy source on the planet: coal… an energy source put utilized en masse before the turn of the last century… these guys, through conrtol of media, buying cheap politicians like Bush, etc. etc., manage to convince a public that it is their right to not have their 100 yr + old empire of dirty/inefficient/environment destroying energy production usurped, that anything new is “environmental whackos”, the whole foolish schpeel.

      In essence, these guys are holding hostage the ability of humanity from moving forward. They argue “property rights”, they successfully blame government for this condition, leave a public convinced that if they further degrade/diminish government then private enterprise (them) will move things forward…

      This is, really, insane. It is insane, somewhere beyond eradication of common sense, let alone applying intelligence. It’s really insane.

      To give it just a bit more context: when coal became human’s fuel, over 95% of humanity was illiterate. Our understanding of energy itself was infantile. We had no internal combustion engines, fields were plowed with oxen, most people couldn’t afford a book… even if they could read it.

      Fast forward to now, 140+ years later: we’ve cracked the atom, and CERN is on the verge of making sub atomic theory demonstrated, useful (eg. we can put into design/engineering) application. There is more possibilities, w/real knowledge and know how, to not just clean things up but to employ abundant, well designed and far lower cost (over long haul) energy.

      Yet, as I said before, America is completely, totally held hostage to this ancient technology, through corrupt means, while convincing the public that allows this to continue that it’s lies are the truth.

      I don’t know… really bizarre. Surreal.

      As I see it, US currency does not reflect our underlying economy any more… the 2 are completely separated. It is a function of just this stuff hi-lighted in this Guardian article, on every level of enterprise here in US. It’s a train wreck waiting to happen, and the public is asleep.

      Not good.

      • Gitcheegumee says:

        jd, that is one righteous rant, BRAVO!

        Could not have said it better myself-for true.

  20. Gitcheegumee says:

    Tom Burghardt did a piece last summer entitled:

    “A Full Service Bank:R. Allen Stanford and the CIA”.

    Superb piece which touches on several of the issues discussed here, but of particular note is the 2006 directive that the SEC stand down on a decade old Texas probe of Stanford’s 28 offshore accounts. (For the record ,in May 2006, Negroponte was given authority to exempt certain firms from regular SEC accounting disclosure.)Incidentally, Stanford was heavily involved with routing money to and from Venezuela.

    Kucinich demanded to know who directed the SEC to back off-still no answer. Crickets.

    BTW, HSBC – another bank reported to be involved in money laundering-,was a bank Stanford used,according to the Texas probes,beginning in ’96.

    Great piece and well worth the time.

  21. behindthefall says:

    If these connections are indeed real, what ‘conspiracy theory’ will any longer seem ‘out of bounds’?

    • Gitcheegumee says:

      Not all conspiracies are merely theories. *G*

      Ever read any of Catherine Austin Fitts’ articles over at Solari Reports?(In particular,The Data Beast :Parts I-VI )


  22. Gitcheegumee says:

    Just a rumination here, but am I correct in thinking that the money laundering began on a big time scale right about the time that Reagan started busting the unions ,and contemporaneously, American jobs were beginning to be seriously off shored?

  23. mafr says:

    It seems shocking to us that our government would take part in drug trafficking, either directly, or by allowing it to go on for other reasons, but

    the British participated in large scale drug trafficking in the 19th century, moving opium from India to China, (legal under British law )

    The nationalist chinese army supported itself with drug trafficking, stock market manipulations, and other crime together with the triads during the twentieth century

    The French supported their war in Indochina by drug trafficking.

    The American government allowed their planes to be used by their allies, to move heroin during the invasion of Vietnam.

    America looked away, and protected drug traffickers during it’s support of the contras.

    yet we are still ( I include myself) surprised when we hear of this stuff.

    In reallity, it would be surprising if it wasn’t going in, since large money has been made, and nobody that participated has had much to worry about.

    • jdmckay0 says:

      In reallity, it would be surprising if it wasn’t going in, since large money has been made, and nobody that participated has had much to worry about.

      Yah, but $378b of laundered (funny term, that) cocaine revenue?

      In the year 2011? With computers everywhere, “freedom” and “liberation” initiatives on 2 continents, information systems extending in real time to almost every living room…

      and in $378b of laundered drug money, our DOJ can’t find a criminal?

      “The truth is your friend.
      If you *think* otherwise, you’ve mis-identified your enemy.”

      Some guy

        • jdmckay0 says:

          Well, yes. And a grave can cover up dead bodies.

          We have metaphors, like up to our ass in metaphors.

          The 1%’ers, they have money… up to their ass in money. Your money, my money, drug lord’s money, our property titles, the governments 0.0 overnight credit window… really, it’s an amazing accomplishment.

  24. mafr says:

    honestly, if you pay too much attention to all of these things,(nuclear, warming, corruption, hunger etc etc) it can become very depressing.

  25. PeasantParty says:

    I’ve garnered quite a bit of knowledge from the past. IMO, anytime a politician declares a War on something, it simply means they have found a new way to shovel in the money.

    Their religiosity in most matters is defunct. The symbol for the God they worship is “$”.

    Don’t fall for another war on something. It’s code words for their friends to get into gear and start funneling money into their pockets.