Too big to fail is indeed too big to jail.
Surging domestic markets propelled higher by headlines promoting the new record highs despite deteriorating fundamentals and improving odds of more stimulus in Europe and Asia following the latest round of negative news helped send the major averages into the final hour with modest gains as there is little domestic data. Wholesale trade missed expectations with a.1% gain in May as the inventory to sales ratio slipped fractionally to 1.35 on sharp declines in drug and auto inventories.
I have spoken at length on the substantial decline of the labor force and how this has helped more than anything else to reduce the unemployment rate. A recent piece on MyBudget360 Blog showed that from 2000 through 2015 those not in the labor force grew from 69 million to 94 million or 36%, the employed population grew from 135 million to 150 million or 11%, while those unemployed went from 10 million to 16 million a 60% increase. With those not in the labor force and the unemployed growing far faster than those employed the story of economic recovery starts to look hollow.
The House Financial Services Committee on Monday released a lengthy report examining why HSBC didn’t get prosecuted for repeated early in the decade substantial criminal money laundering. It noted that the Department of Justice or DOJ declined to prosecute fearing global financial disaster, aka too big to jail or fail and tacit admission that the banks offences were so egregious that it would likely be put out of business, no surprises there. I have always pointed out that the banks actions, along with its brethren caused the global financial crisis of 2008-2009 so the claim of declining to prosecute fearing calamity enables behavior that causes and caused calamity is an illogical strategy just on its face. The report goes on to note a pattern of obstruction by interested parties including foreign entities,lack of cooperation between the DOJ and interested domestic entities such as the Treasury’s Office of Foreign Asset Control. Additionally, the report goes on to note that the DOJ and then-Attorney General Eric Holder deliberately went easy on HSBC, hid records and misled Congress in the process. I can’t say as I’m surprised by any of this as once again we’re shown that 2 sets of rules exist in this country. As an example I can assure you that it would only take one example of minor money laundering on the part of yours truly to net, hefty fines, a lengthy prison sentence and the end of my career.
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