Neil Barofsky on the Fed and Treasury Anger over Standard Chartered

This is the credibility trap.

Some of it is professional not-initiated-hereism, but quite a bit more is a culture of privilege and practical exemptions for the few who run the system. And professional courtesy with London for both our banks and theirs.

Cronyism and complicity, active or passive, take your pick.

"If you want to understand exactly what's going on here, reread the four or five pages in chapter 1 of my book about my battles with Washington over the FARC case. Exactly the same thing happening here.

They'd rather trash a potentially legitimate case than admit that they were asleep at the switch, especially now after the recent revelations about their failures with LIBOR and HSBC."

Neil Barofsky, speaking about the Standard Chartered affair.

Read the entire story at Business Insider here.

They didn't "fail" to regulate LIBOR. They did not even bother, for whatever motives that you care to impute or infer. They knew what was going on and turned a blind eye to it, just as they are doing with the rigging of the commodity and equity markets.

The incompetence and non-involvement defense is getting a little worn out in this financial scandal.

Casual corruption of the markets is now being accepted as a necessary system overhead, as a tax on the public to support the failed financial system, which is being kept alive to support a kleptocracy of politicians and the monied interests. It is sustained through fraud and force, but has little to do with the real economy anymore.

It is important to get this to understand what is going on.

As Glenn Greenwald describes it so well, the kleptocracy based on class position has become fully rationalized and institutionalized.

"What is radically different about today is not that the rule of law suddenly is not always being applied faithfully, because that has always been true. What is different about today, radically, is that we no longer bother to affirm that principle...

You can often, and I would say more often than not, in leading opinion-making elite circles, find an expressed renouncement or repudiation of that principle...All of these acts entail very aggressive and explicit arguments that the most powerful political and financial elites in our society should not be, and are not, subject to the rule of law because it is too disruptive, it is too divisive, it is more important that we should look forward, that we find ways to avoid repeating the problem...the rule of law is not that important of a value any longer...

The law is no respecter of persons, but the law is also a respecter of reality, meaning if it is too disruptive or divisive that it is actually in our common good, not the elite criminals, but in our common good, to exempt the most powerful from the consequences of their criminal acts, and that has become the template used in each of these instances."

Glenn Greenwald

Lawyers and Banks Offer a Full Range of Elite Criminal Services

There is a two-tiered system of rules, with Liberty and Justice for some.

If you knew how routinely it is marketed, and understood the full extent of it, you would be surprised and angry at the cynical injustice of those who consider that only the 'little people' should bear the burdens for their country and the consequences of their actions.

Do What Thou Will Shall Be the Whole of the Law.

And the demimonde of lawyers, banks, and corrupt politicians may have a pre-packaged solution for you, as long as you have the connections and the means to afford it.

There has always been corruption. But it is rarely as routine and systemic as in the last twenty years. It becomes an open secret.

But many ordinary people are so propagandized by clever PR campaigns and energized by prejudice and hatred that they are no longer able to think. Or it becomes too painful.

Fed and Treasury Irate at NY Bank Regulator's Vulgar Display of Public Diligence with Standard Chartered

Spitzer: If they shut me up, who'll take my place?

Lawsky: I will

The NY Banking regulators clearly do not understand the regulatory 'hands off' philosophy of Treasury and the Fed towards the pampered princes of finance and the privileged few.

This was supposed to have been privately settled amongst gentlemen with a gentle wristslap and a thorough coverup.

And of course this exposes the Federal government and their financerati as utter hypocrites, especially when they are stoking the fires of conflict.

Only the little people are meant to suffer for their country. For the favored few, everything is just another law-bending, money making opportunity.

Some of the wording in this is priceless, especially considering the extent of what the Bank had done and with whom.

I won't be holding my breath for the US regulators to clean up their own manipulated markets and privileged insiders. It might muss someone's ruffled sleeves and Presidential cufflinks.

Liberty and justice -- for some.

Reuters
Exclusive: Regulators irate at NY action against StanChart
By Carrick Mollenkamp and Emily Flitter and Karen Freifeld
August 8, 2012

NEW YORK/LONDON (Reuters) - The Treasury Department and Federal Reserve were blindsided and angered by New York's banking regulator's decision to launch an explosive attack on Standard Chartered Plc over $250 billion in alleged money laundering transactions tied to Iran, sources familiar with the situation said.

By going it alone through the order he issued on Monday, Benjamin Lawsky, head of the recently created New York State Department of Financial Services, also complicates talks between the Treasury and London-based Standard Chartered to settle claims over the transactions, several of the sources said.

Lawsky's stunning move, which included releasing embarrassing communications and details of the bank's alleged defiance of U.S. sanctions against Iran, is rewriting the playbook on how foreign banks settle cases involving the processing of shadowy funds tied to sanctioned countries.

In the past, such cases have usually been settled through negotiation - with public shaming kept to a minimum.

In his order, Lawsky said Standard Chartered's dealings exposed the U.S. banking system to terrorists, drug traffickers and corrupt states.

But the upset expressed by some federal officials, who were given virtually no notice of the New York move, may provide ammunition for Standard Chartered to portray the allegations as coming from a relatively new and over-zealous regulator...

Read the rest here.

Gold Daily and Silver Weekly Charts - Capping and Coiling

The metals are capping are coiling under some fairly stubborn price resistance.

Let's see how they do if stocks take a short term drop.

Otherwise this looks like a delaying action, a cosmetic appliqué.