HSBC, a London-based bank, is huge. How huge? According to Forbes, it’s the 3rd largest bank (the NY Times rates it 5th), and the 6th largest public company in the world. Per Wikipedia, it was formed in 1991 when the Hongkong and Shanghai Banking Corporation decided to buy Midland Bank. This week, HSBC agreed to a $1.92 billion settlement for laundering money from Mexican drug lords and “terrorist” groups in Saudi Arabia and around the world. The evidence was so damning that HSBC actually admitted guilt, a singular occurrence in the rarified world of finance capital. HSBC also is accused of Medicare fraud and supporting timber conglomerates who are deforesting the Malaysian state of Sarawak. As if this weren’t bad enough, they, along with 16 other banks, are being investigated for rate fixing (the LIBOR scandal).
In case you still have a glimmer of sympathy for this banking behemoth, consider this: HSBC’s laundering controls were so lax it allowed $60 trillion in transactions for 17,000 accounts that were flagged as suspicious to go forward without review. They also held 50,000 client accounts in 2008 with no review. Where were these accounts? At HSBC’s branch in the Cayman Islands.
In short HSBC is a paragon of probity and moral rectitude. If HSBC were a person, it’d be the kind of youngster you’d want your son or daughter to marry. Well, maybe not.
As usual, no one is going to jail. Nothing new here. Since the 2007 economic implosion, nobody important has ever gone to jail. This is the way the game is played on the yachts and in the mansions of the power elite. When you get caught, you have your corporation or bank fork over a seemingly hefty sum. Look, we simply can’t have members of the upper crust doing time.
With HSBC, the rationale for not pressing criminal charges is even more distorted than normal. According to the NY Times, if the US filed criminal charges against HSBC and won, it is possible that HSBC would be barred from doing business in the US. The result could be HSBC’s collapse. Since HSBC is so huge, its collapse could “destabilize the global financial system.”
The fine of $1.92 billion appears to be fairly stout, and it would be if you, I, and everyone we know had to pay it. But for HSBC $1.92 billion represents 1.2% of its market capitalization (it’s total value in stock) and 0.07% of its combined assets. Think of it like this. Say your assets total $100,000 (perhaps you have some equity in your home), and the government fines you 0.07% of your assets for money laundering and fraud; you’d have to pay them $70.
When the banks refuse to modify our loans, when they sell our homes at auction, and when they order the sheriff to evict us, we will resist. Without a second thought the sheriff will arrest us, because no matter how corrupt, how degenerate, how morally reprehensible these banks are, we live in a class society where money rules at the expense of the people. And when we are carted off to jail to uphold the sanctity of profit and private property, we will know our cause is just and no system that is so nakedly corrupt can survive.
- Dec. 14, Fri., 2:45 PM: Gather at the International District branch of the Seattle Public Library on 8th Ave. S and Dearborn St. for a picket of Luisa’s and Jorge’s relative Michael Thompson. Michael has yet to sign, as he promised, a 3rd-party authorization, which would allow Luisa and Jorge to negotiate a loan modification with Wells Fargo, so they can stay in their home.
- Dec. 14, Fri., 4:30 PM: 999 Third Ave. (corner of Third and Marion St.). SAFE members will deliver a demand letter to Jeremy’s bank, also Wells Fargo. In 2008, Jeremy bought a local iron works company he had been with for ten years, but shortly after acquiring the company the economy collapsed, and he lost everything. After long stretches of unemployment, he’s back at work and can afford his home, but on Nov. 16, Wells bought it back at auction. We want Wells to sell this home back to Jeremy.
Other Upcoming & Ongoing Events:
- 7:00 – 8:30 PM, Tuesdays: Organizational Meeting at Bethany UCC. All are welcome! (Last meeting of 2012. We’re taking off Dec. 25, but we’ll be back on Jan. 1.)
- 2:00 – 4:30 PM, Saturdays: Door-to-Door canvassing. We are making this time a regular weekly event, rain or shine.
This Past Week:
- Dec. 11:Â As a result of our phone, mail, and door-to-door canvassing, more than 50 people attended SAFE’s Neighborhood Meeting — our largest gathering to date! We heard heart-rending stories from three families under the threat of losing their homes. Also, Northwest Justice Project gave a brief presentation and held a Q&A, while other lawyers from Seattle University, the King County Bar Association, and UW were in attendance. A completely energizing experience!
Questions? Â Comments?