US Set To Alienate Angry Germany Next, As Crackdown Shifts From BNP To Commerzbank, Deutsche Bank
Submitted by Tyler Durden on 07/08/2014 08:04 -0400
As we reported over the weekend in "By "Punishing" France, The US Just Accelerated The Demise Of The Dollar", following the record $9 billion fine against French BNP, the outcry has been fast and furious, with virtually everyone in the local chain of command,from the CEO of Total to the head of the Bank of France (and ECB member) Christian Noyer, all saying that the US is now clearly abusing the reserve power of the dollar and it is time to move away from a dollar-based reserve currency (how that jives with concurrent French demands for a lower EUR is a different, incomprehensible matter entirely).
It appears that having pushed France forcefully into the Russia-China Eurasian, and anti-US camp, the US will now do the same with Germany. Because after infuriating the German population by first refusing to return their gold contained (the legend goes) at the New York Fed, and then with scandal after spying scandal, most recently involving the CIA directly soliciting a German double agent, now the time has come to "punish" Germany's largest banks for the same kind of money laundering that BNP was engaged in. As the NYT and Reuters report, the time has come to shift away from the BNP scandal and focus on what will soon be the Commerzbank and Deutsche Bank fallout.
According to the NYT, the money laundering crackdown is "bound for another European financial center: Germany. State and federal authorities have begun settlement talks with Commerzbank, Germany’s second-largest lender, over the bank’s dealings with Iran and other countries blacklisted by the United States, according to people briefed on the matter.The bank, which is suspected of transferring money through its American operations on behalf of companies in Iran and Sudan, could strike a settlement deal with the state and federal authorities as soon as this summer, said the people briefed on the matter, who were not authorized to speak publicly.
The contours of a settlement, which the authorities have only begun to sketch out, are expected to include at least $500 million in penalties for Commerzbank, the people added. Although prosecutors were still weighing punishments, the people briefed on the matter said that the bank would most likely face a so-called deferred prosecution agreement, which would suspend criminal charges in exchange for the financial penalty and other concessions.
It's not just Commerzbank - a settlement with the smaller bank will merely pave the way for the punishment of the biggest bank of all (in terms of gross derivative notional held): Deutsche Bank.
A potential deal with Commerzbank — which is expected to pave the way for a separate settlement with Deutsche Bank, Germany’s largest bank — would pale in comparison to the case announced last week against France’s biggest bank, BNP Paribas. The French bank agreed to pay a record $8.9 billion penalty and plead guilty to criminal charges for processing transactions on behalf of Sudan and other countries that America has hit with sanctions, a rare criminal action against a financial giant.
As NYT adds, correctly, "The Commerzbank investigation features an added twist: The bank is 17 percent owned by the German government. It is unclear whether — as in the BNP case, which led French authorities to intervene on the bank’s behalf —the settlement talks could inflame diplomatic tensions between Washington and Berlin."
Of course, since this is the ridiculous "scorched earth" diplomatic policy, if one may call it that, of the Obama administration, nobody is surprised any more that the US president is alienating one former ally after another.
As we first observed a few weeks ago when we revealed JPM's involvement in all of this money laundering, "some critics have questioned why American authorities have set their eye on European banks. The answer, authorities say, is that American banks by and large avoided processing transactions for Iran and Sudan. But American banks are not immune from touching dirty money. Citigroup’s Banamex unit is under investigation for processing money linked to a drug cartel. And in January, JPMorgan Chase reached a roughly $2 billion deal with the authorities over ignoring signs of the Ponzi scheme orchestrated by Bernard L. Madoff, who held accounts at the bank for over two decades."
Not only that but as we wrote over the weekend, the bank that was instrumental in facilitating BNP's money laundering for nearly a decade was none other than JPM. One wonders if JPM also "unwittingly" was the bank that made German money laundering around the globe possible. Did we mention unwittingly?
Still, while one can debate the idiocy of US foreign policy, eager to push European allies into the willing hands of Russia and China at the worst possible moment, when regional and civil wars and conflicts are suddenly breaking out across all key geopolitical hotspots, one wonders: in the case of BNP, the "fine" was as a result of French unwillingness to halt the Russian amphibious warship deal despite US demands. So it would be curious just what the US blackmail against German banks is for: one really does wonder just what punishment Angela Merkel deserves behind the scenes in the eyes of John Kerry et clueless al, to punish her and Germany so blatantly for the entire world to see.
One thing is clear: if the US thinks that Germany will continue to consider America its BFF and make zero contingency plans for when the alliance with the US finally crashes and burns, it will be truly surprised when the Eurasian alliance of Russia and China finally announces its final, all-important, missing link member: the manufacturing and export powerhouse that is Germany itself.
Germany moving forward with China ties......
German chancellor arrives in country for seventh visit since 2005, with economic ties and trade topping agenda.
Last updated: 07 Jul 2014 07:06
|German Chancellor Angela Merkel has arrived in China for her seventh visit since 2005, with economic ties topping the agenda and a high-powered business delegation in tow.|
Merkel touched down early on Sunday in the southwestern city of Chengdu, where she met local officials, visited a market and toured a factory operated by German car manufacturer Volkswagen.
She then travelled to Beijing, where she wrapped up the first day of the three-day visit with a meeting with Premier Li Keqiang and a banquet at the Diaoyutai State Guesthouse.
Merkel's visit comes just over three months after Chinese President Xi Jinping's trip to Germany, when both parties signed a raft of economic pacts.
China is Germany's second largest export market outside Europe, after the US.
China's state-run Xinhua news agency reported on Sunday that both Merkel and Li promoted the benefits of cooperation between the two countries.
Al Jazeera's Adrian Brown, reporting from Beijing, said Merkel's visit demonstrates how important Germany regards its relationship with China.
"The value of trade between China and Germany at the moment is $200-bn, an astonishing figure," our correspondent said. "It's a sort of relationship that the rest of Europe must regard with envy."
Chinese companies want Germany's technology while millions of newly prosperous citizens crave the country's products, ranging from Audi sedans to luxury home appliances.
Germany last year sold goods worth $91bn to China, its number-two export market outside Europe after the United States.
Imports from the Asian powerhouse, meanwhile, topped $99bn.
Merkel angered Beijing in 2007 by meeting Tibet's exiled spiritual leader the Dalai Lama, whom ruling Communist Party leaders consider a dangerous separatist.
But during the latest visit, any discussion of human rights is likely to take place behind closed doors, an approach that German officials have argued can be more effective in China than finger-wagging reprimands.
In a commentary, Xinhua on Sunday hailed Merkel's trip.
"It is fair to say that China-Germany relations are at their best in history, which have been strongly underpinned by the pragmatic cooperation between the two economic heavyweights," it said.
Meanwhile, the visit was partly overshadowed by allegations from that small and mediums-sized German companies are victims of "industrial espionage" by the Chinese.
Al Jazeera's Adrian Brown said it is unclear whether the issue will be addressed by Merkel and the Chinese leaders.