Hudson: China's Land Question

[touchring]

Re: Hudson: China's Land Question

I reckon.

Pawn shop sounds nicer than loan shark I suppose.

If there's one thing in the world for the NSA to be surveilling right now, I'd suggest intercepting mobile traffic and data from Chinese pawn shops and loan sharks might be it.

I'll be keen to know who are banking the "pawnshops"?

SOE managers that "borrowed" money from their companies to fund pawnshops? More scandalous will be city officials using their city pension and insurance fund.

Haven't the Chinese learned from the French Revolution?

[ProdigyofZen]

Re: Hudson: China's Land Question

The other point about these pawn shops, vs. our TBTF banks and investment banksters, is that in China - are these shadow banking institutions being bailed out by the CBoC vs. the ongoing bailouts by the Fed?

For me, the pawn shop phenomenon is in no way surprising. People forget that the financial environment in China is very new. Modern Chinese have no experience whatsoever with financial management, and the phenomenal growth of the past 2 decades has encouraged (and rewarded) those who took the most risks.

The example of the guy who was selling diethylene glycol as a cheap replacement for glycerin is a good example. He wasn't deliberately trying to poison anyone - in fact he actually swallowed a whole bottle of it himself to test. He just didn't understand that there are fundamental chemical differences between diethylene glycol and glycerin.



That may be, but as an infanct/very young child, I am far less convinced of his emotional makeup being affected by this history than if he were say, a Holocaust survivor.



I certainly agree Giuliani was looking to make a name for himself, but once again it is difficult for me to see that Marc Rich was in any way innocent.

There's no question whatsoever that his actions were treasonous for an American.

Were he Swiss, and were there no Swiss laws against such activity, then you'd have a good case that he was unfairly prosecuted.

However, if he was an American citizen, then to say his actions were fine because they were originating out of a bunch of Swiss shell companies, or even real Swiss companies - I don't see that it matters.

If you initiate a drug sale through a Cayman islands shell company, you are liable for violating US drug laws if you're a US citizen. If Marc Rich was so smart, he should have renounced his US citizenship. From my view, I suspect he wanted to have his cake and eat it too - to be a US citizen with all its privileges while making tons of money violating US laws.

It wouldn't be the first time, and won't be the last.

As for the sanctions vs. Iran - certainly I agree there's all sorts of shady stuff going on there. I've posted before on research which shows a curious relationship between Middle East conflicts and oil company relative market valuation (i.e. conflict results in increasing relative market valuation); I've also posted how the Iran sanctions directly benefit a billionaire farmer in California who coincidentally is heavily involved in anti-Iran think tanks.

What I don't see with Marc Rich is any form of moral justification. Did Marc Rich come out and say that the economic sanctions were immoral and wrong, or did he just look to make a ton of money?

There's a huge difference between acting on moral imperative vs. using an excuse to break the law in order to make tons of money.

I just don't see how trading with sanctioned countries is treasonous (aside that it was agaisnt the law, but that law was based on these countries not doing what the bully on the world stage wanted), it is not like he was selling them arms.

He most likely was doing it to make money instead of for moral reasons.

"If a law is unjust, a man is not only right to disobey it, he is obligated to do so." Thomas Jefferson. What a slippery slope....

[Milton Kuo]

Re: Hudson: China's Land Question

I just don't see how trading with sanctioned countries is treasonous (aside that it was agaisnt the law, but that law was based on these countries not doing what the bully on the world stage wanted), it is not like he was selling them arms.

He most likely was doing it to make money instead of for moral reasons.

"If a law is unjust, a man is not only right to disobey it, he is obligated to do so." Thomas Jefferson. What a slippery slope....

What Rich did was most certainly and clearly illegal and he knew it a priori when doing business with Iran. He then committed another felony when he bailed out of the country and ran away to Switzerland to avoid a potential conviction. I wouldn't be surprised if another felony was committed when he managed to get a pardon from Clinton. [Incidentally, Michael Milken, a person whose alleged crime I find much more difficult to understand considering the weak evidence I've seen, was on the short list but didn't make the cut.]

The law against trading with Iran may be nonsensical but obeying the law would not have harmed any American and it would not have caused Rich any harm to obey that law. I think a reasonably close analogy would be a person who decides to be a rum-runner in the 1920s thinking that Prohibition doesn't make sense and will ultimately be repealed anyway. Unfortunately, whether one agrees with the idea of Prohibition or not, this rum-runner should be caught, prosecuted, and have his ill-gotten profits seized.

Legalities aside, Rich's and the hypothetical rum-runner's profits might not have even existed had a government law not existed to put their more law-abiding competition on the sidelines.

[lakedaemonian]

Re: Hudson: China's Land Question

I just don't see how trading with sanctioned countries is treasonous (aside that it was agaisnt the law, but that law was based on these countries not doing what the bully on the world stage wanted), it is not like he was selling them arms.

He most likely was doing it to make money instead of for moral reasons.

"If a law is unjust, a man is not only right to disobey it, he is obligated to do so." Thomas Jefferson. What a slippery slope....

Wouldn't dollars be considered weapons in some respects?

They certainly seem to be able to be USED like weapons, or simply to purchase weapons.

I was, and remain, frustrated at the ability of special interests to purchase immunity/pardon.

I distinctly remember the last day/hour/minute Rich pardon made a bit of news.

However, in the case of Marc Rich, I wonder how much of a conciliation should be given to him for:

1)Helping shift the balance towards equal in the Iran-Iraq War with what appears to have been a policy of ensuring there would never be a winner in that conflict, only mutually maximized losers. Surely Rich not being pursued and possibly working under some influence/control would have allowed the possibility of throttling Iran's cashflow which was largely going to fund it's war effort against Iraq.

2)Helping provide a strategic human intelligence window into Iran and parts of it's leadership at a time when US/western intelligence would have been scrambling to recover. I would be stunned if Rich wasn't regularly meeting with State Department and CIA in some sort of long-term quiet quid pro quo.

Just my best guess.

[c1ue]

Re: Hudson: China's Land Question

What Rich did was most certainly and clearly illegal and he knew it a priori when doing business with Iran. He then committed another felony when he bailed out of the country and ran away to Switzerland to avoid a potential conviction. I wouldn't be surprised if another felony was committed when he managed to get a pardon from Clinton. [Incidentally, Michael Milken, a person whose alleged crime I find much more difficult to understand considering the weak evidence I've seen, was on the short list but didn't make the cut.]

So you agree he was a criminal then?

As for Milken, it was quite clear what he did to get nailed. He got swelled head from his junk bond sales - to the point where he was a destabilizing force all on his own in moving from financial profiteering to actual operational control of companies.

The law against trading with Iran may be nonsensical but obeying the law would not have harmed any American and it would not have caused Rich any harm to obey that law. I think a reasonably close analogy would be a person who decides to be a rum-runner in the 1920s thinking that Prohibition doesn't make sense and will ultimately be repealed anyway. Unfortunately, whether one agrees with the idea of Prohibition or not, this rum-runner should be caught, prosecuted, and have his ill-gotten profits seized.

Legalities aside, Rich's and the hypothetical rum-runner's profits might not have even existed had a government law not existed to put their more law-abiding competition on the sidelines.

I'm really unclear what you're trying to say.

If he was not a US citizen in reality if not in fact, then why would he care about getting pardoned?

If he was in fact committing a crime, and was doing so for no reason besides profit, why again is this acceptable? Is this another case of God's work?

1)Helping shift the balance towards equal in the Iran-Iraq War with what appears to have been a policy of ensuring there would never be a winner in that conflict, only mutually maximized losers. Surely Rich not being pursued and possibly working under some influence/control would have allowed the possibility of throttling Iran's cashflow which was largely going to fund it's war effort against Iraq.

As far as I understand it, Marc Rich was prosecuted for what he did in the 1970s, not what he did right before his indictment in 1983. It would seem improbable to me that Marc Rich would have been investigated and then prosecuted in so short a time frame as to apply to anything in the 1980s. Since the Iran/Iraq war started in 1981 - it seems a stretch that his activities prior to his indictment had much to do with that, though of course afterwards is anyone's guess.

2)Helping provide a strategic human intelligence window into Iran and parts of it's leadership at a time when US/western intelligence would have been scrambling to recover. I would be stunned if Rich wasn't regularly meeting with State Department and CIA in some sort of long-term quiet quid pro quo.

That may be, although the assumption here is that Rich was directly involved in meeting with Iranian officials - as opposed to providing the shell companies by which others moved product. The same kind of role was being played by Turkish banks in processing payments for Iranian oil not so long ago.

[Milton Kuo]

Re: Hudson: China's Land Question

So you agree he was a criminal then?

c1ue:

You misattributed what I wrote to ProdigyofZen so maybe that's why the viewpoints seem flip-floppish.

My opinion about Marc Rich should be obvious. I believe he broke the law, knew he broke the law, and then broke the law again when he ran away to Switzerland to avoid standing trial, where he evidently felt there was sufficient evidence for him to get convicted.

As for Milken, it was quite clear what he did to get nailed. He got swelled head from his junk bond sales - to the point where he was a destabilizing force all on his own in moving from financial profiteering to actual operational control of companies.

If I ever can find the time, I'll have to do more research about what Milken did. From the stuff I've read, it seems like the work he did at Drexel Burnham Lambert was rather typical of a market-maker; albeit an 800-pound gorilla market-maker. Some of the accounts I read of what happened in DBL's final days also seemed like there was a hit-job on DBL by the established IBs like Goldman Sachs, Salomon Brothers, etc. Being a leveraged entity, DBL was finished when a run on the bank occurred.

[c1ue]

Re: Hudson: China's Land Question

You misattributed what I wrote to ProdigyofZen so maybe that's why the viewpoints seem flip-floppish.

My opinion about Marc Rich should be obvious. I believe he broke the law, knew he broke the law, and then broke the law again when he ran away to Switzerland to avoid standing trial, where he evidently felt there was sufficient evidence for him to get convicted.

Sorry, I use a large font screen and sometimes get headers confused as a result.

Fixed.

If I ever can find the time, I'll have to do more research about what Milken did. From the stuff I've read, it seems like the work he did at Drexel Burnham Lambert was rather typical of a market-maker; albeit an 800-pound gorilla market-maker. Some of the accounts I read of what happened in DBL's final days also seemed like there was a hit-job on DBL by the established IBs like Goldman Sachs, Salomon Brothers, etc. Being a leveraged entity, DBL was finished when a run on the bank occurred.

What Milken did was very smart - he identified a significant pricing mismatch in relatively low quality corporate bonds. Nothing wrong there, though of course he benefited greatly from the early gyrations due to Nixon's Bretton Woods withdrawal.

The part where he got dangerous was then using junk bond cash raises to buy out companies - Milken's pioneering work was a major impetus for the first LBO wave, which included such travesties as documented in 'Barbarians at the Gates'.

What landed him in jail though was a litany of insider trading, tax evasion, and what not where Milken used info from his junk bond cash raising to then make more money off trading as well as to close deals with specific clients.