Accountants KPMG fined for role in Ballast Nedam bribery case

DutchNews.nl, Monday 30 December 2013

(NOS/ANP)

Accountancy group KPMG has reached a €7m out of court settlement with the public prosecution department over its role in a construction sector bribery scandal.

The investigation into three former KPMG accountants is continuing, the public prosecution department said in a statement.

KPMG was accused of disguising bribes paid on behalf of building group Ballast Nedam to win orders. The company also failed to pay proper attention to ensuring integrity demands were met, the public prosecutor said.

The bribery scandal dates from 2000 to 2003 and concerns hundreds of millions of euros in bribes paid to win contracts in the Middle East. Ballast Nedam itself settled with the public prosecutor last year.

KPMG Nederland chairman Jurgen van Breukelen said in a statement: ‘We are shocked by the facts as they have unfolded in this case during the recent past and find these completely unacceptable.’

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Hundreds of Chinese lawmakers quit over fraud scandal

Deutsche Welle, 28 December 2013

More than 500 lawmakers have resigned and over 50 legislators sacked in a mass electoral bribery case, according to state media. The scandal occurred in the southern province of Hunan.

The 512 municipal officials resigned, were disqualified or dismissed after it was found they had taken bribes from 56 members of the provincial assembly to elect them to their posts.

State television channel CCTV said on Twitter on Saturday that local officials had dismissed the 56 representatives of the 763-member Hunan People's Congress, after they were "elected by bribery."

It added later that an initial investigation revealed the total amount of the bribes was more than 110 million yuan (13.2 million euros, $18.1 million). The Xinhua news agency said the money was used to swing the results of elections.

"The number of people involved in the Henyang election case are many, the amount of money is large, the substance serious, the effect pernicious; this is a serious challenge to our People's Congresses system," Xinhua said. "It must be seriously dealt with in accordance with the law."

Xinhua named Tong Mingqian, the former Party chief of Hengyang, a city in Hunan province, as being "directly responsible" for the election scandal.

In China, municipal officials have the power to appoint representatives of their provincial assembly, the local parliament which generally acts as a rubber stamp for party decisions, rather than a forum for policy or debate.

Competition to become lawmakers in some areas has opened the door to corruption, as holding office can provide the opportunity to influence the decision-making process in areas like business contracts.

Since taking power last year, Chinese President Xi Jinping has led a sweeping crackdown on corruption, promising to stamp out high-flying "tigers" as well as low-ranking "flies" amid widespread disquiet over government corruption.

China reforms one-child policy, labor camps

Meanwhile China's legislature formally approved on Saturday a relaxation of the country'sone-child policy.

The standing committee of the National People's Congress passed a resolution that will allow couples to have two children if either of the parents is an only child, Xinhua said. Until now, only in cases in which both partners were only children, were they allowed to have two children.

The change is expected to allow around 10 million couples to have a second child if they so choose. The one-child policy was introduced by Beijing more than three decades ago in an effort to prevent overpopulation in what was already by far the world's most populous nation.

Also on Saturday, the committee approved the abolishment of re-education labor camps, which were introduced in the late 1950s as a way of dealing with petty offenders.

Both changes had been agreed at a previous meeting of top Communist Party officials.

jr/ccp (Reuters, AFP)

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Yakuza-linked Mizuho bank ordered to suspend loan business

Google – AFP, 26 December 2013

Yasuhiro Sato is summoned to give details at the Lower House's fiscal and

 financial committee at the National Diet in Tokyo on a scandal involving loans

to crime syndicates on November 13, 2013 (AFP/File, Yoshikazu Tsuno)

Tokyo — Japan's financial watchdog on Thursday ordered Mizuho, one of the country's biggest banks, to suspend part of its loan business as additional punishment for its links to organised crime.

The bank's parent company, Mizuho Financial Group, said its chairman Takashi Tsukamoto would step down from his post on March 31 to take responsibility for the scandal.

The Financial Services Agency (FSA) said it issued the order to stop Mizuho Bank from extending new loans through its affiliated credit company for one month from January 20.

The agency also ordered Mizuho Financial Group to improve its management of the bank.

The group has been under fire since September, when its credit affiliate was found to have processed about 230 loans worth about $2 million for the country's notorious crime syndicates. The Yakuza syndicates are involved in activities ranging from prostitution and drugs to extortion and white-collar crime.

In a statement, the group offered "sincere apologies" for causing trouble to its customers and other people concerned and vowed to take the punitive action "with utmost seriousness."

Mizuho Bank said its president Yasuhiro Sato was to take a self-imposed salary cut for one year.

"The group wishes to make uninterrupted efforts by mobilising all resources to sever ties with anti-social forces," Sato told a news conference.

"We want to establish a forward-looking, advanced management structure and help Mizuho grow through its contributions to our customers, the economy and society."

In late September the FSA ordered Mizuho Bank to improve operations after it was found to have taken "no substantial steps" to sever the Yakuza links two years after they were discovered.

The FSA decided to take additional punitive action against the group after the bank submitted a false report on the issue to the financial agency.

Mizuho Bank had originally said its top management had been unaware of the Yakuza links. But it later admitted that its current and former presidents were in a position to know about the issue.

In late October the bank submitted a report compiled by a third-party panel probing the issue, which said it found no evidence of a cover-up of the scandal.

But the agency has proved the claim wrong through on-site inspections of Mizuho Bank and Mizuho Financial Group in November.

CNPC chief accountant resigns following graft allegations

Want China Times, Staff Reporter 2013-12-21

A PetroChina gas station in Beijing. (Photo/CNS)

China National Petroleum Corporation (CNPC) — China's largest oil and gas producer and supplier, also known as PetroChina — said on Dec. 17 that chief accountant Wen Qingshan has resigned for "personal reasons." Prior to the announcement, Wen had been held for questioning in an investigation of a corruption scandal which has recently engulfed the state-owned company, reports the Guangzhou-based 21st Century Business Herald.

Kunlun Energy, a CNPC subsidiary, also announced that Wen had stepped down as its chairman and executive director. A day earlier, media reports said Wen was under investigation but it is unclear whether the new development signals a second round of anti-corruption action against CNPC.

Wen has held several positions relating to finance over his long-spanning career working for CNPC. He was appointed Kunlun Energy chairman and executive director in late August this year to replace Li Hualin, who was sacked due to discipline issues — an oft used euphemism for graft.

A source told the paper that aside from Wen several other CNPC officials are also caught up in government probes related to overseas investments and trade. The oil giant declined to confirm the allegations, however.

The anti-corruption drive against CNPC has been sweeping China since August. On Sept. 3, Beijing replaced the head of the State-owned Assets Supervision and Administration Commission, former CPNC chairman Jiang Jiemin, who has also been placed under investigation, the paper said. During Jiang's term, Wen had been the group's deputy chief accountant and finance department chief.

When Jiang headed CNPC, he planned to develop the company into the world's first-class integrated international energy company by 2020. CNPC's capital expenditure has subsequently continued to grow over the past years, and it is expected to reach 355 billion yuan (US$58.5 billion) this year, up from 352.5 billion yuan (US$58.1 billion) last year and 284.4 billion yuan (US$46.8 billion) in 2011. As of early 2013, its total assets reached US$347.8 billion, becoming one of the world's top 10 oil and finery companies.

Following Jiang's sacking, Wen's investigation is quite normal, a CNPC source said. Meanwhile, the direction of the government probe seems to focus on CNPC's overseas investments and trade business, especially as such transactions are huge and complicated and they can be easily manipulated, the paper said.

As the company's chief accountant, Wen would have been privy to many details of the firm's overseas investments and trade, insiders added.

US general went on drunken bender in Russia: officials

Google – AFP, 20 December 2013

This undated US Air Force handout photo shows Major General Michael

Carey (US Air Force/AFP/File)

Washington — A US general recently lost his job in charge of nuclear missiles after he went on a drunken bender in Russia, where he insulted his hosts and cavorted with "suspect" women, officials said Friday.

Air Force Major General Michael Carey was sacked in October as commander of the military's land-based intercontinental ballistic missiles, over what officials at the time called "personal misbehavior."

Now the details of that misbehavior have been revealed in embarrassing detail by the Air Force inspector general, which released the results of its investigation into Carey's conduct in a July trip to Russia.

The two-star general was drunk through much of his official four-day visit to Russia, and his "inappropriate behavior" prompted a female Pentagon employee to file a complaint, the report said.

Carey "acted in a manner that exceeded the limits of accepted standards of good conduct" during the trip that included a nuclear security exercise and meetings with Russian officials, according to the investigation.

The general began drinking during a stop in Zurich and kept drinking over three days in Moscow, showing up late for motorcades to meet Russian representatives, interrupting tour guides, slurring his speech and returning to his hotel room in the early morning hours, the report said.

During the stopover in Zurich, Carey -- apparently intoxicated -- spoke loudly in a public area about his importance as commander of a nuclear force and "that he saves the world from war every day," investigators said.

Once in Moscow at a Marriott hotel, the general said over drinks that his unit "had the worst morale and that the leadership wasn't supporting him," it said.

He and other delegation members had drinks with two foreign women two nights in a row, with Carey dancing with one of them.

The general later told investigators that the two women were "suspect" as "it seemed odd" that they were always showing up at the same location as the American delegation.

Apart from being sacked from his job as commander of the 20th Air Force, Carey received a "letter of counseling" for his actions, an Air Force official, speaking on condition of anonymity, told AFP on Friday.

The episode marks the latest setback for the US military's nuclear forces, which has faced reports of persistent morale problems and mixed results from inspections.

In his former job as commander of the 20th Air Force, Carey was responsible for 450 Minuteman missiles across five states and 9,600 troops that maintain the weapons.

Carey is now assigned as a special assistant to the commander of Air Force Space Command and is no longer overseeing nuclear missiles.

General William Shelton, the chief of the Air Force's Space Command, said in a statement that it was "an unfortunate incident" and that Carey "has otherwise served the nation extremely well."

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Deutsche Bank settles US mortgage lawsuit regarding Fannie and Freddie

Deutsche Welle, 20 December 2013

Deutsche Bank, the litigation-laden lender with new management seeking a "change in culture," has settled a court case with the US authorities. The bank will dole out $1.9 billion to Fannie May and Freddie Mac.

Germany's biggest lender on Friday cleared one of its outstanding court cases, settling with the US Federal Housing Finance Agency (FHFA) and agreeing to pay a combined $1.9 billion (roughly 1.4 billion euros) in compensation.

The FHFA was mediating on behalf of state-owned US mortgage lenders Freddie Mac and Fannie May, which were resuced with taxpayer money in the aftermath of the 2008 financial crisis. Deutsche Bank was accused of failing to properly disclose the risks hidden in mortgage-backed securities it sold to the US Banks between 2005 and 2007, charges it had publicly denied prior to the settlement.

"Deutsche Bank announced today that it has reached an agreement to resolve its residential mortgage-backed securities litigation with the FHFA as conservator for Fannie Mae and Freddie Mac," the bank said in a statement, describing the case as the largest mortgage-related litigation it faced.

The lion's share of the settlement was due to Freddie Mac. Deutsche Bank's new management duo is under pressure from shareholders to turn the company's image around amid several lawsuits.

Cleaning house

The FHFA brought similar lawsuits against a total of 17 lenders on behalf of Fannie May and Freddie Mac; JPMorgan Chase and Swiss lender UBS have already reached similar settlements. "Fannie and Freddie" were two of the hardest-hit lenders when housing prices began to fall and homeowners began to default on their mortgages, turning many of these securities based on a bundle of home mortgages into toxic assets.

"Today's agreement marks another step in our efforts to resolve Deutsche Bank's legacy issues, and we intend to make further progress in this regard throughout 2014," co-chief executives Jürgen Fitschen and Anshu Jain said in a joint statement. "We have exited the mortgage businesses that gave rise to these claims and have further improved our controls."

Deutsche Bank is expected to reach similar settlements with US and UK regulators over alleged manipulation of the Libor and Euribor benchmark interest rates used in the financial sector at some point next year.

Deutsche Bank, whose last quarterly report took a litigation-related hit, paid Friday's settlement with part of a 4-billion-euro war chest set aside for outstanding cases: "No material additional reserves will be taken for this settlement," the bank said.

msh/jlw (AFP, dpa, Reuters)

This tax loophole saved the wealthiest Americans $100 bln

RT.com, December 17, 2013

AFP Photo / Noel Celis

An unintended tax break has cost the U.S. government as much as $100 billion from the wealthiest Americans since the year 2000.

According to a new report by Bloomberg News, filings by the Securities and Exchange Commission revealed that hundreds of business executives, including Mark Zuckerberg of Facebook and Sheldon Adelson of Las Vegas Sands Corp., have exploited an estate tax loophole originating from a law passed by Congress in 1990.

“It’s very common,” said former Aetna Inc. CEO John Rowe, who also used similar tactics, to Bloomberg.“It’s become standard practice in estate planning.”

Since federal law imposes a 40 percent tax on assets that the wealthy leave their families, many have been able to avoid the estate tax by establishing Walton grantor retained annuity trusts, or GRATs. By quickly funneling money into and out of trusts – which are set to revert back to the trust’s creator rather than their family, and, thus become tax exempt – wealthy Americans are able to direct excess earnings to heirs without incurring the consequences of the estate and gift tax.

“You can certainly say we can’t let this keep going if we’re going to have a sound system,” Richard Covey, the lawyer who discovered the loophole and essentially invented the tax shelter, said to Bloomberg.

According to professor Edward McCaffery of the University of Southern California’s Gould School of Law,GRAT and other tax-evasion strategies reduce the estate tax to a voluntary system

The estate tax was originally created back in 1916 and applied to hefty fortunes at the time of an individual’s death. In 1984, Covey discovered a way around the law by creating trusts in the name of a wealthy individual’s children and using the extra income generated to pay down the estate tax.

In 1990, Congress passed a law barring this practice, leading Covey to uncover another loophole that lead to the creation of GRAT. The IRS fought this technique in U.S. Tax Court in 2000, but lost since the law itself didn’t specifically prohibit the practice.

Efforts to fix the system since have stalled. President Barack Obama and his allies have suggested eliminating or shrinking the loophole, but their attempts have gone nowhere among opponents who believe the estate tax shouldn’t exist at all. Meanwhile, Senate and House committees claiming to work on comprehensive tax reform bills have, so far, sidestepped the estate tax situation altogether

“From the Republican side of the aisle, you’re committed to killing the thing,” McCaffery told Bloomberg. He also said that other Democrats are reluctant to spend their political capital on an issue that only applies to a small number of people.

The fact that the people it does affect are typically wealthy campaign donors makes it an even tougher issue to rectify, since they want to keep the loophole exactly where it is.

Still, as Covey recalled the sheer amount of money that’s gone untaxed by the government since the first appearance of GRAT, he can’t help but be shocked.

“It boggles the mind,” he said.

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Saudi activist sentenced to 300 lashes, 4 yrs in jail after calling for constitutional monarchy

RT.com, December 15, 2013

Saudi's King Abdullah (AFP Photo / HO / SPA)

A Saudi Arabian political activist was sentenced to four years in prison, 300 lashes, and a travel ban after calling for a constitutional monarchy. He is the fourth member of the Saudi Civil and Political Rights Association (ACPRA) to be jailed this year.

ACPRA’s Omar al-Saed, 24, was jailed after the organization called for democracy and made statements criticizing the country’s ruling family over its human rights record.

Al-Saed berated the motivations behind his imprisonment via the ACPRA website in a statement released by the group on Friday: “I am the proud prisoner Omar Mohammed al-Saed. I read out to you the motives and causes of my imprisonment: my hatred of injustice, the fabrication of pain and misery, taking advantage of passive attitudes, treating them as if they were fools, and denying them their livelihoods for brutal personal ambition,” he said.

Al-Saed was not allowed legal representation at the secret hearing in which he received his sentence, according to an ACPRA statement. The judge denied that the session had been kept secret, but al-Saed rebutted that for a session to be public, it must be announced prior to its taking place so that proper representatives are able to attend and people can bear witness to its proceedings.

“This unjust sentence is an honor and pride to Omar al-Saed and a disgrace and shame to Judge Issa al-Matrudi,” the activist’s brother, Abdullah al-Saed, tweeted after learning of the sentence late on Thursday.

“It's just another troubling instance of Saudi authorities' absolute refusal to countenance any activism or criticism of Saudi policies or human rights abuses,” Adam Coogle, a Middle East researcher at Human Rights Watch told Reuters on Sunday.

A spokesman for the country’s Justice Ministry would not confirm the accuracy of the report to the agency.

Media in the country is strictly self-censored. Political dissent or criticism of the dominant Wahhabi (Sunni) royal family is not tolerated, and protests are outlawed.

At the end of November, two Saudi men were arrested for offering ‘free hugs’ to passersby, on the grounds that they were “indulging in exotic practices” and offending public order.

Amnesty International has spoken out against the regime’s oppressive practices, releasing a report titled “Saudi Arabia: Unfulfilled Promises” in October.

The report slammed the country for failing to implement any of the main recommendations they accepted under a previous review by the Human Rights Council (UNHRC) which took place in 2009.

Saudi Arabia remains one of the top five executioners in the world. The death penalty is still applied to a wide range of non-lethal crimes such as adultery, armed robbery, apostasy, drug smuggling, kidnapping, rape, “witchcraft,” and “sorcery.” Since 2009, appeals by the growing human rights movement in the country have been met with harsh measures such as arbitrary arrests, detention without charge or trial, unfair trials, and travel bans, Amnesty stated.

Disputed Volcker rule divides financial world

Deutsche Welle, 12 December 2013

The Volcker rule, approved by US regulators this week, aims to rein in risky trading practices at US banks. Some consider it the biggest milestone in financial regulation since 1933, some say it's worse than nothing.

The Volcker rule - named after former Federal Reserve Chairman Paul Volcker - is a key plank of the Dodd-Frank financial regulation law that was passed in 2010 in response to the global financial crisis of 2008. It was approved after two years of debate and lobbying by the big banks to modify it.

"The Volcker rule will make it illegal for firms to use government-insured money to make speculative bets that threaten the entire financial system, and demand a new era of accountability from CEOs, who must sign off on their firms' practices," US President Barack Obama said after the rule was approved by five US regulatory agencies, including the Federal Reserve and the Securities and Exchange Commission (SEC) on Tuesday (10.12.2013).

In essence, the rule severely limits so-called proprietary - or prop - trading, where banks trade for their own profit. US banks are required to put in place compliance programs and document trades to demonstrate that they are in a client's interest or a hedge against risk, rather than purely for profit.

Paul Volcker is a former chairman
of the Federal Reserve

Profound or inept?

"There hasn't been a change this big in the banking industry since 1933," says Mark Williams, a former Fed bank examiner who now teaches at Boston University and has written extensively on the collapse of Lehman Brothers.

"The onus has been pushed back on banks to demonstrate that they are not in violation…through good record-keeping, analysis, through back-testing. They have to demonstrate that they are using risk-management best practices in their hedging operations."

But critics say it is unworkable, as it will be hard to distinguish between mere gambling and legitimate trades.

"It won't work because it will be too easy to evade," Bill Black, also a former regulator, who now teaches at the University of Missouri-Kansas City, told DW.

Apart from being far too much work for understaffed regulatory agencies, he says, "as soon as you tell the banks they can hedge, against a trillion and a half dollars worth of their portfolio, tell me you couldn't find something that that would be a hedge for."

"It's a tragic lost opportunity for real reform," Black told DW. "It is worse than nothing," he says.

Back to banking basics?

Many experts consider proprietary trading to be one of the reasons for the 2008 crisis, in particular the rise of a specific type of prop trading, so-called mortgage-backed securities, "manufactured by some of the largest banks…, sold by them and kept in their portfolios," Williams told DW. These securities often involved repackaged subprime mortgages that led to mass foreclosures, when people could not pay their loans off.

Working in banking now is a far cry from the 1980s when "being a banker used to be a "respected, but also a very boring profession," Williamson says.

"The traditional banking model was a two-legged stool - banks earned income through loans and through fee services, like asset management."

To make more money "the very large banks brought a third leg to that stool and that was prop trading…and that leg is being knocked out and it's going to be a tough transitional period for many of these large banks."

And, indeed, the American Bankers' Association (ABA) argues in a statement on their website that, apart from being "burdensome and highly complex," the rule will lead to "decreased liquidity and inferior product pricing" for customers.

The banks were hoping that the Volcker rule would be much less stringent, but a 6.2-billion dollar trading loss by JPMorgan Chase in the UK in 2012 - known as the "London Whale" - gave the Volcker implementation process the "momentum," Williams says, to curb proprietary trading in a more substantial way.

The London Whale debacle cost JPMorgan
Chase over 6 billion dollars, plus fines

JPMorgan Chase, he says, "was a hedge fund disguised as an FDIC- [federally - the ed.] insured commercial bank."

"There's going to be much less profit to be made from that third leg," he says, arguing that the London Whale loss, and more importantly, the fact that the trader hid the true extent of the losses from management, could have been prevented had the Volcker rule been in place.

Still too big to fail

Bill Black is among those who are calling for much tougher measures, such as cutting banks down to size to eliminate the "too big to fail" argument that he believes encourages risky behavior.

Because of the feared domino effect of one of the big banks failing and dragging the whole economy down with it, "too big to fail institutions - the systemically dangerous institutions - can borrow much more cheaply, which creates a huge competitive advantage," he told DW.

Borrowing, especially short-term borrowing, grew rapidly in the run-up to the 2008 crisis, says Benn Steil, senior fellow at the Council on Foreign Relations in a memorandum. So, an approach to reform "that restricts the scope and incentives for bank balance-sheet expansion funded by short-term debt is essential to prevent another crisis." The Volcker rule will do nothing of the sort, he argues.

Glass-Steagall to the rescue?

Black goes a step further by insisting that the Glass-Steagall Act from 1932/33 should be reinstated. It was part of the US Banking Act passed in the wake of the Great Depression. It separated traditional banking from riskier activities like investment banking. It was repealed in 1999, allowing practices like proprietary trading to emerge.

"It [Glass-Steagall] worked brilliantly for 50 years and was praised by almost everybody," Black told DW. But "we violated one of the key rules of life - if it's not broke, don't fix it," he said.

Black says it is not just the US that has so far failed to pass meaningful regulation. "Contrast the boldness of the US response to the Great Depression and the successful boldness in regulation with the timidity of the global response to the current crisis, where we feel that we can't even think boldly."

The Volcker rule will come into effect on April 1, 2014, but banks have been given until mid-2015 to fully comply.

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Labour sets up 'integrity commission'

DutchNews.nl, Tuesday 10 December 2013

Hans Spekman at Pauw & Witteman

(VARA - Pauw &Witteman)

The Labour party is to set up an 'integrity commission' to advise party management when members break party rules.

The party, which is part of the coalition government, will also sharpen up its 'honour code' and its MPs will have to sign the code before they take up their function, party chairman Hans Spekman told tv talk show Pauw & Witteman on Tuesday evening.

Labour has been faced with a series of examples of controversial behaviour recently. They include the resignation of junior minister Co Verdaas, whose expense claims while a provincial official were 'unclear' and the suicide of Amersfoort councillor Ramón Smits Alvarez shortly after €4,000 was found to be missing from the party's coffers.

Spekman told the tv show he wants integrity to become ingrained in the minds of Labour people at all levels.

The move follows the 'statement of integrity' introduced by coalition partners the liberal VVD in May this year. This also followed a stream of scandals involving politicians.

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"Recalibration of Free Choice"–  Mar 3, 2012 (Kryon Channelling by Lee Carroll) - (Subjects: (Old) Souls, Midpoint on 21-12-2012, Shift of Human Consciousness, Black & White vs. Color, 1 - Spirituality (Religions) shifting, Loose a Pope “soon”, 2 - Humans will change react to drama, 3 - Civilizations/Population on Earth,  4 - Alternate energy sources (Geothermal, Tidal (Paddle wheels), Wind), 5 – Financials Institutes/concepts will change (Integrity – Ethical) , 6 - News/Media/TV to change, 7 – Big Pharmaceutical company will collapse “soon”, (Keep people sick), (Integrity – Ethical)  8 – Wars will be over on Earth, Global Unity, … etc.) - (Text version)

“…5 - Integrity That May Surprise…

Number five: There will be those who think it impossible to have a search for integrity and fairness in all things. In other words, Human Beings will not simply go with what they are told is the status quo. They will look at it and they will say, "Well, I think it could be better. I'm going to look around for something that has more integrity and fairness." Yes, there will be those who tell you, "Look, the institutions hold all the cards and you have to do it their way. If you want health insurance or you want loans from the banks for your home, you better do it their way." I have news for you. Even this is going to change.

"What are you going to do?" the Human asks. "They hold all the power!" In the past, there was nothing you could do. Now I'll tell you what the potentials are. You're going to pull out the puzzle and look past the walls of the maze. You're going to say, "Well, then I'll start my own institution." And some will. The new institutions, based on integrity, will sweep right past an old energy. In other words, there will be those who are young today who are going to start a new way of banking, a new way of health care, and a new way of insurance. And when you see these plans, you'll say, "Why didn't we think of that?"

Have you seen innovation and invention in the past decade that required thinking out of the box of an old reality? Indeed, you have. I can't tell you what's coming, because you haven't thought of it yet! But the potentials of it are looming large. Let me give you an example, Let us say that 20 years ago, you predicted that there would be something called the Internet on a device you don't really have yet using technology that you can't imagine. You will have full libraries, buildings filled with books, in your hand - a worldwide encyclopedia of everything knowable, with the ability to look it up instantly! Not only that, but that look-up service isn't going to cost a penny! You can call friends and see them on a video screen, and it won't cost a penny! No matter how long you use this service and to what depth you use it, the service itself will be free.

Now, anyone listening to you back then would perhaps have said, "Even if we can believe the technological part, which we think is impossible, everything costs something. There has to be a charge for it! Otherwise, how would they stay in business?" The answer is this: With new invention comes new paradigms of business. You don't know what you don't know, so don't decide in advance what you think is coming based on an old energy world.

The Unthinkable… Politics, A Review

Humans will begin to search for integrity and fairness and it's going to happen in the places you never expect. I said this last week, so this is a review. There'll come a time when you will demand this of your politics - fairness and integrity. So when the candidates start calling each other names, you will turn your back on them and they won't get any votes. They're going to get the point real fast, don't you think? How about that?

Let me give you another potential. This country that I sit in right now [USA] will set the mold for that particular attribute. I have no clock. Watch for the youngsters to set this in motion, and they will, for they are the voters of tomorrow and they do not want the energy of today. To some of them, it's so abominable they won't even register to vote in this energy. You're going to see this soon. That was number five.. ..."

Former Icelandic bank bosses jailed

BBC News, 12 December 2013

Four former bosses from the Icelandic bank Kaupthing have been sentenced to between three and five years in prison.

They are the former chief executive, the chairman of the board, one of the majority owners and the chief executive of the Luxembourg branch.

The four were accused of concealing the fact that a Qatari investor bought a stake in the firm with money lent by the bank itself.

He bought a 5.1% stake during the financial crisis in 2008.

The four sentenced are Hreidar Mar Sigurdsson the former chief executive, Sigurdur Einarsson, former chairman of the board, Olafur Olafsson, one of the majority owners and Magnus Gudmundsson the former chief executive of the Luxembourg branch.

They were also made to pay their own legal costs for the case, which amount to millions of pounds.

There were four charges all relating to the purchase of the shares by Sheikh Al Thani from Qatar.

The prosecutor said the deal had influenced the bank's share price. He also said the loans provided for the deal were illegal.

EU nations agree rules on bank bailouts

Google – AFP, 12 December 2013

A logo of the European currency Euro stands in front of the headquarters of

 the European Central Bank (ECB) in Frankfurt am Main on June 6, 2013, 2013

(AFP/File, Daniel Roland)

Strasbourg — EU nations agreed new rules for bank bailouts or "bail-ins" late Wednesday, to save taxpayers from paying for the rescue of ailing financial institutions, an official said.

"Big step tonight," EU Commissioner Michel Barnier wrote on Twitter.

"Taxpayers no longer in front line to pay 4 banks mistakes," he added.

"Banks will have to put money aside for rainy days. We are learning lessons of crisis," he said after the agreement was reached by representatives of the European Parliament, the European Council -- the EU's executive arm -- and the 28 member states.

The aim is to make European banks stronger so that they "can lend to the real economy," he added.

The new directive will eventually dovetail with the EU's "Banking Union", which is currently being hammered out.

All countries now accept the principle that if banks get into difficulty, then it will not be the taxpayer but investors and creditors that bear the costs. But differences remain as to how to put that into practice.

EU ministerial talks in Brussels on Tuesday focused on a so-called Single Resolution Mechanism (SRM) that would step in to close a bank at risk before it could do too much damage to the wider economy.

The SRM would have a pot of cash at its disposal -- funded eventually by the banks themselves -- to cover the cost involved so the taxpayer does not have to pick up the bill.

The SRM would follow an already agreed Single Supervisory Mechanism that the European Central Bank will run to oversee the top 130 or so eurozone banks directly, and thousands more indirectly via national authorities.

While all agree in principle, the political issues are fraught since the new system would effectively hand control of national banks to the EU.

Those talks will resume at ministerial level next week with hopes for agreement by the end of the month.