THE INTERNATIONALIST PAGE

Tuesday, April 30, 2013

World's Banks Fuming At Fed!

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The U.S. is doing more of what it has become obsessed with doing - alienating other nations by a lack of genuine diplomacy regarding their sovereignty, and insulting their ability to govern themselves, or to even have their own laws. Now, we are telling international banks which have subsidiaries or affiliates in the U.S. that the parents have to conform to U.S. standards [chuckling from the audience] in order to allow their satellites (some of which are admittedly sizable) to continue to conduct business in the United States.

This is totally undiplomatic and decidedly against the interests of open international trade. It is increasing anti-U.S. sentiment and indirectly insulting many of our international trading partners at a very vulnerable time for the U.S. recovery. It is also wildly ironic that it was the major U.S. financial institutions that were the first to precipitate the U.S and then the World banking crisis! My late Aunt Carmen (who has never been on time for anything) would say, in her irritating nasal voice "It's like the blind leading the blind!"

We have done this before, and are still doing this with military 'democratization' [our 'Iraqistan' military meddling], an all-too-far reaching Federal Bureau of Investigations, a ritual bird flipping at the World Court (claiming ourselves exempt during the second Bush Administration, instead of finding a better-crafted way of keeping our president from facing war crimes-related charges, regardless of how baseless), and now, telling the international banking community that if they have subsidiaries, affiliates or other extensions of their banks in the United States, that the parents of these little tikes (mostly large foreign bank holding companies) have to abide by increasingly-stringent U.S. standards for the holding companies (many of which have many properties in the non-banking sector, too) which own them.

In the U.S., we have become altogether too fond of issuing ultimatums which carry no weight except to irritate others. Our announcements toward the international community are sounding more and more like kidnappers' ransom notes -- and written in crayon, to boot.

The article excerpt which follows comes from the SmartBrief Newsletter on Global Financial Markets:

US faces mounting opposition to proposals for foreign banks
The Federal Reserve has proposed rules requiring major foreign bank holding companies to increase capital and liquidity at US subsidiaries. Germany's Bundesbank and BaFin, as well as German and UK banks, are adding their voices to opposition. The rules would have a "negative impact on international cooperation since it does not take appropriate account of consolidated supervision following comparable home country standards", according to German regulators. Bloomberg Businessweek (29 Apr.), The Washington Post/The Associated Press (29 Apr.), Financial Times (tiered subscription model) (29 Apr.)

Let's be honest and clear. This is not remotely related to preventing another financial meltdown. This is strictly another case of the United States tactlessly overreaching its regulatory authority with an utter disregard to the feelings of other sovereigns, and an act of further U.S. protectionism against the competition imposed by foreign trade.

Without being overly opinionated about it, The Internationalist Page Blog thinks (blogs can think) that this is utter foolishness and short-term reactive policymaking with a side order of saber rattling. It is making us look very, very foolish.

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Douglas E. Castle

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Monday, April 15, 2013

U.S. and INDIA: A Tighter Alliance

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There is an ever-increasing warmth between these two countries, which is economically and politically beneficial to both parties. While those of us who are readers of The Internationalist Page Blog or just categorically Internationalists, this is a bit ironic because India has been a substantial outsourcing destination for U.S. companies and is occasionally maligned for "taking jobs away from Americans." While in a sense this might be true, the savings (arbitraging the cost of Indian labor against the much higher cost of American labor) to certain U.S. companies has helped to keep them in business in a time of extraordinarily low capital availability, and has saved some employees by keeping their employers in business.

India is also becoming more of a consumer market, and some United States companies are offsetting the outflow of dollars to India by selling U.S.-produced products to the growing middle-class in India's confusing but nonetheless fast-emerging economy.

In terms of politics, both countries have their concerns about the spread of radical Islam and terrorism from Pakistan, Afghanistan and other nations in the region.

While the cultures are quite different, both countries have some serious security and economic concerns in common, making them wonderful international trade partners.

The's a definite warming up of relations on all fronts between the two nations.

This warmth is signified (in a monetary marriage) in an excerpt below from Chairman Fred Hochberg's Quarterly Ex-Im Newsletter Report:
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Ex-Im Bank Signs $500 Million Agreement with ICICI Bank

Chairman Hochberg traveled to India in January on a business-development mission. While in India, the Chairman signed a $500 million Memorandum of Understanding (MoU) with ICICI Bank pledging cooperation on financing projects beneficial to both India and the United States. Up to $500 million in new transactions could be financed as a result of the initiative.

ICICI Bank is India's largest private sector Bank and this MoU will support the financing of U.S. goods and services by ICICI Bank's customers. Ex-Im and ICICI Bank see specific opportunities in air traffic control and infrastructure; railway; urban metro and port development projects; power generation, including renewable energy; oil and gas projects; and water treatment projects.

"India is an emerging market that provides enormous opportunities for U.S. companies," said Chairman Hochberg. "This $500 million MoU represents a partnership between our two countries and will help ensure that American companies and workers help India meet its growing infrastructure needs, while creating jobs here at home."

Speaking on the occasion, Chanda Kochhar, MD & CEO, ICICI Bank said, "ICICI Bank is pleased to be working with the U.S. Ex-Im Bank towards the growth of India-US trade. This MoU combines the strengths and expertise of both our institutions, helping U.S. Ex-Im to leverage ICICI Bank's strong corporate relationships and project finance capabilities, and ICICI Bank to offer diverse funding options to its clients."

Ex-Im Bank's authorizations in India continue to increase dramatically, bringing the Bank's total exposure to India to $8.5 billion as of the end of the first quarter in FY 2013. India is currently the Bank's second largest market in terms of overall exposure. Last year, US Ex-Im Bank financed 17 percent of all U.S. exports to India.

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As a trend-spotter and the Author of The Global Futurist Blog, I would expect this warming trend to continue over the next several years. Personally, I am hoping it will. Both countries can help each other, and the U.S. needs to cultivate some genuine allies in the region.

As always, thank you for reading me, and thank you for sharing my articles with your colleagues through your vast, expansive social media networks.

Douglas E. Castle

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Tuesday, April 02, 2013

The FBI And China - USA Techno-Trade

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For those familiar with the FBI, it is likely one of the fastest-growing and most powerful investigative and enforcement-driven government agencies in the entire world. The Federal Bureau Of Investigation works side-by-side with the United States Justice Department (the "DOJ") to help uphold the laws and regulations of the United States (at least in charter and theory) by investigating offenders, gathering evidence, and turning it over to the appropriate Government authority for either immediate prosecution or relating to ongoing surveillance of any purported criminal activity or potentially criminal enterprises posing a threat to the American people or to the Government's many branches, departments and agencies.

The FBI makes virtually dwarfs any other US agency (such as the police, the CIA, the NSA as well Interpol and the military) in terms of its assumed jurisdiction. Since the advent of the RICO (Racketeer And Influenced Corrupt Organizations) Act, and the questionable broadening of its many powers, the FBI claims de facto unfettered international jurisdiction if it has any reason to believe that either a US regulation has been violated (by anyone, and a citizen of virtually anywhere on the globe), it has virtual carte blanche to do whatever it deems necessary, wherever it deems necessary and to whomever it deems responsible in any way (knowingly or unknowingly).

The FBI has, in essence, kidnapped persons (American and foreign) from sovereign nation states and brought them to the United States to face federal charges. Its reach, regardless of any treaties between countries is global, and the theory of "criminal conspiracy" can be expanded to accommodate the FBI's targeting purposes in pursuing any selected target.

The US' Founding Fathers (may they all rest in peace) never envisioned an agency so powerful that their would be no system of government checks and balances to keep it in line, or that it could be so powerful that it could find virtually anyone guilty of anything it chose to, using the ever-expanding use of RICO.

The FBI, through a passed US budget resolution, now has ultimate oversight (i.e., control) over all Chinese-made technology purchases (this could be interpreted quite generally) made by the US or through the US. Their powers in the latest outbreak of Sinophobia (a fear of things Chinese) usurp those of U.S. Customs and even the Department Of Homeland Security.

While the relationship between China and the US is a tension-filled peace, and given that many items of Chinese manufacture not been up to commercial or precise military specifications, why is the FBI assuming this vetting authority instead of Customs in conjunction with Homeland Security?

The US, in essence, if giving the nation's most brutal, prosecutorially-obsessed agency power not only over these other two possibly better-qualified agencies, but it is also indirectly putting a great deal of what might become a large portion of US- China relations in the hands of an uncontrollable, hamfisted agency. What has the US Department Of State to say of this?

The following article excerpt appears here courtesy of Smartbrief, from one of its many topically-specific newsletters, all of which contain links to excellent articles offering important insights:

Budget resolution gives FBI oversight of Chinese-made tech purchases
U.S. government agencies looking to purchase IT equipment from some Chinese vendors will need to get the approval of the FBI under new budget guidelines designed to protect American infrastructure from state-sponsored cyberespionage. The proposal, which could affect acquisitions from well-known firms including Lenovo, Huawei and ZTE, as well as smaller firms, maintains that any purchases with ties to the Chinese government or subsidized by the state must be deemed "in the national interest of the United States" before they will receive approval. InformationWeek/InformationWeek Government (3/26)

My greatest fear as an Internationalist is that we are effectively putting the FBI in charge of potentially all trade (if history proves me correct) and ultimately the diplomatic relationship between the U.S. and China. The intention to protect Americans is important indeed, but there must be a better, more diplomatic and precise way to maintain control over certain types of trade.

The blow-back associated with any mishandling of the FBI's supervision over something with any diplomatic consequences is quite frightening. If you remember some of the doestic incidents like the FBI and ATF in Waco, Texas or in Ruby Ridge, their potential for miscalculation on an international level could be incredibly harmful.

China indirectly controls many other countries which are US trading partners, as well as a powerful yet delicate balance between the yuan and the United States Dollar. This is a relationship that must be handled with great judgment and masterful diplomacy. China is, at least at present, very important to the United States economy.

For me, I think that the wrong agency was selected for a necessary job, and that productive discussions toward a better relationship between the US and China (oftimes made of corporate political partnerships and organizational "marriages") might be in a great deal of danger.

Regulation and safety are crucially important -- but so are intelligent negotiations and delicate political communications in order for both sides to protect their respective interests, and, in time, to see the synergy in working closely together.

Think about this: Would rather have your cardiac surgery performed by a cardiologist or by an eager carpenter?

As always, thank you for reading The Internationalist Page and for sharing my articles with your friends, associates and colleagues through your social media channels.

Douglas E. Castle