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.

For those of you who like Tags, Labels, Keywords, Search Terms And Categories:
Iraqistan, global banks, world trade, diplomacy, sovereignty, economic policy, global economics, excessive interference with other nations, extending the U.S. regulatory reach, Federal Reserve, global financial meltdown, the example of hypocrisy, protectionism, bullying, tactlessness, Bernanke, The Global Futurist Blog, Tea Party, Humor, humour, negotiating...  

As always, thank you for reading me, and for sharing my articles with your colleagues and connections through your social media networks and tools.
  
Douglas E. Castle   

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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       

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China's Increasing Investment In Israel

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China, following the lead of the United States (predominantly as the US was conducting itself during the period between 1990 and 2004), is increasing its investments in Israeli companies, technologies. China's increased presence in Israel is also acting to facilitate increased joint ventures and cooperative activities.

This economic and sociological phenomenon is also creating a curious demographic: More Chinese companies are being incorporated or re-domiciled in Israel, and Israeli companies are setting up shop in China as well. Not an increased number of Chinese are calling Israel home, and an increasing number of Israelis are re-locating to China.

A recent article in SmartPlanet written by Charlie Osborn (January 2, 2013) discusses the China-Israel connection and the reasons for the strengthening ties between the two powers, economies and peoples:

Chinese firms eye Israeli technology

Following the United States’ lead, major Chinese firms are looking for investment opportunities in Israel.

The U.S. has invested in businesses located in the region for years, and now the Chinese are taking advantage of Israel’s commercial technology and research, according to Reuters. Last month, a troupe of Chinese business officials visited the region — still affected by the battle in Gaza — in order to further explore potential ventures.

Led by chairman of investment holding firm Hang Lung Group, Ronnie Chan, and including delegates from Lenovo, COFCO and the Chinese branch of JP Morgan Chase, the group is considering the option of investing further in Israel, which has seen Chinese funding reaching approximately $3 billion to date.
Chan told the news agency:

“The sky is the limit. Some companies can set up research and development centers here, some can bring Israeli companies to China, some can open up the Chinese market for Israeli companies. I have no idea where this will lead.”

According to Israel’s Foreign Ministry, bilateral trade between the two countries reached $8 billion in 2011. The largest singular Chinese investment within an Israeli venture to date was the 60 percent acquisition of crop production chemical maker MA Industries by ChemChina for $1.4 billion.

Edouard Cukierman, organiser of the trip and managing partner of private equity funds Catalyst Investments, said that the visit could lead to more acquisitions and potential funding for projects in research. Cukierman noted:

“We are following up with each one of them, preparing specific action plans for each one of them. They believe they can benefit from innovation in Israel more than the Americans did.”

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While these bits of information (some anecdotal and some factual and verified) regarding Israel are not generally well-known to most of the western industrialized nations, or even acknowledged, they may well explain some of the magnetism which attracts the Chinese to Israel:

1) Israel is one of the world's top 10 inventors and producers of multi-industry technologies;

2) Israel probably has more of its companies traded on public exchanges and bourses throughout the world (as well as within Israel) than any other nation;

3) Israeli companies tend to be capitalized with minimal debt (very much in philosophical alignment with the way Chinese and other Asian companies grew throughout the 1990s), and principally with equity capital from stock sales and internally-generated earnings;

4) Israeli companies tend to become self-sustaining much earlier in their developmental cycle, and at a much smaller launch capitalization than US and other companies due to a combination of a powerful work ethic, more loyalty between employees and their employers, and very strict financial management.

5) Israel may quite possibly be the creator of some of the most advanced technologies in the world, especially regarding information processing, communications and applications, as well as in biotech, nanotechnologies, AI (Artificial Intelligence), data mining, managing and leveraging big data and a host of technologies relating to military intelligence and operations -- hopefully, many of these will ultimately come out of the black and enter the commercial sector for productive peacetime use.

Expect to hear increasingly about Israel's rapidly-solidifying trade partnership and strategic alliance with China. In certain ways, since the US economy is suffering and a big concern about the Chinese propensity of late toward aggressiveness and acquisitiveness, Israel is an ally (in many senses of this term to both nations as well as a trading partner to each). This is more likely than not a very good state of affairs for the United States. In understanding some of the basic tenets of Internationalism and diplomacy, when two countries are either at odds with each other or are not as friendly as they might otherwise be with each other, a mutual ally is a wonderful means of keeping an open door with respect to discussions and negotiations.

Thank you as always for reading me, re-tweeting me and sharing my articles with your colleagues and associates through re posting and linking on social media.

Douglas E. Castle 

The Internationalist Page Blog

CFI - CrowdFunding Incubator Blog

CFI - CrowdFunding incubator Website  

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