it has yet to pay for its other significant outstanding legal case, relating to “mirror trades” in Russia, in which around ten billion dollars were spirited out of Russia between 2011 and 2015, using simultaneous stock transactions in Moscow and London.
.. If it emerged that, Deutsche Bank had in fact executed mirror trades with parties on the U.S. Sanctions list relating to Russia’s actions in Ukraine, then the fine could be large. (BNP Paribas was fined nearly nine billion dollars for breaking sanctions in 2014.) This outcome, Schenck told investors, would be “nicht lustig”: not funny.
.. If, after a Brobdingnagian fine for mortgage-backed securities, Deutsche Bank also faces a huge settlement for mirror trades, the bank may need to recapitalize with German government money. As I wrote in August, this prospect should frighten even those who derive pleasure from seeing the bank, and its freewheeling culture, effectively policed:
.. Deutsche Bank, it said, was not only “one of the most important net contributors to systemic risks in the global banking system”; it was also a contagious agent, because of heavy financial “spillover” between Deutsche Bank and other lenders and insurers. Any kind of failure at Deutsche Bank, the I.M.F. suggested, would be extremely bad news for everybody.
.. Deutsche Bank shares were down seven per cent on the London Stock Exchange, to 12.16 euros, slightly more than the bank’s all-time low, which occurred after the Brexit vote. That left Deutsche Bank’s market capitalization at 16.77 billion euros, or about $18.6 billion—$4.6 billion more than the proposed R.M.B.S. fine.
Thugs and Kisses
The Russian Federation of 2016 is not the Soviet Union of 1986. True, it covers most of the same territory and is run by some of the same thugs. But the Marxist ideology is gone, and so is the superpower status. We’re talking about a more or less ordinary corrupt petrostate here, although admittedly a big one that happens to have nukes.
.. But today’s Russia isn’t Communist, or even leftist; it’s just an authoritarian state, with a cult of personality around its strongman, that showers benefits on an immensely wealthy oligarchy while brutally suppressing opposition and criticism.
And that, of course, is what many on the right admire.
.. Fuels account for more than two-thirds of its exports, manufactures barely a fifth.
.. Mr. Putin would actually have something to boast about if he had managed to diversify Russia’s exports. And this should have been possible: The old regime left behind a large cadre of highly skilled workers. In fact, Russian émigrés have been a key force behind Israel’s remarkable technology boom — and the Putin government appears to have no trouble recruiting talented hackers to break into Democratic National Committee files. But Russia wasn’t going to realize its technology potential under a regime where business success depends mainly on political connections.
Our Russia Problem
RUSSIA’S place in American politics used to be (relatively) simple. The further right you stood, the more you feared Ivan and his Slavic wiles. The further left, the more you likely thought the Red Menace was mostly just a scare story.
Now things are more complicated. In just 15 years, the Republican Party has had a president who famously claimed a soul-to-soul relationship with Vladimir Putin … followed by two consecutive nominees who took a starkly hawkish stance on Russia … and now a presidential candidate in Donald Trump who has a palpable man-crush on Putin and promises closer ties with his regime.
.. At the root of this uncertainty is the fact that neither the United States nor Russia seems certain exactly what kind of power it intends to be. During the Cold War, we were (mostly) a status quo power — practicing containment, building intricate alliance networks, propping up bad actors for fear of something worse — and the Russians were the revisionists, promoting socialist revolution from Havana to Hanoi.
.. Under George W. Bush America was a revolutionary power, preaching the messianic faith of liberalism and democracy, while Moscow was a friend of strongmen, stability and the Saddam-era status quo.
.. Our primary interest in Syria and elsewhere is not, as it was decades ago, containing Russian expansion. It’s containing jihadi terrorism, ending the refugee crisis, restoring some kind of basic order — and in all these tasks we need a way to work with Moscow if we hope to see them through to any kind of finish.
Why “New Trump” Isn’t So New
“Sometimes, in the heat of debate and speaking on a multitude of issues, you don’t say the right words or you say the wrong thing,” he said. “I have done that and I regret it, particularly where it may have caused personal pain.” If you were Megyn Kelly or Carly Fiorina, or Judge Gonzalo Curiel, or a member of the Khan family, would you have been satisfied with these weasel words? No, you wouldn’t.
.. Trump didn’t attack the Khans during “the heat of debate.” He belittled Ghazala Khan, the mother of a soldier killed in Iraq, in a telephone interview with Maureen Dowd, the Times columnist, on the day after the Democratic Convention ended. Then Trump extended his comments to the dead soldier’s father, Khizr Khan, who had criticized him at the Convention, and, despite protests by other Republicans, he kept up his attacks for days.
This wasn’t a verbal slip or an instant response.
.. Instead of fessing up properly, Trump continued to blame the media for highlighting what he says.
.. He claimed, “They will take words of mine out of context and spend a week obsessing over every single syllable, and then pretend to discover some hidden meaning in what I said.” It wasn’t clear which of his many utterances Trump was referring to here. Presumably, it was ambiguous statements like this one: “We have a very hostile judge. Now, he is Hispanic, I believe. He is a very hostile judge to me. I said it loud and clear.” Or perhaps it was this opaque statement: “isis is honoring President Obama. He is the founder of isis.”
.. Among the many things it ignores, however, are these: 1) Trump has just brought in a wealthy former Goldman Sachs investment banker, Steve Bannon, to run his campaign. 2) The person Bannon’s replacing, Manafort, is a prominent Washington lobbyist whose lucrative arrangements with a pro-Russian party in Ukraine had turned into an embarrassing distraction.
.. 3) Before making the personnel changes, Trump met with one of the richest and most reclusive hedge-fund managers in the country, Robert Mercer, who has a long record of supporting ultra-conservative causes, including Breitbart, the controversial news site that Bannon runs.