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HSBC is cutting back in the U.S. after its 2003 purchase of Household International Inc. required it to set aside more than $65 billion for bad loans

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HSBC and Deutsche Bank align once again

Bloomberg recently said “Deutsche Bank AG Chief Executive Officer Josef Ackermann and HSBC Holdings Plc Chairman Stephen Green are among bankers with a new ally in their tug of war with politicians over stricter rules: Europe’s sovereign-debt crisis.” Lets look at these two banks in America.

HSBC was one of the top ten subprime lenders, while Deutsche Bank invested heavily in failed states like Ohio, and is the investor behind failed mortgage lenders like NovaStar.

Both Deutsche Bank and HSBC bought subprime paper, enabled subprime lending, and contributed to the devastation of the US economy. Indeed the entire world economy was effected as comercial paper and asset backed securities were sold around the world.

A recent program on CNBC documented how almost worthless risky investments were graded AAA, when in fact they were destined to fail. As far away as Norway retirment programs and cities invested in this worthles paper.

As for HSBC, the bank shut down Household Finance (HFC), Decison One, Beneficial FInance, and proceeded to lose billions while receiving about $1 billion from AIG. Of course AIG received the money from the federal government. That slick deal allowed HSBC to say they did not receive any government bailout funds in the US or the UK.

Posted By Timothy Blake

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UPDATE NOTE: HSBC car loans were sold to Santander USA in 2010 :: Most HSBC credit cards became Capital One credit cards in 2012 :: HSBC horrible predatory home mortgages are in run-off