London Inter-Bank Offered Rate

December 2012 Three former City traders have been arrested over the alleged manipulation of Japanese borrowing rates as part of a Serious Fraud Office investigation into Libor-rigging

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11 December 2012 Three former City traders have been arrested over the alleged manipulation of Japanese borrowing rates as part of a Serious Fraud Office investigation into Libor-rigging

The men are the first to be arrested in connection with the criminal investigation and were taken into custody by City of London Police on Tuesday morning.

Former Citigroup and UBS trader, Thomas Hayes, as well as Terry Farr and Jim Gilmour, employees of inter-dealer broker RP Martin, are understood to be the men arrested at their homes in Surrey and Essex.

All three men are understood to have been involved in trading connected to Yen Libor, the benchmark Japanese borrowing rate, according to a source with direct knowledge of the investigation.

RP Martin said it was not under investigation itself and declined to comment further. Mr Farr and Mr Gilmour have both been suspended by the firm. A lawyer for Mr Farr declined to comment.

The SFO’s actions mark the first arrest of bank staff in connection with allegations that major financial institutions across the world conspired to manipulate key borrowing rates. Further arrests are expected as the investigation continues, with former employees of Royal Bank of Scotland thought likely to be drawn into the net.

22 June Barclays chief executive Bob Diamond learns of emails sent by dodgy traders. He later says reading them made him feel "physically ill".

27 June Barclays admits misconduct. Regulators fine it £360m.

29 June Diamond insists he will not resign.

July Barclays chairman Marcus Agius and Diamond resign, followed by chief operating officer Jerry del Missier.

The prime minister, David Cameron, announces a review of the banking sector, sets up Banking Commission. Serious Fraud Office (SFO) launches a criminal inquiry into Libor manipulation.

Deutsche Bank confirms that a "limited number" of staff were involved in the Libor rate-rigging scandal. It clears senior management. SFO arrests three men in connection with investigations into Libor.

Swiss bank UBS is fined £940m by US, UK and Swiss regulators.


January Barclays' new boss, Antony Jenkins, tells staff to sign up to a new code of conduct – or leave the firm – in clean-up operation.

February RBS is fined £390m by UK and US regulators. RBS reduces bonus pot by £300m.

Five other financial institutions are still under investigation.

Then, the bankers began jumping……

1. ABC Verlag (greetings cards, not finance) — CEO Daniel Eicher — suicide, left two notes — week of 6/10/2013 on August 26, the picturesque calm in Switzerland’s financial center was blown apart. Pierre Wauthier, the 53-year-old chief financial officer of one of the world’s biggest underwriters, Zurich Insurance Group ZURVY -0.99% , was found hanging in the Wauthier family home, in the small upscale Zurich exurb of Walchwil. With clean-cut looks and a marathon-runner’s build, the 53-year-old executive left two grown children and a wife, Fabienne, whose memory of his party-dance skills suggested a zest for life, rather than anguish. Whoever hung Daniel wanted the firm’s new Chairman, and former Deutsche Bank CEO, Josef Ackermann, gone as well. They did not kill him. He quit telling Zurich that Daniel’s claims he was overbearing were baseless, but he could no longer do his job there. The investigation ended with suicide being the cause of death.

2. Swisscom (telecom) – CEO Carsten Schloter, 49 — suicide, found hanging — 7/23/13 Swisscom's chief executive Carsten Schloter was found dead at his home near Freiburg where was found dead in the morning of hanging. Initial investigations suggest that he killed himself, police said. No further investigation was done, and no further details are available. Swisscom had taken and financial hit from the Euro debt crisis, but was in far better shape that his rivals. Certainly it was recoverable and absolutely no reason to kill oneself.

3. Bank of America — intern Moritz Erhardt, 21 — seizure due to exhaustion — week of 8/12/2013 It’s unclear what caused the death of Moritz Erhardt, a twenty-one-year-old intern at Bank of America Merrill Lynch, in London last week. Erhardt, a German exchange student who had recently finished a semester at the University of Michigan’s business school, was nearing the end of a seven-week summer internship at the prestigious bank when he collapsed in the shower of his East London residence. Reports indicated that he suffered from epilepsy, and may have had a seizure. This is a tragic story; what makes it even more grievous are revelations of the gruelling schedule Erhardt had kept in the weeks leading up to his death. (Epileptic seizures are also often brought on by exhaustion.) He was making $4200 a month, but if he could endure, he stood to make $400,000 a month. The question is, what discovery may have caused him to say “this is not worth it? I won’t do that to the people just to be rich.”

4. Zurich Insurance Group AG (insurance) — CFO Pierre Wauthier — suicide, found hanging, left two notes — 8/26/2013 Notes were not made public, and the reasons cited were a rash of bad weather in Europe causing losses to be slightly more than analysts predicted. Go figure on this one.

5. Wall Street — hedge fund exec Robert Wilson, 87 — suicide, jumped from 16th floor — week of Dec 23, 2013. (He gave away $800 million prior to death.) Wilson, had recently suffered the debilitating effects of a stroke. His suicide from Manhattan’s exclusive San Remo building didn’t occur before he first gave away his $800 million fortune to charity. The 87-year-old Wilson finalized the last $100 million just before jumping. This last chunk of his fortune went to the Environmental Defense Fund. The $100 million before that landed in the accounts of the Roman Catholic Archdiocese of New York, the World Monuments Fund, the Nature Conservancy and the Wildlife Conservation Society, spread out over a several years. I looked some of these “last minute” recipients of nearly $1 billion in Robert’s private money.

  • The Nature Conservancy - The most controversial environmental group that claims to be "non-controversial." TNC was at the center of a lobbying scam using front groups to stop a dam project; threatened to have the U.S. Fish & Wildlife Service take a landowner's property if he refused to sell to The Nature Conservancy; used undue influence to get property from an elderly victim and lost the court case brought by the proper heirs; and continues to sell private land to the government despite the wishes of those who sold it to the Nature Conservancy. TNC receives millions in government funds and uses tax money to forward its own agenda of nationalizing private land at a profit. Their closest accomplices are federal bureaucrats seeking to seize billions in private property to add to their asset base. Although The Nature Conservancy is a top funder of global warming propaganda. To keep their media spin on being "non-controversial", The Nature Conservancy paid $1,251,150 to Media Strategies and Research company for consulting services. Their top 19 executives receive between $150,000 and $350,000 per year in salaries plus benefits. They produce nothing and report only 5 hours a week to the IRS.

  • The Wildlife Conservation Society – Current corporate partners are Hess Oil Company, Coca-Cola, Con Edison Power Company, Empire Blue Cross Blue Shield, Amarula Cream, and African beer company. Their top 25 executives and trustees earn an astounding $6.92 million a year in wages and other compensations, according to their own tax return filed in 2013. That is nearly $300,000 a year for 5 hours a week of reported time to the organization, if the money is divided equally. My guess is that the Chairman receives ten times that amount while the lowly trustees receive about a third of that amount. Nice charity, huh?

6. Wall Street Journal — reporter  David Bird – missing/disappeared – 1/11/2014 (covered in our original piece) Bird, a 55-year-old avid walker and scout leader, left his cellphone and daily medication at home. Morris County was hit with heavy rain that day, after Bird set out for a walk, and portions of the surrounding Passaic River flooded area swamps. Bird, a 55-year-old avid walker and scout leader, left his cellphone and daily medication at home. Morris County was hit with heavy rain that day, after Bird set out for a walk.

Bird was building an investigative report writing on December 12 raising more concerns about “rising fuel inventories.” Bird said “The Energy Information Administration’s implied demand figures showed diesel/heating oil demand was at the lowest level for this time of year for 15 years, while gasoline demand for the week was the weakest early December level in 12 years.” People were not driving. Trucks were not transporting. The glut of oil was building.

Statements like that contradict the Administration’s thesis that the U.S. is on the path to economic recovery.

On December 16, Bird wrote that “The U.S. is on track to reach records for crude-oil production by 2016, as hydraulic fracturing and horizontal drilling techniques continue to unlock oil in shale rock…In just eight years, the U.S. will have turned around from a 62-year production low of 5 million barrels a day to near the all-time high of 9.6 million barrels a day, according to a report by the Energy Information Administration released Monday…Surging domestic production has pushed U.S. oil prices below the global benchmark, with the gap at about $12 a barrel.”

On January 9, just two days before his disappearance, Bird suddenly threw some cold water on the oversupply thesis, writing that “Natural gas output in the U.S. is hitting record levels, but there is mounting evidence that the best days of the shale boom are over. He reported that Saudi Arabia and other Persian Gulf oil producers were acknowledging that “surging oil production” in the U.S. was having an impact on the price it could charge for its oil in the U.S. The article noted that this statement conflicted with prior statements from OPEC which implied that shale oil was “hurting only their West African counterparts.

The U.S. Senate’s Permanent Subcommittee on Investigations, chaired by Senator Carl Levin, is currently investigating the role played by large Wall Street firms in owning tankers, terminals, and pipelines that store or transport oil while simultaneously speculating on the price of oil in the futures market. The investigation is broad in scope and includes Wall Street’s ownership of other commodities.

Shortly after this article was printed in the WSJ, Bird left the house for a morning walk and was never seen again.

7. Swiss Re AG — U.K.–based communications director Tim Dickenson — cause not released — week of  1/19/2014

8. Deutsche Bank AG — executive William Broeksmit — apparent suicide, found hanging— 1/26/14 (covered in our original piece) a top executive at Deutsche Bank who had retired in 2013, had been found hanged in his home in the South Kensington section of London.

9. Eric Ben-Artzi, a former risk analyst turned whistleblower at Deutsche Bank, spoke aat Auburn University in Alabama on his allegations that Deutsche had hid $12 billion in losses during the financial crisis with the knowledge of senior executives. “What they did wasn’t very different from printing money,” Ben-Artzi said.

And what would have happened had Ben-Artzi not blown the whistle? Nothing, Ben-Artzi said.

The issue would have disappeared, and the bank would have gotten away with what he said was essentially inventing assets and ignoring losses; actions that ultimately undermine the soundness of the financial system, Ben-Artzi said.

Relationships with management cooled. Coworkers aware of the scenario isolated him.

Deutsche Bank retaliated by eventually firing Ben-Artzi without notice after he returned from paternity leave, stating his position had been moved to Germany. Deutsche Bank is also under investigation by global regulators for potentially rigging the foreign exchange markets – an action similar to the charges it settled in 2013 over its traders’ involvement in the rigging of the interest rate benchmark, Libor. Ben is out there, somewhere, being very quiet while he waits for justice to be done.

10. JP Morgan — banker Gabriel Magee — jumped or fell from building, Canary Wharf, London — 1/28/14 (covered in our original piece) Gabriel Magee, a Vice President at JPMorgan in London, plunged to his death from the roof of the 33-story European headquarters of JPMorgan in Canary Wharf. According to Magee’s LinkedIn profile, he was involved in “Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives.”

Magee’s parents, Bill and Nell Magee, are not buying the official story according to press reports and are planning to travel from the United States to London to get at the truth. One of their key issues, which should also trouble the police, is how an employee obtains access to the rooftop of one of the mostly highly secure buildings in London. Magee's girlfriend had reported him missing the night before, after he had sent her a text saying he would be home shortly. He hit the sidewalk in front of the building where he worked mere minutes later.

11. JPMorgan — equities trading executive Ryan Crane, 37 — no cause given — 2/3/14Crane started at JPMorgan in equities trading after graduating from Harvard University in 1999, according to his profile on the LinkedIn Corp. website. Following promotions, he worked as an executive director, or a rank above vice president and below managing director, in the bank’s Americas Program Trading group. Program traders handle transactions in baskets of at least 15 stocks, often for mutual-fund clients seeking to rebalance index-linked portfolios. The Internet had a field day with the deaths of Magee and Crane. Somebody called “V” (who also goes by “Guerilla Economist”) wrote that Crane and Magee “knew each other” and had “uncovered something.” V said Crane headed up the program trading desk, “oversaw all the trades” and was “familiar with” the software trading platforms on which the trades were made.

V further suggested that the two deaths happened just as JPMorgan announced it was exiting the commodities trading business and that it was selling 1 Chase Manhattan Plaza, its downtown Manhattan office tower. (It finally did sell for cash to the Chinese.) The conspiracy theories were supposedly set back by a ruling from the medical examiner that Crane died from an “ethanol toxicity accident,” which sounds like a case of extreme drunkenness. His girlfriend said he never drinks to excess and that he would never drink at work. Figure that one out.

12. Russell Investment — Mike Dueker, 50 — found dead next to Tacoma Narrows Bridge, suicide — week of 1/26/2014 (covered in our original piece) He published dozens of research papers over the past two decades, many on monetary policy, according to the St. Louis Fed’s website, which ranks him among the top 5 percent of economists by number of works published. His most-cited work was a 1997 paper titled “Strengthening the case for the yield curve as a predictor of U.S. recessions,” published by the reserve bank while he was a researcher there.

13. American Title (insurance) — CEO Richard Talley, 57 — suicide by nail gun,7 or 8 self-inflicted wounds — 2/7/14 CEO of Denver-based American Title Services. The death of the 57-year-old banker was accompanied by the fact that his firm was under investigation by the insurance regulators, and now, as The Denver Post reports, state prosecutors launched a criminal investigation and a grand jury over more than $2 million missing from escrow accounts. As part of that inquiry, investigators have seized about 100 boxes of documents and about 60 computers as records suggest the seemingly successful title business had serious financial problems. Talley's wife, Cheryl, who owns the other 60% of the firm has not commented.

The Arapahoe County coroner's office said Talley shot himself in the chest seven times with 2½ -inch finish nails from a nail gun before firing a fatal nail into his head. Police found him dressed for work, sitting in his car in the garage and with the motor running.

All Roads Lead to Karen Hudes

For the past 10 months, we have been detailed scientific analysis of the inputs to the algorithm the output of which is what we perceive as the global economy. More particularly, we Americans are concerned over how the heck we got in this shape in such a short amount of time. In 2007 I published Remembering the Future, and I tried my best to write it in the year 2015. That is to say, I mediated on how things were from my perspective as a business owner in the year 2015.

We didn’t make it. The dollar was absorbed into a small set of global currencies. The presidency collapsed and was replaced by a three-man council. The world major media coagulated into a pure propaganda machine. War was relegated to a nightly reality program showcasing the latest high tech weapons and a plan to seize control of the world’s energy supply.

What I did not really expect was how absolutely accurate that future view was. I worry now that I may have manifested that future, but then I realize that would be giving far too much credit for my abilities. I hope.

Anyway, there are a few people who are like at the right place at the right time. They see something, and they say to themselves, “Hey, that is just not right. You can’t get away with that.” Edward Snowden, Julian Assange and others have managed to escape with their lives to tell the world about crimes committed by these folks.

We are not talking about drug lords or even mafia bosses. No, we’re talking about crimes that make Hitler look like a training operation. Propaganda, murder, genocide, assassination, and a billion-dollar surveillance programs that make military veterans enemies of the state, and ordinary citizens part of non-volatile databank where everything you say, write, or do can be recalled to become part of an endless dossier against you, if you ever vote wrong, or speak out wrong, or somehow fit the pattern of an enemy. The criminal acts by these crime gangs stagger the mind and defy the moral suspicions of every American. And they are in Washington. And they control everything.

For the last six months, my research to try to get past the conspiracy theories and validate the facts keep leading me past one person over and over again. Her testimony shows up in the most important places and in front of the most respected public figures in the country. I kept trying to learn all I could before I interview her.

Well, tonight is that night. You are about to hear what millions have been waiting for. You are about to hear Karen Hudes on X-Squared Radio. By the end of this hour, you will know what we discover. This mystery will be unraveled right here, and starting right now.

Please welcome with me, Karen Hudes.

  1. Karen, you have served at the World Bank for more than 20 years. Now, that sounds like a large organization. What is the primary purpose of the World Bank?

  2. Do they only make loans or underwrite loans for non-US companies or purposes?

  3. Does this mean that emerging markets and new businesses have access to capital?

  4. A few times in the past, I have attempted to describe how the world’s currency would collapse into one currency. There are some forces that don’t want it to happen, like the entire currency program trading syndicate and the countries like China who suck up the world’s value by artificially devaluing their Yuan so all manufacturing becomes Chinese. A global currency would end their game. George Soros would never have become a billionaire and broken the bank of England without using currency trading. Who does one world currency benefit, and how will they assert their power over these economic giants?

  5. Most people are pretty clueless as to why the BRIC was formed, who makes up their allies, and why Brazil is even mentioned in the headline. Can you help us understand why the BRIC nations are trying to unseat the petrodollar?

  6. I have been covering and explain the new Cold War tactics, and the strange hybrid of Wars-R-Us trying its hardest to sell the American people on a new war…even to the point of manufacturing a credible enemy, ISIS. Why is war such an essential part of this global strategy?

  7. What happens if the world says no, we won’t support the war?

  8. Why is the pipeline through Syria being blocked in the first place?

  9. You made a recent mention of a global gold reserve of some kind. Who set this gold aside?

  10. Is the location secret?

  11. Why are banks like JP Morgan trying to short Silver and Gold right now?

  12. Even though the Fed is fabricating new fiat money every month, and the stock market up until last week was roaring like 1920, the price of silver and gold have plummeted. Why does this happen this way?

  13. Are we going to have a choice if one entity tries to change everyone over to one currency?

  14. I often say on this program that Congress has lost control of the government. The agencies, departments, bureaus, and administrations form a new government, make all the laws, spend all the money, tax us, fine us, interfere with commerce and yet we have no representation in that government. Can they be stopped from ruling our country, perhaps the world?

  15. I spoke the first hour about bankers and insurance executives who have assumed room temperature in mysterious ways recently. Do you think they knew something and were about to blow the whistle?

  16. We have a standing army now. We don’t know how large it is, or what their duties are, or even who their enemy is. We are told it is the DHS, since Obama has been president more than half the top management has resigned. The media says that since Jeh Johnson has been approved to lead the Department, morale is low. What do you think the real reason is for leadership leaving the most secret and powerful army in US history?

  17. The speaker of the house for Arizona Andy Tobin publicly says their State is under attack by the Federal government. I get the feeling Arizona is not alone in that feeling. Are you aware of a multi-State effort to assert Constitutional authority to stop this Agency-Government takeover?

  18. People really don’t know what to do. They get their cash out of the bank and pt it in a box at home. They buy some Silver or some gold. If the banksters take over everything, and they say “We don’t accept dollars anymore,” what does the individual do to succeed?

  19. A recent poll shows that 36% of those asked consider Ebola to be the greatest concern, and 31% say ISIS is the greatest concern. Do either of these really threaten Americans?

  20. I am in the auto manufacturing business. I travelled to Detroit perhaps 200 times in 25 years. I went there recently to meet with some engineering firms, and I drove up I-77 all the way. Rather than go around on 696, I went through the city. It looked like Damascus. Seriously. How did the richest high-tech city on Earth turn into a bombed out mess in such a short period of time?

  21. How can Obama announce to the world that Detroit is back and Al-Qaeda is on the run?

  22. You are a global money supply expert. How does an unknown group of illiterate terrorists without any air presence at all feed and arm a million-man army able to threaten Turkey, Russia, and the USA? Is there an economic plan that will reduce the effectiveness of the Islamic State from seizing control of the world’s oil supply?

  23. Who is selling them this stuff?

  24. Why not expose the industrialists and US presidents who are arming and providing high-level intel to ISIS?

  25. I cannot believe how prophetic Dinesh D’Souza was with his movie; 2016. Obama did fundamentally transform America. He is building the Islamic State. We are doing nothing but bombing empty buildings and old pickup trucks. What is going on with this propaganda war?

What is Going on in Hong Kong?

The Hong Kong Federation of Students said late on Sunday that it had not reached an agreement with the government about holding formal talks. It warned that all contact would be cut if the police used violence.

The streets of Mongkok in Kowloon were much calmer on Sunday night and early Morning morning than they had been in a couple of days. One police commander said more than 500 officers were in the area, including a large number of detectives who specialise in dealing with triad gangs.

Another commander said the heavy presence had helped ensure that the gangsters did not return to cause trouble. The area erupted into violence on Friday when suspected triad members attacked the protesting students.

In Admiralty, on Hong Kong island, very few police were on the streets even as the government deadline for clearing the area approached. Asked why so few police were around, one officer said, “all the police are in Mongkok”.

The Occupy movement – also dubbed the “Umbrella Revolution” after people used umbrellas to shield themselves from tear gas – has put pressure on Mr Leung, an already unpopular leader who is reviled by the protesters and depicted as Dracula.

It has also created a big headache for Beijing. The People’s Daily, the official newspaper of the Communist party, has run numerous editorials attacking the “chaos” in Hong Kong. The paper stressed that China would not reverse course on a controversial plan for electoral reform that sparked the protests in Hong Kong. China last month agreed to allow Hong Kong people to vote for a chief executive for the first time in 2017.

Jimmy Lai, a media tycoon who owns the anti-Beijing Apple Daily newspaper, said that even if the police cleared several other protest areas, they would have trouble dispersing the larger crowds in Admiralty. “There are not policemen enough to do that. [But] if they clear the other three places and we consolidate here, it is not a bad thing,” he told the Financial Times.

Clarence Ng, 14, a student with welder’s goggles slung around his neck, said he would not stay if things got violent. “I will go home because it’s too dangerous. I’m still young, so in the future I will be able to come out and speak again.”

While the students received strong support last week, especially after the police used tear gas, there were signs that some residents were tiring of the blocked streets, while businesses in areas such as Mongkok were upset about losing business.

Calls for students to temporarily suspend their movement also grew on Sunday as some argued that the 1989 Tiananmen Square massacre might have been avoided had Chinese university students returned to their dormitories sooner.

“The seeds have already been sown [in Hong Kong] and they need time to lie fallow,” Bao Tong, a former Chinese official purged in 1989, wrote for Radio Free Asia. “No great task can be achieved all at once.”

China last month agreed to introduce universal suffrage – one person, one vote – in Hong Kong, but included conditions that critics say result in “sham democracy”

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email to buy additional rights.

The hundreds of thousands of protesters on the streets of Hong Kong this week want China to give them a role in nominating candidates, instead of the plan on offer that would effectively enable China to prevent its critics from running.

Mr Leung has urged people to back the plan, saying it gives people a greater say than they had during British rule. But many of the demonstrators who were young children when Britain handed back Hong Kong to China in 1997 want to fight for democracy on their own terms, and are calling on Mr Leung to step down.

Ronnie Chan, a property tycoon who was one of Mr Leung’s strongest backers in the 2012 race for chief executive, said the students’ complaints were misplaced.

“The demands of the students are totally ridiculous. It is not up to CY Leung. This is Beijing’s decision,” said Mr Chan, whose Hang Lung group has interests in China.

In Mongkok, a densely populated working class area where violent scuffles erupted over the weekend, hundreds of students stayed put despite the threat of violence. “If the majority agrees to leave, we leave. Otherwise, we stay,” said Dean Shing, a student protester. “The more people we have, the safer we are.”

Occupy Central, one of three groups leading the pro-democracy movement, said it was unclear whether police would act before Monday. A spokesman said it would recommend that people leave if the police used rubber bullets, but not for tear gas.

The protests that have gripped Hong Kong's streets — and the world’s attention — for the past 10 days appear to be coming to an end, with neither a tragic Tiananmen Square–style denouement nor any significant changes to the city’s political status quo. But that hardly counts the student-led movement for direct democracy in Hong Kong as a failure.

Hong Kong’s Occupy protests ought to have surprised no one familiar with the city’s political dynamics. Political protests have been a feature of life in Hong Kong almost from the moment Britain handed the city back to Chinese control in 1997.

In the early days, the crowds numbered a few dozen. They complained about the territory's first Beijing-appointed chief executive in the postcolonial period, Tung Chee-hwa, whom they deemed a puppet of the Chinese leadership. By the summer of 2000, turnout had climbed to about a few thousand protesters.

In 2003, some 700,000 angry people hit the streets, demanding Tung’s resignation and the withdrawal of a proposed change to Hong Kong’s Basic Law that would have curtailed civil liberties. The controversial legislation was abandoned, but Tung remained in office two more years.

The past week’s events may have finally buried the stereotype ­— useful to those most invested in the status quo —­ of Hong Kong’s residents as apathetic and apolitical, dedicated only to enriching themselves in the gleaming, laissez-faire global financial hub.

Guessing what China's leaders think is an exercise in reading tea leaves, but the scale of the Occupy Hong Kong demonstrations will likely have surprised most officials. It’s no secret that plenty of Chinese Communist Party members work and live in Hong Kong and that the party’s United Front Work Department (tasked with overseas intelligence gathering and building relationships) operates in the city. If the agency’s operatives failed to predict the storm that broke two weeks ago, that’s likely a result of party apparatchiks’ spending too much time hobnobbing with the city’s tycoons in skyscrapers and shopping at Gucci and not enough with their ears to the ground.

It’s hard to imagine any party operative hanging out with 15-year-old Hong Kong high school students, taking assiduous notes for transmission back to Beijing. But it was precisely the city’s youths who shut down traffic in the city’s financial district. That cohort’s role and numbers in these protests have made Occupy Hong Kong a children’s revolution.

If Chinese intelligence operatives failed to predict the storm that broke two weeks ago, that’s likely a result of party apparatchiks spending too much time hobnobbing with the city’s business tycoons in skyscrapers and shopping at Gucci.

The protest has fizzled — not the worst outcome for the pro-democracy camp, given that a repeat of the Tiananmen Square killings was always a possibility. Even if the authorities don’t intend to offer any serious concessions in the promised talks with student leaders that have helped persuade them to scale down the demonstrations, a peaceful outcome to the protest would effectively mean they succeeded in carving open unprecedented space for nonviolent civil disobedience in a territory that remains part of Beijing’s domain.

As George Chen, a Yale world fellow and the author of books on China and Hong Kong says, “The fact that Beijing didn’t move quickly with tanks and the military into Hong Kong’s Central district shows that the Chinese leadership does not view it as just another mainland Chinese city.”

The loose alliance of Occupy Central, the Hong Kong Federation of Students and members of Scholarism, led by 17-year-old Joshua Wong, will have a tough time wrangling any concessions from the Hong Kong government. And Beijing shows no signs it will ever relinquish its insistence on vetting all candidates for chief executive.

Still, Hong Kong’s robust civil society, spirited free media, educated population and political parties make it ripe for electoral reform and democracy. Even after the protest ends, for Hong Kong’s discontents, the fight goes on. China will be quick to call the movement a failure, but protest organizers say turnout was beyond anything they ever imagined.

Maya Wang of Human Rights Watch agrees. “We can’t just evaluate the success of the current protests with whether Beijing is willing to concede. We need a different measure here. These protesters are young — most are under age 30 — and they’ll be around. By pushing back against these protests instead of listening carefully to the people and reaching some kind of compromise, the Hong Kong and Beijing governments have created a long-term governance issue on their hands.”

Bao Tong, an adviser to China’s ousted former Premier Zhao Ziyang who showed sympathy for student protesters at Tiananmen Square in 1989, says it best: “The seeds have already been sown, and they need time to lie fallow. No great task can be achieved all at once. They all need some time to gestate … . Take a break, for the sake of future room to grow. For tomorrow.”

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