Libor and its euro counterpart, the Euribor, are benchmark rates determined by bank estimates of how much it would cost them to borrow from one another, in different timeframes and currencies. The banks submit sheets of numbers every weekday morning, London time. An adjusted average of the rates determines the size of payments on mortgages and corporate loans worldwide. The rates also serve as an indicator of the health of the banking system. Because some submissions aren’t based on real trades, the potential exists for manipulation.
So the submissions aren't required to be based on actual trades eh? In other words the banks involved can just make it up! And they did.
A Barclays banker responsible for reporting borrowing rates was told to make the bank look healthier by not revealing that borrowing costs had risen. An e-mail he wrote to a supervisor confirms that he complied: “I will reluctantly, gradually and artificially get my libors in line with the rest of the contributors as requested,” he wrote. “I will be contributing rates which are nowhere near the clearing rates for unsecured cash and therefore will not be posting honest prices,” he continued, referring to rates in the overnight money market.
Got it?
No, you probably don't.
Libor and Euribor are benchmarks that are used as a base to set rates for damned near all lending in the economy in one form or another -- directly or indirectly.
You, personally, got screwed. Everyone who borrowed money got screwed. You might have been screwed by a few pennies a day, but you still got screwed.
This sort of rigging was absolutely standard, it appears:
Here’s an e-mail about the three-month rate from a senior Barclays trader in New Yorkto the London banker who submitted the rates: “Hi Guys, We got a big position in 3m libor for the next 3 days. Can we please keep the lib or fixing at 5.39 for the next few days. It would really help. We do not want it to fix any higher than that. Tks a lot.”
Bankers submitting rates responded to such requests as if they were routine: “For you, anything,” and “done ... for you big boy,” according to the e-mails. Not that the efforts went unappreciated: “Dude. I owe you big time!” one trader wrote to a Libor submitter. “Come over one day after work and I’m opening a bottle of Bollinger.”
Yeah. An outright scam and the guy who did it was rewarded too.
Heads should roll at other banks, too. Regulators and criminal prosecutors, including the U.S. Justice Department, are investigating at least a dozen other firms to determine whether they colluded to rig the rate. Among them: Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc and UBS AG.
Heads should roll all right. But until the Just-US Department along with other alleged regulators and "law enforcement", which have proved to be nothing other than lapdogs for the banksters, ignoring outright criminal conduct as a matter of business and refusing to bring criminal charges against both people and institutions, change their stripes and start enforcing the law I will not be expecting anything other than "more of the same."
The simple fact of the matter is that until we, the people, rise and demand that this crap stop and the people involved go to prison, and back up our demand with our willingness to act, this will not change.
Showing up at some protest and waving a sign may feel good, but if you go home at the end of the day and then vote for the same jackasses who are in office now, or one who doesn't insist on and demand prosecution of this activity you've told the politicians that you have and will consent to this lawless behavior.
I will not vote for, support, endorse or otherwise give legitimacy to any politician who fails or refuses to demand and make as one of his first and foremost priorities the return of the Rule of Law and criminal prosecution for this, and all other myriad economic frauds.
Those who argue that I should do so, irrespective of why, have in the past and will continue to get my middle finger in response -- both publicly and privately.
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I will not vote for, support, endorse or otherwise give legitimacy to any politician who fails or refuses to demand and make as one of his first and foremost priorities the return of the Rule of Law and criminal prosecution for this, and all other myriad economic frauds.
Those who argue that I should do so, irrespective of why, have in the past and will continue to get my middle finger in response -- both publicly and privately.
Rest assured, you're not alone in this regard...
I had a conversation last night with a neighbor/friend. We discussed the SCOTUS ruling and the candidates. We both agreed that we were sick and tired of being told to vote for the lesser of two evils and that we would not do so again. Her husband said that he keeps being told to vote for Romney so that we don't have 4 more years of Obama. He then said he's not heard even one reason to vote FOR Romney except that one.
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"Man will never be free until the last Banker is strangled with the entrails of the last Politician" - unknown
"This isn't a market anymore, it's a computer game." - Drench
"I will not vote for, support, endorse or otherwise give legitimacy to any politician who fails or refuses to demand and make as one of his first and foremost priorities the return of the Rule of Law and criminal prosecution for this, and all other myriad economic frauds."
Then, like me, you've entered the non-voter rolls (votes for politicians anyway), probably for the remainder of our natural lives. With the multi-trillion dollar system of fraud as ingrained as it is combined with ignorant, successfully propagandized voters, I don't see much changing for the good even after the next crash.
"Regulators and criminal prosecutors, including the U.S. Justice Department, are investigating at least a dozen other firms to determine whether they colluded to rig the rate."
So? After the investigation, they are all going to sit around and have a happy fizzy party? As usual, no one will be going to prison. To paraphrase Leona Helmsly, only the little people go to prison.
...It is understood that Mr del Missier was the senior manager who misinterpreted the comments of chief executive Bob Diamond after he came off a call in October 2008 with Paul Tucker, Deputy Governor of the Bank of England.
Due to that misinterpretation, Me del Missier told staff that they had been instructed by the Bank to deliberately lie about their Libor submissions...
Wonder who was pushing Barclays to manipulate its rate? Why none other than the English Fed. From BBG:
BARCLAYS SAYS BANK OF ENGLAND CALLED ON OCT. 29, 2008 ON LIBOR BARCLAYS SAYS DIAMOND MADE NOTE OF CALL BARCLAYS SAYS DIAMOND RECEIVED CALL FROM PAUL TUCKER BARCLAYS SAYS TUCKER SAID `CERTAIN' BARCLAYS DIDN'T NEED ADVICE BARCLAYS SAYS TUCKER SAID DIDN'T ALWAYS NEED TO BE SO HIGH (Probably LIBOR but who knows) BARCLAYS PROVIDES COPY OF DIAMOND'S CALL NOTE
In other words, a central banks was directly and indirectly involved in manipulating interest rates. Say it isn't so.
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Maybe it was a birdy bread-bomber from the future?!
You, personally, got screwed. Everyone who borrowed money got screwed. You might have been screwed by a few pennies a day, but you still got screwed.
Umm Karl, not to be a fly in the ointment, but if I'm not mistaken, they intentionally set the rates artificially low since 2008... and most likely saved a bunch of people (not just themselves) a few bucks-at least those with loan rates tied directly to LIBOR...
LIBOR has been at historic lows since late 2008, when the price fixing began in earnest... and hasn't really budged since... of course if LIBOR returned to historic norms (4-5%) it would blow the economy sky-high just on it's lonesome...
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Crime is far too lucrative a game to let the little people play.-popofthebright
and most likely saved a bunch of people (not just themselves) a few bucks-at least those with loan rates tied directly to LIBOR...
What about the pensions, 401k funds, IRAs, who got ripped off (e.g. received 3% when the risk should have demanded 5%)? They are the ones providing most of the capital to loan out in the first place, at least to my understanding.
I think congress will pass a law making all this fraud legal... The US supreme court has already proven that it doesn't care about how constitutional a law is.
There are two sides of every transaction, depositors get ****ed out of money if the LIBOR is artificially low. I would also like to see the canceled check from Barclays and or the GSK (3B settlement). I wonder if the FOIA lets you request a copy of the cancelled check from one of these companies that was fined. I have a feeling the banks don't really pay these fines.
JP Morgan probed over manipulating power markets. It's getting pretty clear how the world works.
1) JP Morgan manipulates energy markets to drives up costs (traders make money) 2) Analysts/Instiutional Traders for Wall Street call companies affected by energy spikes asking about increase in COGS. 3) Business buys hedging contracts from JP Morgan and increase prices to consumers 4) CNBC has a special on high energy prices (blames Obama for more regulation)pumping in a couple greater fools. 5) JP Morgan sells and prices go back down (traders make money) and hedging contracts fall out of the money. 6) JP Morgan picks a new commodity to pump up.
Remember by the time something is reported by CNBS, The Wall Street Journal, Motley Fool or Bloomberg the money off the trade has already been made. The "breaking news" just provides enough liquidity to sell the position at a profit.
Another mental note; when your financial advisor takes 2% of assets and puts your money in a mutual fund that takes 1% of assets and fee of 0.25%, who makes the lion share of money off your money; you or wall street?
Djloche
Posts: 3273
Incept: 2008-07-07
In the Mountains
for those wishing to build their own chopchop
note the top comment:
Quote:
The solution to bankers' crimes would be for supermarkets to stop selling food, water companies to turn off the water, doctors and nurses to stop providing medical care, and utility companies to turn off the electricity and gas for stockbrokers and Wall Street bankers. Simple. Just stop doing business with them. Well, either that or the guillotine.
you know the game is up when the top comments on youtube are anti-wall-street.
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"If we wish to be free, we must fight! I repeat it, sir, we must fight! An appeal to arms and to the God of Hosts is all that is left us! Gentlemen may cry, "Peace! Peace!" -- but there is no peace. The war is actually begun! Our brethren are already in the field! Why stand we here idle?"
Steelhead23
Posts: 2041
Incept: 2008-09-09
Portland OR
Not to put too fine a point on our spears, but when the Fed started buying USTs by the freaking truckload, the US lost all moral authority to decry market manipulation. So, if we are going to hang Mssrs del Missier and Diamond, we should hang Mr. Bernanke right beside them. We're going to need a lot of rope.
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"Give me control of a nation's money and I care not who makes it's laws" —Mayer Amschel Bauer Rothschild Benjamin Bernanke For-profit commercial banks are a menace and should be eradicated
As was first reported two days ago, and confirmed today, Barclays' natural response to allegations it single-handedly manipulated the interest rate complex for up to $500 trillion notional in IR-sensitive swaps and other products (it didn't - everyone else did it too), was to drag everyone into the scandal, starting off with the Bank of England (and about to drag Whitehall into it too), and specifically the man who was next in line for governorship of the English Central Bank: Paul Tucker. What does this mean? Well, as we suggested also two days ago, now that the natural succession path at the BOE has been terminally derailed, it brings up those two other gentlemen already brought up previously as potential future heads of the BOE, both of whom just happened to work, or still do, at... Goldman Sachs: Canada's Mark Carney or Goldman's Jim O'Neil. Granted both have denied press speculation they will replace Mervyn King, but it's not like it would be the first time a banker lied to anyone now, would it (and makes one wonder if this whole affair was not merely orchestrated by the Squid from the get go... but no, that would be a 'conspiracy theory'.) Yet the fact that Goldman is hell bent on global domination by stretching its tentacles into every monetary policy administration is no secret: it is only a matter of time before GS also runs the English CTRL-P macros. More interesting is that in addition to the BOE, Barclays today also dragged America's very own Federal Reserve into the fray.
From MarketWatch:
Barclays also said in the document that the lender believed other banks were making Libor submissions that were too low during the credit crunch. “The evidence shows that the intent was to protect Barclays from the unfounded negative perceptions by bringing Barclays Libor quotes closer to the pack but not to affect the ultimate rate,” the bank said.
Barclays also cited subsequent research by the New York Federal Reserve staff members that, according to the lender, concluded that banks’ Libor quotes were systematically below their borrowing rates by 39 basis points after the Lehman bankruptcy. “Barclays own submissions for tenors of 1 month to 1 year Libor were higher than actual Barclays trades on 97% of the occasions when Barclays had actual trades during the financial crisis,” the lender said.
Translating the bolded: the Fed knew all along that Barclays self-reported levels were impossible. And did nothing. Which of course was not an issue until 2 days ago. Now that heads are rolling, it is.
So we wonder: will the captured and corrupt congressional critters even pretend to have the guts to escalate LiEborgate on US soil, where the real bodies are buried, or will everyone continue to tiptoe around the issue, hoping it just blows off on its own? If the latter, look for many new and exciting $0.99 apps to hit the iTunes store in the next 12-24 hours. After all must keep the fat, lazy, easily distracted muppets, occupied with cool retina displays and even cooler games where stuff happens fast without draining the battery for hours.
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"Even a dog knows the difference between being stumbled over and being kicked." -Justice Oliver Wendell Holmes
"Neither the wisest Constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt." -Samuel Adams
"Quartavious Davis is still shocked by what happened to him in federal court two months ago. 'My first offense, and they gave me all this time,' said Davis... Davis would occupy no place at all in the annals of crime if not for his sentence. Now 20 years old, he was sentenced to 1,941 months - almost 162 years - in prison without the possibility of parole.
Davis's unusually long sentence results from a controversial practice known as 'stacking,' in which each count of an indictment is counted as a separate crime, thus transforming a first-time defendant into a 'habitual criminal' subject to multiple sentences and mandatory sentencing guidelines."
==== If it's true that "assault weapons" are "weapons of war" and don't belong on the streets of America, why do the police need them? Who are the police at war with?
Seems like the real question is how and why did this all get out into the open? Something else is going on here, and it's even bigger than manipulating Libor rates. This doesn't become news for no reason out of the blue, especially not with the types of "authorities" we have today...
Anyone got an answer?
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Everyone keeps looking at the system and saying "it's not working, it needs to be redesigned somehow." It's working exactly the way the people who own it intend it to work.-Sutluc
you know the game is up when the top comments on youtube are anti-wall-street.