WORLD BANKS GET CAUGHT FIXING GLOBAL INTEREST RATES. MSM ASLEEP AT THE WHEEL

Friday it was revealed, with no mention of it all on most MSM sources, that Bob Diamond, CEO of Barclays, is under intense pressure to resign after he admitted that the bank had conspired, with others, to fix global interest rates.  This huge scandal has gotten zero mention anywhere, even though its implications are staggering. British banks in particular are being accused of routinely distorting data so that interest rates could be set higher than they should.

These banks are now facing criminal prosecution, but if previous attempts are any indication, this will go nowhere fast. For example, now that Jerry Sandusky is behind bars, how much have you heard about the damaging emails from Penn State officials? Not much. Shares from Barclay fell 15.5%, and RBS, the same bank that got trillions of dollars from unknown sources, dropped their stock price by ten percent, wiping 2 billion pounds from taxpayers’ stake in the bank. The bank that transferred the 15 trillion to RBS, HSBC, is also being investigated for their role in the scandal which may have cost investors as much as 30 billion pounds. World banks, including those in North America such as Citigroup, Bank of America and J.P Morgan/Chase, are also being looked at closely. Tell me you’re shocked by that news as I roll my eyes.

As it appears that world banks have conspired to manipulate the world’s primary interest rate, Libor, every adjustable rate investment has been affected across the planet. This means they have manipulated the world economy. According to the CIA, the Global economy is less than $80 trillion dollars. However, over $800 trillion worth of investment is pegged to the Labor rate. To clarify, the world economy is ten times less than what is being affected by Libor and market manipulation. This ties into the highly unstable derivative market which may be as high as $1,200 trillion dollars. Interest rates comprise a majority of the market and this has been such a blatant rip off by the banks that this could bring the whole thing down and kill the world economy. Note that the largest banks being accused of manipulation are also the same ones with huge derivative hedges. According to the WSJ, this manipulation has been going every day since 2005. Why bother with the SEC if all they plan on doing is watching porn all day? Where are the criminal prosecution for destroying the planet’s economy and the middle class? So far, we’ve seen no progress from either worthless party.

 

Anyone who gets caught, gets a slap on the wrist, which doesn’t prevent people from doing it again. If I can steal a billion dollars and the worst sentence I am going to get is five years in a minimum security prison, you can be damn sure 99% of America would do the exact same thing. Get caught with three grams of coke and you get ten years. Steal a couple billion and you get a small fine, maybe a short jail sentence, and that’s it. And that billion is waiting for you when you get out. Sickening.

 

Even after being caught, bankers here and abroad are resisting calls for change as trillions of dollars are at stake. This is from Bloomberg.com:

The group, established by the British Bankers’ Association in March after probes into allegations that traders rigged the London interbank offered rate … won’t propose structural changes such as basing the rate on actual trades or taking away oversight of the benchmark from the BBA, the people said.

 

Libor is determined by a daily poll that asks banks to estimate how much it would cost them to borrow from each other for different timeframes and in different currencies. Because banks’ submissions aren’t based on real trades, academics and lawyers say they are open to manipulation by traders. At least a dozen firms are being probed by regulators worldwide for colluding to rig the rate, the benchmark for $350 trillion of securities.

“I don’t see a significant enhancement to the reputation of Libor without basing it on actual transactions,” said Rosa Abrantes-Metz, an economist with Global Economics Group, a New York-based consultancy, an associate professor with New York University’s Stern School of Business and the co-author of a 2008 paper entitled “Libor Manipulation?” [the manipulation was well-known in England in 2007,  Shah Gilani warned of Libor manipulation in 2008, and Tyler Durden, Max Keiser and others started sounding the alarm at or around the same time.]

“It would only be disruptive if current quotes are inaccurate,” so resistance “is suspicious,” she said.

Traders interviewed by Bloomberg in March at three firms said they were given no guidance on how Libor should be set and there were no so-called Chinese walls preventing contact between the treasury staff charged with submitting the rate and traders who stood to profit on where Libor was set each day. They regularly discussed where Libor would be set with their colleagues and their counterparts at other firms, they said.

“Sadly the response looks to be very consistent with the response of policy makers to the banking disasters we’ve seen over the last four years — cosmetic changes, but nothing substantial happens,” said Richard Werner, a finance professor at the University of Southampton. “It’s insufficient and doesn’t really go to the heart of the problem.”

So the bankers continue to steal from us, no politician will take them on as Citizen’s United has all but guaranteed the government bowing down to huge special interest groups and the next big crisis, most likely sometime in September, looms.

But some MSM outlets are starting to notice and actually report. A quick side note is that CNN exec met to discuss their failing ratings. First, fire everyone but Don Lemon and start again. Then REPORT THE NEWS without spin, without bias and get back into investigative journalism. But I digress.

On CNBC the other day, Chris Whalen of Tangent Capital was invited onto the show Squawk Box to discuss JP Morgan’s Q2 earnings report, the widening LIBOR scandal, and the European debt crisis. Twenty six minutes in, the host Andrew Sorkin brings up the LIBOR rate scandal and says: “You hear about these things and you used to think these are conspiracy theories! You used to hear things that people are manipulating LIBOR, people are manipulating the silver markets-“

CNBC’s Michelle Caruso-Cabrera: “And they are!!”

Sorkin: “And they are!!”

Chris Whalen: “It’s because these markets have become so concentrated that a few players can do it.”

So even CNBC hosts are now noticing that the silver market is being blatantly manipulated, a fact I have known about for more than a year as someone who writes about financial markets for sites like Monex. Notice that they even mention how it is NOT a conspiracy theory and something that should be taken seriously as both the gold and silver market are much lower than they should be and are being kept low for more reasons than I have to discuss here. That is a column for another day.

The bankers have become a corporate group no better than SPECTER from the Bond films or the BCCC banks that got caught laundering money back in the nineties and now have international support under new management and new names. Until we start getting our lives back from the banks, we will never be free. This latest scandal is one of many that no one is paying attention to. By the time America wakes up to what hell we are facing, we will already be there up to our heads in fire and brimstone.