Tag Archives: markets

U.S. Is Building Criminal Cases in Rate-Fixing | N.Y. Times

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Source: New York Times

As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal.

The department’s criminal division is building cases against several financial institutions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said.

The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission. Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars.

Authorities around the globe are examining whether financial firms manipulated interest rates before and after the financial crisis to improve their profits and deflect scrutiny about their health. Investigators in Washington and London sent a warning shot to the industry last month, striking a $450 million settlement with Barclays in a rate-rigging case. The deal does not shield Barclays employees from criminal prosecution.

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Geithner now involved with LIBOR scandal

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This should be no surprise to anyone, but now Reuters is reporting Geithner has been implicated via the publication of internal e-mails in the LIBOR interest rate rigging scandal.  The documentation, evidence and facts all seem to be cascading now to show the world who has been intimately involved in the manipulation of our reality…The question is, what will the resolution be? When does it end?

Bank of England says took Geithner Libor views on board

Source: Reuters

(Reuters) – The Bank of England confirmed on Friday it had received U.S. recommendations to overhaul the Libor benchmark at the heart of a global rate-rigging scandal, saying it had passed them on to the banking group responsible for the rate.

Documents obtained by Reuters earlier on Friday showed that U.S. Treasury Secretary Timothy Geithner pressed the British central bank in June 2008 to make changes to the way that the widely used interest rate benchmark was set.

Geithner, who was the head of the New York Federal Reserve Bank at the time, sent a private email to BoE Governor Mervyn King recommending six ways to enhance the credibility of the London interbank offered rate.

The BoE passed on Geithner’s thoughts in an email to the British Bankers Association (BBA) – the banking group responsible for Libor – which at that stage had already decided to launch a review of the rate.

“Both the Bank and the Federal Reserve were assured by the BBA that it would take on board the recommendations, either through actions or through questions on which it would consult,” the BoE said in a news release.

More than a dozen banks are under investigation by authorities in Europe, Japan and the United States over suspected rigging of Libor, which is used in financial contracts worth hundreds of trillions of dollars globally.

The June 1, 2008 email, first reported by the Washington Post, included a two-page memo dated May 27 of that year that suggested establishing best practices for calculating Libor, “including procedures designed to prevent accidental or deliberate misreporting.”

It recommended the British Bankers’ Association require that auditors for banks reporting their borrowing costs for the calculation of Libor attest to the accuracy of their rates.

The New York Fed is due to release documents later on Friday that it has said will show it took “prompt action” four years ago to highlight problems with Libor.

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Currency wars heat up

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With news breaking in the last 24 hours that there is now a coordinated effort to print money globally, I thought it appropriate to mention one of the most outspoken economists who has helped me to understand how this must play out.  To understand what is now transpiring in the global financial markets, you must turn to one of the key players who has elucidated in great detail this exact phenomenon – in advance.

His name is Jim Rickards, and in 2011 he wrote the book Currency Wars which predicts a de-facto return to the Gold standard due simply to his conclusion that all paper money will be printed into worthlessness.  Jim is clear that this will happen whether we like it or not; it will either be a conscious transition or a chaotic collapse.

Jim is extremely well versed on the technical aspects of this, but is still able to eloquently explain the mechanics so those of us who aren’t academics can understand.  A cursory review of his Wikipedia page should interest anyone who is seeking technical reasons as to why the central banks of the world are now acting in such a globally coordinated way to lower interest rates despite already being at historic lows.

James G. Rickards

In 1981, Rickards was involved in the Iran hostage crisis.[4] As general counsel for the hedge fund Long-Term Capital Management (LTCM),[5][6] he was the principal negotiator in the 1998 bailout of LTCM[7] by the Federal Reserve Bank of New York.

Rickards worked on Wall Street for 35 years.[8] In 2001, he began using his financial expertise to aid the U.S. national security community and the U.S. Department of Defense.[9] From 2002 to 2006, he advised clients of an impending financial collapse, of a decline in the dollar and of a sharp rise in the price of gold, years before any of these events took place.[10]

Rickards is now the senior managing director for market intelligence at Omnis, Inc.,[7] a consulting firm.[3] On March 24, 2009, Rickards presented his view at a symposium at Johns Hopkins, that the U.S. dollar is vulnerable to attack from foreign governments through accumulation of gold and establishment of a new global currency.[11] The same week, Zhou Xiaochuan, governor of the People’s Bank of China, called for a new currency to be introduced and operated by the International Monetary Fund to replace the dollar as the basic unit of international commerce.[11]

On September 10, 2009, Rickards testified before the U.S. House of Representatives about the risks of financial modeling, VaR, and the 2008 financial crisis.[12]

On January 29, 2012, on Bob Brinker‘s radio program, Rickards stated his belief that the U.S. has been in a depression since 2007. He backed this assertion by pointing out the existence of a major component of previously seen U.S. depressions, the prolonged high rate of unemployment.

CNBC Host admits Silver Market manipulated

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As has been reported for god-knows-how long by Max Keiser, CFTC, and other precious metals commentators, the Silver market is one of the most manipulated commodities markets in the world.  JP Morgan, long rumored to have a paper short position on Silver larger than the total annual tonnage produced in a year’s time, is now openly manipulating said sector.

Here are some of my articles related to this issue, but first please venture over to Silver Doctor’s for the whole scoop:

CNBC Host States Silver Manipulation is a Fact, NOT a Conspiracy!

Golden-Rule.org articles on Silver manipulation, JP Morgan crimes, and the insolvency of the banking sector