Tag Archives: Barclay

Michael Snyder ~ Goldman Sachs Made $400 Million Betting On Food Prices In 2012 While Hundreds Of Millions Starved

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The Economic Collapse Blog | January 24 2013

Why does it seem like wherever there is human suffering, some giant bank is making money off of it?  According to a new report from the World Development Movement, Goldman Sachs made about 400 million dollars betting on food prices last year.  Overall, 2012 was quite a banner year for Goldman Sachs.  As I reported in a previous article, revenues for Goldman increased by about 30 percent in 2012 and the price of Goldman stock has risen by more than 40 percent over the past 12 months.  It is estimated that the average banker at Goldman brought in a pay and bonus package of approximately $396,500 for 2012.  So without a doubt, Goldman Sachs is swimming in money right now.  But what is the price for all of this “success”?  Many claim that the rampant speculation on food prices by the big banks has dramatically increased the global price of food and has caused the suffering of hundreds of millions of poor families around the planet to become much worse.  At this point, global food prices are more than twice as high as they were back in 2003.  Approximately 2 billion people on the planet spend at least half of their incomes on food, and close to a billion people regularly do not have enough food to eat.  Is it moral for Goldman Sachs and other big banks such as Barclays and Morgan Stanley to make hundreds of millions of dollars betting on the price of food if that is going to drive up global food prices and make it harder for poor families all over the world to feed themselves?

This is another reason why the derivatives bubble is so bad for the world economy.  Goldman Sachs and other big banks are treating the global food supply as if it was some kind of a casino game.  This kind of reckless activity was greatly condemned by the World Development Movement report…

“Goldman Sachs is the global leader in a trade that is driving food prices up while nearly a billion people are hungry. The bank lobbied for the financial deregulation that made it possible to pour billions into the commodity derivative markets, created the necessary financial instruments, and is now raking in the profits. Speculation is fuelling volatility and food price spikes, hurting people who struggle to afford food across the world.”

So shouldn’t there be a law against this kind of a thing?

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Rob Kirby ~ The U.S. Treasury, ESF & The Massive Crimes Of LIBOR [Audio]

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SGTbull07 | September 7 2012

Rob Kirby of Kirby Analytics joins me to explain the depth and breadth of the MASSIVE LIBOR rigging crimes, which started in 2007-2008. Rob says Barclay’s involvement is merely the tip of the iceberg, and that the crimes of LIBOR began at the U.S. Treasury and the Exchange Stabilization Fund (ESF).

Rob’s site: http://www.kirbyanalytics.com/

Listen to Part 2 ~ The End Game For Our Currency: WORTHLESS

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Robert Mazur ~ Follow the Dirty Money

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The New York Times | September 12 2010

Robert Mazur

OP-ED ~ LAST month [August 2010], a federal district judge approved a deal to allow Barclays, the British bank, to pay a $298 million fine for conducting transactions with Cuba, Iran, Libya, Myanmar and Sudan in violation of United States trade sanctions. Barclays was discovered to have systematically disguised the movement of hundreds of millions of dollars through wire transfers that were stripped of the critical information required by law that would have enabled the world to know that for more than 10 years the bank was moving huge sums of money for enemy governments. Yet all federal prosecutors wanted to settle the problem was a small piece of the action.

When Judge Emmet Sullivan of federal district court in Washington, who ultimately approved the deal with Barclays, asked the obvious question, “Why isn’t the government getting rough with these banks?” the remarkable response was that the government had investigated but couldn’t find anyone responsible.

How preposterous. Banks can commit crimes only through the acts of their employees. Federal law enforcement agencies are simply failing to systematically gather the intelligence they need to effectively monitor the crime.

The Barclays deal was just one in a long line of wrist slaps that big banks have recently received from the United States. Last May, when ABN Amro Bank (now largely part of the Royal Bank of Scotland) was caught funneling money for the benefit of Iran, Libya and Sudan, it was fined $500 million, and no one went to jail. Last December, Credit Suisse Group agreed to pay a $536 million fine for doing the same. In recent years, Union Bank of California, American Express Bank International, BankAtlantic and Wachovia have all been caught moving huge sums of drug money, but no one went to jail. The banks just admitted to criminal conduct and paid the government a cut of their profits.

Wachovia alone had moved more than $400 billion for account holders in Mexico, $14 billion of which was in bulk currency that had been driven in armored cars or flown to the United States. Just who in Mexico did anyone think had that kind of cash? Of course, the government did a thorough investigation but could find no individuals responsible.

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Prof. James Petras ~ The Ascendancy Of A Criminal Financial Elite

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Global Research | August 5 2012

The Two Faces of a Police State: Sheltering Tax Evaders, Financial Swindlers and Money Launderers while Policing the Citizens

“The rotten heart of finance” The Economist

“There is a degree of cynicism and greed which is really quite shocking” Lord Turner Bank of England , Financial Service Authority

Introduction

Never in the history of the United States have we witnessed crimes committed on the scale and scope of the present day by both private and state elites.

An economist of impeccable credentials, James Henry, former chief economist at the prestigious consulting firm McKinsey & Company, has researched and documented tax evasion. He found that the super-wealthy and their families have as much as $32 trillion (USD) of hidden assets in offshore tax havens, representing up to $280 billion in lost income tax revenue! This study excluded such non-financial assets as real estate, precious metals, jewels, yachts, race horses, luxury vehicles and so on. Of the $32 trillion in hidden assets, $23 trillion is held by the super-rich of North America and Europe .

A recent report by a United Nations Special Committee on Money Laundering found that US and European banks laundered over $300 billion a year, including $30 billion just from the Mexican drug cartels.

New reports on the multi-billion dollar financial swindles involving the major banks in the US and Europe are published each week. England ’s leading banks, including Barclay’s and a host of others, have been identified as having rigged the LIBOR, or inter-bank lending rate, for years in order to maximize profits. The Bank of New York, JP Morgan, HSBC, Wachovia and Citibank are among scores of banks, which have been charged with laundering drug money and other illicit funds according to investigations from the US Senate Banking Committees. Multi-national corporations receive federal bailout funds and tax exemptions and then, in violation of publicized agreements with the government, relocate plants and jobs in Asia and Mexico .

Major investment houses, like Goldman Sachs, have conned investors for years to invest in ‘garbage’ equities while the brokers pumped and dumped the worthless stocks. Jon Corzine, CEO of MF Global (as well as a former CEO of Goldman Sachs, former US Senator and Governor of New Jersey) claimed that he “cannot account” for $1.6 billion in lost client investors funds from the collapse of MF Global in 2011.

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Bob Edelmann ~ The LIBOR Scandal: Just The Tip Of The Iceberg

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The New American | July 26 2012

The ripple effects from the announcement by the British Financial Services Authority (FSA) that it was fining Barclays Bank for manipulating in its favor a key interest rate are just beginning to be felt. Explained the authority:

The London Interbank Offered Rate (“LIBOR”) and the Euro Interbank Offered Rate (“EURIBOR”) are benchmark reference rates fundamental to the operation of both UK and international financial markets, including markets in interest rate derivatives contracts.

LIBOR and EURIBOR are by far the most prevalent benchmark reference rates used in euro, US dollar and sterling over the counter (“OTC”) interest rate derivatives contracts and exchange traded interest rate contracts.

The notional amount outstanding of OTC interest rate derivatives contracts in the first half of 2011 has been estimated at 554 trillion US dollars…  (emphasis added)

Let’s put that into simple terms: the LIBOR and the EURIBOR rates affect financial instruments with values more than 36 times the gross domestic product of the United States! These are rates that affect nearly every contract that contains or refers to an interest rate. That would include variable-rate mortgages, municipal bond financings, credit card debt, U.S. treasuries — an enormous, almost incomprehensibly large number.

And all of it manipulated by Barclays and 18 other “money center” banks operating out of the exclusive City of London enclave in the center of London, England.

From the FSA:

LIBOR and EURIBOR are used to determine payments made under both OTC interest rate derivatives contracts and exchange traded interest rate contracts by a wide range of counterparties including small businesses, large financial institutions and public authorities. Benchmark reference rates such as LIBOR and EURIBOR also affect payments made under a wide range of other contracts including loans and mortgages.

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Ellen Brown ~ Titanic Banks Hit LIBOR Iceberg: Will Lawsuits Sink the Ship?

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Nation of Change | July 22 2012

At one time, calling the large multinational banks a “cartel” branded you as a conspiracy theorist.   Today the banking giants are being called that and worse, not just in the major media but in court documents intended to prove the allegations as facts.  Charges includeracketeering (organized crime under the U.S. Racketeer Influenced and Corrupt Organizations Act or RICO), antitrust violations, wire fraud, bid-rigging, and price-fixing.  Damning charges have already been proven, and major damages and penalties assessed.  Conspiracy theory has become established fact.

In an article in the July 3rd Guardian titled “Private Banks Have Failed – We Need a Public Solution”, Seumas Milne writes of the LIBOR rate-rigging scandal admitted to by Barclays Bank:

It’s already clear that the rate rigging, which depends on collusion, goes far beyond Barclays, and indeed the City of London. This is one of multiple scams that have become endemic in a disastrously deregulated system with inbuilt incentives for cartels to manipulate the core price of finance. 

. . . It could of course have happened only in a private-dominated financial sector, and makes a nonsense of the bankrupt free-market ideology that still holds sway in public life.

. . . A crucial part of the explanation is the unmuzzled political and economic power of the City. . . . Finance has usurped democracy. 

Bid-rigging and Rate-rigging

Bid-rigging was the subject of U.S. v. Carollo, Goldberg and Grimm, a ten-year suit in which the U.S. Department of Justice obtained a judgment on May 11 against three GE Capital employees.  Billions of dollars were skimmed from cities all across America by colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion.  Other banks involved in the bidding scheme included Bank of America, JPMorgan Chase, Wells Fargo and UBS.  These banks have already paid a total of $673 million in restitution after agreeing to cooperate in the government’s case.

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Greg Hunter ~ Ron Hera – The End Of Cheap Everything

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USA Watchdog | July 19 2012

“We are in a computer generated dream world . . . because everything is rigged.”  That’s what Ron Hera of Heraresearch.com said this week when interviewed about living in an age he calls “The end of cheap everything.”  The system isn’t going to collapse, it already has.  Hera says, “I think the system failed in 2008, and we are essentially living on borrowed time.”  As far as the Libor rate rigging fraud, Hera says, “Workers, savers and taxpayers will pay for Libor rate rigging.”

He adds, “There is no end in sight to this crime wave . . . “They will ultimately print the money to paper over the problems,” for the too big to fail banks.   Count on inflation.  Join Greg Hunter as he goes One-on-One with Ron Hera.

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Greg Hunter ~ Libor Lie – A Black Swan?

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USA Watchdog | July 16 2012

The Libor interest rate rigging scandal is being called the biggest financial fraud in history.  Libor is a key interest rate that is used globally to set as much as $800 trillion in transactions.  It is used to set interest rates for things such as credit cards, student loans, mortgages, corporate bonds and hundreds of trillions of dollars in derivatives.   Libor stands for the London Inter-Bank Offered Rate.  It is supposed to be an estimate of what it would cost for some of the biggest banks in the world to borrow money from one another.  Sixteen global banks are involved in setting the rate, three of which are in the U.S. (JP Morgan, B of A, and Citi.)  It was recently revealed by Barclays Bank (in the UK) that this key interest rate quoted by most of these banks was nothing more than a gigantic rate rigging scheme.

In a financial system reeling from one fraud after another, this is the mother of all rip-offs by the banksters.  Karl Denninger of Market-ticker.org calls this, “the largest organized theft ever committed in human history.”  This has already brought out lawsuits by the dozens from investors and institutions who say they were cheated by Libor rate rigging.  Who’s suing the big banks?  A better question might be who’s not suing?  Let’s start with investors both big and small.  CNN reported last week, “With Libor’s alleged suppression, Charles Schwab says, it was deprived of the higher interest payments it deserved.  In another complaint, individual investor Ellen Gelboim claims she purchased corporate bonds that paid variable interest based on Libor, and suffered lower returns as the banks held the rate down.”  (Click here for the complete CNN story.)  These lawsuits and others have been combined into one in federal court in New York, but avalanches of new cases are coming.

Several state AG’s are also suing, right alongside municipalities and cities around the country, and that is just in the U.S.  Remember, this scandal is global.   Hedge funds trading in derivatives are going to line up to sue the big banks if they were on the losing end of a trade.  Libor affects $550 trillion in derivative contracts.  Some investors got hurt when Libor was manipulated up, and some took losses when Libor was manipulated down.  There is something for everyone, and that equates to very big exposure to the banks involved in the alleged rate rigging.  If the banks are responsible for just 1/10 of one percent of the $800 trillion in Libor transactions, it would represent $800 billion in liability to the banks.  I’ll bet the total cost will be much higher, and some banks will go under as a result of litigation and loss of reputation.  Ron Hera of Hera Research told me last week, “Truth is, if you take back more than 1% of what the banks have stolen, they’re busted.” 

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Paul Craig Roberts & Nomi Prins ~ The Real Libor Scandal

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Paul Craig Roberts | July 14 2012

According to news reports, UK banks fixed the London interbank borrowing rate (Libor) with the complicity of the Bank of England (UK central bank) at a low rate in order to obtain a cheap borrowing cost. The way this scandal is playing out is that the banks benefitted from borrowing at these low rates. Whereas this is true, it also strikes us as simplistic and as a diversion from the deeper, darker scandal.

Banks are not the only beneficiaries of lower Libor rates. Debtors (and investors) whose floating or variable rate loans are pegged in some way to Libor also benefit. One could argue that by fixing the rate low, the banks were cheating themselves out of interest income, because the effect of the low Libor rate is to lower the interest rate on customer loans, such as variable rate mortgages that banks possess in their portfolios. But the banks did not fix the Libor rate with their customers in mind. Instead, the fixed Libor rate enabled them to improve their balance sheets, as well as help to perpetuate the regime of low interest rates. The last thing the banks want is a rise in interest rates that would drive down the values of their holdings and reveal large losses masked by rigged interest rates.

Indicative of greater deceit and a larger scandal than simply borrowing from one another at lower rates, banks gained far more from the rise in the prices, or higher evaluations of floating rate financial instruments (such as CDOs), that resulted from lower Libor rates. As prices of debt instruments all tend to move in the same direction, and in the opposite direction from interest rates (low interest rates mean high bond prices, and vice versa), the effect of lower Libor rates is to prop up the prices of bonds, asset-backed financial instruments, and other “securities.” The end result is that the banks’ balance sheets look healthier than they really are.

On the losing side of the scandal are purchasers of interest rate swaps, savers who receive less interest on their accounts, and ultimately all bond holders when the bond bubble pops and prices collapse.

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Tyler Durden ~ US Attorneys General Jump On The Lieborgate Bandwagon ~ 900,000+ Lawsuits To Follow, And What Happens Next?

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ZeroHedge | July 12 2012 | Thanks, asp

The second Barclays announced its $450 million Libor settlement, it was all over – the lawyers smelled not only blood, but what may be the biggest plaintiff feeding frenzy of all time. Which is why it was only a matter of time: “State attorneys general are jumping into the widening scandal over whether banks tried to manipulate benchmark international lending rates, a move that could open a new front against the top global banks. A handful of state attorneys general said they are looking into whether they have jurisdiction over the banks, and are starting preliminary discussions to determine what kind of impact the conduct involving the Libor rate may have had in their states.”

From Reuters:

“Our office is aware of the allegations around the manipulation of the Libor, and we are working with other state agencies to determine whether Massachusetts has suffered any losses as a result,” a spokesman for Massachusetts Attorney General Martha Coakley said. A spokesman for Florida Attorney General Pam Bondi said his office is aware of the recent settlement reached by British bank Barclays with U.S. and UK authorities and “will look at the case to the extent that our office might have any jurisdiction in the matter.”

A spokeswoman for the Massachusetts transportation authority, MassDOT, said the agency “is actively investigating its portfolio for the purpose of determining if it was underpaid on its bonds due to the brewing Libor situation,” as are many other issuers of debt whose rate is governed by Libor.

Lawyers for several states have had early discussions about whether they might pool investigative resources and launch a broader, multi-state effort, but no formal consortium has been established yet, people familiar with the discussions said. New York might be expected to lead such an effort, since most of the banks’ U.S. operations are based there. A spokesman for the New York attorney general declined comment on whether the issue is being looked at.

Some municipalities, including the city of Baltimore, and funds including the Frankfurt-based Metzler Investment GmbH, which manages 47 billion euros ($59 billion) in assets, have already sued more than a dozen banks, arguing they were bilked of potentially billions of dollars.

How many potential lawsuits are we talking about here? Quite a bit in fact as the FT explains:

There are at least 900,000 outstanding US home loans indexed to Libor that were originated from 2005 to 2009, the period the key lending gauge may have been rigged, investigators have said. Those mortgages carry an unpaid principal balance of $275bn, according to the Office of the Comptroller of the Currency, a bank regulator.

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“George Washington” ~ U.S. Gave Tens of Billions to Libor-Manipulating Banks … Even AFTER Learning about the Manipulation George Washington’s picture

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Zerohedge | July 11 2012 | Thanks, Thomas

You know that Libor is the largest economic scam in world history and the largest insider trading scandal ever.

You know that the Federal Reserve knew about the manipulation by August 2007. And see this.

But did you realize that the Fed and Treasury threw billions of dollars of taxpayer money at Barclays and the other Libor-manipulating banks after they knew about the manipulation … and did nothing to stop it?

As Richard Eskow notes:

Thanks to the GAO audit of the Fed — an audit which it vigorously resisted — we know that Barclays was the fifth largest recipient of emergency loans. Bailout loans for Barclays came to $868 billion. That means that Barclays probably made billions off the reduced interest rate alone, courtesy of the American people.

Those loans were granted between December 2007 and July 2010. That means the Fed was doling out billions to Barclays after it learned that the bank was lying about its LIBOR rates.

Indeed, all of the probable Libor manipulators – including Citi, JP Morgan Chase, Bank of America, UBS, RBS and Deutsche – were huge recipients of bailout money courtesy of the American taxpayer:

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Matt Taibbi ~ Will US Regulators Take Action In LIBOR Scandal?

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Rolling Stone | Reader Supported News | July 10 2012

Thanks, asp

The New York Times and its outstanding financial reporter, Gretchen Morgenson, have published an important article about the LIBOR banking crisis, challenging American regulators to take this mess as seriously as the British appear to be.

We found out just over a week ago that Barclays CEO Bob Diamond, as well as several other senior Barclays officials, were pushed out of their jobs after Bank of England chief Mervyn King trained a mysterious Vaderesque power on them, impelling them to leave with an “inflection of the eyebrows.”

Morgenson’s piece from Saturday, “The British, at Least, Are Getting Tough,” wonders aloud why American regulators – Ben Bernanke, cough, cough – don’t take a similarly stern approach with our own corrupt bank officials. First, she summarizes what seems to be the mindset of American officials:

“Dirty clean” versus “clean clean” pretty much sums up Wall Street’s view of cheating. If everybody does it, nobody should be held accountable if caught. Alas, many United States regulators and prosecutors seem to have bought into this argument.

This viewpoint has been particularly in evidence since 2008. Time and again, American regulators have appeared to be paralyzed by corruption in cases when most or all of the banks have been caught raiding the same cookie jar. From fraudulent sales of mortgage-backed securities, to Enronesque accounting, to Jefferson-County-style predatory swap deals, to municipal bond bid-rigging, the strategy of American regulators has been to accept “Well, everybody was doing it” as a mitigating factor when negotiating settlements, where that should have made them want to crack the whip even harder.

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Robert Scheer ~ Libor Interest Rate Scandal: Crime of the Century

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Common Dreams | July 6 2012

Barclays Bank chairman Marcus Agius, (L) chief executive Bob Diamond (C) and chief operating officer Jerry Del Missier. (AFP)

Forget Bernie Madoff and Enron’s Ken Lay—they were mere amateurs in financial crime. The current Libor interest rate scandal, involving hundreds of trillions in international derivatives trade, shows how the really big boys play. And these guys will most likely not do the time because their kind rewrites the law before committing the crime.

Modern international bankers form a class of thieves the likes of which the world has never before seen. Or, indeed, imagined. The scandal over Libor—short for London interbank offered rate—has resulted in a huge fine for Barclays Bank and threatens to ensnare some of the world’s top financiers. It reveals that behind the world’s financial edifice lies a reeking cesspool of unprecedented corruption. The modern-day robber barons pillage with a destructive abandon totally unfettered by law or conscience and on a scale that is almost impossible to comprehend.

How to explain a $450 million settlement for one bank whose defense, in a plea bargain worked out with regulators in London and Washington, is that every institution in their elite financial circle was doing it? Not just Barclays but JPMorgan Chase, Citigroup and others are now being investigated on suspicion of manipulating the Libor rate, so critical to a $700 trillion derivatives market.

Caught as the proverbial deer in the headlights, Barclays Chairman Robert E. Diamond Jr. resigned this week and offered a plaintive defense to the British Parliament that he learned only recently that his bank was manipulating the index on which so large a part of international trade is based. That is plausible only if we assume he was paid $10 million a year to be deliberately ignorant. The Wall Street Journal had exposed this scandal fully four years ago but his bank continued to participate in it nonetheless.

“Study Casts Doubt on Key Rate” was the headline on the May 29, 2008, investigative report, which concluded: “Major banks are contributing to the erratic behavior of a crucial global lending benchmark, a Wall Street Journal analysis shows.” Even then, according to the report, it was known that the Libor rate was being manipulated “to act as if the banking system was doing better than it was at critical junctures in the financial crisis.”

Fast-forward four years to Diamond’s testimony before Parliament this week in which the CEO claimed his recent discovery of a pattern of interest manipulation by Barclays had made him “physically sick.” Who was to blame? According to the executive, subordinates acting behind his back.

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