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RBS Busted On Libor Manipulation: "its just amazing how libor fixing can make you that much money"

Tyler Durden's picture




 

Six months after the Barclays epic wristslap in which there were none - zero - criminal charges against Libor manipulators, it is time to trot out the same old theatrical song and dance again, this time focusing on bailed out RBS, which the CFTC just fined a whopping sum of $325 million, modestly less than the $16 billion profit the bank made in 2007, followed by the epic subsequent collapse which saw $104 billion in bailouts to keep the bank afloat courtesy of Biritsh taxpayers. In other words: manipulate the world's most sensitive credit-related metric, and you will see either 5% of your peak profits deducted, or we will force you to get even more bailouts.

So digging into the details of this latest farce (while we still wait for the DOJ to launch a suit against Warren Buffett's Moody's) from the CFTC:

  • As recently as 2010 and dating back to at least mid-2006, RBS made hundreds of attempts to manipulate Yen and Swiss Franc LIBOR, and made false LIBOR submissions to benefit its derivatives and money market trading positions; RBS succeeded at times in manipulating Yen and Swiss Franc LIBOR;
  • At times, RBS aided and abetted other panel banks’ attempts to manipulate those same rates;
  • The misconduct involved more than a dozen RBS derivatives and money market traders, one manager, and multiple offices around the world, including London, Singapore, and Tokyo; and
  • The unlawful conduct continued even after RBS traders learned that a LIBOR investigation had been commenced by the CFTC.

Said otherwise, until one of these wonderful manipulative creeps is beheaded demonstratively (either figuratively or literally) in the town square, nothing will ever change.

And now the good stuff - the quotes. 

EXAMPLES OF MISCONDUCT

Yen LIBOR Manipulative Conduct Within RBS:

August 20, 2007: (Emphasis added.) (RBS Order pp. 17-18.)

Yen Trader 4: where’s young [Yen Trader 1] thinking of setting it?

Yen Trader 1: where would you like it[,] libor that is[,] same as yesterday is call

Yen Trader 4: haha, glad you clarified ! mixed feelings but mostly I’d like it all lower so the world starts to make a little more sense.

Senior Yen Trader: the whole HF [hedge fund] world will be kissing you instead of calling me if libor move lower

Yen Trader 1: ok, i will move the curve down[,] 1bp[,] maybe more[,] if I can

Senior Yen Trader: maybe after tomorrow fixing hehehe

Yen Trader 1: fine[,] will go with same as yesterday then

Senior Yen Trader: cool

Yen Trader 1: maybe a touch higher tomorrow

August 20, 2007: (Emphasis added.) (Reflecting awareness of UBS conduct.) (RBS Order pp. 14-15.)

Senior Yen Trader: this libor setting is getting nutss

[…]

Bank A Trader: im puzzled as to why 3m libor fixing not coming off after the FED action

[…]

Bank B Trader: [UBS] is lending dolls through my currencies in 3 month do u see him doing the same in urs

[…]

Senior Yen Trader: yes[,] he always led usd in my mkt[,] the jpy libor is a cartel now

[…]

Senior Yen Trader: its just amazing how libor fixing can make you that much money

[…]

Senior Yen Trader: its a cartel now in london[.] they smack all the 1yr irs ..and fix it very high or low

December 5, 2007: (Emphasis added.) (RBS Order p. 15.)

Yen Trader 2: FYI libors higher again today

[…]

Yen Trader 4: ‘ucksake. keep ours low if poss. don’t understand why needs to go up in yen

Yen Trader 2: no reason dude[,] [Bank C] and [Bank D] went high yest

Yen Trader 4: send the boys round

[…]

Yen Manager: pure manipulation going on

April 2, 2008: (Emphasis added.) (RBS Order p. 10.)

Senior Yen Trader: nice libor[.] our 6m fixing move the entire fixing[.] hahahah

Yen Trader 1: the BBA called to ask me about that today

Senior Yen Trader: really?

Yen Trader 1: yes

Senior Yen Trader: they complain?

Yen Trader 1: asked to speak to me about the low 6m rate

Yen Trader 1: no[,] just to make sure i was happy with it

[…]

Senior Yen Trader: i think some banks must have complain

Yen Trader 1: he called b4 any of the other banks saw our data[,] at about 11.15[,] to check it was ok

Senior Yen Trader: oh then its fine

Yen Trader 1: before publishing

Senior Yen Trader: i am sure some HF [hedge fund] will complain tomorrow ..

Yen Trader 1: tough

Senior Yen Trader: we will say we lower every tenor ..1m 3m 6m ..we feel rbs name has very good credit ..no problem getting money in

Senior Yen Trader: good way to boost share price!

Senior Yen Trader: our 3m libor is at top end …6m at bottom end …just the ideal level!

September 3, 2009: (RBS Order p. 9.)

Senior Yen Trader: [Yen Trader 6], can you ask [Primary Submitter] to drop 3m Libor by 1 bps? hold 6m libor unchange [sic] thanks

Yen Trader 6: Yes[,] going over to his desk now[,] yup, 6s going unch, 3s will drop by 1

Senior Yen Trader: domo

September 14 and 15, 2009: (Emphasis added.) (Primary Submitter agrees to switch direction of submissions over two consecutive days.) (RBS Order p. 16.)

September 14:

Yen Trader 1: high 3s and 6s please

Primary Submitter: ok

September 15:

Yen Trader 1: can we lower our fixings today please [Primary Submitter]

Primary Submitter: make your mind up[,] haha , yes no probs

Yen Trader 1: im like a whores drawers

Yen Manager’s Participation

August 22, 2007: (RBS Order pp. 10-11, 18.)

Yen Manager: Hi Mate, where are u calling the 6m and 3s Libor today ?

Yen Trader 1: i put in 1.05 and 1.15

Yen Manager: ok cool...is that close to consensus ?

Yen Trader 1: i think my 3s are too high[,] 6s will prob be 1.13 too[,] but i wanted high fixes today

Yen Manager: ok cool[,] its all a random variable for us at this stage it is just we have some small fixings

Yen Trader 1: well let me know if you have any preferencves [sic][,] each day

Yen Manager: thx will do

December 3, 2007: (RBS Order p. 11.)

Yen Manager: for choice we want lower libors...let the [Money Market] guys know pls

Yen Trader 2: sure i am setting today as [Yen Trader 1] and cash guy off [Primary Submitter]

Yen Manager: great set it nice and low

Yen Trader 2: 1.02 in 6m or lower

Yen Manager: yeh lower

Yen Trader 2: 1.01 then cant really go much lower than that

Yen Manager: ok

Yen Trader 2: u care for 1m and 3m too[?] looks to me like fra map pretty flat

Yen Manager: lower generally dude

Yen Trader 2: cool

Yen Manager: within the acceptable bounds

Yen LIBOR Collusion With UBS:

February 15, 2007: (RBS Order p. 20.)

Yen Trader 2: how many people can u get to put this 1m libor low

UBS Yen Trader: well us[,] [Bank E,] and a few others i think

February 21, 2007: (RBS Order p. 20.)

Yen Trader 2: what ur guys calling 3s libor[?] we need to get some low fixes

UBS Yen Trader: .64[,] yes will ask for low low high[,] 1m 3m 6m

Yen Trader 2: our guy agrees but reckons it will be 67[,] not good

UBS Yen Trader: no way!

[…]

UBS Yen Trader: […] make sure your boys set low 1m and 3m

Yen Trader 2: will try though [Yen Trader 1/backup Yen LIBOR submitter] wants high 3s and 6s

UBS Yen Trader: we want high 6’s too? don’t let [Yen Trader 1] keep 3m high to help [Senior Yen Trader][,] i hate that guy

May 7, 2008: (RBS Order p. 21.)

UBS Yen Trader: Hi [Sterling Cash Trader] if this is you can you pls ask for a low 6m in jpy for the next few days[.] Hope you are ok, was good seeing you last week[.] Cheers [UBS Yen Trader]

Sterling Cash Trader: Hi mate, I mentioned it to our guy on Friday and he seemed to have no problem with it, so fingers crossed.

Swiss Franc LIBOR Manipulative Conduct Within RBS:

December 4, 2008: (Emphasis added.) (RBS Order p. 25-26.)

Swiss Franc Trader: can u put 6m swiss libor in low pls?

Primary Submitter: NO

Swiss Franc Trader: should have pushed the door harder

Primary Submitter: Whats it worth

Swiss Franc Trader: ive got some sushi rolls from yesterday?

[…]

Primary Submitter: ok low 6m , just for u

Swiss Franc Trader: wooooooohooooooo[,] 0.01%? thatd be awesome

Primary Submitter: 1.33

Swiss Franc Trader: perfect[.] u r a nice man

January 30, 2009: (RBS Order p. 26-27.)

Swiss Franc Trader: high 3m libors pls!!!!!!

Primary Submitter: 0.50??

Primary Submitter: 0.51

Primary Submitter: 0.52

Primary Submitter: 0.53

Swiss Franc Trader: 0.54

Swiss Franc Trader: 0.54

Swiss Franc Trader: 0.54

Swiss Franc Trader: 0.54

Swiss Franc Trader: 0.54

Swiss Franc Trader: 0.54

Swiss Franc Trader: 0.54

Swiss Franc Trader: 0.54

Swiss Franc Trader: and low 6m

Primary Submitter: Ok i get ya

Swiss Franc Trader: 0.65

Swiss Franc Trader: 0.65

Swiss Franc Trader: 0.65

Swiss Franc Trader: 0.65

Primary Submitter: ok

Primary Submitter: libors as requested

Swiss Franc Trader: you a top dog

May 5, 2009: (RBS Order p. 27.)

Swiss Franc Trader: can we get high 3m, low 6m pls!

Primary Submitter: maybe

Swiss Franc Trader: PPPPLLLLLEEEEEAAAAASSSSEEEEEE

Primary Submitter: ok 41 52

Swiss Franc Trader: perfect perfect

May 14, 2009: (Emphasis added.) (RBS Order p. 28-29.)

Swiss Franc Trader: [Primary Submitter] pls can we get super high 3m[,] super low 6m

Swiss Franc Trader: PRETTY PLEASE!

Primary Submitter: 41 & 51

Swiss Franc Trader: if u did that[,] i would lvoe [sic] u forever

Primary Submitter: 41 & 55 then …

Swiss Franc Trader: if u did that i would come over there and make love to you[,] your choice

Primary Submitter: 41+51 it is

Swiss Franc Trader: thouht [sic] so

Primary Submitter: so shallow

RBS Collusion With Interdealer Brokers:

June 26, 2009: (Emphasis added.) (RBS Order p. 24.)

Interdealer Broker B: Hello mate, [Yen Trader 1]? You all set?

Yen Trader 1: Yeah.

Interdealer Broker B: Right listen we’ve had a couple of words with them, you want them lower right?

Yen Trader 1: Yeah.

Interdealer Broker B: Alright okay, alright listen, we’ve had a couple words with them. You want them lower, right?

Yen Trader 1: Yeah.

Interdealer Broker B: Alright okay, alright, no we’re okay just confirming it. We’ve, so far we’ve spoke to [Bank F]. We’ve spoke to a couple of people so we’ll see where they come in alright. We’ve spoke, basically one second, basically we spoke to [Bank F], [Bank G], [Bank H], who else did I speak to? [Bank I]. There’s a couple of other people that the boys have spoke to but as a team we’ve basically said we want a bit lower so we’ll see where they come in alright?

Yen Trader 1: Cheers.

Interdealer Broker B: Cheers no worries mate.

March 3, 2010: (Emphasis added.) (Former Sterling Cash Trader now employed by Interdealer Broker A.) (RBS Order p. 22.)

Former Sterling Cash Trader: can i pick ur brain?

Primary Submitter: yeah

Former Sterling Cash Trader: u see 3m jpy libor going anywhere btween now and imm?

Primary Submitter: looks fairly static to be honest , poss more pressure on upside , but not alot

Former Sterling Cash Trader: oh[,] we hve a mutual friend who’d love to see it go down, no chance at all?

Primary Submitter: haha [former UBS Yen Trader at Bank C] by chance

Former Sterling Cash Trader: shhh

Primary Submitter: hehehe , mine should remain flat , always suits me if anything to go lower as i rcve funds

Former Sterling Cash Trader: gotcha, thanks, and, if u cud see ur way to a small drop there might be a steak in it for ya, haha

Primary Submitter: noted ;-)

Former Sterling Cash Trader: 8-)

RBS Yen Trader Engaged In Wash Trades to Compensate Brokers

September 19, 2008: (RBS Order p. 23.)

Interdealer Broker B: can you do me a favour … you’re not going to get paid any bro for this and we’ll send you lunch around for the whole desk. Can you flat…can you switch two years semi at 5 3/4 , 100 yards [meaning 100 billion] … between UBS. Just get … take it from UBS, give it back to UBS. He wants to pay some bro. We won’t bro you…

Yen Trader 1: Yeah, yeah

[…]

Interdealer Broker B: Yeah. Yeah. 100 yards … actually can you make it 150 and I’ll send lunch around for everybody?

Yen Trader 1: Yeah.

Interdealer Broker B: Thanks very much. Cheers. Cheers, mate and you choose lunch.

Continuing Conduct after Commencement of Investigation:

November 22, 2010: (Emphasis added.) (RBS Order p. 30.)

Senior Yen Trader: hey ...you think we be able to convince [Primary Submitter] to change the libor today?

Yen Trader 1: i can try

Senior Yen Trader: need to drop 3mth Libor and hike 6m Libor he dropped 6m by 2 bps last Friday

Yen Trader 1: at the moment the FED are all over us about libors

Senior Yen Trader: thats for the USD?

Yen Trader 1: ye[]s

Senior Yen Trader: dun think anyone cares the JPY libor

Yen Trader 1: not yet[,] i will walk over ot [sic] them

November 24, 2010: (Reflecting feigned refusal over Bloomberg Chat, immediately followed by agreement in telephone conversation.) (RBS Order pp. 30-31.)

Bloomberg Chat:

Senior Yen Trader: was wondering if it suits you guys on hiking up 1bp on the 6mth Libor in JPY ... it will help our position tremendously

Primary Submitter: how you doing with all the volatilities these days? ... to be honest happy with levels we see at the moment

Senior Yen Trader: ok no prob ... wouldn’t want to cause any problem ... thanks mate

Telephone Conversation:

Senior Yen Trader: Hello?

Primary Submitter: Morning, [Senior Yen Trader]? Hi, [Primary Submitter].

Senior Yen Trader: Yeah, how are you?

Primary Submitter: I’m pretty good sir. Very Good. We’re just not, we’re not allowed to have those conversations on [instant messages].

Senior Yen Trader: Oh, sorry about that. I didn’t know.

Primary Submitter: (laughter)

Senior Yen Trader: (laughter) Oh because of the, the BBA thing?

Primary Submitter: Yes, exactly.

Senior Yen Trader: Ah, ok ok.

Primary Submitter: So yeah, leave it with me, and uh, it won’t be a problem.

Senior Yen Trader: Ok, great.

 

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Wed, 02/06/2013 - 09:31 | 3219553 GetZeeGold
GetZeeGold's picture

 

 

Do you know where your Libor is?

Wed, 02/06/2013 - 09:36 | 3219568 Ruffcut
Ruffcut's picture

"who me!"

"I did not have sex with that woman!"

Wed, 02/06/2013 - 09:39 | 3219579 LawsofPhysics
LawsofPhysics's picture

What is your definition of "is"?  

Wed, 02/06/2013 - 09:47 | 3219603 Mister Ponzi
Mister Ponzi's picture

Bullish!

Wed, 02/06/2013 - 09:55 | 3219632 CharlieSDT
CharlieSDT's picture

I recently found myself in London for business for the first time in years and was able to immediately confirm that I made the correct decision not to visit at all during the last 10 years. I hope I do not need to return for another 10 years, unless I get my dream job – Head Banker Executioner of the Revolution, which would involve a lot of first class travel between New york and London to make sure the guillotines are well greased and the blades dull and rusty. Now that would be a 9-5 that I would commute to with a smile on my face every day.

 

http://www.singledudetravel.com/2013/01/london-is-for-wankers/

Wed, 02/06/2013 - 10:04 | 3219665 LawsofPhysics
LawsofPhysics's picture

Indeed. I wonder how a concealed carry might impact that choice regarding paying that fare or walking?

Indeed, fuck London and the British sheep.

Thu, 02/07/2013 - 00:12 | 3222183 Thomas
Thomas's picture

I was dead wrong: We desperately need armed drones.

Wed, 02/06/2013 - 12:06 | 3220139 Acet
Acet's picture

Yeah, the kind of women you find in abundance in bars or discos in London is not the most impressive out there. They seem to be trying to overcompensate for something and think that getting a fat ass in an ultra short-skirt, a fake tan, tons of war paint and 10 inch high-heels make them look sexy. Mind you, women in London are thinner and in better shape in average than anywhere else in the UK.

The really interesting ones are to be found in different circuits, but they often suffer from this strange lack of self-confidence which they cover up by being a bit fake and a bit of a poser (hence giving out a feeling that they're distant).

Somebody once told me that British women are taught to be weak and, looking around me, I'd say it's probably true. Certainly here in London most of the really interesting and relaxed women are foreign.

Damn, now I miss Holland and Dutch women :(

Wed, 02/06/2013 - 11:01 | 3219910 Groundhog Day
Groundhog Day's picture

All this "is" is a shakedown from one crook by another crook

Wed, 02/06/2013 - 09:39 | 3219580 negative rates
negative rates's picture

Why worry about the worry, why worry about the problem, when the century city just had to be comingggg.

Wed, 02/06/2013 - 10:04 | 3219661 Sudden Debt
Sudden Debt's picture

You thought that was a woman?!

 

Wed, 02/06/2013 - 09:38 | 3219578 TotalCarp
TotalCarp's picture

How dare they do what central banks do all day!!?? The got some nerve! /sarc

Wed, 02/06/2013 - 09:33 | 3219559 tuttisaluti
tuttisaluti's picture

They should not only get fined, they should have to return the ill gotten profits as well.

Wed, 02/06/2013 - 09:45 | 3219593 TotalCarp
TotalCarp's picture

return to who? the gov'mint? 

an interesting thing is, initially it was well reported that the banks did this to sweeten up largest macro hedge funds.. Brevan, Moore, etc. however those crooks so far managed to keep their names out of the funny pages.

 

Wed, 02/06/2013 - 09:53 | 3219626 knukles
knukles's picture

Ya know, that picture says everything>
Riot police guarding the RBS building form the peasantry.

Not a joke anymore.

No wonder they're buying a bazillion rounds of...
You get the drift...

Wed, 02/06/2013 - 10:03 | 3219660 EscapeKey
EscapeKey's picture

Why?

"They didn't break any laws".

No doubt the traders involved "no longer work for the firm" (aka "they now work for Barclay's across the road").

Wed, 02/06/2013 - 10:22 | 3219564 Mercury
Mercury's picture

Said otherwise, until one of these wonderful manipulative creeps is beheaded demonstratively (either figuratively or literally) in the town square, nothing will ever change.

Hmmm...I still respectfully disagree with ZH's editorial line on this issue.

What exactly is or should be different now? Is the LIBOR fixing process all patched up?  If there is little to no actual interbank lending activity during the period in question what number is the honest and compliant trader supposed to quote - only levels that don't work to his/his desk's advantage?

What would the non-false levels have been in the above examples and what rock-solid data should they have been tied to?

This whole half-assed system should be scrapped and replaced with something else. The big story here isn't The Evil That Traders Do but how a system with perverse incentives and tight bottlenecks is just not the way to go.

Also, as I've pointed out before, the above dialoge seems to indicate that this scandal is almost certainly about manipulation with individual/desk/department profit in mind, not the bottom line of the particular mega-bank as a whole. Surely "artificially" goosing LIBOR upwards hurt some other line of business within Barclays/RBS etc even as it helped the P&L of the above traders/desks.

Wed, 02/06/2013 - 15:34 | 3220929 Thisson
Thisson's picture

Reading the quotes, one of them seemingly agrees with your proposition.  The guy says that all things being equal, he prefers rates lower as he is at a bank that receives funds.  The Libor submissions should perhaps be based on a bid/offer spread.  The current system does suck, and you're correct to point out the incentives as the root problem. 

Wed, 02/06/2013 - 15:44 | 3220966 hooligan2009
hooligan2009's picture

the O in LIBOR is an offered rate. LIBOR is and always has been an indicative rate. it is not a rate that has necessariy beentraded. it is where a bank of reasonable standing thinks it can borrow money. LIBOR is the average of the middle 24 of 32 OFFERED rates. 

if a bank is receiving it wants a higher rate. a paying bank wants a lower rate.

LIMEAN would be just as meaningless as LIBID as LIBOR for actually trading cash or swaps.

just like saying i will lend you money based on an 11 am rate rather than what Joe six pack borrowed at 9 am or 3 pm in five times normal market size.

Wed, 02/06/2013 - 09:35 | 3219565 asteroids
asteroids's picture

In the mean time, ratings agencies are being taken to court. Corzine walks free. Politician and the elite lie at will. Wake up and smell the coffee sheep. You don't live in a "just" society.

Wed, 02/06/2013 - 09:36 | 3219570 holdbuysell
holdbuysell's picture

And of course, the heads of these banks were shocked, SHOCKED, to hear this was going on. /sarc

Until heads of banks are put in 'pound me in the ass prison' at a multiple of Madoff's sentence, there will be no retribution fitting of the crime.

Until then, this is but window dressing that does nothing to help instill faith in a morbidly corrupt system.

Wed, 02/06/2013 - 09:51 | 3219621 a growing concern
a growing concern's picture

I'm in favor of a revival of that wonderful practice of tarring and feathering.  Also, drawing and quartering.  I think those assholes would cut that shit out posthaste once they see a couple of their buddies get torn apart by horses.  

Wed, 02/06/2013 - 12:34 | 3220248 Acet
Acet's picture

The head of the FSA (the UK banking and financial regulator), that was there when all this was going on and did nothing (and apparently, at least the Bank of England was aware and activelly encouraging LIBOR underreporting at some point), has recently (after LIBOR became widelly known) been given a Knighthood (he's now Sir Hector Sants) and went to work for Barclays.

I think this says all there is to say about corruption and accountability in the UK.

[PS: Bet he go the knighthood "For Services to Banking"]

Wed, 02/06/2013 - 09:36 | 3219571 youngman
youngman's picture

They lied..they made huge money...they pay a little fine....they wink wink...and life goes on....NO ONE GETS CHARGED WITH ANYTHING..life is good if you are a banker

Wed, 02/06/2013 - 09:58 | 3219638 GetZeeGold
GetZeeGold's picture

 

 

Interdealer Broker B: Cheers no worries mate.

Wed, 02/06/2013 - 09:37 | 3219575 Jayda1850
Jayda1850's picture

As blatantly obvious and repugnant as this fraud is, it will get all sweeped under the rug and no mention will be made in the MSM. Nothing to see here, just go on about your business.

Wed, 02/06/2013 - 09:37 | 3219576 LawsofPhysics
LawsofPhysics's picture

Hundreds of trillions in stolen wealth and a not even a billion dollar fine.

Like I said before, nothing changes until there are some real consequences for bad behavior.

Roll the fucking guillotines already.

Wed, 02/06/2013 - 09:44 | 3219588 chaartist
chaartist's picture

just amazing. we are living in a strange world where those people sharing this will be in much greater danger than people actually doing it.

 

 

Wed, 02/06/2013 - 09:45 | 3219594 caimen garou
caimen garou's picture

Fire the whole bunch of them with no compensation  and jail time!

Wed, 02/06/2013 - 09:46 | 3219600 Quinvarius
Quinvarius's picture

If they are doing consistant business at LIBOR rates, they should lose money or marketshare by rigging it.  It should hurt their real operations.  If they are not doing business using LIBOR, what business do they have submitting anything to do with it?

Wed, 02/06/2013 - 11:02 | 3219915 hooligan2009
hooligan2009's picture

they are not talking about trading..LIBOR is a fixing. Only idiots trade at 11 am LIBOR fixings and don't negotiate rates.

the big issue is the pricing (mark to market) of P/L of SWAPS and the flow of collateral (cash for short dates, bonds with little or large haircuts for long dates). 

swaps are the 1 quadrillion gorilla and cover all currencies and deposit tenors going out from overnight to 50 years.

the largest users of swaps are corporates and pension funds plus the prop book. it is these people who exchange real collateral flows based on LIBOR fixings and it follws it is these people who make or lose real money.

it is here where collateral managment aggs the big bucks via repo and other methods of rehypothecation. the LIBOR rate setters aren't even fully aware of the results of their actions. 

note that you need to follow the cash earned on collateral managment to get to the real truth.

bps here and there don't seem much. but when you have a maturity ladder running to billions (trillions in JPM, RBS and UBS's case) they are significant.

 

Wed, 02/06/2013 - 09:47 | 3219605 q99x2
q99x2's picture

Fine the English taxpayers.

Wed, 02/06/2013 - 12:13 | 3220163 Poor Grogman
Poor Grogman's picture

Now you're gettin the idea

Wed, 02/06/2013 - 09:47 | 3219606 pan
pan's picture

Crony capitalism bitchez!

Wed, 02/06/2013 - 09:50 | 3219613 GrinandBearit
GrinandBearit's picture

White collar crime certainly pays.

Wed, 02/06/2013 - 09:54 | 3219630 a growing concern
a growing concern's picture

I have a hard time figuring out the downside.  Just make sure you pay off your politicians well and then rape and pillage to your heart's desire.  Then just plead ignorance if you get caught, and your politician buddies will make sure it goes away.

Wed, 02/06/2013 - 15:37 | 3220939 Thisson
Thisson's picture

The downside is a beheading in the revolution that occurs when the greed goes too far.

Wed, 02/06/2013 - 09:51 | 3219623 Racer
Racer's picture

That's the same as giving money to a murderer and telling them not to kill anyone again

Wed, 02/06/2013 - 10:02 | 3219655 fijisailor
fijisailor's picture

Yea but it's only foriegn banks.  Of course JPMorgan and Goldman weren't involved.

Wed, 02/06/2013 - 10:05 | 3219670 sudzee
sudzee's picture

This should be a lawyers wet dream. Where are all the class action lawsuits?

Wed, 02/06/2013 - 15:38 | 3220942 Thisson
Thisson's picture

Some have already been filed.  There will undoubtedly be more.

Wed, 02/06/2013 - 10:10 | 3219684 LongSoupLine
LongSoupLine's picture

Fuck you UBS.  You scum deserve nothing less than slow fucking death.

 

A big fuck you CFTC and Bart Chilton for bending over and fining them the equiv of one UBS fucker bonus.

Eat fucking shit CFTC you fucking limp fucking pricks.

Wed, 02/06/2013 - 10:10 | 3219686 Downtoolong
Downtoolong's picture

$325 million

That should be enough to keep the CFTC running for another year. That's the whole idea, isn't it?

"Thanks Mr. Gensler. Let us know when you're ready to do it all over again."

The Management at (fill in the TBTF bank of your choice).

 

 

 

Wed, 02/06/2013 - 10:11 | 3219689 Racer
Racer's picture

"misconduct"

What?

Criminal activity is the correct term

Wed, 02/06/2013 - 10:15 | 3219706 Iriestx
Iriestx's picture

So let me see if I get this straight.  Get accused of selling drugs and you automatically forfeit all of your property to the governement, even before the case goes to trial.  Steal $616 billion and you get a 5% fine?

Wed, 02/06/2013 - 15:38 | 3219891 hooligan2009
hooligan2009's picture

what's your point? bankers always leave large tips, are sober/drug free, treat their wives well, give up their seats on trains and put the toilet seat back down when they piss in the bowl when the urinals are busy.

Wed, 02/06/2013 - 10:15 | 3219707 fuu
fuu's picture

"Senior Yen Trader: we will say we lower every tenor ..1m 3m 6m ..we feel rbs name has very good credit ..no problem getting money in

Senior Yen Trader: good way to boost share price!"

I'm sure it was just a case of someone forgetting a /sarc tag.

Wed, 02/06/2013 - 10:16 | 3219710 monopoly
monopoly's picture

Ahh, our lovely bankers. And this, from MarketWatch. This is the first article I have seen on MSM that tells it like it is on their site. Maybe there is hope. I actually thought Tyler posted this but here it is. Great piece.

FINANCE
So God made a banker

Wed, 02/06/2013 - 10:20 | 3219729 Herkimer Jerkimer
Herkimer Jerkimer's picture

'

'

'

'

Anybody think this is gong to expand into the Canadian banks?

 

•J•
V-V

Wed, 02/06/2013 - 10:47 | 3219848 Terminus C
Terminus C's picture

Canadian banks are immune to the financial woes of the world. Do not forget that all Canadians, especially the bankers, are honest, hard working and demonstrate the moral fortitude of saints. It is clear that what needs to happen is that more Canadians, like our good banker Mark Carney, need to be at the helm of the world's private and central banks. This is the only viable solution at this point...

Sorry, was channeling my inner Globe and Mail "reporter"...

Wed, 02/06/2013 - 10:24 | 3219734 orangedrinkandchips
orangedrinkandchips's picture

It was obvious as hell when money markets started to break the buck ...everybody was worried about overnight paper not to mention the longer duration shit....SO LIEBOR GOES DOWN? More trust???? Libor measures trust among the fuck-wads....more trust now??

 

shit nigga please as dolemite would say!

 

On another note.....Nikkei up 4% on the day??? WTF??? whats going on? is it just me???

 

thanks in adv.

Wed, 02/06/2013 - 10:28 | 3219763 fuu
fuu's picture

Abe wants to start the wage spiral stage now.

Wed, 02/06/2013 - 10:24 | 3219746 thecoloredsky
thecoloredsky's picture

"Look, the libor manipulation already happened. We can't change that fact. What difference does it make!"

-H. Clinton

Wed, 02/06/2013 - 10:29 | 3219769 TheBird
TheBird's picture

None of this is criminal. LIBOR is a ficticious "rate". LIBOR does not "trade". It is a figment of the imagination and is knowingly, by definition, a "made up" rate. At least the metals "fixings" have some marginal basis in reality.

If you want to argue that people were incredibly stupid to settle swaps and other derivatives (vanilla or complex) against a make believe rate, well that is acceptable. There were certainly other choices which at least would have a paper trail of trades.

Any revaluation rate, whether for fixed income, equities, or commodities which is not based on trade data is make believe and should not be used for anything more than ballparking.

Wed, 02/06/2013 - 10:34 | 3219791 LawsofPhysics
LawsofPhysics's picture

So, no one got rich then?  No one extracted a massive amount of wealth and purchased real assets or enriched their personal wealth from this "non-criminal behavior"?  I think you miss the fucking point dipshit.

Roll the motherfucking guillotines already...

Wed, 02/06/2013 - 10:41 | 3219827 EscapeKey
EscapeKey's picture

Fuck you, and your apologist bullshit.

Libor rate affects everything that has a rate attached. Be it mortgages, car loans, or savings rates. The traders knew fully well they illegally caused massive reallocation of interest, and yet did it - no doubt to boost their own bonuses.

I guess it's nice that you're here on the internet, posting your drivel. Must mean someone out there has a well-deserved break.

Wed, 02/06/2013 - 10:57 | 3219898 augie
augie's picture

Worst.

Sockpuppet.

Ever.

Wed, 02/06/2013 - 12:35 | 3220246 hooligan2009
hooligan2009's picture

factually correct. a lot of equities and bonds are also price off indications, not trades.

it is equally scandalous that many index funds in europe and the US deal "at close" when 99.9% of the trades actually done are not "at close", simply to claim that they are fair and can be "marked to market" with no p/l implications..complete bullshit of course, but then, thats how management fees are taken.

Wed, 02/06/2013 - 10:39 | 3219816 williambanzai7
williambanzai7's picture

Last time I checked, this type of activity is deemed a conspiracy to fix prices. As such any civil plaintiff can demand treble damages.

This is where this ultimately has to be taken. Some group of plaintiffs firms has to band together and go after the big kahuna.

Wed, 02/06/2013 - 15:42 | 3220963 Thisson
Thisson's picture

Plaintiffs' firms are on it.  I don't think the cases are being brought as antitrust claims, though - these are being brought as securities fraud claims, which is familiar ground for the plaintiffs' bar.  The firms don't really "band together" as you put it, though.  They compete for clients with the largest losses, because that is how one gains control over the litigation.

Wed, 02/06/2013 - 10:59 | 3219901 FunkyOldGeezer
FunkyOldGeezer's picture

The fine is half of what was expected, so they got off lightly.

How come the powers that be in the USA find it soooo easy to find malfeance at foreign banks?????????????????????????????????????????

Wed, 02/06/2013 - 11:02 | 3219911 rsnoble
rsnoble's picture

Ok so since they made a bunch of money illegally let's offset it and anyone who has a mortgage is now scott free.

Wed, 02/06/2013 - 11:04 | 3219920 hooligan2009
hooligan2009's picture

my bad..posted this as a reply..not as a lead..here it is agan

they are not talking about trading..LIBOR is a fixing. Only idiots trade at 11 am LIBOR fixings and don't negotiate rates.

the big issue is the pricing (mark to market) of P/L of SWAPS and the flow of collateral (cash for short dates, bonds with little or large haircuts for long dates). 

swaps are the 1 quadrillion gorilla and cover all currencies and deposit tenors going out from overnight to 50 years.

the largest users of swaps are corporates and pension funds plus the prop book. it is these people who exchange real collateral flows based on LIBOR fixings and it follws it is these people who make or lose real money.

it is here where collateral managment aggs the big bucks via repo and other methods of rehypothecation. the LIBOR rate setters aren't even fully aware of the results of their actions. 

note that you need to follow the cash earned on collateral managment to get to the real truth.

bps here and there don't seem much. but when you have a maturity ladder running to billions (trillions in JPM, RBS and UBS's case) they are significant.

 

Wed, 02/06/2013 - 11:38 | 3220057 hooligan2009
hooligan2009's picture

keep in mind that a basis point on a three month depo in any currency is worth around 25 units of the currency per million. 

the value of a basis point on a ten year swap is worth around 800 units of the currency per million.

in other words, shooting at short dates is completely missing the huge target of bond swaps. the miss is a factor of 32 for where the real maniplation is occurring.

next some of the more exotic trades what are a derivative of, say five and ten year swaps are the five year five year forward rates.

next, the collateral used to secure the p/l of these swaps is either cash, government bonds or corporate bonds. where ISDA's allow corporate bonds, guess what collateral is used to secure p/l. clue: it is not the bonds that are correctly rated/priced or the bonds that the bank thinkgs are "good". rather it is the lowest quality bonds that the bank has clogging up its book.

also, the custodian banks are complicit (SSgA, BoNY, JPM) in that they facilitate the use of collateral so that repos can be rehyothecated and used as collateral.

as Dimond says, "we take a little from every deal wr do with you".

Wed, 02/06/2013 - 11:19 | 3219969 ParkAveFlasher
ParkAveFlasher's picture

I love Tyler's pic of the bubble cops in front of RBS.  File that under "you can't make this stuff up."

Wed, 02/06/2013 - 11:33 | 3220033 SmackDaddy
SmackDaddy's picture

How did you guys think this shit worked?  Since I dont have any variable rate debt, I dont really give a fuck...

Wed, 02/06/2013 - 12:58 | 3220342 drivenZ
drivenZ's picture

agreed, and in defense of the banks and or traders...one need only take a quick look at the BBA website to realize that Libor is not based on actual transactions. So buyer(or user of Libor) beware as far as I'm concerned.

 

"Therefore, submissions are based upon the lowest perceived rate at which a bank could go into the London interbank money market and obtain funding in reasonable market size, for a given maturity and currency.   

bbalibor is not necessarily based on actual transactions, as not all banks will require funds in marketable size each day in each of the currencies/ maturities they quote and so it would not be feasible to create a full suite of LIBOR rates if this was a requirement."

Wed, 02/06/2013 - 15:46 | 3220978 Thisson
Thisson's picture

That argument doesn't fly in an advanced economy with specialization of labor.  We can't expect every policeman, fireman, teacher etc to also be informed on banking-related issues such as how Libor is determined.  Yet these people are expected to get mortgages, and it is to be expected that a fair number of them will choose mortgages based on libor where the information they have available to them indicates that this is their best choice. 

Wed, 02/06/2013 - 17:38 | 3221370 hooligan2009
hooligan2009's picture

scuse the duplicate

enquiring minds want to know who gets the fines being levied by the SEC, CFTC and whoever?

if the fines represent the value of the odious profit gained by the rogue banks, why then do the people who incurred the cost not get a refund?

are the fines taken from the staff of the bank who perpetrated the fraud, or from theshareholders of the banks or, god forbid, do they go straight back to the Fed who lends the money to pay for the fines in any case?

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