"The Illuminati Were Amateurs" - Matt Taibbi Explains How "Everything Is Rigged"

Tyler Durden's picture

From Matt Taibbi of Rolling Stone, back to his best, most floral of writing styles:

Everything Is Rigged: The Biggest Price-Fixing Scandal Ever

The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There's no price the big banks can't fix

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.

Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.

It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions). Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.

"It's a double conspiracy," says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. "It's the height of criminality."

The bad news didn't stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. "Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry," CFTC Commissioner Bart Chilton said.

But the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.

"A farce," was one antitrust lawyer's response to the eyebrow-raising dismissal.

"Incredible," says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation's GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it's increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it's no secret. You can stare right at it, anytime you want.



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vulcanraven's picture

Silly sheeple in the comments section at Rolling Stone still believe the US justice dept. will prosecute a banktard.



LetThemEatRand's picture

Apparently you should ALWAYS go full banktard.

espirit's picture

Never underestimate the enemy (or who it is).  I think there's a Sun Tzu reference here. 

dryam's picture

The trolls in this thread will reveal themselves as being somehow associated with those that Taibbi writes about.  It's all about misinformation & diluting true information.

cifo's picture

I'm sure the iluminati will reply. They will also explain to us better how it works :)

john39's picture

real people own TBTF banks and central banks.  They have names.  who they answer to, less clear...  the true puppet masters.

Almost Solvent's picture

Hi, I'm Fred Thompson. And, you know, if you're like a lot of folks out there lately, then finances might be a little tight. Well, maybe it doesn't have to be that way. 'Cause if you're 62 years or older and own your own home, then join hundreds of thousands of other Americans who have used a reverse mortgage as a safe, effective financial tool.

TwoShortPlanks's picture

I'm no conspiracy theorist, but perhaps I can finally stop bashing my head against this brick wall.

4th post down and continues down the thread.

fonzannoon's picture

I missed that post the first time. that was ridiculous. thanks for referencing. amazing thoughts.

erg's picture

Matt's brain must be distilled into some kind of spray that may be spritzed upon the crowding, doltish umong us.

FEDbuster's picture

Let's see the "powers that be" get the price of physical gold and silver to match their paper smack down.  ASE in my area are stuck at $30 no matter what the paper spot price drops to.  If the paper price heads back up to $26+, I am sure the price will go up.  The current floor price is $30, if they have any in stock.  Gold eagles did move down closer to spot, but not many of those around either.

DoChenRollingBearing's picture

In the past week, I have been to my LCS three times, and bought a one oz Gold Eagle each time, all they had (or said they had).  At least I was able to buy (as well)  a 1/4 oz Au Maple and the last 1/10 oz AGE they had.

Today, I am happy to also report, that my LGS (Gun) had 100 rounds of 7.62 * 39 (Fiocchi brand, made in Hungary, I have fired (total) about 300 rounds -- ZERO problems) that they sold me.  $101.00, included sales tax.  I believe that beats all but Russian ammo prices at gunbot.net (one supplier has $1.00 per round, but I bet they charge for shipping).

LetThemEatRand's picture

I'm a little suspicious of you and your bearings.  Do you also sell slow cookers?


LetThemEatRand's picture

No, it's "Lloyd" for you, not "lord."  Unless you mean Lord Lloyd, in which case I get your drift.

Harbanger's picture

 "I get your drift."?  I picture you as some old bitter hippie hanging on to your LSD dreams of utopia.  Hows it working out for you?

LetThemEatRand's picture

I picture you as a douche.  

Harbanger's picture

Because you're a nymph with a dirty vagina.  Find another boyfriend.

LetThemEatRand's picture

Dirty vagina.  +1 for that.  P.S.  Got to ya.

Harbanger's picture

Fuck you hippie loser, I'll tell you when it's over.

LetThemEatRand's picture

When all else fails, your antagonist is a hippie.  Love it.  Think for yourself much?

DaveyJones's picture

Mommy, is the boogeyman real?

pods's picture

Yep, and when he goes to sleep he checks his closet for Jamie Dimon.

Oops, wrong thread.


grunk's picture

Wait, second thoughts.

grunk's picture

I feel like I'm in a subway at rush hour.

grunk's picture

Like a college phone booth prank.

grunk's picture

Hold my breath. Someone else can fit in.

grunk's picture

I've reached the other side. Am I dead?

Think for yourself's picture

Sorry, ain't been around a lot lately. Obviously there's work to be done.

DoChenRollingBearing's picture

@ LTER  

No, I help my in-laws (they are in Peru) buy bearings, from Korea, Japan and China.

Au is my hobby...  Pb is what defends it...

DoChenRollingBearing's picture

Probably WOULD be cheaper than the S Korean we buy, LOL... Have to plus ya for that!

LetThemEatRand's picture

Thanks for having a sense of humor.  Rare these days.

DoChenRollingBearing's picture

The "/sarc" tag helps, Bearings are notorious for not identifying subtle humor...

Harbanger's picture

Interesting you mention hungary.  Last week my friend was playing with some 3 1/2 inch, 12 gauge rounds of 1-1/16 oz. slugs that were made in hungary.  @ 2000ft/sec, standing at about 100 feet,  they went straight thru both sides of an old truck in his yard.  You need a strong shoulder and it sounds like a cannon.

DoChenRollingBearing's picture

@ Harbanger


Like ammo trivia?  Today I learned at my LGS that the Russian AK ammo (steel bullets, not even lead, I guess that's why it's cheap) will go through a concrete block when fired from the AK-47 (so "armor-piercing"), which I did not know.  "Through a concrete block" was not further defined, and I did not ask for further details...

Hungarian Fiocchi is made with Pb bullets and brass cases (Russian uses steel in their FMJs as well, like I wrote: cheap)

Steel bullets are not OK for use at indoor ranges, they ricochet much more than lead bullets.

Harbanger's picture

Steel always moves faster but with less impact..  they have tungsten rounds now that are denser than steel but have a similar impact as lead.  My favorite rifle and round is the old 30 06.  people moved away from it because of the recoil, but you can't beat it for distance and accuracy.

LetThemEatRand's picture

-1 for small nor non-existent penis.

Harbanger's picture

I'm ignoring you again.  I know that gets on your nerves.

LetThemEatRand's picture

If you really want to drive me crazy,  you will never post again.  

enloe creek's picture

har and rand are the same person

sunnyside's picture

I just assumed they were married.