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“Don’t Worry Mate -- There’s Bigger Crooks In The Market Than Us Guys!”
One of the great things about the neverending series of Libor busts and settlements (which incidentally were once a "conspiracy theory" because it was supposedly impossible for so many people to keep their mouth shut, or so the always wrong conventional wisdom went until the summer of 2012 when theory became fact) is that they all thought they would never get caught, used communications that left a record visible from a mile away, and in the process described the criminal aspects, which lately it seems are the only ones left, of banking from the inside in greater detail than anyone else. Such as in the case of today's Rabobank $1.1 billion Libor manipulation settlement which also cost the CEO, Piet Moerland, his job. It is there that we read just how the Libor criminals saw their daily crimes, which amounted to millions in year end bonus terms: "Don’t worry mate -- there’s bigger crooks in the market than us guys!" There is (sic) indeed.
This is what one Rabobank yen Libor submitter, identified as Submitter-4 in the DOJ's Statement of Fact filing, said in the September 21, 2007 e-mail, after agreeing to increase the daily yen rate by a percentage point.
Elsewhere, one Rabobank trader told a yen submitter that people were talking with each other to change the rates. The submitter said: “yes deffinite manipulation - always is tho to be honest mate… i always used to ask if anyone needed a favour and vise versa…a little unethical but always helps to have friends in mrkt.”
Then, another mid-level manager joked to a colleague seeking help rigging rates: "I am fast turning into your Libor bitch!!!" And so on.
To the manipulating cabal, it was a lucrative victimless crime. To everyone else, between this and all the other crimes conducted by bankers in the years before 2008, it became the biggest taxpayer funded bank bailout in history. So unfortunately, the joke was on everyone else. Twice.
On July 28, 2006, a Rabobank trader and rate submitter discussed moving one-month rates higher. Within 20 minutes, the submitter contacted a trader at another bank and said: “morning skipper will be setting an obscenely high lm again today,” according to the U.S. filing.
The other bank’s trader responded, “(K)...oh dear..my poor customers....hehehe!! manual input libors again today then!!!!”
The rate submissions by both Rabobank and the other bank, which isn’t named in the documents, moved up one basis point that day, from 0.37 to 0.38. Those submissions were the second highest of the contributor panel that day, according to the statement of facts.
To be sure, everyone was involved...
Mid-level managers at the bank, such as Rabobank’s global head of liquidity and finance in London, were aware of and participated in the internal manipulation of Libor submissions, according to the statement of facts.
“We were obviously struck by the extent of the misconduct,” Mythili Raman, acting assistant attorney general of the Justice Department’s criminal division, said in an interview.
She said the investigation found both internal and external agreements to manipulate rates and that the rate setter allowed swaps traders to have significant influence over the Libor setting process.
“What we’ve found across a number of our investigations whether it be in this case or others is that there is misconduct that banks need to be paying more attention to,” Raman said. “They should be paying attention to the fact that we’re paying attention and there’s more to come.”
... and not just at Rabo but everywhere else too.
The fines make Rabobank the fifth firm penalized over manipulation of the London interbank offered rate. Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for Barclays Plc (BARC), Royal Bank of Scotland Group Plc, UBS AG (UBSN) and ICAP Plc.
Thirty current and former employees of the Dutch lender were involved in rate rigging, Rabobank executive board member Sipko Schat said today. Five of them were fired, he said.
“We were startled by the amounts, which were higher than we had anticipated, taking into account regulators found no involvement from the bank’s management board or senior managers,”
And that, it goes without saying, is the biggest punchline of all. Because absolutely everyone in each of the Libor manipulating banks knew what was going on- from the lowliest mail boy, to the CEO. And so did the regulators: after all many of them used to work previously at the banks where the Libor cartel operated. But it would not look good to the general public if the people at the very top of the banking industry were found to be the same common crooks like those filling every single US prison.
Full DOJ filing below.
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Why don't we start issuing our own bonds and setting our own interest rates?
Why is it I feel that naming the guilty in public, assessing fines, ushering people out of the industry and bringing a few of them to trial is like shooting spitballs against this corruption battleship?
Ah, I know. Because it is. The incentive to cheat still FAR outweights the penalty, even if you are caught. If you can make your LIFE in one year (or less) of cheating others, who wouldn't buy that lottery ticket?
Would I cheat a few "rich" people I don't even know to put a couple mil in my pocket?
Of course not.... unless you ACTUALLY present me with the opportunity to do so. At that point would you rather trust in good 'ol NoDebt to do the right thing because I'm an upstanding guy, or would you rather I be well aware that the penalty for cheating is so bad, so horrendous, I would shy away from that behavior out of sheer self-preservation instinct, if for no other reason.
I agree with you, but I don't think the problem is actually an inbalance of incentives and penalties, but an absence of civic virtue. Both incentives and penalties are types of power ("compensatory" and "condign" in JK Galbraith's terms, the third being propaganda, or "conditioning"), and it's all about control and submission. These bankers exert a hell of a lot of power, and I don't think the answer is to exert another kind of power on them to compensate. We're strapped into an out-of-control technological freght train, operated by fools and maniacs, yes, but they're not the real issue here, dude.
At this late date, I'm not sure we have anything left but penalties and incentives. The "conditioning" portion is what grumpy old bastards like me would call ethics, morality, etc. (what you refer to as civic virtue, which works just fine for me). But I'm not sure we've got much gas left in that tank regardless of what you call it.
Getting that back is a multi-generational effort (as it was tearing it down), even if we agree it needs to be embarked upon, which I see no consensus on whatsoever at this point.
That kind of effort would have to start in the realm of education..... and just have a gander at what that world looks like right now. Yeech! Nothing good is going to happen coming out of that system currently. Certainly not the only low point in our society right now, but also certainly not helping point the way out (which is what education SHOULD do, but isn't right now)
@mickeyman "Why don't we start issuing our own bonds and setting our own interest rates?"
Why don't we abolish the Fed, print money as per the constitution and live within our means?
That would solve everything (in the fiscal realm at least.)
Basically it's a proven fact that the vast majority of human beings will suck cock for a dollar, LIBOR is just an iteration of this fact "cock for a dollar". Why we continue as a species to create situations in our society that ignores this primal fact is beyond me.
think about it, the vast majority of humans around you will suck cock for a dollar, just in many different disguises. Do you suck cock for a dollar? if you trade in this market then the answer is YES! you DO suck cock for a dollar!!!
Why feed the beast??
It seems the greater fool is the one who isn't lying, cheating and stealing.
Sad! So very sad.
My father, who is a very good man, got very disappointed in me when I told him those exact words this weekend. I told he should be proud of me, to be honest enough to tell him , you now must cheat to survive.
Funny you should mention that. I asked my father aboout 7-8 years ago "are cheaters the only ones who get rewarded any more?" I got the same reaction- his face fell, he was crushed and it took him more than just a minute or two to recover from that. I think, deep down, he knew but just had never seen it hit that close to home until then.
I won't relay the rest of the conversation past that point but, like your father, I think it's enought to say he's still a good man.
I've been pondering this quite a bit lately. Our culture, from the top down, is ethically bankrupt. Lie, cheat, steal and be rewarded. Unfortunately for the common man, different rules seem to be enforced than for the political class. It's no wonder the younger generations have seemingly given up.
If there were truly any real justice, all of the people involved in currency devaluation would be hung on the nearest lamppost. Maybe it'll come to that...
Oh well, at least it's still a predominantly christian country.
that is exactly how I feel.
I've relied on my intellect, but it's not about who is smarter, now, anymore.
And no one will go to jail.
I'm looking forward to being reimbursed for my fair share of damages funded from all these settlements.
/s
let me guess no God's work USA bank will be implicated.
The Libor "scandal" was concocted to deflect attention away from the real manipulators: Central Banks and their joined-at-the-hip sovereign finance departments: e.g. the Fed and the Treasury.
Richie Rich Intro
http://www.youtube.com/watch?v=npBr4MBCIZc (0:36)
I bet the NSA knew.
https://www.youtube.com/watch?v=9F8QM3tjkTE
The fact that the DoJ chooses to use language like "misconduct" in the document really pisses me off.
If I go down to the fucking bank and hold them up for $10m, my indictment won't read "misconduct" and I would have taken chump change by comparison.
Plausible deniability.
But it isn't stealing if you take it from debt slaves right?.....right?
Wrong.
I never signed the so-called social contract... never even seen the fucking thing.
OK, I'm in the UK, not the USA, but same deal - I grew up believing - as did my parents - that the small print of said contract was along the lines of;
"Yes, I will grudgingly give you a small amount of the money/wealth that my hard work and talents allow me to earn and in return you'll do useful shit; keep the streets clean, lock up murderers, stop the country getting invaded by Belgium... that kinda shit, yeah? In return you will keep your nose out of my business - cos, well, it's mine, not yours - not waste the small amount of tax (since you do it at the point of a gun, I should call it what it is: theft) on pointless shit and generally keep to your mansion, suck the dick of the inbred old-money wierdos you went to school with and generally get on with frittering the wealth of your forefathers away on pointless shit."
Nowhere in this imagined small print <-never seen it, remember, though apparently the fact of my birth was, like dude, a de-facto signature. My mother is called Eileen, not Linda Green, unless she's been conning me all these years-> did I imagine.........
I was about to start a rant about killing brown people for oil, subsidising loss-making wind farms, running drugs, printing bullshit fiat currency out of thin air, at interest! paying politicians a salary they could never make if they had to sell their native talent in a free market, etc......but why bother stating the obvious?
........that I'd legally signed a contract, that I didn't physically sign and have never seen, to work for you fuckers for nearly free, while being expected to participate in a voting system that allows me to choose the least bad candidate out of a shortlist of maybe half a dozen of your pre-vetted candidates.
So, to sum up; fuck you! Fuck your kids. Fuck your grand-niece’s horse! Fuck your G650, fuck your covertly-armed super-yacht, fuck your retreat in the Maldives, fuck your Bentley, fuck your 17 domestic staff, fuck your sociopathy. Fuck you!
And since I wouldn't risk catching a 'social disease' by fucking your personally, can I please have a loan to pay someone else to fuck you? After all, you've got all the money, you fucking prick!
You may not have signed, but your ancestors did. If I'm not mistaken, there was this Magna Carta thing. Kinda old. Also sort of a major pillar of Western Civilization. Probably not many remember now- like I said, it's old. The basic idea, if I recall correctly, was "we're tired of a limited few in power fucking with all us other people's property and stuff and you're going to stop doing that. We matter. And you're going to have a passing respect for that or we'll pretty much ruin your ass."
The outrage you express in your post is not new. You aren't the first to feel it. But this all went down on your soil generations ago. It's all there for you to rediscover and reassert. We'll help where we can (We love you guys. No hard feelings about that whole American Revolution thing, OK?) but please realize we're also a little jammed up right now ourselves, so the help is going to be more of the "moral support" variety, not actual help.
Comforting to know the venom is boiling over there too. I resonate every word you wrote.
The biggest problem is that crooks will learn enough from these culprits and how they got caught so as not to get caught next time. In other words the next batch of crooks will be very careful about leaving a trail behind them.
Why can't American Finaceriers do this....oh wait
I'm so glad that Bart's boys have clear the silver markets of such shenanigans. So glad.