• Sprott Money
    04/29/2016 - 05:58
    There is unfortunately no basis for renewed optimism that this current litigation will have any meaningful impact on precious metals manipulation – with respect to either silver or gold.

Deutsche Bank Turns Sides, Becomes Rat For The Liebor Prosecution

Tyler Durden's picture


Escalation. The inevitable collapse of the Prisoner's Dilemma that kept the LIBOR contributors together is occurring rapidly. After Barclays' forced admission and initial fine, the 'he-who-defects-first-wins' strategy has been trumped by Deutsche Bank as they turn all 'Donnie Brasco' on their oligopolistic peers. As Reuters reports this morning "The bank last year obtained the status of being a witness for the prosecution in the EU and in Switzerland," and "as a result of that, the bank could get a lighter penalty if a punishment is imposed," though of course this does not mean they are admitting guilt (sigh). Under the leniency programs of the EU, companies may get total immunity from fines or a reduction of fines which the anti-trust authorities would have otherwise imposed on them if they hand over evidence on anti-competitive agreements or those involved in a concerted practice. How quickly the worm turns when trust leaves the system - the warning the rest of the Liebor contributors - be afraid, be very afraid.

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Sun, 07/15/2012 - 13:10 | 2617624 mikla
mikla's picture

It's all math and game theory.

Ponzis all end the same, and the conclusion is established the day it begins.  The only difference is timing.

However, because it is "math" and "logic", it could-not-have-been-predicted by politicians, economists, "the-smart-guys", and morons.

Only normal people see this coming.

Sun, 07/15/2012 - 13:11 | 2617633 veyron
veyron's picture

I wonder if anyone bothered to plot the frequency and scale of Ponzi schemes over time. The schemes the past few years really make Charles Ponzi look like a shoplifter.

Sun, 07/15/2012 - 13:16 | 2617648 HoofHearted
HoofHearted's picture

So who turns State's first concerning gold and silver manipulation? I'd guess (just to be sardonic) it would be JP Morgan.

Sun, 07/15/2012 - 13:22 | 2617673 metastar
metastar's picture

When my son was young he would ask me what I was doing when I made a stink in the bathroom.

I would tell him that "I was doin Business, BIG BUSINESS!"

Sun, 07/15/2012 - 14:13 | 2617834 strannick
strannick's picture

when it comes to their fellow bankers in crime, seems bankers arent stand up guys with a code of omerta. bankers are even lowlifes amoung other criminals, sqeak sqeak

Sun, 07/15/2012 - 16:08 | 2618142 Joe Sixpack
Joe Sixpack's picture

The biggest scoundrel in the derivatives bubble gets some temporary protection, as the flesh of the lesser banks is stripped from their bones, in a desperate last ditch attempt to avoid the onrushing cataclysm.

Sun, 07/15/2012 - 14:02 | 2617810 MillionDollarBoner_
MillionDollarBoner_'s picture

Are JPM manipulating gold & silver?

Who says so?


Sun, 07/15/2012 - 15:32 | 2618107 Pool Shark
Pool Shark's picture



This is exactly how the system should work: all the criminal rats should be afraid they'll be ratted out; makes 'em more likely to follow the law.

I hope we have a giant Rat Roast...


Sun, 07/15/2012 - 19:35 | 2618796 ZackLo
ZackLo's picture

I love it when a cartel breaks down , almost as good as a bank run.

Sun, 07/15/2012 - 13:20 | 2617664 mikla
mikla's picture

Good question.  Google searches turn up interesting things, such as "bizarre economic bubbles": http://www.businesspundit.com/10-most-bizarre-economic-bubbles-in-history/

However, yes, there has been some good analysis the last few years about the increasing-size-and-amplitude of (worldwide) economic bubbles.  In short, to combat deflation, the "next" bubble must be bigger-and-more-dramatic than the previous bubble.

The "Housing" bubble was supposed to be the "last possible" bubble, because it is the greatest percentage of "normal" people's expenditures (e.g., rent/mortgage).  The previous bubble cannot be repeated, which is why "housing-bubble" usurped "Dot-Com-bubble".

Now, they are trying the "Education-Bubble" to usurp the "Housing-Bubble", but it likely can't surpass housing, and shows signs of stress (e.g., rate-of-growth is impressive, but wavering).  It's tough to see much more life in the "Healthcare-bubble" (e.g., it's mostly maxed-out).  The "Collateralization-bubble" isn't really being repeated with things like MBS, but the off-the-books "Derivatives-Bubble" is truly fantastic -- Quadrillions, and if you dig deep enough, Quintillions.  (Not kidding.)

But, the problem with the "Derivatives" bubbles is that they are already "too-large", and are mostly not-relevant to the "real-economy".  So, one can argue they don't matter, except for end-game-timing (e.g., counter-party risk manifested through law-enforcement or return to anything that looks like an accounting standard).

So, IMHO, it's easy to illustrate, and people have done it:  Each bubble for the last forty years has been bigger than the one before, and the one before never repeats.  And, all of these bubbles are ponzi fraud (my assertion, but IMHO easy to support).

Sun, 07/15/2012 - 13:33 | 2617703 veyron
veyron's picture

Do you think Facebook, Groupon, and other Internet company IPOs constitute a second Internet IPO bubble (repeat of 1999)?

Sun, 07/15/2012 - 13:40 | 2617717 mikla
mikla's picture

Short answer:  No.

Long answer:  They wish.

The Fed has been printing money, and speculators (e.g., banks and investment banks) are looking for bubble-speculation-to-park-the-cash.  The valuations have no bearing to anything (e.g., Facebook will be priced at zero because there is no scenario by which they could achieve dividend).  So, you *are* seeing Facebook and Groupon at insane valuations, but in "the-big-scheme-of-things" it's in-the-noise (it's not enough money to worry about).

The "market-cap" being reported is not real.  That money doesn't exist.  And, it has no bearing on the "real-economy".  It reflects printing and speculation desperation, and the accident for how "market-cap" is computed.  (Just try to sell those shares and see what the "real-market-cap" happens to be.)

There is no investing anymore (right now).  Half of the S&P500 will go to zero, the Bond market will be wiped out (e.g., counter-party risk), and we'll have a worldwide financial reboot.

So no, on the whole, while it "happens" to be a bubble, it's not really one because it's mere desperate thrashing during the "end-game" and it actually has no significant bearing on the economy.

Sun, 07/15/2012 - 16:18 | 2618202 Joe Sixpack
Joe Sixpack's picture

The derivatives bubble and the desperation to keep it from blowing out completely control the operation of every nation on earth today.

Sun, 07/15/2012 - 13:47 | 2617757 blindman
blindman's picture

bond bubble.
The Real Libor Scandal ~Paul Craig Roberts and Nomi Prins
"...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.

We think we can conclude that Libor rates were manipulated lower as a means to bolster the prices of bonds and asset-backed securities. In the UK, as in the US, the interest rate on government bonds is less than the rate of inflation. The UK inflation rate is about 2.8%, and the interest rate on 20-year government bonds is 2.5%. Also, in the UK, as in the US, the government debt to GDP ratio is rising. Currently the ratio in the UK is about double its average during the 1980-2011 period.

The question is, why do investors purchase long term bonds, which pay less than the rate of inflation, from governments whose debt is rising as a share of GDP? One might think that investors would understand that they are losing money and sell the bonds, thus lowering their price and raising the interest rate.

Why isn’t this happening?

PCR’s June 5 column, “Collapse at Hand,” explained that despite the negative interest rate, investors were making capital gains from their Treasury bond holdings, because the prices were rising as interest rates were pushed lower.

What was pushing the interest rates lower?

The answer is even clearer now. First, as PCR noted, Wall Street has been selling huge amounts of interest rate swaps, essentially a way of shorting interest rates and driving them down. Thus, causing bond prices to rise.

Secondly, fixing Libor at lower rates has the same effect. Lower UK interest rates on government bonds drive up their prices.

In other words, we would argue that the bailed-out banks in the US and UK are returning the favor that they received from the bailouts and from the Fed and Bank of England’s low rate policy by rigging government bond prices, thus propping up a government bond market that would otherwise, one would think, be driven down by the abundance of new debt and monetization of this debt, or some part of it.

How long can the government bond bubble be sustained? How negative can interest rates be driven?" ...

Sun, 07/15/2012 - 15:17 | 2618059 blindman
blindman's picture

yes and no to that link. beware recycled
ideology misrepresenting the historical facts
and details and most definitely in service of
more of the same initial abuse and systemic usury
as demanded by legislated fraud in the form of
a crooked monetary monetary system
and watch out for this.
The Gentleman's Guide To Forum Spies (spooks, feds, etc.)

Sun, 07/15/2012 - 16:20 | 2618238 Joe Sixpack
Joe Sixpack's picture

"Only normal people see this coming."


Yep. Joe Sixpack commented on this in 2008:



Sun, 07/15/2012 - 16:26 | 2618263 TheGardener
TheGardener's picture

Original "prisoner`s dilemma" is a show piece of all the wrong assumptions of those ivory tower type never-been-down-and -low who made up the case study, I could write a book refuting each and every detail of this non-dilemma in it`s full futility.

But what is commonly perceived as a story of former partners
in crime turning on each other, this metaphor certainly fits.

Sun, 07/15/2012 - 17:11 | 2618386 WillyGroper
WillyGroper's picture

love the avatar!

Sun, 07/15/2012 - 13:09 | 2617627 ekm
ekm's picture

As I commented on the previous Liebor entry,


Sun, 07/15/2012 - 13:42 | 2617732 cossack55
cossack55's picture

"There is no honor among thieves"


"Scumbag banksters need to burn in Hell"

Sun, 07/15/2012 - 13:55 | 2617784 saturn
saturn's picture

Nah, they need to burn much much sooner.

Sun, 07/15/2012 - 14:11 | 2617839 monoloco
monoloco's picture

It's like a game of musical chairs, last one on the mordida train might get prosecuted. but at least, now they've established the cost of business as usual. 

Sun, 07/15/2012 - 15:01 | 2617993 americanspirit
americanspirit's picture

Please, please let's all stop calling these high-floating pieces of shit 'The Elite". They are merely those turds who by no virtue of their own have risen to the top of the cesspool. It's a function of the gas given off by decay - in this case decaying souls.

Sun, 07/15/2012 - 15:08 | 2618023 ekm
ekm's picture

I do not disagree.

Well, propose another "name" and let's use it, but the term "elite" has already negative connotation.

Sun, 07/15/2012 - 16:12 | 2618214 Joe Sixpack
Joe Sixpack's picture

I prefer the term "piles of human feces". It has an elitist ring, is does not use any four letter words, and is pretty much on the mark.

Sun, 07/15/2012 - 21:42 | 2619045 ekm
ekm's picture


From now on, the "elite" is officially the "fecal elite".

Sun, 07/15/2012 - 17:30 | 2618430 WillyGroper
WillyGroper's picture

let the games begin.


Sun, 07/15/2012 - 13:16 | 2617650 Bill D. Cat
Bill D. Cat's picture

Bank on bank crime spree . The irony , it burns .

Sun, 07/15/2012 - 13:17 | 2617654 AL_SWEARENGEN

This whole thing is going to be one giant fucking disaster!!  Every last one of these greedy cocksuckers will rat eachother out to save their own diseased skin.  I'm so fucking glad all these pinchbeck government commissioners were around to slap wrists and point fingers at the banks now that the corruption spotlight is off them right?  A Godly armed mob demanding justice will be the only quorum which can wrestle control away from these evil cocksuckers!

Sun, 07/15/2012 - 13:35 | 2617710 yabyum
yabyum's picture

Al, Time to feed them to Mr. Wu's pigs.

Sun, 07/15/2012 - 14:15 | 2617861 monoloco
monoloco's picture

Wouldn't that constitute cruelty to pigs?

Sun, 07/15/2012 - 14:42 | 2617938 AL_SWEARENGEN

Don't I yearn for the days yabyum, where a draw across the throat made fucking resolution!

Sun, 07/15/2012 - 13:58 | 2617796 bubbleburster
bubbleburster's picture

However, unless these inquests avoid turning into dog and pony shows that will pander to their constituents......unless these inquests lead to heads rolling and jail time served....JUST like the most famous first inquest...the Watergate scandal....then all these investigations will be yet another gloss, allowing the criminals to avoid jail.  Unless real heads roll then nothing will have changed and the motivation to avoid financial crimes in the future will be neutered. 

Sun, 07/15/2012 - 14:09 | 2617831 MillionDollarBoner_
MillionDollarBoner_'s picture

You hit the nail on the head!

This is ALL about the Rule of Law (or lack thereof)

Sun, 07/15/2012 - 16:17 | 2618221 Joe Sixpack
Joe Sixpack's picture

Rule of Law? That was eliminated in the first round of cost cutting.

Sun, 07/15/2012 - 17:12 | 2618392 TheGardener
TheGardener's picture

Jail ? What is jail ? Where commoners can freely resemble ?

Sun, 07/15/2012 - 14:13 | 2617849 monoloco
monoloco's picture

Yeah, in the end it will probably be some lowly bank clerk left holding the bag.

Sun, 07/15/2012 - 16:15 | 2618223 Joe Sixpack
Joe Sixpack's picture

The proper term would be a "rogue bank clerk".

Sun, 07/15/2012 - 15:12 | 2618033 fonzannoon
fonzannoon's picture

rat each other out to who?

Sun, 07/15/2012 - 18:03 | 2618541 Ratscam
Ratscam's picture

to "Scam The Rat"

Sun, 07/15/2012 - 15:12 | 2618034 fonzannoon
fonzannoon's picture

rat each other out to who?

Sun, 07/15/2012 - 13:20 | 2617661 metastar
metastar's picture

Fines!!?? What fines??

It's just a cost of doing business. I'm sure it is already built into their business case.

It's not like anyone is going to go to jail? It's not like anything is going to change.

Sun, 07/15/2012 - 13:22 | 2617672 Haole
Haole's picture

The elite ponzolympics of collapsing fraud and paper where the winners are likely to get the same literal medallion of superiority albeit more than just gold plated.  Ain't it awesome when criminals turn on eachother?

Sun, 07/15/2012 - 13:42 | 2617733 world_debt_slave
world_debt_slave's picture

Those at the gourndloor level on the ponzi could care less about the suckers climbing onboard.

Sun, 07/15/2012 - 13:42 | 2617734 DavidC
DavidC's picture

I was told the other day by someone in the know that UBS could be the next one in London. Only a rumour, but...


Sun, 07/15/2012 - 13:47 | 2617756 Extremist Tan
Extremist Tan's picture

Please advise as to impact that Liebor reforms have on prevailing interest rates.  It strikes this non-bond-trading, non-Bloomberg-owning, non-Jim-Grant-worthy observer of interest rates that at least some chance exists that truthful submissions could mean submissions at higher rates, regardless of what central banks try to do.  

Sun, 07/15/2012 - 13:54 | 2617777 bubbleburster
bubbleburster's picture



It spreads like running water.  Maybe toxic, heavy water....

Sun, 07/15/2012 - 13:54 | 2617780 Joebloinvestor
Joebloinvestor's picture


Remember when the BIG PROBLEM were those horrible Chinese currency manipulators?

Sun, 07/15/2012 - 14:01 | 2617806 MillionDollarBoner_
MillionDollarBoner_'s picture

Uuuur...let me guess...they all turned state's evidence somewhere, so they all get let off lightly?

Say it isn't soooo..!

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