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The Liebor Land: What The BoE Said

Tyler Durden's picture





 

With a few hours until BoE's Paul Tucker takes the stand, the venerable institution has finally acquiesced to the Freedom of Information Act request from British MP John Mann and released all copies of emails and transcripts of telephone conversations between Tucker and Bob Diamond between 10/1/08 and 11/30/08. The emails make for some fascinating reading when one considers the sources of the conversation. The thrust of the discussion is Tucker's concern at UK Libor rates being considerably higher than US - especially as US rates were dropping; Tucker's 'shock' at the cost of funding for Barclays' government-guaranteed debt; and finally the explanation/admission for why the BoE's liquidity hosepipe was not fixing the solvency problem in British banks - a lack of eligible collateral. Smoking gun maybe; nail in the coffin of independent Central Banks for sure; hangings in the streets - we are not so sure.

Tucker shocked at Barclay's funding rates (even for government guaranteed paper):

and that US rates are down but UK's not yet - and a mysterious 'mission' is referred to:

 

But have no fear, Diamond responds, for we have issued some 3Y debt at only L+25bps - with the spin that this was not even sucked up by the Central Banks (but asset managers who are therefore providing liquidity to the system) - no matter how self-referential the book-runners were:

 

 

and in reponse to questions of why Libor is not falling faster despite the government's guarantees and hosepipe of liquidity - no collateral!:

 

 

and this is followed by the suggestion that the BoE allow bank collateral at both the Discount window and the Long Term Repo Operations (yes BoE were doing LTROs before the ECB). And the clarification that the market has become bifurcated with only lenders and only borrowers (as opposed to all bilateral deals):

 

 

And the suggestion that Libor's decline is on going but gradual (how would he know this for sure?) but to speed it up, the BoE should change the guarantee fee (cut it):

 

Shockingly Barclays are advocates for speeding up the drop in Libor (and the cut in guarantee fees)!

More free money at a lower cost please...

 

Full Email/Transcript pdfs (here and here)

 


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Mon, 07/09/2012 - 09:03 | Link to Comment LULZBank
LULZBank's picture

Glitchy emails Bitchezz!!!

Mon, 07/09/2012 - 09:09 | Link to Comment Badabing
Badabing's picture

Tucker takes the stand, live!

I thought vampires were dead.

Mon, 07/09/2012 - 09:14 | Link to Comment BandGap
BandGap's picture

Mission refers to a project or direction of some sort. Corporations have a "mission statement", sometimes projects start out this way.

Had to start somewhere, when is the man on the street going to figure out he's getting the two fingered cavity search mission?

Mon, 07/09/2012 - 09:06 | Link to Comment walcott
walcott's picture

TD interpret this please. Nothing ever happens ever. The screwing continues wholesale.

Mon, 07/09/2012 - 09:10 | Link to Comment CH1
CH1's picture

Go long lamposts?

Mon, 07/09/2012 - 09:43 | Link to Comment tocointhephrase
tocointhephrase's picture

Long on rope (pun intended)

Mon, 07/09/2012 - 10:20 | Link to Comment Nobody For President
Mon, 07/09/2012 - 09:06 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Given the genuine angst on some of the Brit lawmaker's faces/words during the Diamond drilling/grilling, perhaps the Ban-King conflagaration of 2012 is meant to begin in Europe and jump the ponds/bridges in all directions. 

ori

Mon, 07/09/2012 - 09:08 | Link to Comment LULZBank
LULZBank's picture

Dont fall for it dude, Im sure there is some agenda in there.

Mon, 07/09/2012 - 09:10 | Link to Comment Oh regional Indian
Oh regional Indian's picture

True. Diamond was equally cocky in return. What I meant was, as part of the unfolding plan, that is what is meant to happen.

ori

Mon, 07/09/2012 - 09:51 | Link to Comment i-dog
i-dog's picture

I doubt it, ORI. There are always a number of moves - and counter moves - available at any time in a chess game, but the objective remains the same.

As I have been saying on here for well over a year, the objective (IMO) is to bring down the US in late 2012 and place it firmly under globalist centralised control, then to do the same with Europe after the US military no longer has any possibility of being rallied to anyone's defense by an independent-minded general. (But if the EU breaks apart first, they're sort of screwed!!)

As part of the takedown, the banking system will also be dissolved. There will be no room for bankers - or bank accounts, or forex traders, or hedge funds, or brokers - under the NWO ... when there is a single electronic currency and everyone is paid by having their chip topped up (for food purchases only) at the weekly re-education session.

Stock and currency markets - and bank accounts - are sooooo 20th century and only for evil speculators and capitalist roaders. ;-)

IMO, this Lie-bor "scandal" (who knew?!) is scene 3 in Act I of 'It's Time to Bring Down the Banks'. (MFG and the London Whale were earlier scenes that set the stage for the meme-du-jour of "the banks can no longer be trusted" - but "a central global monetary authority will fix that"). We'll see....

Mon, 07/09/2012 - 09:07 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Shit, what a confidence destroyer

Mon, 07/09/2012 - 09:08 | Link to Comment Cursive
Cursive's picture

A peak behind the Wizard's curtain.  These are the same people who sued Microsoft for anti-trust concerns?

Mon, 07/09/2012 - 09:09 | Link to Comment ArkansasAngie
ArkansasAngie's picture

What's the difference between a bankster and a politician?  Nothing.  They both get paid with other people's money and lie through their teeth.

 

Moral Hazard ... ropes ... it's their cans that need to be kicked down the road

Mon, 07/09/2012 - 09:09 | Link to Comment LoneStarHog
LoneStarHog's picture

Hanging in the streets?  Mention LIBOR to the walking two-legged idiots and they assume you are promoting a Lamaze class.

Now back to our regularly scheduled Dancing With The Idiots.

Mon, 07/09/2012 - 09:13 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

I spoke with my neighbor, who happens to work at JP Morgan.  He knows my hatred of this bank well.  I brought up the Libor rigging and he said, "Well, that is just the cost of doing business with the one of the biggest banks in the world.  It's like that $6 billion and rising loss from our trading desk. We have enough money to cover all of this."

I just followed up with, "I hope your retirement savings are not connected to that bank.  I am not bashing you, per se, just giving you a heads up."

Mon, 07/09/2012 - 09:15 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Here is a recorded phone call to someone at the BOE where the caller asks what QE is all about - http://www.youtube.com/watch?v=Ks12-OheHLA&feature=g-all-u

The caller nails this BOE stooge pretty well with the question on, "Someone charges a pretty hefty fee on this free money?"

Mon, 07/09/2012 - 09:27 | Link to Comment giovanni_f
giovanni_f's picture

There is a war raging. The Libor manipulation issue is just a vehicle, or the battlefield. What is really going on? (Sorry LulzBank you were faster than me, asking the same question)

Mon, 07/09/2012 - 09:30 | Link to Comment Zero Govt
Zero Govt's picture

not war, a game

and the Regulators at the Bank of England have taken up their traditional position as 'referees' moving the goalposts for the 1% against the 99% (ie. cheating)

Lord Merv-the-Swerve Kings total turkey of a record is beyond a sad joke, now he's a crook too. His autobiography is complete(ly tarnished) before his retirement arrives next year

Mon, 07/09/2012 - 09:18 | Link to Comment midgetrannyporn
midgetrannyporn's picture

jeremy haywood is an idiot. "bank's" with an apostrophe? WTF?  These maggots think they are so smart and yet they suck at everything!

Mon, 07/09/2012 - 09:26 | Link to Comment Agent P
Agent P's picture

He's just used to spelling it that way because they own everything. 

Mon, 07/09/2012 - 09:17 | Link to Comment Agent P
Agent P's picture

"The borrowers do not have a cheaper alternative and lenders see no pressure to offer funds more cheaply.  There is no immediately apparent mechanism to change this stand off."

 

Stand off?  Really?  I do believe the first sentence does a pretty good job of describing how market rates of interest are fairly determined. 

Mon, 07/09/2012 - 09:55 | Link to Comment theprofromdover
theprofromdover's picture

Perhaps he was asking for more competition

?

Mon, 07/09/2012 - 09:24 | Link to Comment FunkyOldGeezer
FunkyOldGeezer's picture

I'm reporting Haywood to these good folks.

http://www.apostrophe.org.uk/page2.html

 

Mon, 07/09/2012 - 09:25 | Link to Comment pods
pods's picture

What, no bottles of Bollinger?

Mon, 07/09/2012 - 09:29 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Bollinger

Party at Pods.

Mon, 07/09/2012 - 10:30 | Link to Comment AlaricBalth
AlaricBalth's picture

The following review was actually written by "Krugman". Use of the word "austere" is interesting, but the last comment is priceless.

"This bottle of Special Cuvee was good, but certainly not the best that I have had from this cuvee. It was a little more closed and austere than usual and was a bit lighter than normal. It still had flavors of tangerines, a bit of white bread, apples, spices, and a bit of caramel. Not sure which lot this was, but it could certainly use a couple years in the cellar."

" it could certainly use a couple years in the cellar."

Of course it could, as well as the LIBOR traders and other criminal bankers.

http://www.cellartracker.com/list.asp?Table=Notes&Page=0&iUserOverride=0...

Mon, 07/09/2012 - 09:25 | Link to Comment tmosley
tmosley's picture

There isn't a thing in the world more terrifying than a central banker with a "mission".

Mon, 07/09/2012 - 09:28 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

It seems the camel's fraudulent nose has been under the tent for a while.

Say well over 200 years? Even more maybe?

What's shocking is not that this is going on, but that anyone is shocked that this is going on. Notice I said IS, not was. Still happening folks, and in all areas of the "free" market.

Markets don't move, markets are moved.

Mon, 07/09/2012 - 09:38 | Link to Comment luckylongshot
luckylongshot's picture

If I remember right there was a time when we used to respect bankers....long long ago

Mon, 07/09/2012 - 09:55 | Link to Comment pods
pods's picture

Last time I respected a banker was when I watched Mary Poppins with my kids.

pods

Mon, 07/09/2012 - 09:54 | Link to Comment theprofromdover
theprofromdover's picture

It would be nice to also see the emails that went around when Gordon the Magnificent bullied Lloyds ('a lender not a borrower') into buying the wretched HBoS.

Can we have that under Freedom of Information Laws too (or are they about to be repealed)

Mon, 07/09/2012 - 10:53 | Link to Comment jumblies
jumblies's picture

You should be able to watch Paul Tucker's "meeting" with the Treasury Select Committee (TSC) here. Starts at 430pm (UK time).

Mon, 07/09/2012 - 16:05 | Link to Comment smiler03
smiler03's picture

 "nail in the coffin of independent Central Banks for sure"

 

Why would this be true? Surely Central Banks will just continue to do what the hell they or the politicians like. Or are you suggesting that they are accountable for their actions? I think not. 

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