Shocking Details Of Barclays Epic Lie-bor Fraud: "Duuuude…Whats Up With Ur Guys 34.5 3m Fix…Tell Him To Get It Up!"

Tyler Durden's picture

We knew something was very wrong back in January 2009. We knew the rabbit hole went deep. We had no idea just how deep.... It goes very, very, very deep.

From the FSA' breakdown of Barclays traders caught in the act of manipulation:

On Friday, 10 March 2006, two US dollar Derivatives Traders made email requests for a low three month US dollar LIBOR submission for the coming Monday:

 

i. Trader C stated “We have an unbelievably large set on Monday (the IMM). We need a really low 3m fix, it could potentially cost a fortune. Would really appreciate any help”;

 

ii. Trader B explained “I really need a very very low 3m fixing on Monday – preferably we get kicked out. We have about 80 yards [billion] fixing for the desk and each 0.1 [one basis point] lower in the fix is a huge help for us. So 4.90 or lower would be fantastic”. Trader B also indicated his preference that Barclays would be kicked out of the average calculation; and

 

iii. On Monday, 13 March 2006, the following email exchange took place:

 

Trader C: “The big day [has] arrived… My NYK are screaming at me about an unchanged 3m libor. As always, any help wd be greatly appreciated. What do you think you’ll go for 3m?”

 

Submitter: “I am going 90 altho 91 is what I should be posting”.

 

Trader C: “[…] when I retire and write a book about this business your name will be written in golden letters […]”.

 

Submitter: “I would prefer this [to] not be in any book!”

More:

The number of requests and the period of time over which they were made indicate that the Derivatives Traders made requests on a routine basis. Specific emails also indicate the requests were made regularly. For example, the following email exchange took place on 27 May 2005:
Submitter:“Hi All, Just as an FYI, I will be in noon’ish on Monday […]”.
Trader B: “Noonish? Whos going to put my low fixings in? hehehe
Submitter: “[…] [X or Y] will be here if you have any requests for the fixings”.

More:

In response to a request from Trader C for a high one month and low three month US dollar LIBOR submission on 16 March 2006, a Submitter responded: “For you…anything. I am going to go 78 and 92.5. It is difficult to go lower than that in threes, looking at where cash is trading. In fact, if you did not want a low one I would have gone 93 at least”.

More:

Trader C requested low one month and three month US dollar LIBOR submissions at 10:52 am on 7 April 2006 (shortly before the submissions were due to be made); “If it’s not too late low 1m and 3m would be nice, but please feel free to say “no”... Coffees will be coming your way either way, just to say thank you for your help in the past few weeks”. A Submitter responded “Done…for you big boy”.

More:

On 6 August 2007, a Submitter even offered to submit a US dollar rate higher than that requested:
Trader F: “Pls set 3m libor as high as possible today
Submitter: “Sure 5.37 okay?”
Trader F: “5.36 is fine”

More:

On Thursday 14 December 2006, Trader F emailed a Submitter, requesting a low three month US dollar LIBOR submission for the following Monday, 18 December 2006; “For Monday we are very long 3m cash here in NY and would like the setting to be set as low as possible…thanks”. The Submitter instructed another Submitter to accommodate the request; “You heard the man” and confirmed to Trader F “[X] will take notice of what you say about a low 3 month”.

 

Two seconds later, that Submitter sent himself an electronic calendar reminder to make a low three month submission at 11 am on Monday 18 December 2006: “USD 3mth LIBOR DOWN”.

It just gets better:

For example, on 26 October 2006, an external trader made a request for a lower three month US dollar LIBOR submission. The external trader stated in an email to Trader G at Barclays “If it comes in unchanged I’m a dead man”. Trader G responded that he would “have a chat”. Barclays’ submission on that day for three month US dollar LIBOR was half a basis point lower than the day before, rather than being unchanged. The external trader thanked Trader G for Barclays’ LIBOR submission later that day: “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger"


And better:

For example, on 6 September 2006, an external trader at another bank (Panel Bank 1) contributing EURIBOR submissions sent an instant message to Trader E at Barclays requesting a low one month submission: “I seriously need your help tomorrow on the 1mth fix”. The next day, Trader E passed on the request to Barclays’ Submitters, blind copying in the external trader.

And better:

On 28 February 2007, Trader B made a request to an external trader in relation to three month US dollar LIBOR “duuuude… whats up with ur guys 34.5 3m fix…tell him to get it up!!” The external trader responded “ill talk to him right away”.

And other banks:

Barclays’ Submitters also received 11 requests for sterling LIBOR submissions from an external trader at another bank (who had previously worked at Barclays). These requests were not taken into account.

And truly stunning:

Trader E communicated with traders at Panel Banks 1, 2 and 6 in advance of the IMM date. For example on 12 February 2007, Trader E stated in an instant message with a trader at Panel Bank 6:
“if you know how to keep a secret I’ll bring you in on it […]
we’re going to push the cash downwards on the imm day […]
if you breathe a word of this I’m not telling you anything else […]
I know my treasury’s firepower…which will push the cash downwards […]
please keep it to yourself otherwise it won’t work”.

And, in the end, the punchline:

Various instant messages exchanged after the final benchmark rates were published on 19 March 2007 indicated that the traders involved considered that their strategy had been successful. Trader E commented to the external trader at Panel Bank 6 “this is the way you pull off deals like this chicken, don’t talk about it too much, 2 months of preparation […] the trick is you must not do this alone […] this is between you and me but really don’t tell ANYBODY”.

Absolutely sickening. Read the full thing here.

Our advice to anyone who had an adjustable rate mortgage in the period between 2005 and today: speak to a lawyer immediately about suing the living feces out of Barclays, and all other banks who crawl out of the woodwork with purported settlements. Because due to their undisputed mark manipulation, it is absolutely safe to say that ARMs, which rely on Libor for interest rate formation, were grossly manipulated by the same idiot traders who left written evidence of their manipulation year after year. Now it is their turn to pay.

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NotApplicable's picture

Now that's some fuckin' ROI, right there. Likely second only to lobbying.

Carl Spackler's picture

It was another "tribute" scheme carried out by another corrupt, centralized "authority".

A few (i.e., the BBA members)were empowered and with no oversight (i.e., government regulators prove -once again- they are bozos) with with the power to influence all financial behavior across the kingdom. 

Those vested with such power decided how they could squeeze a little tribute for self out every time the rate had to be re-evaluated.

From the other side of the game, it is a tax on every legal entities and people who conduct financial transactions.

Seize Mars's picture

Email? These morons used email for this?

(shaking my head slowly)

e-fucking-mail?

midgetrannyporn's picture

there is obviously nothing to be afraid of for them or barclays.

Divided States of America's picture

no shit....Barclays made probably billions over the years and get off scotch free (200mn chump change) while those traders are on the beach somewhere....while 90% of society is starving. And of course the market rips...

JLee2027's picture

And the Feds want the guy who hacked and released nude photos of Scarlett Johansson to be jailed for 5 years.  But LIBOR manipulation? No problem, go right ahead.

matrix2012's picture

I do love the Amerikan and United Kingdom touted DEMOCRACY. It's simply amazing beyond one's belief!

Cursive's picture

@Seize Mars

Not that bad really.  They were caught red handed and only have to pay $400M without admitting guilt for "fixings" that could save a "fortune."  Why bother to rape a woman behind the bushes when you can do it in the middle of the street in broad daylight with little to no repercussions?  It's much more fun and easier in broad daylight, don't you know?

midgetrannyporn's picture

the regulators will help hold her down.

ParkAveFlasher's picture

Of course she needs to be held down, look at how hysterical she is.

homersimpson's picture

Traders aren't the brightest bunch, y'know. Some people confuse their penchant for gambling for intelligence. Just because one trades in millions/billions of dollars doesn't make one smarter.

Txo's picture

Agreed, but it s the feeling of impunity that allows them to be so stupidly explicit ... it s like a dope dealer trading on his land phone ...

Mitzibitzi's picture

Yup. My bro lives next door to some mid-level trader bozo at HSBC. By all accounts the dude drives a brand new Merc but is as dumb as box of rocks. Kept setting the alarm off every time he came in the house, until somebody from the alarm company showed up to explain that a four digit code and pressing a button marked 'Unset' really isn't that difficult.

sunaJ's picture

The Twitter hadn't been invented yet.

LeisureSmith's picture

Yea, makes one wonder what the "pros" use theese days besides handwritten notes burned in champagne buckets and lowered voices.

NotApplicable's picture

If you haven't noticed, most businesses are willing to conduct even their most highly sensitive operations over email, thinking it is no different than snail mail. As a developer, I'm constantly finding insecure data entry forms published on our website, where anyone can submit anything posing as anybody. All I hear when I bring it up is, "But we need to offer this service online!"

Oh, well, educating the idiots, ain't my job! Besides, they'll just lie about it later anyway when it blows up in their faces.

Bringin It's picture

Email?  Why not? 

Above the law means above the law.

LongSoupLine's picture

slow death through a dull wood chipper feet first is NOT punishment enough.

 

 

fuck these crooked assholes to hell.

Cursive's picture

Fixings!  Get your fixings right here, folks!  These scum are no better than circus barkers.  The financial world is not "complex" as all these psychopathic criminals would have us believe, it is really very simple.  It's organized crime, run by bullies with average to below average intelligence and it should be treated as such.  The Casa Nostra is nothing compared to The City.

Divided States of America's picture

Totally agree. I mean if I was Jewish and had inside information and expert network all around me and got tips from all my Jewish buddies on Wall Street, or those that work in Central Banks and in the Media industry, I would make just as much as them. Most of them may be more privileged than us (undeservedly) but they aint that smart.

bagehot99's picture

Ummm. Wanna knock it off with the reflexive anti-semitism? Barclays traders in London are not part of some Jewish conspiracy. They are cockney wide-boys operating a simple cartel scam. 

Hopefully someone will finally go to jail here, but I won't be holding my breath. 

Bringin It's picture

anti-semitism is an assinine term designed to put some legitimacy into the Palestine land grab.

Buck up, be a mensch and say anti-Jew, when the guy is calling out the Jews, if that's your beef.

And to say that Anglo-American-Zionist banking system is not dominated by croney ethnic collaboration is just uselessly denying reality.

[That's like me telling you that the Cossa Nostra is an equal opportunity employer.][Do you believe that?][No, you don't.  Just like no one here believes your absolution.]

The bankers buy the politicians.

The politicians makes the laws that funnel wealth to the banksters.

Part of the voodoo that makes it all possible is to mess with the semantics, making it difficult for peolple to articulate the scam they're unwilling participants in.

 

Andy Lewis's picture

If these are Divided States, bigoted filth like you help make it that way.

Captain Benny's picture

And only Barclays gets a small fine... hmm.

killallthefiat's picture

I have an ARM from early 2005.  It started adjusting in 2010.  I have had 2 downward adjustments from my initial interest rate and this year was up to 3.375%.  I will not refi to a recourse loan...rather I would walk away.

pods's picture

We have an ARM based on the ten year.  I think it is at bottom now, 2.5% and wont drop lower.  Too bad they stuck a floor in it.

Although it is a recourse loan (refi).  But WF probably doesn't have the papers anyway.

pods

 

sangell's picture

I wanna see the e-mails between Barclays and the CFTC and FSA

Scalaris's picture

Dude Where's My LIBOR

williambanzai7's picture

As I was saying....substantial litigation.

Cursive's picture

@WB7

...and the lawyers will be the big winners.  Courtrooms mete out very little justice and, in the case of the financial industry, very little payouts.

Uncle Remus's picture

Rumor has it Beelzebub hisself is a lawyer.

emersonreturn's picture

you are right, Cursive, there will be few if any payouts...the debate though becomes public, and has the potential to grow and uncover endless amounts.  this will be the true payout. imo.

Dr. Engali's picture

We saw what happened with the robo signing. I expect nothing more here.

pods's picture

Seems they just don't punish fraud like they used to.

If they ever did.  

j0nx's picture

Oh they surely do. I bet if YOU tried some of the shit that these guys have done and continue to do then they'd be on your ass like white on rice. Two laws brother: one for you and one for them. This will continue as long as the American people allow it to.

asteroids's picture

Fear and Greed. Now, back to Angela and friends. There is fear and greed at that meeting too.

goldencross10's picture

The broz alwayz winz?

surf0766's picture

with prime time rating at 20 year lows. b-cups should be back in no time to spin this as good news.

11b40's picture

And I read this morning that some guy locally just got 11 years in jail for stealing cigarettes.....one day, this whole thing is going to explode.

Dr. Engali's picture

It's fricken nuts. It's like the whole idea of right and wrong is backwards.

Mitzibitzi's picture

I'm betting the weasely self-justification most banksters use is the obvious one; We created the money from thin air in the first place, so it belongs to us. You can't steal your own money!

NotApplicable's picture

That's known as the self-propelled version of divide and conquer. Add a little activation energy (a spark in the prairie grass), then sit back and watch the firestorm destroy all who fuel it.

BBullionaire's picture

11 years for stealing cigarettes? Crazy isn't it. The whole system is corrupt and getting worse

Bob's picture

When the crime is carefully engineered between well-placed financial players, they earn special credit for expertise and having "the right stuff." 

Here's what happens when it's "unearned":

 

http://news.yahoo.com/blogs/sideshow/detroit-man-gambles-away-1-5-million-accidentally-191619543.html

Divided States of America's picture

Who do you think runs the legal system and makes the rules and regulations and know all the effin loopholes??

Who do you think runs Wall Street and creates toxic instruments that deprive many innocent and clueless people of their hard earned money??

Who do you think runs the Central Banks and implements policies that screw most of society for their own benefits??

Who do you think runs the media and spews out the propaganda that are meant to deceive and brain wash the sheeple?

Give you a hint, it starts with a J and ends with a W.

Ancona's picture

Wow.....just fucking........wow!

I want some heads on a fucking stick.

pods's picture

And to think these fuckers have been soaking off the FED teat as a Primary Dealer too.

So while they were LEGALLY skimming off the muppets, they were also double dipping on the illegal side.

pods