LIeBOR is all over the MSM today...
- The Must Read: Changing Barclays, Monetary Policy [16]
- Wall Street Bank Investors in Dark on Libor Liability [17]
I wonder how many realize how deadly this is to big western banks workwide. I have commented on this in detail in my most recent Max Keiser interview, which aired last night [18]. Download the Barclays Submission, aka the "Smoking Gun".pdf [19] for more insight to what happened. Here's a taste...
Quick translation...
BOE inquires why Barclay's LIBOR rate was always so high, realistic...
Barclay's asks BOE reps to brand the liars as liars...
BOE says, "are you out of your fucking mind???"
BOE rep says, this is coming from on top, lose the truth, or lose your ass! But you didn't hear that from me...
Of course the most daming part of this email is this "I asked [Tucker] if he could relay the reality, that not all banks were providing quotes at the levels that represented real transaction". This clearly shows that the BOE was on alert (as if they didn't already know, and probably orchestrated) of the fact that most banks were outright lying.
See my extensive comments on Max Keiser's show earlier this week, starting at 12:48 in the following video...
So, who are these other banks???
From Matt Taibbi's blog [20]:
The Royal Bank of Scotland is about to be fined $233 million (£150 million pounds) for its role in the Libor-rigging scandal. It joins Barclays as the first banks to walk the plank in what should be, but so far is not, the most sensational financial corruption story since the crash of 2008.
Many of the banks implicated in the Libor mess have also been targeted in the various municipal bond bid-rigging investigations, and RBS is no different – its subsidiary Natwest is also a defendant in the major civil lawsuit in the bid-rigging case. The cases aren't related, except in the sense that they both involve manipulation and anticompetitive cooperation. It's going to be harder and harder to make the case that the major banks do not routinely cooperate at the expense of the public when it serves their purposes to do so.
The news that RBS is involved comes with a perverse twist. This is from the Times UK:
The bank, which is 82 per cent owned by the taxpayer, is preparing for a political firestorm over the affair because it believes that it has no power to claw back bonuses from the traders responsible. Instead, the expected fines would be borne by the shareholders — largely the Government.
Libor manipulation is a crime that already robs the public to create bonuses for bankers. By artificially lowering interest rates, the banks caused cities, towns, countries, and other public entities to receive smaller returns on their variable-rate investment holdings. If it turns out that taxpayers end up paying the fine for RBS's crime of robbing taxpayers, how perfect would that be?
More importantly Matt, synthetically depressed LIeBOR rates artificially lowers the bar for economic profit, in layman's terms it makes the bank look more profitable and less risky than they actually are. As you stated, this leads to bigger bonuses funded by bigger taxes borne by financially smaller taxpayers. Hmmmm....
Who else is in the sights of the upcoming truth? Citbank, Bank of Lynch (robbing) America Coutrywide and JP Morgan! Have I commented on these big banks' risks ad nauseum? The litigation risks in these institutions are enormous, and are not discounted in their pricing - Banks face crippling Libor litigation costs [21]
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Not only do the share prices of these banks fail to reflect the true litigation risks, the bank management themselves are failing to come clean, despite astute BoomBustBlog analysis....
There's imprudent risk management litigation stemming from JP Morgan's massive derivative's exposure, first brought to light in 2009 by yours truly...
Listen Carefully and You Can Hear the Crumbling [23] ....May 11, 2012 – First, pardon my tardy response to this JP Morgan news. ... Equity segment, net income (excluding Private Equity results and litigation expense) ...
In 2009 I noticed that JPM's exposure to Fraudclosure-gate and to a greater extent, mortgage putbacks, was much, much more than what was being reported by managment. There's much more, see:
JP Morgan Purposely Downplayed Litigation Risk That Spiked 5,000% Last Year & Is Still Severely Under Reserved By Over $4 Billion!!! Shareholder Lawyers Should Be Scrambling Now [25] Mar 2, 2011 – JP Morgan Purposely Downplayed Litigation Risk That Spiked 5000% Last Year & Is Still Severely Under Reserved By Over $4 Billion!
The Rating Agency Endorsed BoomBustBlog Big Bank Bash Off [26] ... Feb 16, 2012 – JP Morgan (as well as Bank of America) is literally a litigation sinkhole. See JP Morgan Purposely Downplayed Litigation Risk That Spiked ...
You see, what many believe to be a UK bank thing can drag these big American banks deeper, much deeper, into the quagmire. Beware, the F.I.R.E.! The F.I.R.E. Is Set To Blaze! Focus On Banks, part 1 [27]