Dec 142013
 

By J. Iddhis Bing, 99GetSmart

Bob Diamond

Where’s Bob Diamond Now?

Early in the summer of 2012, Bob Diamond was an American banker with a talent for making numbers say what he wanted them to say. He was legit and was sitting in the catbird seat at Barclays Bank UK. He’d made $100 million over the previous six years.

A few weeks later, in early July, the world had flipped. Instead of sitting at his desk at Barclays Diamond was answering questions from a Parliamentary committee investigating LIBOR rate-fixing in 2008. A week after that he was out of work.

What’s LIBOR? The London Interbank Offered Rate measures the price at which banks lend currencies to each other. It gauges how much banks charge each other when they carry out interbank trades and it affects the rates businesses and households all over the world pay on loans and other financial products.

Diamond lost his job and Barclays was fined £290m. It was the financial scandal of the summer. Some say of the century, but we’ve got plenty of time to go yet.

July, 2012 was just the first act. The European Union wasn’t asleep at the wheel and started to investigate two other currency markets, the EURIBOR and the Yen LIBOR. They took their time and announced their findings two days ago. It turns out to be a good deal more serious than having to sweat through a rough morning in Parliament. Barclays got off with a £290m penalty in 2012 for their bad behavior. Maybe that wiped out a quarter or a half year’s earnings, and brought them some bad publicity. They found a way to dodge the bullet this time.

On Wednesday it was Joaquín Almunia’s job to announce EU charges against the banks involved. Almunia is the European Commission Vice-President in charge of competition policy. He stood behind the podium in Brussels looking like the stern accountant with the big glasses who comes in to set things straight after the wild party’s over. The European Commission was going to levy €1.7bn in fines on seven banks and a brokerage firm for their roles in the worldwide interest rate manipulation. Banks named were Barclays, UBS, the Royal Bank of Scotland (RBS, bailed out at taxpayer expense), Deutsche Bank, Société Générale and two American banks, Citigroup and JP Morgan. A brokerage house, RP Martin, is in the mix, too. They’re contesting the charges and the fine. The tables with the damages, courtesy the EC, are included here as illustrations.

EU penalties in the Euribor scandal, by duration and number of incidents

EU penalties in the Euribor scandal, by duration and number of incidentsOfficial EU data on the instances and duration of Yen Euribor violations.Official EU data on the instances and duration of Yen Euribor violations

For its part of the deal, RBS will pay another £300m on top of the £390m it has already paid to US and UK regulators. RBS is a nationalized bank. That means English taxpayers will pick up the tab for the bank’s behavior.

Barclays was the first bank caught in the sting back in 2012. They knew which way the wind was blowing. They decided to cut a deal: by exposing the cartel in Euribor rate-fixing they avoided an additional £570m fine. Swiss bank UBS was spared a £2bn fine by doing the same for the rigging of yen interest rates. A cartel? The banks were working together? This is where things get interesting.

“What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other,” Almunia said.

Barclays tried to make it sound like they were Boy Scouts who got a little lost in the woods and stumbled on a coven of witches: “The European Commission has today announced that it has reached a settlement with Barclays and a number of other banks in relation to anti-competitive conduct concerning Euribor. The settlement acknowledges that the banks’ conduct infringed EC competition law by attempting to distort the normal course of pricing components for interest rate derivatives referencing Euribor. As today’s announcement from the Commission confirms, Barclays voluntarily reported the Euribor conduct to the Commission and cooperated fully with the Commission’s investigation.”

Which is a nice, elaborate way of saying, we burned the witches and got off scot-free. Would the EU have known about the Euribor fix if they hadn’t?

JPMorgan Chase, not a bank that makes nice to anybody, used the “Rogue” defense, citing “two former traders during a one-month period in early 2007.”

“The settlement makes no finding that JPMorgan Chase management had any knowledge or involvement in the conduct at issue, or that the traders’ actions had any impact on the firm’s LIBOR submissions or the published LIBOR rates. JPMorgan Chase has cooperated fully with the European Commission throughout its investigation and does not believe that the firm engaged in wrongdoing with respect to the EURIBOR benchmark. The company intends to defend itself fully.”

What we know now that we didn’t know in June 2012 was that the banks acted in concert. They didn’t compete on rates, they put their heads together and figured out a way to make even more money by jiggering them. Maybe you’ve read the emails where the traders promise each other crates of champagne if they help each other out. Which is something else that makes it difficult to believe in those “two former traders during a one-month period in early 2007.” The banks are all bonus-driven, and maybe the best way to survive is not to let your boss know what you’re doing. Results are what matter. JP Morgan and the others have cleaned house, and those two rogues won’t be heard from again.

Welcome to the world of the international cartels. The banks now work together to raise interest rates on everybody across the globe. The compliance officer at UBS saved his bank a €2.5bn by blowing the whistle on the yen scam. Maybe bankers only object when the numbers go over a billion.

Almunia said there is more to come. “This will not be the end of the story.” The EU is investigating the firms that refused to settle with the EC over the EURIBOR and yen LIBOR charges, and is taking a look at possible shenanigans in the FOREX market. Regulators in other countries are hard at work as well.

But that’s the problem. We’ve been stuck at the beginning for a while now: the banks find a new way to transgress, they make a bundle, investigators announce fines a few years later, somebody walks the plank and on we go to the next round.

The fines are big but they won’t hurt the banks too much. Nobody’s going out of business. They’ve got Quantitative Easing to thank for that. It’s a nice little program that helps out when the banks get tight.

You get knocked around on the market these days but there’s always a government somewhere to help you out. Even the moderate Socialist “enemy of finance” French government. Whenever Dexia in Belgium gets in a tight spot, François Hollande sends somebody over with a few billion to stop the bleeding. Too much old French money there to take any chances.

Bob Diamond’s long gone. He at least lost his job. Nobody remembers him. Where’d he go with all his millions? Who cares? There’s another millionaire to take his place, saying the same things about how it was all done by subordinates and he had no knowledge. Nobody knows what’s going on at the banks, the traders and compliance officers are running wild. Then one or two of them get caught, there’s an investigation, the bank shells out, somebody leaves and somebody else takes his place and life goes on, right over the waterfall until we all get soaked. Where’s Bob Diamond these days? In some nice paradise where he’s laughing his head off. What’s that to any of us?

J Iddhis Bing
Paris

Aug 132013
 

Posted by greydogg, 99GetSmart

* THE NSA IS TURNING THE INTERNET INTO A TOTAL SURVEILLANCE SYSTEM

By Alexander Abdo and Patrick Toomey, The Guardian

The NSA collects "nearly everything a user does on the internet"

The NSA collects “nearly everything a user does on the internet”

Another burst of sunlight permeated the National Security Agency’s black box of domestic surveillance last week.

According to the New York Times, the NSA is searching the content of virtually every email that comes into or goes out of the United States without a warrant. To accomplish this astonishing invasion of Americans’ privacy, the NSA reportedly is making a copy of nearly every international email. It then searches that cloned data, keeping all of the emails containing certain keywords and deleting the rest – all in a matter of seconds.

If you emailed a friend, family member or colleague overseas today (or if, from abroad, you emailed someone in the US), chances are that the NSA made a copy of that email and searched it for suspicious information. […]

READ @ http://www.theguardian.com/commentisfree/2013/aug/11/nsa-internet-surveillance-email

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* DEBT, AUSTERITY, DEVASTATION: IT’S EUROPE’S TURN

By Susan George, CADTM

austerity-george-osborne-desktop

As the creditors get fatter, the innocent are punished. Susan George laments a leadership subservient to big business.

Like plague in the 14th century, the scourge of debt has gradually migrated from South to North. Our 21st-century Yersinia pestis isn’t spread by flea-infested rats but by deadly, ideology-infested neoliberal fundamentalists. Once they had names like Thatcher or Reagan; now they sound more like Merkel or Barroso; but the message, the mentality and the medicine are basically the same. The devastation caused by the two plagues is also similar – no doubt fewer debt-related deaths in Europe today than in Africa three decades ago, but probably more permanent harm done to once-thriving European economies.

Faithful – and older – New Internationalist readers will recall the dread phrase ‘structural adjustment’. ‘Adjustment’ was the innocent-sounding term for the package of economic nostrums imposed by wealthy Northern creditor countries on the less-developed ones in what we then called the ‘Third World’. A great many of these countries had borrowed too much for too many unproductive purposes. Sometimes the leadership simply placed the loans in their private accounts (think Mobutu or Marcos) and put their countries in hock. Paying back in pesos, reals, cedis or other funny money was unacceptable: the creditors wanted dollars, pounds, deutschmarks…

Furthermore, the Southerners had contracted their loans at variable interest rates, initially low but astronomical from 1981 when the Federal Reserve declared an end to the era of cheap money. When countries such as Mexico threatened default, panicked creditor-country treasury ministers, top bankers and international bureaucrats spent some sleepless weekends eating take-out and cobbling together emergency plans. […]

READ @ http://cadtm.org/Debt-austerity-devastation-it-s

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* YOU’RE MORTGAGE DOCUMENTS ARE FAKE!

By David Dayen, Salon

Lynn Szymoniak (Credit: CBS News/60 MInutes)
                            Lynn Szymoniak (Credit: CBS News/60 MInutes)

Prepare to be outraged. Newly obtained filings from this Florida woman’s lawsuit uncover a horrifying scheme

If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)

A newly unsealed lawsuit, which banks settled in 2012 for $1 billion, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.

This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama Administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us. […]

READ @ http://www.salon.com/2013/08/12/your_mortgage_documents_are_fake/

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* ABBY MARTIN BLAST RACHEL MADDOW FOR 9/11 COMMENTS

Source: RT

Abby Martin calls out MSNBC’s Rachel Maddow, for promoting the notion that violence is rooted in conspiracy theories, while disregarding the importance of questioning official government narratives.

VIDEO @ https://www.youtube.com/watch?feature=player_embedded&v=qUkjIpgthWs#at=63

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* FINALLY A BILLBOARD THAT CREATES DRINKABLE WATER OUT OF THIN AIR

No really, it’s a billboard that can generate up to 26 gallons of water a day from nothing but air.

By Matt Peckham, Techland

I’ve never cared much for billboards. Not in the city, not out of the city — not anywhere, really. It’s like the saying in that old Five Man Electrical Band song. So when the creative director of an ad agency in Peru sent me a picture of what he claimed was the first billboard that produces potable water from air, my initial reaction was: gotta be a hoax, or at best, a gimmick.

Except it’s neither: The billboard pictured here is real, it’s located in Lima, Peru, and it produces around 100 liters of water a day (about 26 gallons) from nothing more than humidity, a basic filtration system and a little gravitational ingenuity.

Let’s talk about Lima for a moment, the largest city in Peru and the fifth largest in all of the Americas, with some 7.6 million people (closer to 9 million when you factor in the surrounding metro area). Because it sits along the southern Pacific Ocean, the humidity in the city averages 83% (it’s actually closer to 100% in the mornings). But Lima is also part of what’s called a coastal desert: It lies at the northern edge of the Atacama, the driest desert in the world, meaning the city sees perhaps half an inch of precipitation annually (Lima is the second largest desert city in the world after Cairo). Lima thus depends on drainage from the Andes as well as runoff from glacier melt — both sources on the decline because of climate change. […]

VIDEO @ http://techland.time.com/2013/03/05/finally-a-billboard-that-creates-drinkable-water-out-of-thin-air/#ixzz2bqVAhEwK

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* 15 OUTRAGEOUS FACTS ABOUT THE BOTTLE WATER INDUSTRY

By Eric Goldschein, Business Insider

4527436_orig

Water used to be free.

In fact, it still is — at least in nations blessed with plentiful clean tap water like the U.S. — but that doesn’t stop the world from spending over $100 billion on bottled water a year.

This strange industry is exploding overseas as well.

Who got the idea to sell us something we can get for free? And how did it get so popular that now more than half of Americans drink it?

READ / PHOTOS @ http://www.businessinsider.com/facts-bottled-water-industry-2011-10?op=1#ixzz2bqWwyrNE

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* THE MORAL IMPERATIVE OF ACTIVISM

By Ray McGovern, ConsortiumNews

St. Thomas Aquinas, a theologian of the Thirteenth Century.

St. Thomas Aquinas, a theologian of the Thirteenth Century.

That America is in deep moral and legal trouble was pretty much obvious to everyone before Edward Snowden released official documents showing the extent to which the U.S. government has been playing fast and loose with the Fourth Amendment rights of Americans to be protected against unreasonable searches and seizures.

Snowden’s revelations – as explosive as they are – were, in one sense, merely the latest challenge to those of us who took a solemn oath to support and defend the Constitution of the United States against all enemies foreign and domestic. That has been a commitment tested repeatedly in recent years, especially since the 9/11 attacks.

After all the many troubling disclosures — from torture to ”extraordinary renditions” to aggressive war under false pretenses to warrantless wiretaps to lethal drone strikes to whistleblowers prosecutions to the expanded “surveillance state” – it might be time to take a moment for what the Germans call “eine Denkpause,” a “thinking break.” And it is high time to heed and honor the Noah Principle: “No more awards for predicting rain; awards only for building arks.”

This is our summer of discontent. The question we need to ask ourselves is whether that discontent will move us to action. Never in my lifetime have there been such serious challenges to whether the Republic established by the Founders will survive. Immediately after the Constitutional Convention, Ben Franklin told a questioner that the new structure created “a Republic, if you can keep it.” He was right, of course; it is up to us. […]

READ @ http://consortiumnews.com/2013/08/12/the-moral-imperative-of-activism-2/