Tag Archives | Plunder

Bankers Gone Wild

Adam Smith (CC)

The erudite James Surowiecki brings his journalistic skills to the problem of a banking system that has subsumed the its own watchdogs, in The New Yorker:

In order to work well, markets need a basic level of trust. As Alan Greenspan said, in 1999, “In virtually all transactions we rely on the word of those with whom we do business.” So what happens to a market in which the most fundamental assumptions turn out to be lies? That is the question in a scandal that has roiled the banking industry all summer. The LIBOR (London Inter-bank Offered Rate) index is the most important set of numbers in the global financial system. Used as a benchmark for interest rates around the world, it’s assembled by asking a panel of big banks to estimate what it would cost them to borrow money today, if they had to. Hundreds of trillions of dollars in derivatives, corporate loans, and mortgages are pegged to these rates.

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LIBOR Pains: Why Do These Stories Always Seem to Break in Britain?

Probably not because their regulators are any smarter or scrupulous than those in the U.S. – more likely because they’re relatively powerless to conceal them. From Caroline Salas Gage and Joshua Zumbrun at Bloomberg:

The Federal Reserve Bank of New York was aware of potential issues involving Barclays Plc (BARC) and the London interbank offered rate after the financial crisis began in 2007, according to a statement from the district bank.

“In the context of our market monitoring following the onset of the financial crisis in late 2007, involving thousands of calls and e-mails with market participants over a period of many months, we received occasional anecdotal reports from Barclays of problems with Libor,” New York Fed spokeswoman Andrea Priest said in an e-mailed statement.

“In the spring of 2008, following the failure of Bear Stearns and shortly before the first media report on the subject, we made further inquiry of Barclays as to how Libor submissions were being conducted,” the statement said.

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Matt Taibbi Explains The LIBOR Bankster Scam

Disgraced former New York Governor Eliot Spitzer just might have a future as a talk show host if he keeps booking amazing guests like Matt Taibbi for Current TV:

…Barclays CEO Bob Diamond recently resigned after the bank was fined $453 million for its part in the scandal, which involved manipulating the London Interbank Offered Rate (Libor), a key global benchmark for interest rates, by essentially “faking their credit scores,” according to Taibbi. And as Taibbi explains, Barclays couldn’t have acted alone.

“It can’t just be Barclays and the Royal Bank of Scotland. In fact, it can’t even be four banks or even five banks,” he says. “Really, in the end it’s probably going to come out that it’s going to be all of them … involved in this. And that’s what’s critical for people to understand: that this is a cartel-style corruption.”…

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Barclays CEO Resigns Under a Cloud of Criminal Allegations

World Economic Forum (CC)

Uh-oh.  In case you haven’t been paying attention, there’s a rolling sh*tstorm breaking out across the pond related to the admitted gaming of LIBOR by big investment banks like Barclays.  You know LIBOR, right?  The rate referenced in practically every major financial contract since 1985.

I wonder how much of that $450 million will go to folks who got the short end of the stick on contracts paid out under a fradulently low LIBOR rate.

From Mark Scott at the NY Times:

LONDON – Barclays is quickly trying to stem the fallout from a rate-manipulation scandal, as its chief executive Robert E. Diamond Jr. [at right] abruptly resigned on Tuesday.

Less than a week ago, the big bank agreed to pay $450 million to settle accusations that it had tried to influence key interest rates for its own benefit, sparking a political firestorm in Britain.

Now, the scandal has claimed three casualties, including Mr.

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Wall Street Criminal Rajat Gupta Convicted

Photo: World Economic Forum (CC)

A symbolic strike for the good guys, for once, as ex-Goldman Sachs bankster Raj Gupta is convicted of insider trading. For an explanation of why Wall Street is a crime scene check out this week’s Disinfo Deal: Danny Schecter’s Plunder: The Crime of our Time. Report from the Los Angeles Times:

A jury has convicted former Goldman Sachs director Rajat Gupta in his high-profile insider-trading case in New York.

A federal jury had been weighing Gupta’s fate for two days. The jury of eight women and four men found Gupta guilty of four criminal counts in a wide government push against insider trading. Gupta was found guilty of three counts of securities fraud and one count of conspiracy for leaking stock tips to Raj Rajaratnam, head of the Galleon Group hedge fund. He was acquitted on two counts of securities fraud.

Each fraud charge carries a sentence of up to 20 years in prison; the conspiracy charge could result in up to five years.

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Western Banks ‘Reaping Billions From Colombian Cocaine Trade’

Reports Ed Vulliamy in the Guardian:

The vast profits made from drug production and trafficking are overwhelmingly reaped in rich “consuming” countries – principally across Europe and in the US – rather than war-torn “producing” nations such as Colombia and Mexico, new research has revealed. And its authors claim that financial regulators in the west are reluctant to go after western banks in pursuit of the massive amount of drug money being laundered through their systems.

The most far-reaching and detailed analysis to date of the drug economy in any country – in this case, Colombia – shows that 2.6% of the total street value of cocaine produced remains within the country, while a staggering 97.4% of profits are reaped by criminal syndicates, and laundered by banks, in first-world consuming countries.

“The story of who makes the money from Colombian cocaine is a metaphor for the disproportionate burden placed in every way on ‘producing’ nations like Colombia as a result of the prohibition of drugs,” said one of the authors of the study, Alejandro Gaviria. ”Colombian society has suffered to almost no economic advantage from the drugs trade, while huge profits are made by criminal distribution networks in consuming countries, and recycled by banks which operate with nothing like the restrictions that Colombia’s own banking system is subject to.”…

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‘Inside Job’ Director Charles Ferguson Indicts Our ‘Predator Nation’

Bald EagleHail Caesar! The circle of those of us crusading for a jail-out of banksters, and not another bailout for them is widening, Our newest Commissar of Condemnation, Charles H. Ferguson, director of the film Inside Job is in the house with a new must-read book, Predator Nation, that documents and details how the financial elite and its values took over our culture and country.

When I first saw Ferguson’s film, coming out two years after my Plunder: The Crime Of Our Time on a similar subject, I was a bit jealous because of all the support he attracted from Sony and Hollywood insiders who waged a successful Oscar campaign on its behalf. He had access to big money for a film on big money, after selling a software company. He could afford high production values but also the kind of marketing that Indy filmmakers like myself dream about.

As a PhD, former business executive and government advisor, Ferguson had developed a keen skill for synthesizing information and creating a filmic “explainer,” almost like a big screen power-point presentation, that recounts how we got into this financial crisis through government deregulation/complicity.… Read the rest

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How Wall Street, Congress and President Obama Killed Financial Reform

Financial Reform“It’s bad enough that the banks strangled the Dodd-Frank law. Even worse is the way they did it – with a big assist from Congress and the White House.” Another must read from Matt Taibbi in Rolling Stone:

Two years ago, when he signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, President Barack Obama bragged that he’d dealt a crushing blow to the extravagant financial corruption that had caused the global economic crash in 2008. “These reforms represent the strongest consumer financial protections in history,” the president told an adoring crowd in downtown D.C. on July 21st, 2010. “In history.”

This was supposed to be the big one. At 2,300 pages, the new law ostensibly rewrote the rules for Wall Street. It was going to put an end to predatory lending in the mortgage markets, crack down on hidden fees and penalties in credit contracts, and create a powerful new Consumer Financial Protection Bureau to safeguard ordinary consumers.

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Occupy Protesters Attempt To Crash Wells Fargo Shareholder Meeting in San Francisco

Wells FargoThe police are ready for this. Good luck. Reports the AP via the Washington Post:

Police were guarding the entrance to the annual meeting of Wells Fargo shareholders on Tuesday as protesters associated with the Occupy Wall Street movement geared up to crash the gathering.

Dozens of officers were stationed around the Merchant’s Exchange Building in the city’s Financial District in advance of the 1 p.m. meeting. Bank stockholders were asked to show certificates or other proof of ownership before being corralled past gates erected in front of the doors.

Many of the early arrivals represented community groups from across the country that purchased Wells Fargo stock so they would have a say in the bank’s practices.

Shareholder Mark Richmond, a 59-year-old Portland member of the group We Are Oregon, said he hoped he could voice his concerns specifically about predatory lending and home foreclosures. He said he expected some raucousness inside and outside the meeting.

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