Li(e)bor: The Cartel Emerges

Huge.  Zero Hedge.  Excerpts:

Just when you thought the Li(e)bor scandal had jumped the shark, Germany's Spiegel brings it back front-and-center with a detailed and critical insight into the 'organized fraud' and emergence of the cartel of 'bottom of the food chain' money market traders. "The trick is that you can't do it alone" one of the 'chosen' pointed out, but regulators have now spoken "mechanisms are now taking effect that I only knew of from mafia films." RICO anyone? "This is a real zinger," says an insider. In the past, bank manager lapses resulted from their stupidity for having bought securities without understanding them. "Now that was bad enough. But manipulating a market rate is criminal." A portion of the industry, adds the insider, apparently doesn't realize that the writing is on the wall.



There have been plenty of banking scandals, but none quite like this: Investigators and political leaders believe that the manipulation of the Libor benchmark interest rate was the result of organized fraud. Institutions that participated could face billions in fines and penalties.
And:

What the Banks Could Now Face



German banks must have pricked up their ears when BaFin President Elke König recently spoke about the Libor scandal. "Basically, banks must establish suitable reserves for possible losses," König concluded.


Investors, like Vienna hedge fund FTC Capital, have made it clear that they do not intend to let up. They feel obligated to their customers to file claims for damages, explains FTC executive Majcen...


There are already 20 lawsuits in the United States, some of which have been combined into class action suits. The plaintiffs range from the City of Baltimore to police and firefighter's pension funds, the City of Dania Beach, Florida, and Russian oligarch Vladimir Gusinsky.


They feel encouraged by the actions of regulators. "Both the American CFTC and the FSA have done excellent investigative work," says Majcen. Bank analysts expect that other institutions could face fines similar to the one imposed on Barclays. In fact, it ought to be in the banks' best interest to quickly settle their cases. "But they're afraid, because since Barclays, they know that it isn't just about money, but also about making heads roll," says a major shareholder of Deutsche Bank.


German attorneys are also lining up to represent potential clients. "A few institutional investors have already contacted us," says Marc Schiefer of the law firm TILP in the southern German city of Tübingen.


Years could go by before damage suits are ruled on...


Possible Libor-related liabilities would cause serious problems at WestLB, or its successor company Portigon. The once-proud state-owned bank is in the process of being liquidated, at a cost of billions to its former owners, the western German state of North Rhine-Westphalia and savings banks. The Libor scandal could further increase the burden on taxpayers.
...
The call for stricter regulation is also getting louder in politics once again... "cheap populism."


"This is a real zinger," says an insider. In the past, bank manager lapses resulted from their stupidity for having bought securities without understanding them. "Now that was bad enough. But manipulating a market rate is criminal." A portion of the industry, adds the insider, apparently doesn't realize that the writing is on the wall.


The parties involved, including Deutsche Bank and its new co-CEO Jain, cannot expect leniency when charges are investigated. "We can't make any allowances for high-profile names," say officials in the capital.

The vast inter-connectedness of these institutions presents a huge problem for regulators and investigators(Think thousands of strings of Christmas lights tangled together), but the main players are known, and those players have got to be freaking out.  Who will be branded "The First Example?"

Couple thoughts:  The public will never understand this scandal until the media finds a way to explain it clearly and succinctly.  But the media first must start actually covering this scandal.

What a glorious time to be an honest, independent Auditor!  Welcome to your Golden Age, nerds!

Greece Has Defaulted: Here Is Where We Stand

This weekend should be interesting.  From Zero Hedge.  Excerpts:
1) Greece was able to write off 100 billion euros worth of debt in exchange for a 130 billion rescue package of new debt, of which Greece itself will receive 19%, or about 25 billion, so that it can continue to operate as an ongoing concern. Somehow Greece is in a better position than before, with more debt and less sovereignty and still---by virtue of sharing a common currency---trying to compete toe-to-toe with the likes of Germany and the Netherlands, kind of like being the Yemeni National Basketball team in an Olympic bracket that includes the US, Spain and Germany. At least a "within the euro" default prevented bank runs in Portugal, Spain, Italy et al.



2) As a result of the bond haircuts, Greece has many pension plans that can no longer even pretend to be viable, at least according to the original contracted scheme, but pensionholders still working can take heart in the fact that their current wages will be cut, too.
And:
8) Given how much angst was caused by the drawn out Greek affair, the Spanish leader knows he has enormous leverage with EU leadership and he can continue to do what he has been doing with regard to ignoring the deficit targets demanded/suggested by the EU. The EU might well bark at him, but they cannot afford to bite at this time. Muchos gracias, Greece.

Yeah, I Bet They Were More Than Speechless..

Holy shit.



The person who invited this dude to the BBC no longer works there.  At one point, the announcer references the dropped jaws around the newsroom..  Rastani tells waay too many secrets here, and will experience some form of blowback.  Will it be from those in the financial sector for talking too much, or will it be all the poor people watching him sneer and gloat at his future enrichment from their  money? 

Another big secret revealed:  TRADERS DON'T CARE WHAT HAPPENS.  They will make money at your devastating expense, and it will all happen very soon.  And it's a matter of fact within the industry.  And they can't wait to steal your life savings. They salivate for Doom.  Remember that when you watch them talking, feigning concern about the "dire situation".. 

Hang on; Financial Television is about to get even more interesting.  And by "interesting," I mean "full-tilt batshit."

That Loud Boom You'll Hear Is Greece Exploding..

The Real Deal begins later today.  My gut says Austerity measures pass, and Athens begins to ROCK shortly afterward..  If Austerity fails..  The Greek economy goes into collapse, and Athens begins to ROCK shortly afterward.  Maybe, maybe not.  But the Greeks do like to riot, and they're really good at it..  (By no means is this an insult, either.  The No Bullshit political will of the Greek people is inspiring to others living in more complacent regions of the world.  It's good to see that spirit alive and well..  Somewhere..)

Greece and Europe brace for austerity measures vote  The Sofia Echo.  Excerpts:

Greek lawmakers, under the watchful eyes of the rest of the world, are due to vote on a second round of austerity measures that sparked nationwide strikes and violent riots on June 28.

The vote will be held later on June 29.
The outcome of the vote will be vital for the stability of the European economy and for the future stability of Greece which is facing bankruptcy. Resembling a typical Greek drama, the voting process itself has become rife with accusations of betrayal and treachery following revelations in Greek media that there are mavericks in both camps who could sway the result unexpectedly.
..
If the government fails to pass the austerity measures, Greece will go bankrupt. The proposed measures will affect the public sector and will consist of the sale of assets as well as higher taxes and more spending cuts.

Massive protests are expected on the streets of central Athens and outside Syntagma Square in front of the parliament building, protests which have the potential to turn violent judging from the past.

WRAPUP 2-Greek lawmakers seen backing austerity, future unsure  Reuters.

Greece's parliament looked increasingly likely to approve unpopular austerity measures on Wednesday, despite violent protests, to secure international funds to prevent the euro zone's first sovereign default.

But with the country on the brink of bankruptcy, it remains uncertain whether a weakened Socialist government can push through laws to implement structural reforms and privatisations in a second series of votes on Thursday, and then stick to a tight EU/IMF-imposed schedule for implementation.
Many economists and investors still expect Greece to default in the medium-term.

Greek leader 'dead man walking', Greek bailout 'collective punishment'  Video courtesy Russia Today, via You Tube.

If Greece Defaults, What Happens to Portugal and Ireland—and Spain?

From Gonzalo Lira.  Yet another Catastrophe befalling mankind in the beginning days of its expansion.  Excerpts:

So if Greece goes down the tubes, Ireland and Portugal would almost immediately need a bailout: They would not be able to borrow on the open markets the money they need in order to continue funding their governments.

That is, if Greece defaults, the Irish and the Portuguese would suddenly find themselves without the money to fund elementary schools, ambulances, sewer systems, power grids, etc.

So! What is the European leadership doing?

Dithering! They are not approving a Greek bailout—and they are not giving a clear signal that Greece will be booted out of the eurozone, but Ireland and Portugal will be protected. In other words, the European finance ministers who are supposed to “stabilize the markets” are creating the conditions of uncertainty in the markets—

—which only hurts Ireland and Portugal.

Now, why is defending (financially speaking) Ireland and Portugla essential?

In a word, Spain.
And:
It’s as simple as that. Spain is too big—roughly half the size of Germany. If Spain goes, it will drag down all of the European continent with it—that is, bank failures (on both sides of the pond), a crash of the eurozone as a currency, massive unemployment, a European economy that would grind to a halt—

—basically, the worst parts of the Great Depression.

It doesn't look like Greece as-it-is-now will remain much longer.  The inevitability of financial "obligations" versus the needs of the populace will continue to escalate towards violence towards whatever outcome eventually occurs.  It's like watching an Impact in slooow motion.  Greece is Happening, and the implications of Greece Happening have already begun, too.

And now they're protesting in Spain, while the crisis continues to deepen.

If You Said "Greece," Congratulations! You Win The Global Economic Dead Pool!

Greek PM warns against 'catastrophic' default  Video and article from Al Jazeera.

Al Jazeera's Tim Friend, reporting from the capital, Athens, said: "The anger is deep and (protesters) resent having to pay the price for the mistakes of others as they see it, the mistakes of banks and financiers."

"The problem for the politicians here is they're being dictated to by the International Monetary Fund and events now taking place elsewhere in Europe with the euro zone finance ministers," our correspondent said.


"They are the ones now calling the shots. The Greeks really are having to simply comply and do what they say."

Crisis point for Greece as it gets loan to stave off default  What will the people do when the banks and government openly defy their wishes?  Well, they're Greek, so the logical answer "Take to the streets!."  Will this event devolve into riots, fighting, insurrection, or worse?  At the moment, Greece's situation looks inevitable, and looks like a Worst Case Scenario no matter the direction.

Everything's getting hotter; everywhere.  Greece is just the opening song of the opening act.

Breaking: Greece Threatens To Leave Eurozone, Reintroduce Own Currency

If this is true?  Then, Wow..  Here it comes.  From Zero Hedge.  Excerpts:

The debt crisis in Greece has taken on a dramatic new twist. Sources with information about the government's actions have informed SPIEGEL ONLINE that Athens is considering withdrawing from the euro zone. The common currency area's finance ministers and representatives of the European Commission are holding a secret crisis meeting in Luxembourg on Friday night.

Greece's economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou's government is considering abandoning the euro and reintroducing its own currency.

Alarmed by Athens' intentions, the European Commission has called a crisis meeting in Luxembourg on Friday night. In addition to Greece's possible exit from the currency union, a speedy restructuring of the country's debt also features on the agenda. One year after the Greek crisis broke out, the development represents a potentially existential turning point for the European monetary union -- regardless which variant is ultimately decided upon for dealing with Greece's massive troubles.

Will Greece indeed be the first to leave?  The Euro Zone crisis is already in motion - The question is:  Who topples the domino, how disastrous and complicated is the resulting chain reaction, and how and where will it end?  But the free fall hasn't even started yet, and wondering about the future is pointless when the near term present will be crazy enough.

A failing nation state attempting to decouple from a failing Union.  Again, if true:  This is a big deal.