On Lie-borgate: "Everyone Knew, And Everyone Was Doing It"
"I wish I could say that this was an isolated case... You will hear more on this in due course" is how the UK FSE's Director of enforcement described Lie-borgate to Reuters this weekend.
It seems incredibly that the US regulators and investing public alike
are shunning this interest rate rigging scandal as the UK goes to
DEFCON 1 with more than a dozen other banks being investigated in the
long-running global probe. The Barclays Chairman quit over the weekend
(and we assume will not be the last casualty) as The Telegraph notes the 'dislocation of libor from itself' - since banks could not be seen borrowing at higher rates for fear of liquidity repercussions, as widespread. According to the trader the BBA asked for a rate submission but there were no checks and "everyone knew" and "everyone was doing it".
What is incredible is the level of nonchalance that this illegal act
had taken on with entire teams of people well aware as open discussion
occurred (not clandestine blue-horseshoe-likes-low-libor-style). Indeed
this widespread and well-known action of dislocating libor from itself
(since in a trader's words "everyone knew we couldn't borrow at Libor,
you only needed to look at CDS to see that... with real Libor rates 3 to 4 per cent higher than the BBA's submitted Lie-bor") has now led George Osbourne, as per the FT, to launch a 'Leveson-style' probe into standards in the banking industry - a full, public independent inquiry into the $504 Trillion market's underlying integrity. Libor had dislocated with itself for a very good reason – to hide the true issues within the bank.
"I wish I could say that this was an isolated case... You will hear more on this in due course" is how the UK FSE's Director of enforcement described Lie-borgate to Reuters this weekend.
It seems incredibly that the US regulators and investing public alike
are shunning this interest rate rigging scandal as the UK goes to
DEFCON 1 with more than a dozen other banks being investigated in the
long-running global probe. The Barclays Chairman quit over the weekend
(and we assume will not be the last casualty) as The Telegraph notes the 'dislocation of libor from itself' - since banks could not be seen borrowing at higher rates for fear of liquidity repercussions, as widespread. According to the trader the BBA asked for a rate submission but there were no checks and "everyone knew" and "everyone was doing it".
What is incredible is the level of nonchalance that this illegal act
had taken on with entire teams of people well aware as open discussion
occurred (not clandestine blue-horseshoe-likes-low-libor-style). Indeed
this widespread and well-known action of dislocating libor from itself
(since in a trader's words "everyone knew we couldn't borrow at Libor,
you only needed to look at CDS to see that... with real Libor rates 3 to 4 per cent higher than the BBA's submitted Lie-bor") has now led George Osbourne, as per the FT, to launch a 'Leveson-style' probe into standards in the banking industry - a full, public independent inquiry into the $504 Trillion market's underlying integrity. Libor had dislocated with itself for a very good reason – to hide the true issues within the bank.Not So Fast: Finland And Holland Will Block ESM Bond Buying
While the bailout ball is in the German constitutional court, which has 8 days to decide, and potentially put the entire timeline of Europe's bailout in limbo should it cogitate longer than July 9 without handing over the ESM law to the president, in effect forcing the country into a Euro bailout referendum, it is easy to forget that there are other AAA-rated countries in Europe, which also have a say as to who gets bailed out. As of this morning, it appears that Germany may increasingly be the only one left footing the insolvency bill as both Finland and Holland said "Ei" and "Nee" respectively.European Manufacturing Contracts For 11th Consecutive Month As Unemployment Hits Record
While Belgian caterers are delighted that Europe's increasingly more unelected leaders quarrel endlessly over who gets to foot the bill to keep the market fooled for one more week that things are fixed, Europe is burning. The just released MarkIt PMI data showed that while Spanish bonds may be up 50 bps one day, down 75 bps the next, "the downturn in the Eurozone manufacturing sector extended to an eleventh successive month. Production and new orders suffered further severe contractions, leading to the steepest job losses since January 2010." And here is where Germany, which as noted earlier, is becoming isolated in its European bailout ambitions, should pay attention: "The rate of decline in Germany was the steepest for three years, and marked a fourth successive monthly decline in the region’s largest economy." This metric is only going to get worse, only in the future it will be coupled with increasingly more direct and contingent debt all around. And further confirming that there is no easy way out for Europe was the May Eurozone unemployment number which at 11.1% rose to a new record
June Global PMI Summary: Euro Area Slowdown Is Beginning To Impact The Rest Of The World
The sea of red just got even redder as Japan, Korea, Norway, South Africa and Taiwan all dropped below 50, i.e., into contraction territory.
From Bank of America: "Overnight and early this morning, a bevy of
global manufacturing PMI reports were released. This provides us with an
early reading on the state of manufacturing. Out of the 24 countries
reporting so far, 10 saw month-over-month improvements in their
manufacturing PMIs, while fourteen countries saw their PMIs worsen in
June. Seventeen of the manufacturing PMIs were below the 50 breakeven
level that divides expansion (+50) from contraction (+50). A majority of
the below-50 PMI indices are located in the Euro area. The ongoing
sovereign debt and banking crisis continues to weigh on the region’s
economic activity and sentiment. The Euro area slowdown is beginning to impact the rest of the world."The Failure Of The Firewall
The markets are getting mislead, one more time, by the spin that Europe places on events; by the focus that the giant European propaganda machine spits out from various sources again and again and again. You may recall, in the not too distant past, how the firewall was the thing, how the money needed to be bigger and how we were all led to believe that this giant, massive wall of Euros would protect the core nations of Europe. These nations included Spain and Italy without question and now the first mighty oak has fallen as Spain stepped up to the plate and swung the begging bat. Firewalls, of any size, do not do one thing to stop the infection of those that are heading economically south and Europe has placed its full concentration on the totally wrong aspect of the problem which has been to ward off the evil spirits of the bond vigilantes instead of on fixing the financial problems of the nations and so the problems continue and worsen. Over the weekend Spain said their second quarter results would be worse than the first quarter and Italy said there may come a moment when she needs help and the basis of what is driving the markets heightens as the economies of a mostly recession bound Europe are getting worse. What have we learned in short, in brief, in actuality is that the concept of some mighty firewall is a failed concept and Spain has just proved the truth of that.As Lie-Bor Unwinds, Just How Much Is At Stake?
This much...
Key Events In The Holiday-Shortened Busy Week
Despite the July 4th mid-week holiday, the coming week will be packed with major economic updates. Goldman Sachs summarizes what to look for in the next 5 days.
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I'm PayPal Verified Bank of England dragged into rate-rigging row
Eric De Groot at Eric De Groot - 19 minutes ago
The global financial system which contains USA, UK, European Incorporated
etc. is based on a game of confidence. The rigging of any market doesn't
help bolster confidence. Watch demand for private money (gold) grow as
another scandal unfolds and widen within public view. Headline: Bank of
England dragged into rate-rigging row Bob Diamond had a conversation with
Paul Tucker about how...
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content, and more! ]]
The US Has Outperformed The Emerging Markets
Admin at Marc Faber Blog - 39 minutes ago
Since last year very few emerging markets have made a new high whereas the
S&P has made a new high. In other words, the US has outperformed the
emerging markets. - *in Economic Times*
Related ETFs: SPDR SP 500 ETF (NYSE:SPY), iShares MSCI Emerging Markets
Indx (ETF)
*Marc Faber is an international investor known for his uncanny predictions
of the stock market and futures markets around the world.*
Why Traders Are 'Glued' to Their Desks
Eric De Groot at Eric De Groot - 1 hour ago
Traders, including myself at times, are glued to their desks because media
hype makes it difficult to remember the secular cycles and intermarket
trends. Many of those trends have turned defensive in 2012. For instance,
the Dow Jones Transportation to Industrial Average ratio has broken a key
up trend. This when combined with a growing number of defensive capital
flows suggests a...
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content, and more! ]]
If Gold Goes Down, I’ll Buy More
Admin at Jim Rogers Blog - 2 hours ago
Gold is up 11 years in a row. Gold is consolidating now, a well-deserved
consolidation. I own gold, I’m not selling gold. If gold goes down, I’ll
buy more. - *in ETF Trends*
Related ETF: SPDR Gold Trust ETF (GLD)
*Jim Rogers is an author, financial commentator and successful
international investor. He has been frequently featured in Time, The New
York Times, Barron’s, Forbes, Fortune, The Wall Street Journal, The
Financial Times and is a regular guest on Bloomberg and CNBC.*
Buy Low And Sell High
Admin at Jim Rogers Blog - 2 hours ago
“Buy low and sell high. It’s pretty simple. The problem is knowing what’s
low and what’s high.” - *in a recent investment conference *
Jim Rogers is an author, financial commentator and successful international
investor. He has been frequently featured in Time, The New York Times,
Barron’s, Forbes, Fortune, The Wall Street Journal, The Financial Times and
is a regular guest on Bloomberg and CNBC.Frontrunning: July 2
- The Real Victor in Brussels Was Merkel (FT)
- German Dominance in Doubt after Summit Defeat (Spiegel)
- Euro defeat for Merkel? Only time will tell (Reuters)
- The Twilight Zone has nothing on Europe: European Banks Bolster Capital With Shunned Bonds (Bloomberg)
- Krugman is baaaaaack and demands even more debt: Europe’s Great Illusion (NYT)
- Republicans See Way to Repeal Obamacare (FT)
- Hollande Ready to Tackle Public Finances (FT)
- China’s Manufacturing Growth Weakens as New Orders Drop (Bloomberg)
- Protesters March in Hong Kong as Leung Vows to Fight Poverty (Bloomberg)
China's Landing Getting Harder As Stimulus Fails To Prime Pump
The
spread between HSBC's and China's version of Manufacturing PMI
increased a little over the weekend when the headline of China's data
point managed to cling perilously above the 50-line of expansion over
contraction (while HSBC's drifts lower and lower under 50). The headline
print - still its lowest since Nov 11 - however, hides a much less
sanguine truth in the sub-indices with the new orders index fell once
again staying in the contractionary territory under 50. What is
more worrisome for China (and implicitly the rest of the world) is
that while transport equipment and electrical machinery improved
(explicitly thanks to government funded infrastructure projects) there
has been no multiplier effect of a broad-based investment rebound. As
Credit Suisse notes: "The stimuli launched in middle of May
seems to have failed to jump-start the overall economy, yet the
moderation in PMI is not severe enough to justify a much more
aggressive rescue package."Today’s Items:
Having the spot light of truth show that
Turkey instigated aggression against Syria, NATO, and the U.S. are
clearly the aggressors in this conflict. Hillary Clinton, now having
the rug pulled from under her, has to come up with a way to explain to a
skeptical world on how NATO can help Turkey invade Syria under
invalidated and false premises. But since international law means
nothing to the U.S. government, that is only a minor stumbling block.
China’s official purchasing managers’
index fell to 50.2 in June. It was the lowest reading since November,
and economists expect things to worsen. New orders, which include
domestic orders, were anemic too, slipping 0.6 percentage points to
49.2. And the world recovery continues…
Now we know exactly why those hundreds of
bankers have been resigning in droves all over the world. Hundreds of
bankers across three continents are embroiled in the interest-rate
fixing scandal. For now, British bankers, from 20 banks like HSBC and
Royal Bank of Scotland, are facing criminal inquiries. Did they
honestly believe that resigning were going to save their backsides?
India’s currency, the rupee, is falling
fast against the US dollar and a range of other currencies. As a result,
Indians buy gold to protect themselves against the falling rupee.
India’s problem is that it’s no longer the ‘hot’ economy it was just a
few years ago. The average, Indian with savings, and understanding the
legendary corruption, really has no choice but to buy physical. And it
will not be long before Americans will be in the same boat.
The White House released its annual report
to Congress on staff salaries. So, while the economic picture for the
rest of the nation looks more bleak, they are partying at the White
House as their payrolls increased from $37.1 million in 2011 to $37.8
million in 2012. According to the report, out of the 466 paid
employees, 139 make over $100,000 a year. Bet they do not have to
worry about student loans either.
This video details the development of an
experimental flu vaccine patch, that can be mailed, which will aid in
the spreading preventable diseases, such as AIDS, to you and your
family. Just imagine it, you apply the patch to your children, they
die, and you cannot sue anyone because they can claim you did not apply
the patch correctly. Nothing like no-fault litigation.
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