Tag Archives: fed

36 UBS Bankers To Be Implicated In Liborgate, Criminal Charges To Be Filed

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ZeroHedge

As the fallout of Liborgate escalates, the next big bank to be impacted in the fallout started by Barclays civil settlement “revelation” is set to be troubled UBS, already some 10,000 bankers lighter, where as many as three dozen bankers are reported by the implicated in the fixing of the rate that until 2009 was the most important for hundreds of trillions in variable rate fixed income products. Only instead of attacking the US or even European jurisdiction, where the next big settlement is set to hit is Japan: a country whose regulators as recently as half a year ago promised there were no major issues with Libor, or Tibor as it is locally known, rate fixings. And while this most recent development will have little material impact on UBS’ ongoing business model, the one difference from previous settlements is that it will likely include criminal charges lobbed against some of the 36 bankers.

From the FT:

“UBS is close to finalising a deal with UK, US and Swiss authorities in which the bank will pay close to $1.5bn and its Japanese securities subsidiary will plead guilty to a US criminal offence. Terms of the guilty plea were still being negotiated, one person familiar with the matter said on Monday, adding that the bank will not lose its ability to conduct business in Japan. The pact between the bank and the US Commodity Futures Trading Commission, US Department of Justice, UK’s Financial Services Authority and UBS’s main Swiss supervisor Finma is expected to be announced on Wednesday, although last minute negotiations continue.”

More:

Not all of the three dozen individuals will face criminal or civil charges and the level of alleged misconduct varies among them. While it also is not clear how many bankers will be criminally charged, people familiar with the investigation said the settlement documents will document an intercontinental scheme to manipulate the Yen-Libor interest rate over several years involving desks from Tokyo to London.

The UK FSA has also notified at least five individuals linked to UBS that they are being personally investigated in connection with Libor. The watchdog has the power to impose fines and ban people from working in London’s financial services industry.

Criminal and regulatory investigations of individuals often take significantly longer than cases against institutions. The global settlement reached with Barclays over the summer did not include any charges against individuals, but several bankers are under criminal investigation, according to people familiar with the matter.

To a big extent, the reason why so many banks have given up on Libor and are now eager to settle comparable allegations, is because in a world in which not banks are primary counterparties to other banks, but central banks onboard all the counterparty risk, especially in Europe, Libor is now an anachronism – an unsecured lending rate remnant from another time, a time when there was risk a bank may fail without dragging its host central bank. That time is now gone, and as a result the only relevant metric now is how effectively can banks flush to the gills with excess reserves courtesy of various central banks, use said capital to generate a return on (central bank) capital, and a high enough ROE to keep shareholders happy.

Which is why even as banks are settling Libor allegations left and right, and even willing to throw some low-level traders under the bus because just like Fabulous Fab Tourre, nobody else had any idea of the criminal rate manipulation that was going on, and certainly not the corner office, what banks are really doing is learning from the master of trading – that would be none other than Steve Cohen – and experimenting with becoming the best hedge fund out there. Because in the new zero NIM normal, where money can not be made by traditional lending verticals, the only option left is to outsmart the competition.

And with retail investors leaving the marketplace in droves, the only ones left to be outsmarted are other banks. In other words, the cannibalization phase is almost upon us. Which means that just like the Knight Capital “fat finger” led to the collapse of one of the biggest market makers, so more and more banks will soon set their sights on their peers (think Bear and Lehman circa 2008), in an attempt to turbocharge their returns in a field in which there are simply too many competitors for everyone to make the needed returns.

Of course, if in the meantime some lowly attorney general can score some brownie points by amputating a division that is no longer needed, and throwing some janitors in minimum security prison for 12-24 months, so much the better for their political career. Sadly, nobody at the top, certainly nobody at HSBC or any of the other big banks, will ever see true justice, at least not until they too suffer the fate of Dick Fuld and suddenly find themselves as the main dish at the ever shrinking predators’ ball.

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Sanctions; More Fatal than the Atomic Bomb

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When you earn 1 dollar a week, 3% inflation could be the difference between eating and starving.  This is the most insidious form of oppression and terrorism known to man-kind.  Highjacking a country’s ability to voluntarily trade and conduct business is tantamount to genocide.  The difference between sanctions and conventional warfare is that only the educated understand how the oppression is taking place.  Many will live entire lifetimes not realizing from where their economic struggles are coming from.  Taking control of a country’s currency is redefining what money is and isn’t, thus putting everyone outside the insider bubble at the Banker’s Mercy. -TGR

http://www.inceptionhouse.com

Comparing the effects of sanctions vs nuclear bombs. Contrasting the fatalities of the atomic bombing of Hiroshima to those of the sanctions imposed on Iraq in the 1990s. “Genocide masquerading as policy” as one congressman put it. Should the US do the same to Iran? Are sanctions a legitimate ‘diplomatic tool’ to avert war?

For more info/sources see the following articles:

http://original.antiwar.com/sepahpour-ulrich/2012/08/07/sanctions-diplomacys-…

http://www.aljazeera.com/indepth/opinion/2012/10/201210373854792889.html

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Germany wants Her Gold Back

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Source: Spiegel via SilverDoctors

In perhaps the biggest story in gold since Hugo Chavez sent shockwaves throughout the gold market in mid 2011 (and propelled gold up $300 to a record $1915), the German Constitutional Court has ruled that the Bundesbank must conduct an audit on German Central Bank gold holdings, and in anticipation, has begun the repatriation of German gold from the NY Fed.   The Bundesbank will request the NY Fed ship 50 tones of German gold back to the motherland a year for the next 3 years!

It appears de Germans are about to receive a crash course in the lesson He who owns the gold makes the rules (aka possession is 999/1000ths of the law).

Assuming that the NY Fed does decide to comply with the Bundesbank’s request to keep up appearances for the other central banks, we wish the cartel luck in finding 150 tons of TUNGSTEN FREE PHYZZ over the next 3 years as the Bundesbank reportedly will PHYSICALLY VERIFY THE GOLD.
From Spiegel  (h/t ZH):

Germany has the second largest gold reserves in the world, nearly 3400 tons. Supposedly, anyway. Because stocks have never been checked for authenticity and weight. Now, the Federal Court has asked the Bundesbank to examine the gold reserves abroad regularly.

 

The German central bank gold is safely stored in vaults in Frankfurt, New York, Paris and London. Checked really but apparently no one. The Federal Court has the Bundesbank now anyway required regular inspection and inventory of the vast gold reserves abroad. The auditors explain this in a report on Monday has become known to the budget committee of the Bundestag with the “high value of gold holdings.”

 

The samples stored at other German banks stocks were also never by the Bundesbank itself or by other independent auditors “added physically and for authenticity and weight” checked. Actually talk on the subject numerous theories – so should the U.S. gold reserves at Fort Knox have long been looted.

 

The Bundesbank has on the USA’s second largest gold reserves in the world. End of 2011 there were 3396 tons, worth 133 billion euros. After the soaring price of gold is likely to reach about 142 billion euros currently even. Secures the gold bars by the Bundesbank in own vaults in Frankfurt as well as at three bearing points abroad: The U.S. Federal Reserve Bank in New York, Bank of France in Paris and the Bank of England in London.

 

Bundesbank gets tons of gold from New York

 

The Court had determined the order of the Bundestag that the Federal Bank reviews its overseas gold reserves stored exactly. It is disputed whether the Bundesbank experienced for years practice sufficient to rely only on a written confirmation to the gold bars by the foreign central banks.

 

The Court recommends that the Bundesbank to negotiate with the three foreign central banks the right to physical verification of stocks. With the implementation of this recommendation, the Bundesbank has begun according to the report. They also decided to bring in the next three years to 50 tons each of the past at the Fed in New York gold to Germany to get it here to undergo a thorough examination. In the report, several points are blackened. In effect, the paper is not clear exactly how much gold is in which foreign central bank.

 

The information held in the Federal Bank headquarters holdings consist of 82,857 according to the report bullion stored mostly in sealed containers with 50 bars, which are kept in four separate locked safe boxes. Part of it (6183 bar) stored on open shelves, therefore in a separate vault – the so-called gold chamber. To secure the gold it says in the report: “The vault closure is double, the inner seals and the gold chamber under a triple lock.”

For those unaware, Germany’s official gold holdings are 3,400 tons. Perhaps Germany announcing the repatriation of 150 tons indicates that only 150 tons of actual, tungsten-free phyzz remain in NY and London?

Related:

New $100 bills stolen en route to Fed facility

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Source: CNN Money

NEW YORK — Unknown thieves stole a “large amount” of newly-designed $100 bills bound for a Federal Reserve facility in New Jersey on Thursday, the FBI said.

Frank Burton, Jr., spokesman for the FBI’s Philadelphia division, said the theft occurred at some point between when the shipment of bills landed at the Philadelphia airport on a commercial flight from Dallas at 10:20 Thursday morning, and when the shipment reached its New Jersey destination around 2:00 p.m., when the courier service transporting the bills reported some missing.

The missing bills carry a design that is not slated to reach circulation until 2013. They feature a large gold “100″ graphic on the back, and an orange box on the front with a faint image of the Liberty Bell.