You can’t make this shit up. Trust no one. Get your money out of the financial markets before they vaporize it.
Before I confess bank price fixing…let me say, I love your accent
The exchange takes place between a Barclays /quotes/zigman/301787 UK:BARC -0.83%official who isn’t named and Fabiola Ravazzolo of the New York Fed. Despite her Italian background — as detailed in a recent celebration of Italian entrepreneurs worldwide — Ravazzolo has a British accent, one the Barclays official very much appreciated.
“I’m glad you haven’t picked up an American accent yet,” he said.
“No, never,” she replied. She regaled how she’s still using British vocabulary, “like apartment, not flat.”
Ravazzolo, it should be said, wasn’t familiar with the intricacies of Libor, asking whether it was the borrowing or lending rate. This probably led to the extraordinary exchange, which starts on page five but really heats up on page six.
The Barclays official was noting when a Financial Times article showed the elevated rates Libor, the stock price at the U.K. bank dropped. So, the bank changed its attitude, as seen in this transcript.
The “:” is the unidentified official; FR is our New York Fed hero.
“: And so we just fit in with the rest of the crowd, if you like.
FR: Okay.
: So, we know that we’re not posting um, an honest LIBOR.
FR: Okay.
: And yet and yet we are doing it, because, um, if we didn’t do it
FR: Mm hmm.
: It draws, um, unwanted attention on ourselves.”
The official makes clear, it wasn’t just Barclays that was cheating.
“:And in fact, wha-what we’ve noticed is almost like um, a um, um perverse thing
where people that we know that are paying for money actually put in the lowest LIBOR
rates.
FR: Okay.
: So it, it’s almost to um, you know the ones that need cash the most put in the lowest,
lowest rates.
FR: Mm hmm.”
Ravazzolo didn’t exactly rush to the Department of Justice with the information. (The New York Fed says she did alert her superiors, who did tell other agencies of the U.S. government within a month.)
“FR: It’s that you are penalized just because you are honest the way somebody else that is dishonest, eh, you know that’s an advantage so that’s why I was thinking in that direction
but
: Yeah, yeah.
FR: I understand. No, no and I completely understand the, the point is that ah you know, you, you, you always try to, to try and help for everybody you know, and this is so bizarre what is going on in the market
: It is bizarre. Yeah
FR: Because this is creating
: We felt very un-, very
FR: Uncertainties.
: I mean we, it- it’s true words to
FR: Um.
: Say we feel very
FR: Yeah.
: Very uncomfortable with it.
FR: I understand now.
: But, the-the position we find ourselves in, is one where we can’t really fight it.
FR: I know, I know.”
– Steve Goldstein
Administrator says:
Key Highlights From Fed Lieborgate Disclosure
Submitted by Tyler Durden on 07/13/2012 11:31 -0400
Here are the choice highlights from the Fed datadump as we see them.
From Barclays to NYFed:
“Libor’s going to come in at.. .. three-month libor is going to come in at 3.53.
…it’s a touch lower than yesterday’s but please don’t believe it. It’s absolute
rubbish. I, I, I’m, putting my libor at 4%
…I think the problem is that the market so desperately wants libors down it’s actually putting wrong rates in.”
and on the ‘Stigma’:
“I think people are afraid to be seen as urn being ahh having, I mean if they have a high libor the market automatically assumes they’re paying too much, but in a perverse kind of way if you put a low libor, it’s almost as if the market knows that you’re scared to put where you really think it is. I mean, I know that I’m consistently high, but I think I’m consistently correct.”
and just how bad:
“when libor was fixing at 3.55… just to give you a clue I got paid 4.30 in threes by my Tokyo, via the yen”
and specific to Barclays:
“I don’t know if you’ve looked at my libors but I’ve kept mine the same virtually every day for the last week and everyone seems to be gradually sort of coming up to my levels, and I can tell you that I’m putting levels in that I’ m not sure I can trade or not, but I know they’re more realistic than anyone else’s.”
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13th July 2012 at 1:13 pm
Mr. Happy says:
From the venerable Richard Russell. Sounds like ‘REVOLUTION’. Fine by me.
The fact is that our Congress isn’t functioning intelligently — in fact, it just is not functioning. Congress is disgustingly corrupt and much of Congress is in the grip of lobbyists. Too many people enter Congress medium-poor and leave Congress rich. The President spends far too much time running for a second term. We should elect presidents for a single six-year term, and then the president should go home and do something else, that hopefully, is useful. The Supreme Court members should be elected, not appointed.
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13th July 2012 at 1:19 pm
bluestem says:
Yes, it’s not right what the bankster’s have been doing. Will anything change? I don’t see it. The usual scare tactics will be used to keep the sheeple in line. Take care of yourself the best way you know how. Nothing to see here. John
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13th July 2012 at 1:36 pm
TeresaE says:
So much corruption and so much collusion.
These are the crimes the freaking RICO statutes should be used for.
So many criminals, so few nooses.
China needs a 16 week lead time – which is probably dropping, now that I think about it.
Good news finally!
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13th July 2012 at 1:46 pm
Hope@ZeroKelvin says:
Like I have said previously, this LIBOR manipulation is on a scale that is absolutely beyond human understanding.
It means that the very heart of the financial system is completely broken.
AND OUR FED.GOV KNEW ABOUT IT AND DID NOTHING. In fact, the guy at the center of it, Turbo Timmy, is put as the Secretary of the Treasury!!!!!
If there is anybody out there that still has any “faith and confidence” in the US government, that person must be WILLFULLY deaf, dumb, and blind.
Soon to be DEAD for their willful ignorance.
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13th July 2012 at 2:00 pm
Administrator says:
HZK
Romney will fix it. He will surely be tough on Wall Street and the banksters. No more shenanigans once he’s in charge. Book it.
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13th July 2012 at 2:14 pm
Hope@ZeroKelvin says:
Admin:
I dunno, mebbe. The collapse is probably too far along for any body in ONE term to fix. I just know that Obama doubling down on all the stupid Bush stuff has sped the collapse a lot.
Obama wins and continues current shit = collapse within 4 years.
Romney wins and starts to reverse current shit = collpase within 20 years.
Take your pick.
However, there is still a ton of money sloshing around out there, still a functioning economy and an industrial base. If we can just get the fed.go off the neck of the American businessman and worker, perhaps we can be saved. China is gonna implode soon, so somebody is gonna have to make stuff again. We’ll see, but I’m sticking with ANYBODY BUT OBAMA theme.
(In keeping with the dog theme.)
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13th July 2012 at 2:27 pm
Hope@ZeroKelvin says:
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13th July 2012 at 2:30 pm
AWD says:
Of course the Fed knew about the LIBOR scam. They’re the biggest manipulators of interest rates on the planet.
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13th July 2012 at 2:39 pm
Administrator says:
Lassie has more brains than Romney. I’d vote for her.
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13th July 2012 at 2:44 pm
ThePessimisticChemist says:
I kept looking for the little green onion.
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13th July 2012 at 3:34 pm