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The BillyB, Aster & JR8 roundtable!

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BillyB
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Postby BillyB » Mon, 09 Jul 2012 1:54 pm

JR8 wrote:
BillyB wrote:It was a big shock on the street. Diamond transformed the IB division and turned barcap from a laughing stock to a well respected and slick 'almost tier 1' player (Acquiring LB helped) - he had the vision and personality to really change the status quo from a high street plodder, to a bank that now competes with MS, JPM etc.

It sounds like yet another huge operational risk issue where traders do what they want and there are no internal controls to keep an eye on things. Similar to the JPM fiasco last month. Ultimately, in these situations, the buck stops at the top of the tree.

I believe there'll be more banks exposed as part of the LIBOR collusion in the coming weeks.




It's turning into a bit of a shocking story. Apparently there are several more banks involved. The linked is an interesting though long article. It points out the perversity of RBS/HBOS who were on ELS (that could be an acronym for emergency life support) from the BOE, because they could not raise funds in the interbank market, reporting lower LIBOR figures than Barclays who had far less material liquidity issues. And apparently the BOE knew about this... well, hard not to notice you'd have thought.

Apparently Diamond got taken out my Mervyn King himself. Oh the BOE knew LIBOR was not representative, under-reported, as long ago as 2007.

Tucker the Dep-Gov of the BOE faces the Treasury Select Committee tomorrow. This story has legs!

http://www.telegraph.co.uk/finance/news ... -heed.html


Another point to consider - LIBOR rate is set by using 16 banks, haircutting the top and bottom 4, and then taking the average rate offered. How can 1 bank overly influence this process? It has to be a collective effort.

Is Barcap the first domino to fall, hmmm, I think so

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Postby JR8 » Mon, 09 Jul 2012 5:06 pm

BillyB wrote:Another point to consider - LIBOR rate is set by using 16 banks, haircutting the top and bottom 4, and then taking the average rate offered. How can 1 bank overly influence this process? It has to be a collective effort.

Is Barcap the first domino to fall, hmmm, I think so


Barcap is the first, that is because it settled early. The rest are yet to come. Apparently RBS have taken legal steps to block the release of their records re: the setting of LIBOR. Curious since they are nationalised!

I wondered about the averaging effect of submissions too. Didn't realise they got haircuts, which only reinforces the question. My thinking is that since the LIBOR submissions are published data that having 15 banks at say 1.5% and Barclays, the healthiest of the bunch, at say 1.8% is broadcasting to the world that something is really wrong with the rate.

Wouldn't it be ironic if Barclays were the only ones who were being honest, and it was the BOE and Treasury that forced them to lie.


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Edit to add: Is this the smoking gun?
[color=blue]
[i]'In an email dated October 22, 2008, from Sir Jeremy Heywood, then principal private secretary to Gordon Brown, to Paul Tucker, then head of markets at the Bank of England, he asks why Barclays is paying “ABOVE Libor”
Last edited by JR8 on Fri, 20 Jul 2012 2:49 pm, edited 1 time in total.

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Postby aster » Thu, 12 Jul 2012 6:38 pm

Image

How prophetic. :D

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Postby JR8 » Thu, 12 Jul 2012 6:46 pm

And you are the only person in the world who doesn't seem to realise that's an obvious photoshop job.

How pathetic :P

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Postby BillyB » Thu, 12 Jul 2012 8:48 pm

Play nice....

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Postby JR8 » Fri, 20 Jul 2012 2:45 am

Noting that the paint on the wall is inevitably drying as expected quickly becomes uninteresting.

However here is an article that I think should be linked here, just for the record...

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IMF loses all faith in the euro project
http://blogs.telegraph.co.uk/finance/am ... o-project/
...
'The IMF could hardly be clearer. It is a pre-emptive move to pin responsibility for the coming deluge exactly where it belongs:

On those who created this doomsday machine and pushed it through as a federalist Trojan horse, with scant concern for Europe’s democracies; on a second group of people who ran it for a decade with high-handed arrogance, disregarding warnings as the North-South gap grew to dangerous levels; and on a third group of leaders – led by Chancellor Angela Merkel – who now refuse to face up to the awful implications of what has happened.

The IMF is the leader of the Eurosceptic camp now.'

-----------------------------------

I think this is what is known as a bit of timely ar$e-covering, for when they need it later on and can then say 'Well, we told you so'.

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Postby JR8 » Mon, 23 Jul 2012 6:45 pm

Let's all raise out clenched fists to salute the Euro, bringer of peace and prosperity and now joy to the entire world, not just socialist Europe!


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'The yield on Spanish government 10-year bonds hit a new euro-era record of 7.5pc on Monday on fears that one of the eurozone's biggest economies might need a full-blown sovereign bailout.
The FTSE 100 opened down 1.5pc at 5566 points. Spain's Ibex slid 3pc, Italy's MIB dropped 2.6pc, France's CAC-40 dropped 1.7pc and Germany's DAX fell 1.3pc.
In Asia, Hong Kong's Hang Seng dropped 2.8pc, while Tokyo's Nikkei 225 shed 1.9pc, Australia's ASX Sydney slipped 1.7pc, South Korea's Kospi lost 1.8pc and China's Shanghai Composite slid 1.3pc.'
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http://www.telegraph.co.uk/finance/fina ... eepen.html

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Postby JR8 » Tue, 24 Jul 2012 10:44 pm

Spain's stock index is trading at a 9.5 year low. Ten year bonds @ 7.60%. Oh dearie dearie me, the Grim Reaper surely cometh soon.

Anyway, 'up the EU workers' eh lol!
Image


p.s. Perhaps Aster will be along later to remind us why the Spanish people are so lucky to be members of the euro.

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Postby JR8 » Thu, 26 Jul 2012 6:39 pm

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11.14 Mario Draghi has declared that the ECB will "do whatever it takes to preserve the euro". He repeated comments made to Le Monde newspaper last week that the euro is "irreversible," adding:
'...within our mandate the ECB is ready is ready to do whatever it takes to preserve the euro, and believe me, it will be enough.'
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http://www.telegraph.co.uk/finance/debt ... -live.html



Wow... this is the first time that in a kind of flash of light, I have realised that the euro is finished, and the politicians already know it.



Edit to add:
And if any more proof were needed that the euro is a political rather than economic project, take this!

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'On continued rumours of a euro break-up, Mr Draghi insisted that where there's a will, there's a way:
When people talk about the fragility of the euro, very often non-euro members underestimate the political capital that has been invested.'

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