Another bank ripoff and another lawsuit dismissed. The Libor manipulation scandal spurred private investors and others to sue the banks over their losses. A judge just threw out major portions of their case. There were at least 22 Plaintiffs. Now groups like the City of Baltimore are out of luck in recovering all of their losses due to banks manipulating a key interest rate.
Payday loans have to be the poster child for exploiting the poor. People should never get a payday loan. Selling blood or begging in the streets is a better option. The Pew Chartable Trust has been on the warpath to expose these exploitive sorts of financial ripoffs which it turns out are quite the profitable business.
The manipulation of the LIBOR scandal just keeps growing. Ever since Barclays was busted for manipulating this key critical interbank interest rate, more outrageous details keep pouring out.
Europe wants to make such evil financial dealings criminal. Yes, that's right, already manipulating a key interest rate is being classified as not criminal by this announcement.
Europe's top regulatory official intends to propose new rules that would criminalize the manipulation of benchmarks such as Libor.
The U.K. Serious Fraud Office opened a criminal probe into the attempted rigging of interest rates that led to a record fine against Barclays Plc (BARC), adding to pressure on banks already under investigation by regulators around the globe.
Supposedly the U.S. opened a criminal probe in February 2012:
Several major global banks, including Citigroup Inc, HSBC Holdings Plc, Royal Bank of Scotland Group Plc and UBS AG, have disclosed that they have been approached by authorities investigating how Libor is set.
The Central Banks went on the move. Within 45 minutes of each other, the ECB lowered interest rates, the Chinese central bank did too and the U.K. just enacted more glorified quantitative easing. BoE increased their asset purchases by £50 billion to a grand total of £350 billion.
While it appears we have a global, coordinated plan of attack by Central banks, one might also notice we have a global coordinated plan to counter an economic slowdown. In other words, by all acting in concert, this gives more confirmation that we have a global economic mini-implosion going on.
Barclays was busted for manipulating the LIBOR. The London Interbank Offered Rate is the interest rate banks charge to lend to each other. This key interest rate sets most banking transactions, including retail. Manipulating the Libor is like being a casino with crooked roulette wheels and loaded dice.
Barclays has been fined £290m ($450m) for trying to manipulate a key bank interest rate which influences the cost of loans and mortgages.
Marcus Agius will step down from Barclays as soon as Monday, amid fallout from the bank's $453 million settlement of probe into Libor manipulation.
On Wednesday the U.K's Financial Services Authority announced to the world Barclays manipulated the Libor and was fined. Below is some of the FSA's press release:
The FSA has today announced that it has found serious failings in the sale of interest rate hedging products to some small and medium sized businesses (SMEs). We believe that this has resulted in a severe impact on a large number of these businesses. In order to provide as swift a solution to this problem as possible we have today confirmed that we have reached agreement with Barclays, HSBC, Lloyds and RBS to provide appropriate redress where mis-selling has occurred.
The Federal Reserve released the August 9th FOMC meeting minutes and now the world of Wall Street is all ablaze, afire with more quantitative easing dreams and desires.
The FOMC meeting minutes paragraph causing the stir is this:
Federal Reserve Chair Ben Bernanke gave his long awaited Jackson Hole speech this morning. Now all are reading between the lines on whether more quantitative easing will be done and picking apart every single word as if Bernanke speaks in cryptography.
First, here is the speech paragraph that will generate quantitative easing, or QE3 buzz:
In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. We discussed the relative merits and costs of such tools at our August meeting. We will continue to consider those and other pertinent issues, including of course economic and financial developments, at our meeting in September, which has been scheduled for two days (the 20th and the 21st) instead of one to allow a fuller discussion. The Committee will continue to assess the economic outlook in light of incoming information and is prepared to employ its tools as appropriate to promote a stronger economic recovery in a context of price stability.
Clearly QE3 is still on the table from this speech.
Ben Bernanke has come out with a now, now, there, there on the falling dollar:
The Federal Reserve is monitoring currency markets “closely” and will conduct policy in a way that will “help ensure that the dollar is strong”, Ben Bernanke said on Monday in rare comments on the US currency.
The Fed chairman also indicated that the US central bank would not ignore the impact of rising commodity prices when evaluating the outlook for inflation. He said he would not rule out using interest rates to combat new asset price bubbles, even though he did not see obvious mispricing in the US at this stage.
Hmmmm, no obvious mispricing. Does that include the oil speculative bubble of 2008?
Meanwhile Gold is through the roof, in part due to the dollar decoupling.
In my recent series, Economic Indicators during the Roaring Twenties and Great Depression, I concluded that the indicators that were studied from the Deflationary period of 1920-1950 suggested that this recession might bottom out in about Q3 2009. But with anemic wage growth to say the least, such a weakly based recovery might be doomed at birth to be short-lived.
All the deflationary recessions from 1920 - 1950 followed a pattern. The CPI declined from the beginning of the recession and its YoY rate of decline bottomed immediately before the recession's end. M1 money supply followed a similar pattern, sometimes coincidentally, sometimes leading slightly. In all 6 of the deflationary recessions during the period of 1920-50, once M1 and CPI both declined at a decreasing rate, the recession was about to end.
Sometime in the next couple of years we are going to see the virtual death of the dollar and its death is going to be perpetuated by the very recovery the administration is now engineering.
The death I speak of may not necessarily come in the form of terrible exchange rates, but it will definitely manifest itself in the form of very high interest rates and likely inflation as well (through commodities again).
The manipulation of the LIBOR scandal just keeps growing. Ever since 
The Central Banks went on the move. Within 
Barclays was busted for 
Federal Reserve Chair Ben Bernanke gave his long awaited 
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