+++ 13. Juli 2012 +++
Libor-Gate Hits the Federal Reserve, Tim Geithner and Barack Obama
The revelations on the rigging of the London interest rates ("LIBOR-gate") have spread to the United States institutions big time. Not only did the New York Federal Reserve have knowledge of the rate fixing, but they were apparently witting participants in the whole sordid affair. At the time, the New York Fed was headed by Tim Geithner, the man Barack Obama appointed to become his Treasury Secretary.
Consider one of the items on Geithner's agenda for April 28, 2008 : a meeting listed as "Fixing LIBOR". A Reuters wire reported that the meeting was called with at least eight senior Fed staffers invited, including William Dudley, who took over Geithner's post when the latter joined the government. Also invited was James McAndrews, a Fed economist who three months later, in July 2008, published a report questioning whether or not the LIBOR rate was being manipulated.
In March 2008, the Bank for International Settlements had published a paper raising the issue of possible LIBOR rate fixing. And on April 16, 2008, the Wall Street Journal ran an article casting doubt on the accuracy of the same rates. So it was an open secret that "fixing" was indeed going on. When the news broke in late June, the British banking association and many others claimed to be “shocked”, but that was all for show.
Other documents released by Barclays Bank on July 3 show that the New York Fed was communicating directly with Barclays as early as 2007. In response, the Fed asserted in a statement that they "received occasional anecdotal reports from Barclays of problems with Libor" in the wake of the market crash in 2007, and that the dialogue continued until after the collapse of Bear Stearns in March 2008. Indicating that there was more than a simple "exchange of information" going on here, the Fed admitted that "[w]e subsequently shared our analysis and suggestions for reform of Libor with the relevant authorities in the U.K."
For author Robert Scheer, the Libor-gate is "The Crime of the Century." His article in the July 6 The Nation is damning: "Forget Bernie Madoff and Enron's Ken Lay — they were mere amateurs in financial crime. The current Libor interest rate scandal, involving hundreds of trillions in international derivatives trade, shows how the really big boys play. And these guys will most likely not do the time because their kind rewrites the law before committing the crime."
Former Labor Secretary Robert Reich called it, in the Guardian, “a rip-off of almost cosmic proportions” (cf.LIBOR and Wall Street Crimes: Reich Repeats Demand for Glass-Steagall).
A growing number of local governments, pension funds, and firefighter and police funds are filing lawsuits in Manhattan Federal Court against the major banks. This could end up costing them tens of billions of dollars in damages, if not more.
Even the Congress is moving to open investigations and organize hearings on the whole affair. What they should do is to set up immediately an investigative committee with subpoena powers, along the lines of the 1932-33 Pecora Commission.
~ deutsch + english ~
+++ 7. Mai 2013 +++
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+++ 7. Mai 2013 +++
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+++ 7. Mai 2013 +++
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