The Sambuca Trough

 

Wine Bar Spivs

The wine bar spivs are still gorging themselves at the Sambuca trough, snorting their nasty white powder and generally taking the piss out of citizens who work for a living. The only change in attitude we have seen is a move from threatening to go elsewhere to smug self-congratulation. The 'managers', i.e. the politicians, told us they would "sort the banks out" - but we know it was only ever a sound bite.

These fantasists created a virtual world of financial instruments that were bought and sold with reckless ignorance akin to the Tulip mania of the 18th Century. These people are not responsible bankers, they are wine bar spivs and chancers, the spawn of Nick Leeson, jokingly called talented highflyers but only in the Virtual World that they themselves created. Now these wide boys have moved on from toxic mortgages, to carbon credits, trading has been brisk - some alarmists are suggesting that dealers are merely trading fresh air.

 

Forex, banks fiddle while most people work for a living...

The Unaccetable Face of Capitalism

Barclays caught out fiddling interest rates

Exchange Rate rigging: another banking scandal?

 

 

 

Forex, banks fiddle while most people work for a living...

Some of the world's biggest banks have been fined billions of pounds for manipulating foreign currency rates. Barclays faces the biggest payout - of £1.5bn. UBS, JP Morgan, Citigroup and the Royal Bank of Scotland were also fined.

Foreign currency traders from these banks colluded to fix the currency market in their favour, gaining tens of thousands of pounds in a matter of seconds.

So, the banks have been fined for their wrong doing, now, we wait to see who goes to jail. This was not a crime without victims, the banks' barrow boys stole their spoils as surely as any pickpocket on the London underground. Companies of all descriptions who rely on the 4.00pm Fix to guide their investment decisions lost out due the crooked dealing of the banks.

Note: as a result of the banks' manipulation, the 30 second snapshot of exchange rates, in the run to 4.00pm London time, has now been extended to a five minute window. Outstanding!

Libor rat

Also, outstanding, City trader, Tom Hayes has been nabbed for fiddling the Libor rate - the London Interbank Offer Rate - that's the rate used by banks around the world to set the price of financial products worth billions of pounds. Apparently, Tom is a whistle blower, i.e. he's trying to shorten his prison time by naming others involved in the Libor fiddle or in the parlance of the mob, he's a rat.

Hayes may be a big player in the Libor fiddle but let us not forget that he and his chums were not operating without supervision, due diligence, oversight and all the rest of the PR claptrap that the bank's roll out at times of bad news. Their aim was to facilitate their derivative bets and conceal the flaky balance sheets of their banks.

 

The Unaccetable Face of Capitalism

21/08/12

The Unacceptable Face of Capitalism, that's what Ted Heath called Lonro plc back in 1973. At some point the conglomerate that Lonrho boss Tiny Rowlands built up demerged and the mining division morphed into Lonmin plc.

President Jacob Zuma declared this week one of mourning and we don't expect to hear anymore announcements from the tired leader of South Africa.

The ANC have not been seen or heard and Lonmin have gone to ground; the media here have failed to explain adequately what brought things to a head at the Marikana platinum mine. The wild cat strike that resulted in angry miners charging police lines because they were there, identified as a symbol of doing the owners bidding; it was a mad unthinking moment met by an equally mad response.

The dispute that brought about the strike and the killings was between competing unions, stupidly the management of Lonmin thought they could play one side against the other. This dispute was taking place in a time of trouble for the mining companies, world demand was facing a downturn. The owners' response would be typical, close the mines and sack the workers, in places this was beginning to happen but the government was intervening to ask mine owners (ever so nicely) not to close mines.

At the Maikana mine, the poorest workers, the rock drillers, wanted a pay rise of 50%. These workers were mainly represented by the new Association of Mineworkers and Construction Union (AMCU). This new union arose because the traditional NUM was in cahoots with Lonmin over collective bargaining rights designed to prevent new unions taking a foothold. Add this dissatisfaction with the NUM to dissatisfaction at the fact that comparable workers in other mines had received pay rises, and you have the seeds of discontent.

Expelled ANC Youth League President Julius Malema’s claimed that the NUM ‘was no longer a union that represented the interests of the workers but [only] interested in making more money. NUM is not a union, it’s a company. They hold shares in mining companies, that is why when there are problems in the mines they are the first to sell out the workers’.” The ANC denounced Malema's intervention as trouble making but why have the ANC deserted the poorest workers in the mining industry?

It would difficult to argue that the ANC has not lost the plot at Malema, even if they knew what the plot was in the first place. They appear to have conceded the ground to their political opponents, at a time when 259 miners are facing criminal charges. The future for these workers was bleak before the dispute but it will get worse unless those in a position to deal with this dispute do something instead of hiding in their villas.

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Barclays caught out fiddling interest rates

June 2012

LIBOR: London Interbank Offer Rate

Going back to 2005 the banks have been colluding to rig lending rates. Barclays has been fined £290m by the regulators - tip of the iceberg comes to mind. The FSA has already said its investigating other banks, or as the police say, other banks are cooperating with inquiries. That great manager of change, Bob Diamond, told a world full of stunned simpletons:

"This is not consistent with our culture and values."

Very interesting to note that Bob told us a year ago:

"Culture is defined by the things you do when no one is looking."

Well, Bob must be a disappointed man today, having just published Barclays 'three year citizenship plan' - which includes promoting the community agenda by investing in local areas where it does business. Launching the plan, Bob said that he recognised that they had a long way to go to restore trust - oh, dear!

However, Barclays refuses to disclose how many employees were caught up in the affair and how many have left or face disciplinary action, although it is known that some employees connected to the affair have left. Are we here considering ethical business failure, what is the world coming to - share holders are expressing concern.

The London interbank offered rate (Libor) and the Euro interbank offered rate (Euribor) and used as benchmarks for all lending. They are used by the financial industry to set the rates of interest that households and major companies pay to borrow. Which means, if they were set higher than they should have been by the banks' submitters then every Joe was paying more for their loans. Expect compensation claims to be on the agenda next...., expect Diamond to consider his future.... And why were the submitters setting rates to suit themselves and their chums in other banks, so that they could facilitate their derivative bets and conceal the flaky balance sheets of their banks.

Exchange Rate rigging: another banking scandal?

09/03/14

We are told that after examining 15,000 emails and 21,000 instant messages and 48 hours of telephone calls that one Bank of England employee has been suspended.

The solo worker may have been involved in foreign exchange rate fixing in collusion with market traders. We are told that there is no evidence that the Bank staff were generally aware of rate fixing.

The rate fixing allegation has come about as a result of a claim by one trader that Bank officials told him that it was OK to share information with rival banks while setting key exchange rate benchmarks.

That's it, there's no more, no one knows anything. The banks are hoping this is not another Libor situation, you know, big fines all round but no jail sentences for anyone.

 


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