Category Archives: Uncategorized

By Pam Martens: July 17, 2012 The U.S. Department of Justice has a thing about the big corporate law firm, Covington and Burling.  The U.S. Attorney General, his assistant, and the assistant to his assistant, all came from that firm.  And Citigroup has decided that’s the firm for it as it winds its way through the Libor matter. On Citigroup’s earnings call yesterday, it effectively told analysts that they should not infer that all banks on the Libor rate setting panel will be tarred with the same brush. That’s true.  Some banks were in much better financial shape going into the 2008 crisis and would have had less reason to fudge their costs to borrow.  Unfortunately, despite CEO Vikram Pandit’s efforts to wipe analysts long term memory banks clean, Citigroup was not one of the banks that had no motive to fudge its numbers.  The popular retail brokerage, the Charles … Continue reading →

By Pam Martens: July 14, 2012 Let me see if I have this straight: 12 outraged Senators are demanding “prompt and thorough investigations” into the rigging of a global interest rate benchmark, Libor, and they want U.S. Treasury Secretary Timothy Geithner to oversee the investigations — despite the fact that Geithner has been keeping the rigging under wraps for the past four years. Five of the Senators who signed the letter sit on the powerful Senate Banking committee which has an abundance of knowledge about Wall Street’s ongoing cartels.  (See letter below.)  U.S. Treasury Secretary Geithner was the President of the Federal Reserve Bank of New York when Barclays, the first bank to be charged with rigging Libor, made at least 12 contacts with the New York Fed to blow the whistle on itself and other banks during 2007 and 2008.  Geithner has conceded that he was aware of the allegations in 2008 and relayed recommendations to Mervyn King, Governor of the … Continue reading →

  Snip…”Though it was mostly a week of in-your-face reminders of ethical lapses and outright wrongdoing by movers and shakers, it began with news from New York City officials that 70 students at an elite high school had been involved in a cheating scandal.” Susan Antilla is a syndicated columnist and has covered the insidious proliferation of Wall Street’s crime machine and its facilitators for more than three decades. Read the full blog post here:  Could It Get Any Worse? Don’t Answer That. Bankers, Regulators, High School Students Have Really Bad Week.  

By Pam Martens: July 13, 2012 In unusually swift fashion (unlike the long court action to obtain details of the secret trillions in loans the Fed lavished on domestic and foreign banks) the Federal Reserve Bank of New York today handed over emails and other documents showing that Barclays, the first firm to be charged in rigging the interest rate benchmark known as Libor, was using the New York Fed’s stately offices as a confessional.  In one email, an unnamed confessor from Barclays tells Fabiola Ravazzolo, a Senior Financial Economist at the New York Fed with a sexy British accent (sort of like that comforting voice on your car GPS) that, yes, he’s sinned. FR is Fabiola Ravazzolo;  the colon represents the Barclays employee. FR: And, and why do you think that there is this, this discrepancy? Is it because banks maybe they are not reporting what they should or is it um…  … Continue reading →

By Pam Martens: July 13, 2012 If you were one of the smart folks and didn’t waste 120 minutes of your now shortened lifespan listening to three overpaid bankers at JPMorgan attempt to explain away gambling losses on insured deposits on this morning’s conference call, let me distill it down to what all that verbosity and high frequency speech was meant to obscure.  Chairman and CEO, Jamie Dimon, and his colleagues on the call, repeatedly referred to this debacle as an “isolated failure.” The use of the word “isolated” is quite a stretch. JPMorgan Chase currently faces an FBI criminal probe of this matter; criminal probes over rigging overnight borrowing rates (Libor); a probe over rigging the electric markets of California and the Midwest; a fraud trial for rigging derivatives in Milan. It recently paid $1.1 billion to settle its foreclosure fraud issues and had to admit to Congress that it overcharged 4500 … Continue reading →

By Pam Martens: July 13, 2012 Current U.S. Treasury Secretary, Timothy Geithner, was President of the Federal Reserve Bank of New York in 2008.  He has now conceded that he was aware of problems with the setting of Libor interest rates as early as 2008 and sent an email to the Bank of England with recommendations for addressing the problems.  Why the rigging was allowed to continue remains an open question.  According to the chart below, released by Barclays, it made a total of 12 complaints to the Federal Reserve beginning as early as August 28, 2007, the date it contacted the Fed twice in one day.  Its contacts with the Fed continued through October 27, 2008.  The Federal Reserve Bank of New York is set to release documents this morning, presumably showing what it knew and when, following a written request by Randy Neugebauer, a House Republican from Texas. Blue … Continue reading →

By Pam Martens: July 12, 2012 A deeply troubling message for America is unfolding around Russell Wasendorf, Sr., owner of Peregrine Financial Group, who lies in a coma in an Iowa City hospital after an attempted suicide with a hose attached to the exhaust pipe of his car outside the corporate monument he built to his wealth and success; a monument he sustained with money stolen from his clients. According to regulators, Wasendorf’s commodities and futures firm is missing at least $200 million of customer funds. The troubling message is this: from Bernie Madoff’s cell in North Carolina, to $1.6 billion of missing customers’ funds at MF Global, overseen by a former U.S. Senator and Governor of New Jersey, Jon Corzine, to the news last week that some of the largest banks in the world had created a culture where their traders felt free to email and instant message instructions to … Continue reading →

By Pam Martens: July 10, 2012  One would have thought that after $1.6 billion of customer funds went missing at MF Global, the large commodities firm run by former U.S. Senator and Governor from New Jersey, Jon Corzine, that the Commodity Futures Trading Commission would have verified bank balances at every futures merchant it regulates.  It didn’t. In an enforcement action announced yesterday, the National Futures Association (NFA) said that accounts have been frozen, except for liquidating positions, at Peregrine Financial Group, Inc. (PFG) and Peregrine Asset Management.  According to the NFA, PFG was reporting $400 million in segregated funds for customers and a bank balance of $225 million. (The difference would have conceivably been margin balances.) The actual bank funds that can now be accounted for are $5 million.  According to the NFA, the dramatic overstatement of bank balances dates back to at least 2010.  According to media reports, the … Continue reading →

By Pam Martens: July 9, 2012 The Mayor of Baltimore, the Baltimore City Council, the City of New Britain Firefighters’ and Police Benefit Fund of Connecticut filed an amended lawsuit on April 30 of this year seeking class action status in Federal Court in New York over the rigging of Libor.  The plaintiffs state that the City of Baltimore purchased hundreds of millions of dollars of derivatives tied to Libor while the New Britain Firefighters and Police Benefit Fund purchased tens of millions.  They are suing the banks involved in submitting Libor rates.  The plaintiffs have submitted to the Court significant background data suggesting that anomalies in other financial measurements show which banks were brazenly lying when submitting their borrowing rates for setting Libor.  One chart stands out in particular.  The following shows the 12-month U.S. Dollar Libor quotes from Citigroup and the Bank of Tokyo, together with the respective bank’s one-year … Continue reading →