As it goes in silver, so it goes in gold. In London at least.
In a bid to have UBS reinstated as a defendant in a London Gold Fix antitrust lawsuit, plaintiffs documents submitted to a New York Court last week include explosive chat room transcripts of UBS and traders from different banks encouraging each other to “push,” “smack,” and “whack” gold prices.
Back in April, when we first reported that Deutsche Bank had agreed to settle allegations it had rigged the silver market in exchange for $38 million, we revealed something stunning: “in a curious twist, the settlement letter revealed that the former members of the manipulation cartel have turned on each other“, and that Deutsche Bank would provide docments implicating other precious metals riggers. To wit: “In addition to valuable monetary consideration, Deutsche Bank has also agreed to provide cooperation to plaintiffs, including the production of instant messages, and other electronic communications, as part of the settlement. In Plaintiff’s estimation, the cooperation to be provided by Deutsche Bank will substantially assist Plaintiffs in the prosecution of their claims against the non-settling defendants.”
Overnight we finally got a glimpse into what this “production” contained, and according to documents filed by the plaintiffs in the class action lawsuit, what Deutsche Bank provided as part of its settlement was nothing short of “smoking gun” proof that UBS Group AG, HSBC Holdings Plc, Bank of Nova Scotia and other firms rigged the silver market. The allegation, as Bloomberg first noted, came in a filing Wednesday in a Manhattan federal court lawsuit filed in 2014 by individuals and entities that bought or sold futures contracts. Continue reading »
As Wall Street axioms (Santa rally, January effect, as goes January etc.) are rapidly falling by the wayside at the start of 2016, following a chaotic but return-less 2015, the UBS analysts who correctly forecast last year’s volatility are out with their forecast for 2016. It’s simple – Sell Stocks, Buy Gold… expect a Fed u-turn.
– How UBS Sent Millions to the Clintons After Hillary Saved the Mega Bank While Secretary of State (Liberty Blitzkrieg, July 30, 2015):
A few weeks after Hillary Clinton was sworn in as secretary of state in early 2009, she was summoned to Geneva by her Swiss counterpart to discuss an urgent matter. The Internal Revenue Service was suing UBS AG to get the identities of Americans with secret accounts.
If the case proceeded, Switzerland’s largest bank would face an impossible choice: Violate Swiss secrecy laws by handing over the names, or refuse and face criminal charges in U.S. federal court.
Within months, Mrs. Clinton announced a tentative legal settlement—an unusual intervention by the top U.S. diplomat. UBS ultimately turned over information on 4,450 accounts, a fraction of the 52,000 sought by the IRS, an outcome that drew criticism from some lawmakers who wanted a more extensive crackdown.
From that point on, UBS’s engagement with the Clinton family’s charitable organization increased. Total donations by UBS to the Clinton Foundation grew from less than $60,000 through 2008 to a cumulative total of about $600,000 by the end of 2014, according the foundation and the bank.
The bank also joined the Clinton Foundation to launch entrepreneurship and inner-city loan programs, through which it lent $32 million. And it paid former president Bill Clinton $1.5 million to participate in a series of question-and-answer sessions with UBS Wealth Management Chief Executive Bob McCann, making UBS his biggest single corporate source of speech income disclosed since he left the White House.
– From today’s Wall Street Journal article: UBS Deal Shows Clinton’s Complicated Ties
The best part about Hillary Clinton’s run for the Presidency, is the endless series of scandals and shadiness that inevitably comes along with being part of an entrenched status quo family that prioritizes the accumulation of wealth and power above all else. The reason Barack Obama was able to generate so much genuine “hope” prior to his election is 2008, is because he was a complete unknown. He could say all the right things, and it was easy for people to believe the hype. Continue reading »
– UBS Had Libor-Rigging Instruction Manual, Former Trader Claims (ZeroHedge, June 19, 2015):
Just like in the case of Goldman’s first of its kind MBS settlement which unleashed over $200 billion in legal charges against the US banking system (an IRR of about 1% relative to the criminal gains) and which in turn cast all the blame on the infamous Fabrice Tourre who was the solitary scapegoat for all of Goldman’s Abacus transgressions, so when it comes to Libor rigging at one of the biggest culprits, Swiss bank UBS, all the senior executives are trying to put all the blame on 35-year old Tom Hayes who is the centerpiece of the prosecution’s case against Libor manipulator.
The only problem: Hayes won’t go down without a fight and unlike Tourre who may well have been promised a Swiss bank account with many zeroes in it on the other side, Hayes is fighting back and making it very clear that it wasn’t just him who was rigging Libor. It was everyone. And everyone knew about it, from the traders on to the very top.
His proof: a Libor “manipulation” manual, presented as evidence in court. Continue reading »
From the article:
“Under scrutiny are Bank of Nova Scotia , Barclays PLC, Credit Suisse Group AG , Deutsche Bank AG , Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Société Générale SA, Standard Bank Group Ltd. and UBS AG , according to one of the people close to the investigation.”
– Ten Banks, Including JPM, Goldman, Deutsche, Barclays, SocGen And UBS, Probed For Gold Rigging (ZeroHedge, Feb 23, 2015):
No matter how many times the big banks are caught red-handed manipulating precious metals, some failed former Deutsche Bank prop-trader (you know who you are) will take a vociferous stand based on ad hominem attacks and zero facts that no, what you see in front of you is not precious metal rigging at all but a one-off event that has nothing to do with a criminal banking syndicate hell bent on taking advantage of anyone who is naive and dumb enough to still believe in fair and efficient markets. Continue reading »
– Caught Rigging FX and Gold? Your Punishment Will Be A Bonus Capped At Just 200% Of Your Base Salary (ZeroHedge, Nov 11, 2014):
There are many more details and we will break them out shortly, but cutting to the chase, here is the punishment:
FINMA has also instructed UBS to limit bonuses for traders of foreign exchange and precious metals to 200 percent of their base salary for two years.
Which means that clearly nobody is going to jail, however the punishment is far more harsh: riggers will have a bonus of ONLY 200% their base salary for two years to look forward to!
The horror, the horror.
Which naturally means that base salaries across the rigging banks are about to soar to offset the tempoyrary bonus cap to the “keep the talent” happy. After all someone has to keep on rigging markets and generate bank revenue.
– Gold Rigging Settlement With UBS – Other Banks To Follow (GoldCore, Nov 10, 2014):
Suspicions that the price of precious metals are frequently manipulated by a few international banks were further confirmed over the weekend. UBS agreed to settle with various international regulatory bodies investigating rigging in foreign exchange and precious metals markets.
– This Is What Happens When Trying To Get To The Bottom Of The UBS Gold-Rigging Scandal (ZeroHedge, Nov 9, 2014):
As reported previously, and as had been suspected for years, the gold manipulation cartel is slowly breaking apart, and courtesy of the FT, we now know at least one individual directly implicated in Swiss gold-rigging: the former head of UBS’s gold desk in Zurich, André Flotron. So as part of our diligence, because apparently no other media will touch the topic of gold rigging until and unless it is shoved in their face on a, ahem, silver platter, because after all the subject matter is just too “conspiratorial”, we decided to ask Mr. Flotron some on the record questions, and sent him an email. This is the response we got…
– Europe Demands Banks Hand Over Their Lunch Money Following Swiss Franc Libor Rigging (ZeroHedge, Oct 21, 2014):
…And don’t do it again!
Having confirmed that RBS, UBS, JPMorgan,,and Credit Suisse operated a cartell to manipulate bid-ask spreads of Swiss Franc libor, the European Commission has unleashed unmerciless vengeance on these law-breaking institutions:
JPMorgan fined EUR 72.2 Million, UBS fined EUR 12.7 Million, Credit Suisse fined EUR 9.17 Million, & RBS Nothing (for whistle-blowing). Continue reading »
– UBS Investigated For Gold Manipulation Suggesting Gold Inquiry Goes Beyond London Fix (ZeroHedge, March 17, 2014):
The last time the FT penned an article on the topic of gold manipulation, titled “Gold price rigging fears put investors on alert” it was promptly taken down without much (any) of an explanation. Luckily, we recorded the article for posterity here. Earlier today, another article on the topic appears to have slipped through the cracks of the distinguished editors of the financial journal that enjoys the ad spend of the status quo, when it reported that “Gold pricing scrutiny widens”, hardly an update that will take the world by storm, however it is notable that “even” the FT, where for years goldbugs claiming gold manipulation had been ridiculed, is finally start to admit the glaringly obvious.
In this case, the FT looks at one of the most habitual and recidivist manipulators of practically every asset class that the market has ever known, Swiss bank UBS, better known as the rat that is allegedly perfectly happy to expose all other manipulators in exchange for immunity, and focuses on the Friday’s admission by UBS in its 2013 annual report: “that a review of its foreign exchange operations has been widened to include its precious metals business. In the report, the Swiss bank said: “Following an initial media report in June 2013 of widespread irregularities in the foreign exchange markets, UBS immediately commenced an internal review of its foreign exchange business, which includes our precious metals business.”
– Meet the “Bandits’ Club” – The TBTF Wall Street Cartel Rigging the FX Market (Liberty Blitzkrieg, Dec 20, 2013):
Another day, another tale of how the “Too Big to Jail” Wall Street cartel manipulates a major global market with no repercussions whatsoever. Must be nice having essentially every Congressperson and regulator in your back pocket. Get caught? Pay a little fine and get on with it. Everyone wins!
Actually, everyone loses. Except for the handful of FX manipulators, rigging global currency markets from their Essex villages outside of London. These traders for major TBTF banks refer to themselves by various names in their now silenced Bloomberg chat rooms, from The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia.” Very classy guys. Glad we bailed your asses out…
More from Bloomberg:
‘The Illuminati were amateurs’???
J.P. Morgan is a Rothschild front and the Illuminati do not only control the big banks and the governments, they also took over control of the media a long time ago:
U.S. Congressional Record February 9, 1917, page 2947
Congressman Calloway announced that the J.P. Morgan interests bought 25 of America’s leading newspapers, and inserted their own editors, in order to control the media.
Mr. CALLAWAY: Mr. Chairman, under unanimous consent, I insert into the Record at this point a statement showing the newspaper combination, which explains their activity in the war matter, just discussed by the gentleman from Pennsylvania [Mr. MOORE]:
“In March, 1915, the J.P. Morgan interests, the steel, ship building and powder interests and their subsidiary organizations, got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the United States and sufficient number of them to control generally the policy of the daily press in the United States.
“These 12 men worked the problems out by selecting 179 newspapers, and then began, by an elimination process, to retain only those necessary for the purpose of controlling the general policy of the daily press throughout the country. They found it was only necessary to purchase the control of 25 of the greatest papers. The 25 papers were agreed upon; emissaries were sent to purchase the policy, national and international, of these papers; an agreement was reached; the policy of the papers was bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information regarding the questions of preparedness, militarism, financial policies and other things of national and international nature considered vital to the interests of the purchasers.
“This contract is in existence at the present time, and it accounts for the news columns of the daily press of the country being filled with all sorts of preparedness arguments and misrepresentations as to the present condition of the United States Army and Navy, and the possibility and probability of the United States being attacked by foreign foes.
“This policy also included the suppression of everything in opposition to the wishes of the interests served. The effectiveness of this scheme has been conclusively demonstrated by the character of the stuff carried in the daily press throughout the country since March, 1915. They have resorted to anything necessary to commercialize public sentiment and sandbag the National Congress into making extravagant and wasteful appropriations for the Army and Navy under false pretense that it was necessary. Their stock argument is that it is ‘patriotism.’ They are playing on every prejudice and passion of the American people.”
So FORGET about the Illuminati (the real elitists) and just blame their bankster elite puppets, their government elite puppets (like Obama, Bush, Clinton etc.) and their corporate media presstitutes for everything instead!!!
George carlin sums it up best:
– George Carlin: The American Dream (Video):
A short excerpt from the video “Life Is Worth Losing” (2005).
That said, enjoy Matt Taibbi’s otherwise excellent article and writing style.
The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There’s no price the big banks can’t fix
– Everything Is Rigged: The Biggest Price-Fixing Scandal Ever (Rolling Stone, by Matt Taibbi, April 25, 2013):
Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.
You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t”) worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.”
That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.
Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It’s about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget. Continue reading »
Tags: Bank of America, Banking, Barclays, CFTC, Debt, Deutsche Bank, Economy, Freemasonry, GDP, Global News, Government, Illuminati, JPMorgan, Libor, Matt Taibbi, Politics, RBS, Rolling Stone, Rothschild, Society, U.S., UBS
– Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings (Economic Collapse, Jan 29, 2013):
Does a shadowy group of obscenely wealthy elitists control the world? Do men and women with enormous amounts of money really run the world from behind the scenes? The answer might surprise you. Most of us tend to think of money as a convenient way to conduct transactions, but the truth is that it also represents power and control. And today we live in a neo-fuedalist system in which the super rich pull all the strings. When I am talking about the ultra-wealthy, I am not just talking about people that have a few million dollars. As you will see later in this article, the ultra-wealthy have enough money sitting in offshore banks to buy all of the goods and services produced in the United States during the course of an entire year and still be able to pay off the entire U.S. national debt. That is an amount of money so large that it is almost incomprehensible. Under this ne0-feudalist system, all the rest of us are debt slaves, including our own governments. Just look around – everyone is drowning in debt, and all of that debt is making the ultra-wealthy even wealthier. But the ultra-wealthy don’t just sit on all of that wealth. They use some of it to dominate the affairs of the nations. The ultra-wealthy own virtually every major bank and every major corporation on the planet. They use a vast network of secret societies, think tanks and charitable organizations to advance their agendas and to keep their members in line. They control how we view the world through their ownership of the media and their dominance over our education system. They fund the campaigns of most of our politicians and they exert a tremendous amount of influence over international organizations such as the United Nations, the IMF, the World Bank and the WTO. When you step back and take a look at the big picture, there is little doubt about who runs the world. It is just that most people don’t want to admit the truth.The ultra-wealthy don’t run down and put their money in the local bank like you and I do. Instead, they tend to stash their assets in places where they won’t be taxed such as the Cayman Islands. According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
U.S. GDP for 2011 was about 15 trillion dollars, and the U.S. national debt is sitting at about 16 trillion dollars, so you could add them both together and you still wouldn’t hit 32 trillion dollars. Continue reading »
Tags: AXA, Bank of America, Banking, Barack Obama, Barclays, Credit Suisse, Deutsche Bank, Dictatorship, Economy, EU, Europe, Fed, Federal Reserve, GDP, Goldman Sachs, Government, Illuminati, IMF, JPMorgan, Merrill Lynch, Morgan Stanley, New World Order, Obama administration, Politics, Rockefeller, Societe Generale, U.S., UBS
– 36 UBS Bankers To Be Implicated In Liborgate, Criminal Charges To Be Filed (ZeroHedge, Dec 17, 2012):
As the fallout of Liborgate escalates, the next big bank to be impacted in the fallout started by Barclays civil settlement “revelation” is set to be troubled UBS, already some 10,000 bankers lighter, where as many as three dozen bankers are reported by the implicated in the fixing of the rate that until 2009 was the most important for hundreds of trillions in variable rate fixed income products. Only instead of attacking the US or even European jurisdiction, where the next big settlement is set to hit is Japan: a country whose regulators as recently as half a year ago promised there were no major issues with Libor, or Tibor as it is locally known, rate fixings. And while this most recent development will have little material impact on UBS’ ongoing business model, the one difference from previous settlements is that it will likely include criminal charges lobbed against some of the 36 bankers.
From the FT: “UBS is close to finalising a deal with UK, US and Swiss authorities in which the bank will pay close to $1.5bn and its Japanese securities subsidiary will plead guilty to a US criminal offence. Terms of the guilty plea were still being negotiated, one person familiar with the matter said on Monday, adding that the bank will not lose its ability to conduct business in Japan. The pact between the bank and the US Commodity Futures Trading Commission, US Department of Justice, UK’s Financial Services Authority and UBS’s main Swiss supervisor Finma is expected to be announced on Wednesday, although last minute negotiations continue.”
More: Continue reading »
– UBS faces $1 billion day of reckoning over interest rate rigging (Reuters, Dec 17, 2012):
UBS AG is expected to be hit with a $1 billion (618.4 million pounds)-plus fine to settle charges of rigging Libor interest rates this week, making it the second bank to be brought to book for its role in the global scandal.
The fine, to be imposed by regulators in Britain and the United States, would be the latest blow for the Swiss bank that suffered a rogue trading scandal last year, paid a $780 million fine to settle a U.S. tax investigation in 2009 and nearly collapsed in 2008 under the weight of huge subprime losses.
Sources familiar with the matter have told Reuters the fine will be $1 billion or more, which would be more than double the $450 million levied on British bank Barclays Plc in June for interest rate manipulation.The penalty could be as high as $1.6 billion and UBS will admit 36 traders around the globe manipulated yen Libor between 2005 and 2010, Swiss newspaper Tages-Anzeiger said, citing unnamed sources.
– The Federal Reserve Cartel: Part IV: A Financial Parasite (Veterans Today, Dec 14, 2012):
(Excerpted from Chapter 19: Big Oil & Their Bankers…Part four of a five-part series)
United World Federalists founder James Warburg’s father was Paul Warburg, who financed Hitler with help from Brown Brothers Harriman partner Prescott Bush. 
Colonel Ely Garrison was a close friend of both President Teddy Roosevelt and President Woodrow Wilson. Garrison wrote in Roosevelt, Wilson and the Federal Reserve, “Paul Warburg was the man who got the Federal Reserve Act together after the Aldrich Plan aroused such nationwide resentment and opposition. The mastermind of both plans was Baron Alfred Rothschild of London.”
Tags: Adolf Hitler, Banking, Barclays, BNP Paribas, Credit Suisse, CS First Boston, Economy, Fed, Federal Reserve, Global News, Gold, Goldman Sachs, Government, James Paul Warburg, JPMorgan, Lehman Brothers, Max Warburg, Merrill Lynch, Military, Morgan Stanley, Paul Volcker, Politics, Rockefeller, Rothschild, Salomon Brothers, U.S., UBS, Woodrow Wilson
– Banker Bonuses: Spot The Odd One Out (ZeroHedge, Nov 29, 2012):
Bankers in London, Europe’s trading hub, are bracing themselves for significantly lower bonuses (and salary cuts) especially so relative to their New York counterparts. As Bloomberg Businessweek notes in the brief clip below, investment bankers and traders should expect a 15% pay cut compared to unchanged in the US and while hope is that these are temporary, many believe this shift is structural and reflects “US regulators [not having] the same obsession with pay structures that European regulators have.” As is evident from the chart below, there are winners and losers (and we bet you can guess who the winner is).Looks like Goldman wins, UBS loses, and even with a huge drop in revenues Morgan Stanley is being generous…
– UBS To Terminate 10,000, Or One Sixth Of Its Employees (ZeroHedge, Oct 26, 2012):
There is down-sizing; there is trimming-the-fat; and then there is UBS. The once-giant Swiss Bank just announced it will cut up to 10,000 jobs. This comes on top of the 3,500 from last year – which makes a rather dramatic weight-loss strategy for the 63,500 employee firm. As the FT reports, they will not happen all at once (so just after the election then?) but will lead to the closure of a sizable part of UBS’ fixed-income trading operations (and other capital intensive areas of the investment bank). Perhaps in the understatement of the day: “There were several options on the table but UBS has decided on the most radical one,” a person familiar commented as the plan is hoped to reduce complexity and costs – so no more Bloomberg Terminals? One thing surely gone is a source of fixed income axes: “The new strategy, hammered out in several executive board meetings in New York this week and set to be announced next Tuesday, will lead to the closure of a sizeable part of UBS’s fixed-income trading operations and other capital-intensive areas of the investment bank.” The winner: Goldman of course, which in a world of collapsing trading revenues has taken to Lehmaning its competition once again, only this time not using brute force but the far more classical war of attrition in a collapsing economy.
UBS is set to unveil a radical downsizing of its struggling investment bank next week in a move that will prompt the loss of up to 10,000 jobs across the Swiss banking group.
Switzerland’s largest bank by assets will significantly shrink the trading side and complexity of its investment bank and as a consequence also cut thousands of jobs in its back office over the next few years, three people close to the situation said. Continue reading »
– Welcome to the Recovery (New York Times, by Timothy Geithner, August 2, 2010)
‘Recovery’ is the ‘Greatest Depression’.
– Will The Bottom Fall Out? 15 Signs That Layoffs And Job Losses Are Skyrocketing (Economic Collapse, Oct 25, 2012):
If you still have a good job, you might want to hold on to it very tightly because there are a whole bunch of signs that unemployment in the United States is about to start getting worse again. Over the past several weeks, a substantial number of large corporations have announced disappointing earnings for the third quarter. Many of those large corporations are also loaded up with huge amounts of debt. So what is the solution? Well, the favorite solution on Wall Street these days seems to be to lay off workers. In fact, it is almost turning into a feeding frenzy. Since September 1st, we have seen more job cuts announced than during any other two month period since the start of 2010. These announcements represent future layoffs and job losses which are not even showing up in the unemployment numbers yet. So needless to say, things don’t look very promising for the end of 2012 or for the beginning of 2013. If this race to eliminate jobs becomes a stampede, will we see the bottom fall out of the employment market?If you are concerned about whether or not you will still have a job 12 months from now, you might find the numbers posted below to be quite alarming. We have not seen layoff announcements come this fast and this furious since the gloomy days of the last recession.
According to Bloomberg, job cuts are well ahead of the pace set last year…
North American companies have announced plans to eliminate more than 62,600 positions at home and abroad since Sept. 1, the biggest two-month drop since the start of 2010, according to data compiled by Bloomberg. Firings total 158,100 so far this year, more than the 129,000 job cuts in the same period in 2011.
So what happens if the economy really starts sliding rapidly and this loss of jobs becomes an avalanche?
Can the U.S. economy and the American people handle another major economic downturn?
Some of the biggest names in the business world have announced job cuts in recent weeks.
The following are 15 signs that layoffs and job losses are skyrocketing… Continue reading »
– Cashin Remembers Germany’s Hyperinflation Birthday (ZeroHedge, Oct 11, 2012):
Via Art Cashin of UBS,Originally, on this day in 1922, the German Central Bank and the German Treasury took an inevitable step in a process which had begun with their previous effort to “jump start” a stagnant economy. Many months earlier they had decided that what was needed was easier money. Their initial efforts brought little response. So, using the governmental “more is better” theory they simply created more and more money. But economic stagnation continued and so did the money growth. They kept making money more available. No reaction. Then, suddenly prices began to explode unbelievably (but, perversely, not business activity).
– Swiss Banks Stand to Lose Hundreds of Billions (The Epoch Times, updated Sep 21, 2012):
UBS predicts massive asset outflows as governments crack down on former tax haven
Hundreds of billions of dollars could be moved out of Swiss banks as clients attempt to flee a coordinated crackdown on tax evasion, UBS’s Jürg Zeltner told magazine Schweizer Bank on Sept. 17. The crackdown will likely cost Switzerland its tax-haven status.
The head of the UBS wealth management unit predicted that his bank will lose about 12 billion to 30 billion Swiss francs (US$12.8 billion to 31.9 billion) of the 783 billion francs in assets under management for wealthy clients. “As a consequence of the realignment of the financial center and the planned withholding tax, we assume that a total of hundreds of billions of francs will flow out of Switzerland,” he told Schweizer Bank.
Credit Suisse, the other big player in wealth management, estimates it will lose over $37 billion over the next few years as European clients withdraw their money. German business consultants ZEB estimate that out of the total 2.8 trillion francs ($3 trillion) that the roughly 300 Swiss banks have under management, 800 billion francs could be untaxed funds from European citizens. ZEB predicts that 200 billion of those funds could be withdrawn due to several tax treaties and investigative breakthroughs. Continue reading »
– Jailed UBS Employee Gets $104 Million From IRS For Exposing Swiss Bank Account Holders (ZeroHedge, Sep 11, 2012):
Just in case there wasn’t enough excitement and fury directed at Swiss bank account holders, which continue to dominate the presidential election “debate” above such mundane topics as the economy, or, say, reality, here comes the IRS, which as we noted yesterday collected $192 billion less than the government spent in the month of August alone, and have awarded Bradely Birkenfeld, a former UBS employee who in 2008 pleaded guilty to conspiracy to defraud the United States and was sentenced in 2009 to 40 months in prison, but received preferential whistleblower status after a prior arrangement to expose numerous Americans with Swiss bank accounts, has just been awarded $104 million.
U.S. tax authorities have awarded $104 million to a whistleblower in a major tax fraud case against Swiss bank UBS AG that widened a government crackdown on Americans avoiding taxes in Switzerland, his lawyers said on Tuesday.
Bradley Birkenfeld, freed last month from prison, was not present at the news conference where his attorneys announced the reward made under an Internal Revenue Service whistleblower program that has come in for some criticism in Congress.
Birkenfeld had sought a large payout for his role in a tax-dodging case that resulted in early 2009 in UBS entering into a deferred prosecution agreement and paying $780 million in fines, penalties, interest and restitution.
– The Scary Math Behind The Mechanics Of QE3, And Why Bernanke’s Hands May Be Tied (ZeroHedge, Sep 7, 2012):
When it comes to the NEW QE, everyone has an opinion, and most seem to believe that the NEW QE will come next week, now that the US economy added “just” 96,000 people (but, but, the unemployment rate ‘fell’). Certainly, and far more importantly, if the most recent FOMC minutes are any guide, the Fed shares this view. Sadly, as so often happens, most, and this includes the FOMC’s various voting members, have once again made up their minds without actually evaluating the limitations posed by simple math. After all it is far easier to form an opinion, and actually think about the underlying facts later. The math, for those who actually have looked at the numbers behind the scenes, is scary (in UBS’ words, not ours).Here is the math.
As part of its Operation Twist, the Fed is buying long-term bonds, and selling short-term (0-3 years) bonds. As we reported in April, the biggest limitation for the Fed is that it is rapidly running out of short-term bonds to sell. There is a fix to this: the Fed will simply have to sell longer dated bonds from its SOMA portfolio, first up to 5 years, then 7, and so on. Of course, this will also force the Fed to extend its ZIRP language by an appropriate amount of time, through 2017, then 2019, and so on (which also means all bets that the Fed will hike any time in the next 5 years will be immediately null and void, and one can position accordingly in the Eurodollar space).
This move, however, will simply permit the Fed to extend Twist 2 beyond its year-end maturity. As a reminder, the primary role of Twist, aside from that stated one which is to keep the curve as flat as possible (i.e., boost housing which as we showed yesterday is not working, as refis have plunged recently despite record low mortgage rates), is to absorb virtually all the long-end supply: after all, it is all about the funding of the US $1 trillion+ annual budget deficit.
Said otherwise, when it comes to the 10-30 year sector the Fed is already monetizing all new issuance. This is part of the entire flow argument which we have been discussing for the past 6 months, and why we, correctly, say that Operation Twist is really QE 3 and QE 3.5 (for the recent extension of Twist). So far so good.
Here comes the important part.
Three weeks ago we presented a video courtesy of Stone McCarthy which showed a timelapse of the “takeover” of the Fed as the primary holder of public debt. For those short on time, here is how the Fed’s holdings portfolio looked like then…
The shaded region is important for two reasons: this is where the Fed will be buying new bonds as part of any new QE Large Scale Asset Purchase program, and it tells us all there is to know about how big and how effective QE3 (really 4) will be. The bottom line, as calculated by UBS’ Michael Schumacher and confirmed by anyone with access to the detail behind the Fed’s SOMA holdings, which incidentally just hit a record 116 months two months ahead of Twist 2 schedule, is that “the Fed owns all but $650 billion of 10-30 year nominal Treasuries.” Also as pointed out above, Twist 2, aka QE 3.5 is already absorbing all of the long end supply. And herein lies the rub. To quote UBS: “Taking out, say, $300 billion in long-end Treasuries almost certainly would put tremendous pressure on liquidity in that market….Ploughing ahead with a large, fixed size QE program could cause liquidity to tank.”
In other words, anyone expecting a full blown LSAP focusing only on US Treasurys will very likely be disappointed as the Fed will certainly realize, quite soon we hope, that it has only $650 billion in total 10 year + bonds available in the entire private market!
Well, perhaps the Fed will just monetize MBS, as Bill Gross has been betting on for nearly a year now. It could do that… but when once factors in “math“, the results are once again quite startling. Quote UBS again: Continue reading »
From the article:
Comment: It’s not “socialism for the rich”; that’s an oxymoron.
It’s corporatism, i.e. fascism, as defined by Benito Mussolini.
– Audit of the Federal Reserve Reveals $16 Trillion in Secret Bailouts (Sott.net, Sep 1, 2012):
The first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out.
Ben Bernanke, Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.
What was revealed in the audit was startling:
Continue reading »
Tags: Alan Greenspan, Bailout, Bank of America, Banking, Barclays, Bear Stearns, Ben Bernanke, BNP Paribas, Citigroup, Congress, Credit Suisse, Deutsche Bank, Fed, Federal Reserve, Global News, Goldman Sachs, Government, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, Politics, RBS, U.S., UBS
– Swiss Bank Crackdown Accelerates As Credit Suisse, UBS Clients Raided In Germany, France (ZeroHedge, July 11, 2012):
While virtually every European risk indicator is now being gamed to underreport the true nature of the capital flow panic on the continent, one remains steadfast: Swiss nominal yields, which as we pointed out a month ago, have become the only true indicator of liquidity stress. And as noted this morning, Swiss 2 Year bond just hit a record nominal -0.37% (which coupled with record low yields in German yields explains everything about where money is sprinting to in Europe, and just how much “confidence” in the system is left). And while the SNB continues to suffer massive losses on its EURCHF peg, the reality is that it continues to offer a free put to all those who wish to move away from EUR exposure and into the relative safety of the CHF (the risk of cantonal disintegration is still relatively low). Which is why the only recourse authorities have in dealing with the now record flight to Swiss safety is brute force. Sure enough, as Reuters reports, clients of the two largest Swiss banks: Credit Suisse and UBS was raided in two independent, but likely linked, operations in Germany and France, respectively, in a show of force that moves beyond mere tax-evasion and has a goal of scaring anyone who still thinks of keeping their money in the relative safety of Geneva and Zurich bank vaults.
German tax authorities have raided Credit Suisse clients and French officials searched the homes of UBS employees, deepening the crackdown on foreigners hiding money in Swiss offshore accounts to dodge taxes.
Switzerland’s strict banking secrecy rules, which have helped build a $2 trillion offshore financial sector, have infuriated cash-strapped governments as they try to crack down on tax evasion by wealthy citizens.
Roughly 5,000 German clients of Credit Suisse are being probed on suspicion of tax evasion and some had their homes searched, a bank source said on Wednesday, as European tax officials broaden their investigation to include clients as well as banks. Continue reading »
– Big Bank Downgrade By Moody’s Imminent (ZeroHedge, June 21, 2012):
Even as Moody is now about a week late on its Spanish bank downgrade where the banks are rated higher than the sovereign (which obviously is kept in check to prevent yields on bonds from soaring even more), here comes the next wholesale bank downgrade:
- Moody’s expected to announce ratings downgrade for UK banks this evening – Sky Sources
- Exclusive: Big news – I’m told Moody’s will announce downgrades of some of world’s biggest banks, incl in UK, after US mkts close tonight. – Sky’s Mark Kleinman
Looks like that fabricated 2 notch Margin Stanley downgrade (because 3 notches just won’t do – those 4 months of Gorman-led “negotiations” made that painfully clear) is about to strike. The real question is: What Would Egan Who Do?
Some of Britain’s biggest banks are poised to have their credit ratings downgraded by Moody’s as soon as tonight as part of a wider reassessment of the health of the global banking industry, I can reveal.
Moody’s is expected to outline its verdicts about the creditworthiness of banks including Barclays, HSBC, JP Morgan and Royal Bank of Scotland.
Tags: Bank of America, Banking, Barclays, BNP Paribas, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Economy, Europe, Global News, Goldman Sachs, HSBC, JPMorgan, Moody's, Morgan Stanley, Nomura, Rating, RBS, Societe Generale, UBS
– UBS May Have Facebook Trading Loss of $350 Million (Yahoo Finance/CNBC, June 8, 2012):
UBS is sitting on losses that could be as high as $350 million stemming from its investment in the Facebook initial public offering, and is preparing legal action against Nasdaq as a result, people familiar with the matter told CNBC.
That loss is some ten-times more than the $30 million number that is currently being speculated in the market by others.
The issue has to do with the failure to get confirmations and executions from the Facebook trade.
– Moody’s may downgrade UBS and Morgan Stanley (Reuters):
Moody’s warned on Thursday it may cut the credit ratings of 17 global and 114 European financial institutions in another sign the impact of the euro zone government debt crisis is spreading throughout the global financial system.
It was reviewing the long-term ratings and standalone credit assessments of a range of banks, Moody’s added. Markets were unaffected by the Moody’s announcement.
“Capital markets firms are confronting evolving challenges, such as more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions,” the ratings agency said in a statement.
It said among 17 banks and securities firms with global capital markets operations, it might cut the long-term credit rating of UBS, Credit Suisse and Morgan Stanley by as much as three notches following the review. It said the guidance was indicative.
Among the banks that might be downgraded by two notches are Barclays, BNP Paribas, Credit Agricole, Deutsche Bank, HSBC Holdings, and Goldman Sachs.
Bank of America and Nomura were included in those that might be downgraded by one notch.
– Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks? (The Econonomic collapse, Dec. 2, 2011):
What you are about to read should absolutely astound you. During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret. Do you remember the TARP bailout? The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the “too big to fail” banks. Well, that bailout was pocket change compared to what the Federal Reserve did. As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the “too big to fail” banks between 2007 and 2010. So have you heard about this on the nightly news? Probably not. Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture. The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down. The Federal Reserve has been actively picking “winners” and “losers” in the financial system, and it turns out that the “friends” of the Fed always get bailed out and always end up among the “winners”. This is not how a free market system is supposed to work.
According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.
Tags: Bailout, Bank of America, Banking, Barclays, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Dexia, Dollar, Dresdner Bank, Economy, Fed, Federal Reserve, GAO, Global News, Goldman Sachs, Government, JPMorgan, Lehman Brothers, Merrill Lynch, Morgan Stanley, Politics, RBS, Societe Generale, U.S., UBS, Wachovia, Wall Street, Wells Fargo
– Revealed – the capitalist network that runs the world (New Scientist, Oct. 19, 2011):
AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.
The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.
The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).
“Reality is so complex, we must move away from dogma, whether it’s conspiracy theories or free-market,” says James Glattfelder. “Our analysis is reality-based.”
Tags: Allianz, AXA, Bank of America, Barclays, BNP Paribas, Corporations, Credit Suisse, Deutsche Bank, Economy, Global News, Goldman Sachs, Government, JPMorgan, Lloyds TSB, Merrill Lynch, Morgan Stanley, Science, Societe Generale, Society, UBS, Unicredit
Dr. Philippa Malmgren is the President and founder of Principalis Asset Management, a financial firm based in London. In short, she helps fund managers better understand how politics, policy and geopolitics will impact the financial markets. Investors use her insights to manage their portfolios more profitably. Her clients include many investment banks, fund managers and hedge funds as well as Sovereign Wealth Funds, pension funds and corporations. She founded the Canonbury Symposia, which brings together high level experts on strategic security, defense and intelligence matters to meet with experts from the financial markets.
She is a frequent guest on the BBC’s Today Program, Newsnight, a guest presenter on CNBC’s Squawk Box (UK) and is a speaker at conferences. She has a column on the markets in Investment Week and has written for The International Economy, International Fund Investment Magazine and Institutional Investor Magazine. Dr. Malmgren has been a visiting lecturer at Tsinghua University in Beijing and an occasional lecturer for the Duke Fuqua Global Executive MBA Program.
She serves on the International Advisory Board for the School of Oriental and African Studies in London and Indiana University School of Public and Environmental Affairs. She is a Governor of the Ditchley Foundation in the UK.
She served as financial market advisor in the White House and on the National Economic Council from 2001-2002, where she was responsible for financial market issues. She founded Malmgren and Company, in London, England on 2000 and was previously the Deputy Head of Global Strategy at UBS and the Chief Currency Strategist for Bankers Trust. She headed the Global Investment Management business for Bankers Trust in Asia. She has a B.A. from Mount Vernon College and an M.Sc. and Ph.D. from the London School of Economics. She completed the Harvard Program on National Security. The World Economic Forum named Dr. Malmgren a Global Leader for Tomorrow in 2000. She is also a member of the Council on Foreign Relations, Chatham House, the Economic Club of New York and the Institute for International Strategic Security.
– September 2011 Policy & Markets (Dr. Pippa Malmgreen, Sep. 13, 2011):
News to expect in the coming days and weeks:
- Greece defaults
- Germany protects German banks but other countries cannot do the same thus quickly provoking multiple sovereign defaults and or bank failures, all of which may easily lead to a payments crisis in the global banking system. Derivatives are particularly at risk in terms of operation and execution.
- The Euro falls in value especially against the US dollar
- The Germans announce they are re-introducing the Deutschmark. They have already ordered the new currency and asked that the printers hurry up.
- The Euro falls even more on any news that Germany is withdrawing from the Euro.
- Legal wrangling begins as to the legality of Germany’s decision. Resolution takes years.
- Germany insists that the Euro continues to exist even they do not use it any longer. They emphasize that European unification will continue and suggest new legal instruments to strengthen European Unification including new EU Treaties.
The markets are focused on the imminent default by Greece. But, this is not the most important issue now. The historic development the markets have not priced in as that Germany is preparing to exit the Euro. The markets are very likely to have to contend with the re-introduction of Deutsche Marks in the near future. This is bound to mean a collapse in the value of the Euro for those countries that will remain in it (devaluation for the rest of Europe). This step may seem unthinkable but, I believe that the German government is telling us in multiple ways that there is no other solution from their point of view. It is also why you will hear various policymakers at the G7 meeting his weekend echo Christine Lagard’s comment that the world economy is entering a “dangerous new phase.”[i] This was certainly the atmosphere at Jackson Hole where policymakers openly talked about entering a period of history where we would face challenges beyond the scope of anything we have seen in our careers. Continue reading »
– The $2 Billion UBS Incident: ‘Rogue Trader’ My Ass (Rolling Stone, Sep. 15, 2011):
The news that a “rogue trader” (I hate that term – more on that in a moment) has soaked the Swiss banking giant UBS for $2 billion has rocked the international financial community and threatened to drive a stake through any chance Europe had of averting economic disaster. There is much hand-wringing in the financial press today as the UBS incident has reminded the whole world that all of the banks were almost certainly lying their asses off over the last three years, when they all pledged to pull back from risky prop trading. Here’s how the WSJ put it:
The Swiss banking giant has been struggling to rebuild trust after running up vast losses in the original financial crisis. Under Chief Executive Oswald Grubel, the bank claimed to have put in place new risk management practices, pulled back from proprietary trading and focused on a low-risk client-driven model.
All the troubled banks, remember, made similar promises in the wake of the financial crisis. In fact, some of them used the exact same language. Some will recall Goldman’s executive summary from earlier this year in which the bank pledged to respond to a “challenging period” in its history by making changes.
“We reviewed the governance, standards and practices of certain of our firmwide operating committees,” the bank wrote, “to ensure their focus on client service, business standards and practices and reputational risk management.”
But the reality is, the brains of investment bankers by nature are not wired for “client-based” thinking. This is the reason why the Glass-Steagall Act, which kept investment banks and commercial banks separate, was originally passed back in 1933: it just defies common sense to have professional gamblers in charge of stewarding commercial bank accounts.
More BS we can believe in!
In other news:
– Alleged rogue trader costs UBS $2bn (Guardian):
A 31 year old man has been arrested by City of London Police on suspicion of fraud in connection with the alleged rogue trading incident that has cost Swiss bank UBS around $2bn (£1.3bn).
The Zurich-based bank uncovered the incident as recently as the last 24 hours and suffered a near 10% fall in share price in early trading after it revealed the loss could push the bank into the red for the current financial quarter.
– Bank unaware that ‘rogue trader’ had lost £1.3bn until he blew the whistle on HIMSELF (Daily Mail, Sep. 15, 2011):
- UBS were only alerted to the staggering losses when Kweku Adoboli ‘confessed about the dealings’
- Privately educated Adoboli was a ‘work-hard play-hard’ trader who entertained a string of attractive women at his luxury flat in East London
- Shares in Swiss bank UBS slump 10% following the scandal
- Adoboli’s boss ‘quits’ as questions surface over his supervision of staff
- Credit ratings agency Moody’s said it will review UBS’s rating
The trader arrested on suspicion of a staggering £1.3billion fraud at UBS is believed to have blown the whistle on himself about the unauthorised deals.UBS’s internal controls were unaware of the the huge losses allegedly generated by ‘rogue trader’ Kweku Adoboli, 31, who allegedly confessed to bosses about the huge losses.
UBS are then believed to examined his trading positions and called City regulator the Financial Services Authority (FSA) and the police, according to the BBC.
After his arrest at his desk in the early hours of Thursday, Adobli has hired City experts Kingsley Napley, the law firm which advised Nick Leeson, the man who brought down Baring’s Bank in the 1990s, according to Sky News.
Continue reading »
Pressure on currency and fears of its demise mount after Dutch government’s bombshell
– Euro exit could cost €45,000 for each family (Irish Independent, Sep. 11, 2011)
THE cost of Ireland leaving the euro could be as much as €45,000 per family in the first year, according to research report for clients of giant Swiss investment bank UBS.
The threat of a break-up of the euro mounted last week when the Dutch prime minister, Mark Rutte, and his finance minister, Jan Kees de Jager, dropped a bombshell by suggesting that countries that persistently break eurozone budget rules should be chucked out of the currency. With the latest Greek bailout deal on a knife-edge, the possibility of Greece leaving the euro has increased dramatically in recent weeks.
– European Bank Job Cuts Exceed 40,000 as UBS Eliminates 5% of Its Workforce (Bloomberg, Aug 24, 2011):
UBS AG (UBSN)’s decision to cut 5 percent of its workforce brings to more than 40,000 the number of jobs cut by European banks in the past month as the region’s worsening sovereign debt crisis crimps trading revenue.
UBS, Switzerland’s biggest bank, said yesterday it will eliminate 3,500 jobs, mainly from its investment bank. It follows HSBC Holdings Plc (HSBA), which announced 30,000 cuts on Aug. 1, Barclays Plc (BARC), which is cutting headcount by 3,000, and Royal Bank of Scotland Group Plc (RBS), which is eliminating 2,000 posts. Credit Suisse Group AG (CSGN) announced 2,000 reductions on July 28.
European banks are slashing jobs this year six times faster than their U.S. peers, according to data compiled by Bloomberg, as concerns about the creditworthiness of Italy, Spain and France roil financial markets and reduce income from fixed- income trading, stock and bond underwriting as well as mergers and acquisitions. Financial firms are also cutting costs as regulators force banks to hold more and better quality capital to withstand future shocks.
“It’s a bloodbath, and I expect things to get worse before they get better,” said Jonathan Evans, chairman of executive- search firm Sammons Associates in London. “I cannot see a lot of those who have lost their jobs getting re-employed. Regardless of how good someone is, no one wants to talk about hiring. Life will be very difficult for two or three years.”
The 46-member Bloomberg Europe Banks and Financial Services Index has fallen 31 percent this year. RBS tumbled 47 percent, Barclays 45 percent and France’s Societe Generale (GLE) SA 48 percent.
YouTube Added: 22.08.2011
– Wall Street Aristocracy Got $1.2 Trillion in Fed’s Secret Loans (Bloomberg, Aug 22, 2011):
Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.
By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.
Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.
Tags: Bank of America, Banking, Barclays, Citigroup, Deutsche Bank, Economy, Fed, Federal Reserve, Global News, Goldman Sachs, Hypo Real Estate, Morgan Stanley, RBS, Societe Generale, UBS, Wall Street
– Greek Central Bank Accused of Encouraging Naked Short Selling of Greek Bonds (Financial Times)
And remember that the biggest Greek CDS speculator has been the state-controlled Hellenic Post Bank with help from (Yes, you’ve guessed it!) Goldman Sachs:
– State-controlled Hellenic Post Bank (TT) bet against Greece (Kathimerini)
– Fragwürdige Finanzgeschäfte Griechen wetten auf eigene Pleite (Sueddeutsche Zeitung)
The state-controlled Hellenic Post Bank was betting on Greece going bankrupt!
What will happen if Greece defaults:
The following article will be constantly updated at ‘Covering Delta’, so please visit the link and read the article there.
– Accusations of Treason in the Greek Parliament (Covering Delta):
Leaving aside for a moment the obvious questions of criminality and treason that have arisin from the details of the Memorandum of Understanding between the Greek government and the Troika (IMF/EU/ECB), which concedes total sovereign authority of the Greek state over the fate of its own citizens to foreign banks, let us turn to recent allegations made in Parliament against the Prime Minister of Greece himself, George Papandreou.
Recently, in an interview on Greek television, Member of Parliament for New Democracy, Mr. Panos Kammenos, made allegations that if true, could very well constitute treason for the Greek Prime Minister, members of his staff and possibly members of his own family. These allegations were repeated by Mr. Kammenos on the floor of parliament and given support by the leader of LAOS, Mr. George Karatzaferis. These allegations are therefore, not made lightly, and have now been plainly put forth before the Greek people. They can no longer be ignored, and the Prime Minister is obliged to respond to them.
The gist of the allegations rest on the charge by Mr. Kammenos, that the Greek Prime Minister, Mr. George Papandreou and members of his team, presided over the sale of 1.3 billion dollars worth of credit default swap contracts (CDS on Greek sovereign debt) on or around December of 2009, shortly after coming to power. The 1.3 billion dollars worth of insurance protecting against a Greek default was bought during the spring and summer of the same year, by the Hellenic Postbank, a public banking arm of the Greek government. It is unclear what the intentions of the Postbank were when it purchased the credit protection. Clearly, the previous government that was in power at the time (New Democracy or N.D.) understood that Greece was headed towards a fiscal crisis, otherwise they would not have purchased the insurance. However, we do not know if the move was initially made with the intention of reaping private profit, or simply as a hedge by the government itself against it’s own default.
[*Note: I have been made aware of a possible discrepancy between the numbers cited by Mr. Kammenos and those cited by Mr. Tombras in his law suit. Specifically, the subject at issue is the notional value of the CDS purchased and then sold by Hellenic Postbank. The size of the bank’s balance sheet would not warrant as large a hedge as the 60 billion in notional CDS (implied by Kammenos), which would imply that either the bank was net-short it’s own government’s debt, or that some mistake has been made by those looking over the books. This would affect the profit potential for the position, but would not change the fundamental fact that insurance protection was sold from public to private hands. – i.e. it has no bearing on the allegations]
Tags: Banking, cds, Debt, Derivatives, Derivatives market, Deutsche Bank, Economy, EU, Europe, George Papandreou, Global News, Goldman Sachs, Government, Greece, HSBC, JPMorgan, Politics, RBS, Societe Generale, UBS