Everything Is Rigged: The Biggest Price-Fixing Scandal Ever
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
Somehow I missed this article and only now became aware of it. It is depressingly eye opening how trivial it is for a handful of people to jerk around 100’s of trillions of dollars worth of securities for their own profit. Fractions of a percent shift would mean millions of dollars in bonuses for the traders and billions of dollars for the banks. But heck, we shouldn’t expect these organizations to operate for free, right? They are in the business to make profit; so what if their stature gives them the access to make more profit than any smaller (say one with ‘only’ a trillion dollars under management) organization? Isn’t that just how the world works? Of course, that is one of the purposes of governments; sadly our governments are basically owned outright by these same people. We will just have to get used to it.
Since it is a long article and I know many of my reader(s) shy away from such, here is a teaser to try to encourage you to make the time…
The idea that prices in a $379 trillion market could be dependent on a desk of about 20 guys in New Jersey should tell you a lot about the absurdity of our financial infrastructure. The whole thing, in fact, has a darkly comic element to it. “It’s almost hilarious in the irony,” says David Frenk, director of research for Better Markets, a financial-reform advocacy group, “that they called it ISDAfix.”
After scandals involving libor and, perhaps, ISDAfix, the question that should have everyone freaked out is this: What other markets out there carry the same potential for manipulation? The answer to that question is far from reassuring, because the potential is almost everywhere. From gold to gas to swaps to interest rates, prices all over the world are dependent upon little private cabals of cigar-chomping insiders we’re forced to trust.
“In all the over-the-counter markets, you don’t really have pricing except by a bunch of guys getting together,” Masters notes glumly.
That includes the markets for gold (where prices are set by five banks in a Libor-ish teleconferencing process that, ironically, was created in part by N M Rothschild & Sons) and silver (whose price is set by just three banks), as well as benchmark rates in numerous other commodities – jet fuel, diesel, electric power, coal, you name it. The problem in each of these markets is the same: We all have to rely upon the honesty of companies like Barclays (already caught and fined $453 million for rigging Libor) or JPMorgan Chase (paid a $228 million settlement for rigging municipal-bond auctions) or UBS (fined a collective $1.66 billion for both muni-bond rigging and Libor manipulation) to faithfully report the real prices of things like interest rates, swaps, currencies and commodities.