GEITHNER: Tucker knew about Libor scamming in 2008

Washington Post calls out Deputy BoE Governor

Image

Tucker…pants on fire have been edited out to protect the guilty.

The Post’s lead story this morning asserts as follows:

‘While president of the Federal Reserve Bank of New York, Timothy F. Geithner pressed British regulators to reform the way a critical global benchmark called the London interbank offered rate, or Libor, is calculated, according to a June 1, 2008, e-mail obtained by The Washington Post. Writing to the head of the Bank of England, among others, Geithner made six recommendations, which included eliminating incentives that could encourage banks to manipulate the rate and establishing a “credible reporting procedure.”

So much for Paul Tucker’s St Paulesque revelatory conversion of two months ago. Three days ago I posted this, arguing that ‘anyone with a brain’ now knew the scam was both well-established, known about, and global. After the Tucker evidence I posted again to say ‘yesterday’s Tucker Treat was simply unbelievable’. Now the Post’s well-crafted, sourced and fully-documented piece confirms it.

And there will be more to come today: The New York Fed that Timmy led between until 2008 is to publish ‘dozens of implicatory documents’ this afternoon GMT. Says my trusty New York source, “We’re talking trillions of dollars in money rates here. I hear that several of the papers, emails and letters show conclusively that Geithner’s Fed knew about Libor dishonesty by 2007 at the latest.”

The Post also says something similar towards the end of its story. Added to the Slog’s Iswap piece about interbank derivates recently, what we are witnessing here (as I’ve said all along) is the fixing of markets – to the general disadvantage of innocent investors – across the piece and over many years.

If Gordon Brown ridiculously suggested that he’d saved the world, will Conservative Camerlot now be fingered by the Americans as the home of all things amoral in the banking business? Dave needs to think about this. But my Cabinet contact – obviously having decided I am The Enemy – has switched off the Mole Machine. Guilty conscience, perhaps….

June 28th: How The Slog first suggested the can of worms would open

68 thoughts on “GEITHNER: Tucker knew about Libor scamming in 2008

  1. Pingback: GOLD PRICE MANIPULATION: Telegraph’s new enfant terrible spills the beans | A diary of deception and distortion

  2. Are financial crimes no longer crimes,criminality and prosecution only being for the little people or those outside the gilded cage?
    So,there you are in Ford Open,you know the post MBA institution run by the government,and you are watching what is occuring.How satisfied are you that your actions were punishable?

  3. Turbo Tax Timmy could have stopped the LI(E)BOR
    fixing with 16 phone calls.Just threaten the loss of
    Fed primary dealer UST status to those banks.
    Done.
    The e mails just released are CYA by TTT..
    He knew ,and did not stop it.
    He is in it up to his neck.

    • I’m sure the banks will appreciate all that cheap loan money… to lend to each other! Cos sod all of it is being lent to businesses, according to what I’m hearing on the street. The usual excuse being that a prospective lender has insufficient collateral; amusing given the quality of the underlying assets the ECB has been willing to issue loans upon.

      • Indeed. The current lack of lending to (especially) SMEs will not be helped one jot by this BoE LTRO scheme. Despite the so-called rules of the scheme which require the banks to lend the cheap money to customers, they will simply transfer what lending they’re already doing across to this scheme and rake in the profits.

        I really wonder who the hell King & Osborne think they’re fooling.

    • LTRO, computer “breakdown” and more QE. You would think that someone was having liquidity problems. Steve Keen is bang on the money when he says the UK is due a Lehman type event is year.

      • Well, at the risk of starting a panic, here’s my list of candidates:

        1. RBS.
        2. Lloyds-HBOS.
        3. Santander/Barclays.

        I have no privy information about any of these banks.

      • Did anyone else notice that Lloyds internet banking was out of action yesterday late morning for over half an hour (plus however long it was down before I noticed)?

      • So RBS, Santander and now Lloyds have had computer problems. Must be still using BBC Acorns.
        I think your list BT is pretty much what I was thinking

      • Don’t forget HSBC and even Standard Chartered, leveraged up to their eyeballs in the rapidly cooling China trade.

      • EDF’s systems are down at the moment…..the first time ever that I can recall. Was told to phone back *Monday* .

      • J P Morgan??

        …. who, apparently, have revised their 1st quarter accounts to include the effects of “one rogue trader”.

        Now where have I heard the “one rogue employee (copyright NewsCorp)” defence before..!

  4. Well, depending on the exact content of the WP’s e-mails & documents (I’m *not* talking here not of interpretation but of actual content) and who in the BoE they were sent to by Geithner, it’s a slam dunk and the SFO will have an easy job at bringing criminal charges against Tucker and perhaps King, who will then squeal and implicate Brown/Balls by screaming “mummy mummy, I was only doing my job”.

    Apart from that, if anybody can explain JW’s final strange comments about it all being the Tories fault, I’d be pleased to hear it.

    • I did not read it as a dig at the Tories.
      If the Americans want to point blame to London then they will give the current government a hard time. It is then pass the parcel as they use the domestic political scene to channel the problems towards members of the last government.
      Remember also that Cameron says we are all in it together.

      • Exactly,the Americans have a scapegoat and it has London written all over it.Quite a number will be extradited and imprisoned in the US and at our expense.The EU will stick the boot in for good measure.

      • @Kit Green: Fair enough, I’m pleased to hear that. But his comment didn’t refer to London “…will Conservative Camerlot now be fingered by the Americans as the home of all things amoral in the banking business? Dave needs to think about this.” does require some explaining and clarification. Any offers, John?

      • @Kit
        It is indeed a game of pass the parcel.

        The trouble is that the parcel contains a grenade and the pin got nudged during one of the passes.

        So nobody knows if the grenade is still safe or is there reducing number of seconds before…

        The (very) short-term solution is to pass it on, as quick as poss.

    • @BT: Would the SFO really bring criminal charges against Tucker and possibly King? I for doubt it, as you rightly point out, the “only doing my job” nonsense will not cut the mustard so to speak, and they will pass the buck upwards, then there is the issue of the whole can of worms being opened and all their dirty secrets being exposed. No, this will be one of those affairs that will have to ‘have a line’ drawn under it before too long IMHO. Too big to go anywhere is the definition that I would use.

      • @kfc: I’d bet that you’re 100% spot on. It’ll all be kicked into the long grass and the MSM Daily Slime will ask no questions. Corporatism rools!

        The police took one year to investigate a simple killing of the Brazilian and afaik they’re still carrying out a post mortem on the body of the murdered GCHQ guy even though he’s now been buried. The Olympic Games will create plenty of distractions….

    • BT, please stop jumping to the defence of the Conservative party. They’re every bit as rotten as Labour. On a previous comment you made containing the same basic point I posted a reply containing two or three questions regarding your fixation with defending the Tories.

      Care to answer them now?

      • @supafeckinmingster: I have not seen your two or three questions…I only go back to read 3-4 articles. But please stop causing diversions by defending allegations made against the Tory Party when you know they are false. Like the one’s JW keeps making. Read his final paragraph again until you get it. Anybody would think that Libor rigging was a giant Tory plot or summat. Where’s the evidence? It is a fact they were not in power when the Libor scandal went on so they could not possibly be responsible for it. We all know WHO was in power and is most responsible for it, but since you won’t mention their name, I will. It was THE LABOUR PARTY. Yes, THE LABOUR PARTY. Get it?
        Now give me a break…..

        HTH :-)

  5. Tucker the lying F____R has a certain ring to it . Goldman’s Ferguson standing by with Timmy at the ready to give him a hand . Looking good for the squid .

  6. No wonder off shore hacking has been the career of choice in London,with inside information eliciting pure profit?

  7. Ooh dear. If you want bent, I’d say *ucker is an amatuer.

    You want bent, then Timmy’s your mega-man.

    I wouldn’t touch what he has to say with a bargepole. Whatever mainstream paper it is in.

    • Well, Geithner is claimed to have sent letters and/or e-mails to the BoE about Libor rigging, according to the Wash Post (as per JW’s article). So there might be good reason for him throwing sh*t over the wall to the UK. But he still needs to explain why he took from mid 2007 to mid 2008 to do that.

      • Except the BofE has published the emails from Geitner and they don’t refer to LIBOR rigging as such – only to banks misreporting borrowing rates so they aren’t seen in a bad light (which would not result in a rigged LIBOR rate).

        The Washington Post got it wrong, hence the BofE publishing the emails. JW was too keen to assume that a foreign newspaper would report UK banking activity accurately. He should read the FT.

      • @Just sayin’: Ah ha! Well, according to JW’s article this is a developing story. Let’s wait and see what other reports come out of the Washing Post. If you’re right, there’s hardly enough to make a smoking gun against Tucker although most people believe he’s heavily implicated.

  8. Some indicate that America will use Britain has scapegoats, that may well be even more difficult for Cameron than Labour it may well come to pass that the investment lorded on Britain in the eighties that gave the illusion that thatcher ism worked was not because we were the best place to invest in at all
    That we became a banana monarchy over night

  9. new york has been on london’s case ever since it had the effrontery to top it in the ipo sweeps back around 2005. they want to do down london by fair meams or foul: how dare they challenge the almighty rouge state. add brussels to the mix and we are in a fix. i am sure they will win to the point that the city is markedly smaller in 5-10 years. my advice to anyone wanting a career in finance now is go abroad.

  10. One would have to imagine that Cameron has got ‘the man’ working hard on that old USA extradition treaty for his mates by now…….Likely he will be announcing that it is so unfair against UK bods that he is scrapping it NOW !

  11. This is the best possible result for Joe Citizen. The rats are turning on each other,to save their sorry asses. I have despaired of ever seeing those bastards face justice. Possibly the court of public opinion will result in a verdict. Much rather see a hanging tho’. it is what they truly deserve. The guillotine looks like making a come-back, ‘cos sure as hell the Justice system do not have the cojones to give us true justice.

    • @Salford Lad: “The rats are turning on each other,to save their sorry asses.”

      As I’ve long said, the signs of terminal decay are when this happens and it’s been gathering momentum for a few years. It means that trust has broken down between the rats and it’s now every rat for himself. Another thing to watch for is when the rats communicate with each other through MSM to make sure their position is widely known…

  12. Pingback: John Ward – Geithner : Tucker Knew About Libor Scamming In 2008 – 13 july 2012 | Lucas 2012 Infos

  13. “Geithner made six recommendations, which included eliminating incentives that could encourage banks to manipulate the rate ”

    Here we go yet again! What is your problem with sticking to the facts! This letter has been published in the FT. You can go and see it yourself at FT Alphaville. Geitner did indeed make 6 recommendations for changing the way LIBOR was calculated. 5 of them refer to making LIBOR reflect U.S. interbank lending rates (quite why the U.S. can’t create its own LIBOR equivalent is beyond me). Only point 6 refers to misreporting, and the concern is that banks are misreporting rather than appear to be having to pay above the odds for loans. Nothing to do with manipulating rates.

    Here is the link to the letter, for those of you interested in facts:
    http://www.bankofengland.co.uk/publications/Documents/news/2012/nr068.pdf

    • As i said in a previous post.
      Geitner could have unfixed LI(E)BOR with a few phone
      calls.He didn’t.Therefore he was complicit.
      The emails were a CYA precaution.
      Shame he didn’t put as much effort into paying his
      taxes,
      Once a cheat …..

      • Precisely! You’ve got it! A worry about misreporting – but not about banks colluding together to push LIBOR one way or t’other to their own advantage.

        Maybe they were, but it isn’t mentioned here. That’s my point.

    • @Just Sayin’: The very existence of those e-mail exchanges (which also refer to a call Angela Knight received from Tucker – contents unknown), are positive proof that Libor rigging was known about in June 2008 by Geithner, King, Tucker and Angela Knight *at least*. Knight also refers to having called the banks’ CEOs, so they must have known about it at the time. Yet Libor rigging continued for some years after…

      • No, the very existence of the emails shows that they had discussed the possibility of misreporting. There is no mention in the emails about banks colluding together to rig the market, or even any remark suggesting there was evidence that mis-reporting had ever actually happened. In fact, the emails suggest that they had no evidence that such a thing had happened, or presumably Geithner would have openly mentioned it to the BofE, since it was hardly his fault if it was going on if it was. Could be that Geithner was only responding to what he had seen in the Wall Street Journal reports back in 2008. I think it is quite likely that Geithner reads the Wall Street Journal, would be reasonalbe if he had concerns about LIBOR and then raised them with the BofE.

      • JS, I don’t think that you’ve done enough corporate time. Of course no-one is going to say nasty or even explicit things in writing. Life as led by the BoE and similar others certainly doesn’t work that way.

      • @Just Sayin’: Actual allegations about Libor rigging didn’t need to have been explicitly mentioned. The fact that the e-mails were about the issue – albeit in a slightly abstract and diplomatic way – indicates that the issue had come to their attention and actions were required to deal with it. The e-mails do not suggest there wasn’t evidence to believe it was happening, only that Geithner did not make any such allegation in writing at that time…possibly for legal reasons.

        As I said previously, IMO these e-mails are not a smoking gun. But they do confirm the matter was known about by important key players: King, Tucker, Knight and bank CEOs and Geithner in June 2008, yet Libor rigging continued. That could suggest the whole e-mail exchange and several quoted conversations were little more than a smokescreen.

  14. I very much doubt Geithner would have mentioned any suspicions or knowledge about rate rigging he may have had in an e-mail to anyone, let alone a foreign regulator.
    The priciple of “don’t write anything in an e-mail you wouldn’t want to see on the front cover of a newspaper” has been around for a while. Naturally a few idiot twentysomething super-greedy bankers may have ignored it, but that says more about them than it does about the integrity of financial regulators.

    • Funnily enough, I was just chatting earlier to a freind who works at the FSA, who found out about the rigging from the papers.
      However, MASSIVE caveat, he’s only worked there for 3 months, and says his colleagues wouldn’t trust him enough to tell him if they knew different.

  15. “… my Cabinet contact – obviously having decided I am The Enemy – has switched off the Mole Machine. Guilty conscience, perhaps….” More likely that you are showing a complete lack of objectivity, unless you know something you are not telling. There are several self-evident things in this mess.

    Government has always tried to manipulate ‘the market’ especially banking, either directly, through regulators or via the central bank.
    Big banks, big business, organisations and the business spiv tendency like the Jeremies, Michaels and so on you comment on always gravitate towards government and politicians in order to promote their interests. In general those in the financial area gravitate towards the Tories and those in the service/organisational sectors towards Labour and the LibDems.

    Manipulation of the LIBOR rate could only benefit the banks or the government or both, although there is an argument that forestalling financial meltdown would also help the country in the main as well as keeping ordure away from the government. Nowhere in all this is there anything that would help the Tory party, individual members, yes, the party as a whole no if for no other reason than they were in opposition out of government during the time it all went on. Had they been in government no doubt they would have been egging it all on, I quite agree, but they weren’t.

    It may not be your intention, John, but the way you have structured your comments suggest you consider the whole thing to have been an evil Tory plot, which is why it looks like you have lost your objectivity.

    • I’m sorry PeterC, but it seems only your good self and BT that seem to be seeing this lack of objectivity.

      • @supafeckinmingster: Actually, there are a few others too if you look closely at sloggers’ comments over a period. JW could clear it up easily by only blaming the Tories for their own failures and not constructing articles which blame them – or strongly imply – they are responsible for the dishonesty of others. Now there’s a challenge :-)

      • @ supafeckinmingster

        So tell me, where in all this is there anything that would help the Tory party as a whole? John’s comments have pointed at various Tory figures as being deeply implicated, which is perfectly reasonable given the arguments he raises, but instead of complaining that Cameron et al are shielding them, failing to distance the party from them or whatever he is giving the impression it was, if not all a plot hatched by them, something deliberately orchestrated by the Tory party presumably to gain some political advantage. That is where I see a lack of objectivity.

        It truly grieves me to the core to defend any of the political elite, I despise them and all their works, but understanding is only possible where there is objective honesty otherwise we descend into the kind of bigotry and tribalism that is at the root of so many failings in our country and hides the truth we are seeking to expose.

  16. We can argue about who knew what till the cows come home. One thing sticks out like a sore thumb from this shambles – the tripartite regulation system.
     Our good friends Gary and Balls will not be able to escape. They should be first up in front of the beak!  

  17. I’m starting to think that the French Revolutionaries were quite sensible to wipe out much of the governing elite. Unfortunately just like weeding, the scum do eventually return. But it must’ve been fun to see the ruling class have a temporary reversal of fortune.

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