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Oct 25, 2012

BBC Timeline: Libor-fixing scandal -October 25, 2012-.

Timeline: Libor-fixing scandal


Libor, the London inter-bank lending rate, is considered to be one of the most crucial interest rates in finance.
It underpins trillions of pounds worth of loans and financial contracts.
So, when Barclays was fined £290m back in June after some of its derivatives traders were found to have attempted to rig this key rate, already weak public confidence in banks was harmed further.
The scandal forced both Barclays chief executive Bob Diamond and chairman Marcus Agius to resignation.
With the Financial Services Authority (FSA), the UK financial watchdog, due to publish its final report on reform of the Libor rating-setting system on Friday, 28 September, here are some of the key dates in the scandal:



As early as 2005 there was evidence Barclays had tried to manipulate dollar Libor and Euribor (the eurozone's equivalent of Libor) rates at the request of its derivatives traders and other banks.
Misconduct was widespread, involving staff in New York, London and Tokyo as well as external traders.
Between January 2005 and June 2009, Barclays derivatives traders made a total of 257 requests to fix Libor and Euribor rates, according to a report by the FSA.
One Barclays trader told a trader from another bank in relation to three-month dollar Libor: "duuuude... what's up with ur guys 34.5 3m fix... tell him to get it up!".


At the onset of the financial crisis in September 2007 with the collapse of Northern Rock, liquidity concerns drew public scrutiny towards Libor. Barclays manipulated Libor submissions to give a healthier picture of the bank's credit quality and its ability to raise funds. A lower submission would deflect concerns it had problems borrowing cash from the markets.
Barclays' Libor submissions were at the higher end of the range of contributing banks, and prompted media speculation about the true picture of the bank's risk and credit profile.
Senior treasury managers instructed submitters to reduce Libor to avoid negative publicity, saying Barclays should not "stick its head above the parapet", according to the FSA report.
From as early as 28 August, the New York Fed said it had received mass-distribution emails that suggested that Libor submissions were being set unrealistically low by the banks.
On 28 November, a senior submitter at Barclays wrote in an internal email that "Libors are not reflecting the true cost of money", according to the FSA.
In December, a Barclays compliance officer contacted the UK banking lobby group British Bankers' Association (BBA) and the FSA and described "problematic actions" by other banks, saying they appeared to be understating their Libor submissions, according to US regulator the Commodity Futures Trading Commission (CFTC).

On 6 December, a Barclays compliance officer contacted the FSA, according to the FSA report, to express concern about the Libor rates being submitted by other banks, but did not inform the FSA that its own submissions were incorrect, instead saying that they were "within a reasonable range".
The FSA said that the same compliance officer then told Barclays senior management that he told the FSA "we have consistently been the highest (or one of the two highest) rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience", and that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances".
In early December, the CFTC said that the Barclays employee responsible for submitting the bank's dollar Libor rates contacted it to complain that Barclays was not setting "honest" rates.
The employee emailed his supervisor about his concerns, saying: "My worry is that we (both Barclays and the contributor banle panel) are being seen to be contributing patently false rates.
"We are therefore being dishonest by definition and are at risk of damaging our reputation in the market and with the regulators. Can we discuss urgently please?"
On 6 December a Barclays compliance officer contacted the FSA about concerns over the levels that other banks were setting their US Libor rate. This was made after a submitter flagged to compliance his concern about mis-reporting the rate. Compliance informed the FSA that "we have consistently been the highest (or one of the two highest) rate provider in recent weeks, but we're justifiably reluctant to go higher given our recent media experience".
He also reported that the FSA "agreed that the approach we've been adopting seems sensible in the circumstances, so I suggest we maintain status quo for now".
In a phone call on 17 December a Barclays employee told the New York Fed that the Libor rate was being fixed at a level that was unrealistically low.

To continue reading this extraordinary outstanding report click:

The New York Times | The Learning Network: -October 25, 2012-. The Cuban Missile Crisis

The New York Times

October 25, 2012

The Learning Network

Lesson Plans

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Space Out: Modeling the Solar System

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In this lesson, students calculate the relative distances between planets in our solar system, build a model illustrating those distances to scale and compare the model with standard solar system illustrations.
Flash Points: Searching for Modern Lessons in the Cuban Missile Crisis

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In this lesson, which includes a slide show of historic photos, students decide whether the crisis stands as an example of cool leadership under pressure or a cascade of error and miscalculation.
What's Going On in This Picture? | Oct. 22, 2012

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Every Monday morning, we'll be publishing a New York Times photo without any caption, headline or other information about its origins. This is our first. Join the conversation by posting about what you see and why in our comments section.
Celebrate the National Day On Writing by Posting #WhatIWrite Messages on Twitter

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Post a message about writing with the hashtag #WhatIWrite and join a global conversation on Oct. 19.

Student Opinion Questions

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What Are the Best Souvenirs You've Ever Collected While Traveling?

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What Are Your Reactions to the Final Presidential Debate and Predictions for Nov. 6?

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What Magazines Do You Read, and How Do You Read Them?

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GATA | THE GATA DISPATCHES -October 25, 2012-: German gold has been gone since 201 | Gold and Silver in the curency War | | German gold reserve audit controversy

German gold has been gone since 2001, Turk tells King World News

2:52p CT Thursday, October 25, 2012

GoldMoney founder and GATA consultant James Turk, whose 2001 commentary first posted at his Free Gold Money Report Internet site, "Behind Closed Doors" --
-- and republished at GATA's Internet site --

-- martialed the evidence that the United States had swapped gold with the German Bundesbank for market-rigging purposes, today tells King World News that all the German gold vaulted abroad has been gone, leased into the market, for 11 years. Excerpts from the interview and Turk's 2001 commentary are posted at the King World News blog here:

Jesse: Gold and silver are the strategic high ground in the currency war

2:35p CT Thursday, October 25, 2012

Jesse's Cafe Americain has some insightful commentary this week about the international currency war and gives GATA credit for perceiving the war's gold and silver details.

Jesse writes: "Gold and silver are intimately involved in the unfolding currency war, because they take no sides and have no counterparty risk. No one can print them. And this is why I think GATA is right -- not because of the evidence they have, which is more substantial than one might suspect given obsessive secrecy and the disinformation campaigns -- but because it is exactly what one would do if there was to be a currency war, and such things as gold and silver existed. It is basic strategy of war: Seek to control the high ground. And along with oil, gold and silver are strategic high ground in a currency war. And the first victim in a war is the truth."

Jesse's commentary is posted here:

'Keiser Report' examines German gold reserve audit controversy

11:34a CT Thursday, October 25, 2012

Financial market provocateur Max Keiser, whose interview with Bundesbank officials in Frankfurt four years ago raised the issue of the foreign vaulting of most of the German gold reserve, revisits the newly controversial issue today on his program, "The Keiser Report," on the Russia Today network with his sidekick commentator, Stacy Herbert. They discuss the German government auditors office's calls for an audit of the gold reserve and the possibility that the gold is, to put it nicely, oversubscribed. Keiser also interviews market analyst Dominic Frisby about the issue. GATA figures heavily in the discussion. It's 26 minutes long and posted at the Russia Today Internet site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.




The New York Times | Politics -October 25, 2012-.

The New York Times

October 25, 2012


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DeakBook Afternoon Edition -October 25, 2012-: Deal Professor: Gamesmanship in Xstrata-Glencore Merger Vote

Thursday, October 25, 2012
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Money Show Investors Daily Alert -October 25, 2012-: Should We Worry About the Dollar?

Investors Daily Alert

The Daily Guru

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Wall Street at Close Report | MarketWatch -October 25, 2012-: U.S. stocks rise modestly on economic data

By Kate Gibson, MarketWatch 

NEW YORK (MarketWatch) — Stocks on Wall Street rose modestly Thursday as data from the U.S. and abroad cast a more favorable light on the global economy. 

 The Dow Jones Industrial Average DJIA +0.20% and the S&P 500 index SPX +0.30%  posted their first gain in three days.

Is the economy really improving? Orders for long-lasting goods posted the largest gain in more than 2 1/2 years in September and the number of U.S. workers filing applications for jobless benefits fell last week. 

“The economic news was fairly decent, but there’s a continual overhang about earnings and growth going forward,” said Robert Pavlik, chief market strategist at Banyan Partners in New York. 

The Dow rose 26.34 points, or 0.2%, to end at 13,103.68, with 11 of its 30 components finishing in negative territory. Procter & Gamble Co. PG +2.92%  was the top gainer in the Dow, with its shares rallying 2.9% after the consumer-products company reported results for the first quarter of fiscal 2013 that exceeded estimates. Read more on P&G’s results and outlook. 
The S&P 500 added 4.22 points, or 0.3%, to 1,412.97, with energy and health-care posting the biggest gains among its major sectors. 

Many analysts believe the stock market is oversold and in need of a more substantial correction than the 3% to 4% retreat by the S&P 500 from its September high. 

“We’re focused more on earnings, and even more on sales. At some point, 2% sales growth and 10% earnings growth can’t work mathematically forever,” said Paul Nolte, managing director at Dearborrn Partners in Chicago. “We’re at that point now, where margins have maxed out or are darn close to it,” Nolte added. 

Health insurer Aetna Inc.’s AET +1.09%  results topped expectations, along with security-software maker Symantec Corp. SYMC +6.67% , which projected sales that surpassed analysts’ estimates.
“From a technical perspective, we’d like to see 1,400 to 1,425 hold. If we go below 1,400, that opens the door” to a much steeper decline, said Nolte.

Pavlik believes the market is likely to test both the 100-day and 200-day moving averages on the S&P 500, with the first being 1,395 and the latter 1,376.
“We’re in for what could probably amount to a 7% correction. The market is oversold, but not to the point where we’re as oversold as we were in May,” Pavlik said of the market’s spring pullback.
The Nasdaq Composite COMP +0.15%  rose 4.42 points, or 0.2%, to end at 2,986.12.
On Thursday, 696 million shares traded on the New York Stock Exchange. Composite volume was roughly 3.48 billion. 

“From an economic perspective, we’re getting there slowly,” said Nolte at Dearborn Partners of U.S. reports that had demand for durable goods jumping 9.9% in September and jobless claims falling last week. Read more on durable goods. 
A third report had pending-home sales rising 0.3% in September, stabilizing following a sharp decline the prior month. 

And China’s Ministry of Industry and Information Technology said the nation’s factory output should increase at a more rapid pace in the final quarter, while a preliminary report from the U.K. showed that nation’s economy in the third quarter grew 1% from the prior period, the largest such rise in five years.
After the close, Wall Street will get quarterly results from Apple Inc. AAPL -0.74% . Read: iPhone is big wild card in Apple results. 
“Now everybody is looking to Apple as the new technology, since the old technology laid an egg,” said Nolte, citing results from technology names including Intel Corp. INTC +1.07% , International Business Machines Corp. IBM +0.46% and Dell Inc. DELL -0.11% . Read: How to trade Apple’s earnings report. 
Kate Gibson is a reporter for MarketWatch, based in New York.