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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:

2005

 

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!".


2007

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:

http://www.bbc.co.uk/news/business-18671255



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

Guest Post | Three Starting Points for Thinking Differently About Learning

Guest Post | Three Starting Points for Thinking Differently About Learning

Author Will Richardson suggests three ways to rethink teaching and learning at a time when technology has "upended the basic premise of school."
Space Out: Modeling the Solar System

Space Out: Modeling the Solar System

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

Flash Points: Searching for Modern Lessons in the Cuban Missile Crisis

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

What's Going On in This Picture? | Oct. 22, 2012

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

Celebrate the National Day On Writing by Posting #WhatIWrite Messages on Twitter

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

What Current Musicians Do You Think Will Stand the Test of Time?

What Current Musicians Do You Think Will Stand the Test of Time?

What do you think it takes to stay relevant and popular as a musician?
What Are the Best Souvenirs You've Ever Collected While Traveling?

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

Look at a gallery of reader photos and stories about beloved souvenirs, then tell us about some of your own favorite things collected while traveling.

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

React to the final presidential debate live here on our blog, or post thoughts anytime after. How have the debates changed the race in general? What predictions can you make for Election Day 2012?
Have You Ever Changed a Family Member's Mind?

Have You Ever Changed a Family Member's Mind?

Have you ever persuaded a family member to change his or her mind about something?
What Magazines Do You Read, and How Do You Read Them?

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

Do you read magazines? Which ones? Are you more likely to read them in print or online?
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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" --

http://www.fgmr.com/behind-closed-doors.html
-- and republished at GATA's Internet site --
http://www.gata.org/node/1088

-- 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:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/25_J...


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:
http://jessescrossroadscafe.blogspot.com/search?updated-max=2012-10-23T1...

'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:

http://rt.com/programs/keiser-report/episode-358-max-keiser/

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

Politics



Business Leaders Urge Deficit Deal Even With More Taxes

Business leaders are stepping up pressure on Washington to get a deficit-reduction deal completed even if it calls for more revenues - including higher tax bills for themselves.
At left, Mitt Romney during campaign event at a coal mine in Beallsville, Ohio in August.  In March, President Obama, at right, spoke at the Copper Mountain Solar Project in Nevada.
The Agenda

Both Romney and Obama Avoid Talk of Climate Change

Even after a year of high temperatures and drought, President Obama and Mitt Romney have seemed intent on trying to outdo each other as lovers of coal, oil and natural gas.

More Politics

Vice President Joseph R. Biden Jr. and Senator Harry Reid last Thursday in Las Vegas. Mr. Reid has shaped a vote machine

Reid's Machine Powers Obama in Nevada Test

Senator Harry Reid's political machine could hold the key to a victory for President Obama in the economically ravaged state, as both Mr. Obama and Mitt Romney seek coveted electoral votes.
Ashley Delpidio, 26, of Derry, N.H., supports Mitt Romney, believing that the economy is the biggest problem facing the nation.

Crucial Subset: Female Voters Still Deciding

While female voters generally tend to favor President Obama, that cannot be said of white women without college degrees, a subset known - in this race - as waitress moms.
The Caucus

Powell Gives Obama His Endorsement for a Second Time

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Politics Can Be a Dirty Business. And Then There Are House Races in Florida ...

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Mr. Romney addressed supporters at a rally in Reno, Nev., on Wednesday. His campaign has been drawing large crowds.

Romney Is Upbeat, but Math Is the Same

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The Caucus

The Dangers of the All-Out Sprint to Election Day

Wall-to-wall campaigning eventually leads to an exhausted candidate, and that can lead to sloppiness, mistakes and gaffes.
Richard Mourdock's opposition to abortion in cases of rape has given Democrats an opening to paint Republicans as extremist.

Rape Remark Jolts a Senate Race, and the Presidential One, Too

An argument against abortion when pregnancy resulted from rape because all life is sacred led to calls that Richard E. Mourdock of Indiana is out of step with women.

The Caucus

Romney and Republican National Committee Raise $111.8 Million in First Part of October

Mitt Romney and the Republican National Committee raised $111.8 million during the first 17 days of October, Mr. Romney's campaign announced on Thursday.

The President Could Use a Good Lozenge

After a 39-hour campaign swing, President Obama's voice starts to show some wear and tear.

Clinton to Remain as Secretary of State? 'Unlikely'

Those who play the perennial Washington parlor game about Hillary Rodham Clinton's future got a fresh tingle on Thursday. Then it fizzled.

Has Romney's Rise in Polls Stopped?

Many commentators and polling experts suggested that Mitt Romney's bounce in polls after his first debate has been halted, and that President Obama maintains a lead in crucial swing states.

Echoing 2008 Obama Slogan, Romney Calls for Change

Mitt Romney started a bus tour across Ohio by casting himself and his running mate, Paul Ryan, as reformers prepared to correct America's course, by reining in debts, salvaging Medicare and reducing taxes.

The Washington Post Endorses Obama

The newspaper is "open to the disappointments of Mr. Obama's first term," but said that "there is no way to know what Mr. Romney really believes."
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Election 2012 iPhone App

A one-stop destination for the latest political news, from The Times and other top sources around the Web. Plus opinion, polls, campaign data and video.
FiveThirtyEight
In Polls, Romney's Momentum Seems to Have Stalled
Mitt Romney gained ground after the first debate, but the forecast now finds a slightly favorable trend for President Obama.

Multimedia

Video: Candidates Blitz the Swing States
TimesCast Politics: Four events on Thursday just in Ohio. | Another comment about rape. | An interview with Jim Talent, a Romney adviser.
Graphic: A 48-Hour Sample of the Campaign Trail
President Obama and Mitt Romney traveled more than 3,000 miles each on Tuesday and Wednesday.
Video: The Women's Vote
Female voters in the swing state of New Hampshire discuss what issues are foremost in their minds in the closing days of the presidential campaign.
Interactive Feature: The Third Presidential Debate
Follow along with this interactive replay of the final debate, using fact-checks and graphics to take a closer look at attacks and assertions by President Obama and Mitt Romney.
Video: Presidential Debate Analysis
Highlights and analysis of the third presidential debate between President Obama and Mitt Romney at Lynn University in Boca Raton, Fla.

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


Thursday, October 25, 2012
TOP STORY
Deal Professor: Gamesmanship in Xstrata-Glencore Merger Vote Steven M. Davidoff says that shareholders who want the giant merger of the companies to go through but want to block a rich compensation package for their executives are left with a complicated quandary.
  • DEALBOOK »
  •  
  • DEALBOOK HIGHLIGHTS
    Rajaratnam's Lawyers Argue to Overturn Conviction A lawyer for the former hedge fund manager argued before appellate judges that the government's request to secretly record Raj Rajaratnam's conversations was riddled with problems.
    Mayer Strikes First Deal at Yahoo With Acquisition of Stamped Yahoo announced that it had purchased Stamped, a start-up focused on mobile products, for an undisclosed amount, fitting the Internet company's focuses on small deals and expanding its mobile offerings.
    David Einhorn Continues His Take Down of Fed Policy The hedge fund manager says the central bank's loose-money policy is hindering economic growth, an argument he expanded on during a conference in New York on Thursday.
    Standard Deduction: The Shift Toward Law School Specialization Victor Fleischer says that instead of just offering the traditional, general legal education, law schools may want to considering playing matchmaker, guiding students toward specialties that are likely to endure, including tax or securities law.
    Evercore Profit Falls in Weak M.&A. Climate Evercore Partners said profit slipped 13 percent in the third quarter, as it grappled with a slowdown in its advisory and investment management businesses.
    White Collar Watch: Judging if Wiretaps Are Necessary Peter J. Henning says that at a federal appeals court hearing on Thursday involving Raj Rajaratnam's appeal of his convictions for conspiracy and insider trading, the critical issue will be whether the government established that it needed to use wiretaps because other avenues of investigation were not fruitful.
    Lazard's Profit Fell 33% in 3rd Quarter Lazard said its third-quarter profit fell 33 percent, adding that it was taking steps to cut about $125 million in annual costs, including through layoffs and lower compensation.
    McKesson to Buy PSS World Medical for $1.46 Billion The McKesson Corporation, the health care services and information technology company, has agreed to buy PSS World Medical for $29 a share.
    Revolving Door: Perella Weinberg Hires Gatto, a Veteran Mergers Adviser Perella Weinberg Partners has hired Joseph D. Gatto as a partner and senior banker focused on the consumer and industrial sectors. A veteran deal maker, Mr. Gatto most recently worked at Barclays.
    Bank of China Profit Rises 17% on Loan Growth The first of China's biggest banks to report quarterly earnings reported a strong rise in profit on growth in new loans.
    Santander Earnings Plunge 94% on Real Estate Woes Banco Santander of Spain reported a 94 percent drop in net profit in the third quarter after it set aside money to cover potential losses in the Spanish real estate market.
    Credit Suisse Profit Fell 63% in Third Quarter The Swiss reported a 63 percent decline in net profit in the third quarter after taking a charge related to the value of its debt.
    Another View: New Taxes on Global Reinsurers Would Hurt Response to Natural Disasters J. David Cummins and Bradley Kading say that a new tax under consideration aimed at reinsurers based outside the United States would be punitive and could reduce aid for natural disasters by billions of dollars.
    LOOKING AHEAD
    Economic Reports Data to be released on Thursday will include weekly jobless claims, durable goods for September and pending home sales for September.
    Corporate Earnings Companies scheduled to report quarterly results on Friday include Comcast, Goodyear Tire and Rubber, Interpublic Group, K.K.R., Merck, Moody's and Weyerhaeuser.
    DealBook Video
    Business Day Live: U.S. Accuses Bank of America of a 'Brazen' Fraud
    Business Day Live: U.S. Accuses Bank of America of a 'Brazen' Fraud Prosecutors sue Bank of America over bad loans. | The inventor James Dyson on patent infringements. | Zynga plays a game called survival.

     

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

Investors Daily Alert

The Daily Guru

No-Nonsense Investing

Jim Jubak on MoneyShow.com

Today's Top Pros' Top Picks

Today's Gurus' Views & Strategies

Today's Charts in Play

MoneyShow.com Exclusive Interviews
A Top Canadian Pick, Roger Conrad

Ideas from Around the World

Today's Featured Videos & Exclusive Interviews

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.