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The Crooked Traders of london
Back in 1964 a labour politician George Brown, who was Deputy Leader of the Labour Party coined the phrase “Gnomes of Zurich”. He meant, of course, the Swiss bankers and their client speculators (who came from all over the world) who decided, rightly in retrospect, that the British Economy was not all it was cracked up to be and that the British pound was overvalued. These speculative activities ultimately resulted in the pound in our pockets being devalued and somehow the blame was the fault of the gnomes who lived and worked in underground vaults of the Swiss banks who held the secret funds of people all over the world, including those of the wealthy British.
Banks, like the leopard cannot change their spots and like the Ethiopian cannot change their skins. They are founded to make money by borrowing and lending for a profit and by speculating and trying to outsmart other banks. Sometimes they act as principals and sometimes as mere brokers; they rarely act with principles and often their broking is aimed to break something.
In the recently discovered LIBOR fraud we have found that the banks are alleged not to have returned true figures for the rates at which they were lending to each other, thus over charging the poor fools who borrowed at rates fixed to LIBOR or short changing those other fools who lent at rates fixed to LIBOR.
Bloomberg has reported that transcripts have been brought into the cold light of day which show just how casual and widespread the fraud was; the following is part of a transcript of a conversation when a Royal Bank of Scotland trader was supposed to be returning the actual rates of LIBOR for the actual deals that the trader had made:
Q “What’s the call on LIBOR?”
A “Where would you like it, LIBOR that is?”
Q “Mixed feelings but mostly I’d like it all lower…” –
A “Ok, I will move the curve down 1 basis point, maybe more if I can.”
There are trillions of pounds of transactions by commercial borrowers and lenders that depend on LIBOR being exactly what it says on the tin – the London Inter-Bank Offered Rate.
One thing is certain; as criminal as this behaviour is, no one in the British Banking system will go to prison for the fraud; directors and senior managers will remain untouched but doubtless some overpaid underling will be found responsible and the bank will publish statements of extreme regret that these oversights, from which they have profited, could have occurred.
The threat is not from the gnomes of Zurich but the crooked traders of London.
Filed under: climate change Tagged: banking, George Brown, gnomes of Zurich, LIBOR, libor rate 
2012-10-16 02:54:22
Source: http://robertkyriakides.wordpress.com/2012/10/16/the-crooked-traders-of-london/
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