Geitner Gets a Round

Geitner gets around;
Like a run a round Sue;
He thinks he's got it good;
He get a round.

"If you think we stole, wait till you see what the other banks did." That's the gist of a July 13 internal memo by Barclays CEO Marcus Agius to the bank's staff which went public today. "As other banks settle with authorities, and their details become public, and various governments' inquiries shed more light, our situation will eventually be put in perspective," the Telegraph quoted the memo today. The memo goes on to stridently defend the investment bank master-minded by the disgraced Bob Diamond— known internally as "Bob's baby"—in what the bank itself called "an unequivocal statement": "Our strategy and business model were right for Barclays before recent events, and they remain right for Barclays now."
Will the Liborgate killers get away with this "hang tough" line? Barclays Chief Operating Officer Jerry del Missier will be questioned by the British Parliament on Monday; on Tuesday, a hearing will be held to grant Barclays' request to be taken off the panel that sets the interbank lending rate for the UAE (EIBOR); and the Barclays correspondence is exploding in Timmy Geithner's face and threatening to sink Obama himself, even if the mainstream media is working overtime to CoverYour and Geithner's Asses.
"That is very stupid of them," Lyndon LaRouche commented today about the attempted pro-Geithner spin and coverup. "With an angry population, I really would advise them, don't do that."
The U.S. Justice Department's Criminal Division is building cases against several banks, today's NY Times reports today, based on DOJ sources. Congress must demand that they not be settled with an obscene kiss on the rump, as Eric Holder's DOJ did in its agreement not to prosecute Barclays because of its extensive "assistance" to the DOJ. Though technically reserving the right to prosecute individuals, the DOJ release makes it very clear that there is no DOJ intention to do so—and certainly not the higher-ups.
Deutsche Bank has sought a deal in which it provides evidence to European authorities about the LIBOR rigging in exchange for a lighter penalty, Der Spiegel reports today. It offered EC and Swiss investigators a pact in 2011, which Spiegel says was recently agreed on. According to a Morgan Stanley study, Deutsche Bank's exposure to lawsuits might total more than $1 billion, and that of all banks together totals $22 billion.
The prospect of criminal prosecution is rattling the banking world in general, the Times piece reports. The DOJ investigation comes on top of private investor lawsuits and broad investigations by the Commodity Futures Trading Commission (CFTC). More then 10 big banks in the U.S. are under investigation, and at least two European banks are scrambling to arrange deals. NY Times sources say UBS, whose Americas division chairman Robert Wolf is an Obama bundler and golf buddy, is high on the list.

Harlem, Sue over LIBOR Banks

LIBOR banks beware, you can sued by cities and by Harlem dudes.

The New York Times reports that there is now a pile-on of cities, states, and municipalities to lawsuits filed in Manhattan Federal Court against the banks that set the LIBOR rate, for having ripped off millions from them. These are cities and other government units that have torn up their budgets, laid people off, and in some cases been forced into bankruptcy. This is hugely explosive politically, especially if properly channeled to putting an end to the financial system which created and thrives on such misery, through LaRouche's Glass-Steagall policies.

The City of Baltimore and a pension fund in Connecticut, the City of New Britain's Firefighters' and Police Benefit Fund, are the first to sue, claiming the LIBOR manipulation cost them millions, according to NPR.
"Now, cities, states, and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California's public pension system, are looking at whether they suffered similar losses and are weighing legal action," the Times reports. Peter Shapiro, an investment advisor to Baltimore and other cities, told the Times that "about 75% of major cities have contracts linked to this" — the LIBOR fixing. "Unambiguously, state and local government agencies lost money because of the manipulation of LIBOR," said Shapiro. "The number is likely to be very, very big."

The banks targetted include Bank of America, JP Morgan Chase, Deutsche Bank, and Barclays. Darrell Duffie, a Stanford professor of finance, estimates that these lawsuits could result in the banks' having to pay out tens of billions of dollars, an estimate in line with recent report by Nomura Equity Research.
The Times story emphasized the losses to cities, etc. from transactions involving interest-rate swaps, just barely mentioning pension funds which lost income on their investments if interest rates were held artificially low.
The rather unlimited potential of these lawsuits was pointed out a week ago by, among others, the Seeking Alpha blog and the NY Times "Dealbook" blog. UBS and Barclays have already admitted to wrong-doing in their settlements with government authorities, and are cooperating with authorities, increasing the pressure on their co-conspirator banks to do the same. These admissions of misconduct will open the floodgates to civil lawsuits, since the proof of wrong-doing is already on the record. This also opens to door to a massive number of suits under U.S. federal anti-trust and racketeering statutes. Both the Sherman Anti-trust Act and the Racketeer-Influences and Corruption Organizations (RICO) Act allow for triple damages, and RICO furthermore allows for recovery of attorneys fees, an incentive for the filing of class-action cases.

Glass-Steagall, Economic Collapse, Empire

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The Space In Which To Live

So get into the groove Harlem dudes and get that sweet money.