Thursday, 13 March 2014


It's Friday. It's financial. It's Friday Financial with JULIAN SAYER.

They're not bankers, they're gamblers and they are playing with a rigged deck of cards. Worse still they're playing with our money. Read on for the low down on how the banksters are fixing everything.


As I have explained previously, banking and finance is at the very heart of this system we live in. It promotes economic growth and allows companies to conduct their business around the world, in a fair and honest way. Or so the story goes? Well that's alright then isn't it? But what if I told you that the whole system is rigged?

The entire financial world is governed by the central banks who oversee the large investment banks that make the markets of finance and commodities. There has always been rumours of rigging within the financial markets, but it is only just becoming clear what a toxic industry it is. It seems whatever the market is, they will fix it.

Conspiracy theorists of the world, we sceptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.

Currency trading is the latest addition to the "rigged" column, here is a summary of the known market manipulation scandals (because it can be problematic keeping track of them all by now)

Libor - interest rates
ISDAfix - swaps
Platts - oil prices
WM/Reuters - FX
High-Frequency Trading - equities

The latest to hit the headlines is the foreign exchange markets and this one is particularly troublesome because the Bank of England seems to have known about it for some time. A fair review of the foreign exchange scandal can be found here

The principal charges in this allege that currency traders at some banks made rigged trades designed to lose money — then took cash kickbacks from co-conspirators who made money on the deals. Yes, it's very easy to understand.  There's a lot of money involved and very, very few consequences.  If power corrupts then absolute power corrupts absolutely.

Banksters are quite literally robbing the world.
If you want to know the nitty gritty on how they did it, then read this;

Make no mistake this is theft, and what is astounding me, is how many bankers have been sent to prison. How many have even lost their bonuses and assets from these ill-gotten gains? When somebody doesn't pay their TV licence or claims a benefit they are not entitled to, what happens to them?

An interesting and telling quote comes from financial journalist Matt Taibbi. After years of reporting on some of the best examples of Wall Street stacking the deck in its favour, Taibbi has concluded that the entire system underpinning the global economy is rigged in some form or another. And it’s not just financial markets that are at stake.

The real economy, with factories, services, goods and jobs for real people, is under threat. You only need to read my piece on Quantitive Easing from two weeks ago, that it's not the guilty that are suffering the consequences, it's taxpayers, the elderly and those made unemployed that end up paying the price for the banking casino. Currently the banking industry has people betting billions of pounds, in order to secure their annual bonus, under the preconception that they are too big to fail, and should they lose their bet, the taxpayer will have to bail them out. 

The list of the guilty reads like a who's who of the banking world, they include Deutsche Bank, Société Générale SA, Royal Bank of Scotland Group PLC and J.P. Morgan Chase JPM. According to WSJ calculation, this latest action brings to roughly €6 billion the total penalties levied by regulators against financial institutions in connection with probes into manipulation of the London interbank offered rate, or Libor, and other widely used financial benchmarks.

The only reason this problem has not received the attention it deserves is because the scale of it is so enormous that ordinary people simply cannot see it. It's not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever's in your pocket worth less. This is corruption at the tiniest yet most enormous level of the economy, and it's only just coming into view.

My guess is nearly all the commodity markets will also be tainted, rigged and fixed in the pursuit of the biggest profits that in turn produce those huge non-returnable bonuses that the banks are so keen to protect. The latest round of bankers’ bonuses have just been paid, and once more the casino has paid handsome profits.

The average bankers' bonus globally was 29% higher than a year ago, with those in the City of London higher than in other parts of the world, according to a survey by a leading careers website.

More than 2,660 financiers in the UK, US, Hong Kong, Singapore and Australia were asked about their bonuses by eFinancialCareers, and the 700 who responded from the UK were found to have higher pay-outs.

How many were fairly earned is anybody's guess? The sad facts are our very own Bank of England was aware of the manipulation at least eight years ago. How can anybody trust this current structure and relationship between the banks and Government?

Make no mistake the whole fabric of finance needs to be deconstructed, the banks need to be heavily regulated and taxed, and many cases broken up. Banking has got too big and too powerful. Finance and banking should be made to work for the economy and for the good of society. At the moment the banks are only interested in profits for the few, and are actually harming the economy. This will not be done by any one Government, and in reality we all know that the Governments of the world are so beholden to the power of the Banks, that they cannot be trusted to do the job either. As I mentioned last week, the issue of tax havens is only part of the web, you can now add investment banking to the list of global corruption.

Finally, after another week of international corruption on a grandiose scale, I will leave you with the man of the week. You may not agree with his politics, but unlike others he was a man of integrity. I only wished a few more in power had his beliefs.


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