Category Archives: A rigged game

6th March 2013 – Is the FSA Market Abuse Team fit for purpose?

For the last 18 months I have mainly been investing in AIM stocks.  Well I say investing, AIM is more about speculating and the market has been dreadful for most of the last year.  It is especially galling considering I am so close to having the full working trading system and have missed out on most of the latest Bull Run, which has no doubt made a lot of people a lot of money.

There is little point now worrying about this as my fairly heavy involvement in AIM has proven to be one hell of a learning experience.

At some point I will no doubt write a “rigged game” blog about AIM.  So much of what I have witnessed on this market has been contrary to the interests of realising genuine shareholder value.  When I first started speculating on AIM, I’ll admit I was much more naive than I am now.

Even so the actions of one particular company I have put money into have really gone beyond the pale.  I won’t say the company’s name or reveal any specific details, but I have been so outraged at their misleading RNS announcements, that I actually phoned the FSA’s Market Abuse Helpline to report them.

Bear in mind this is a company I have been following closely for a long time.  I had compiled a lot of information to support my claims, including itemised details of specific announcements I believe this company made that misled the market.

I spoke to a nice enough, but ineffectual, chap for about 45 minutes telling him my story.  I made some pretty serious allegations, but couldn’t help escape the feeling I was being fobbed off. Continue reading

24th December 2012 – How we got here, what might happen and an interesting take on the Libor scandal

I’m on my way to Christmas with the family.  On the train I’ve caught up on some reading.  It’s cheerful stuff for the festive period!

The Wall Street Journal blog has given an excellent behind the scenes view of how the Fiscal Cliff talks failed.  I’ve seen a follow up piece in Bloomberg asking “will 2013 mark the beginning of American decline”.

Finally this piece caught my attention stating that “UBS Libor manipulation deserves the death penalty”.  This may sound an extreme reaction, but consider how pervasive the effects of this manipulation are.   Billions of dollars have been stolen as a result of the cartel’s actions. 

I am against the death penalty, but there are many people who must be called to account for this and thrown in prison.  Life sentences seem a just punishment for the harm that has been done.  However it won’t happen.  At best huge fines will be levied, but I will be amazed if anyone is personally held to account.

On that note have a very Happy Christmas! J

July 17th 2012 – LIBOR scandal about to get bigger

I am a little late posting about this, but there can be no surprise that the LIBOR scandal looks set to get bigger.

Barclays may have been the first to be punished, but there is simply no way they did this on their own.

This piece from Bloomberg explains who corruptible the system was. If anyone were in any doubt we can neither trust financiers to regulate themselves nor the regulatory bodies to do their jobs properly.

I have always felt that a massive opportunity was missed in 2008 to conduct root and branch reform of the whole sector. When the industry was on its knees politicians could have put through whatever changes they desired. They baulked at this opportunity though and it was lost.

Perhaps the LIBOR scandal may open the door again?

After all this scandal is so gross and so inexcusable and affects so many people (even though they may not realise it!) that another golden opportunity has been offered up to force through much needed change.

However I doubt it will happen. Based on the track record of lawmakers it is hard to believe they will make anything of this.

More’s the pity.

4th July 2012 – A rigged game part V – Bank of England at it as well

This is stunning, truly stunning.

It appears the deputy governor of the Bank of England, Paul Tucker, at the very least knew of the price fixing of LIBOR. At the very worst he was complicit in it.

Until this point I’ve expressed grave concerns about the roles central bankers around the world have played in the credit crisis. I’ve felt all along that many of the policy initiatives have been designed to help their friends in the investment banking community, but this revelation is exceptional.

This is clear evidence of a relationship that has become too close for either party to operate effectively.

It is very interesting how desperate the various players involved in this mess are trying to come clean. This only raises the question “how bad is the real truth”?

It must be terrible and surely more heads are going to roll.

Bob Diamond has at least resigned and this scandal really looks set to grow and grow. It is slightly surprising that it doesn’t seem to have caused much of a stir in America. They are meant to be a more financially sophisticated society so I would have thought anything that indicated price fixing had occurred would have caused more of a fuss. Perhaps it will and it just needs to be given a little time.

28th June 2012 – A rigged game Part IV – The Fixing of LIBOR

The London Interbank Offer Rate (“LIBOR”) is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. It is calculated daily and is a benchmark for interest rates around the world. It is used to calculate the rate of interest that businesses pay on loans and ordinary people pay on their mortgages. It is especially crucial for those with variable rate mortgages.

And it’s been corruptly fixed. For years.

A huge scandal is breaking now that Barclays have been fined £290million for manipulating LIBOR to their own ends. To be fair this is not a new story and I have come across it several times in recent years. However this judgement is damning.

Zerohedge provides a good summary of some of the email evidence provided by Barclays. This reveals how endemic deeply cavalier attitudes and behaviour were (are) in these institutions. Consider not only the manner in which these people happily went about their nefarious deeds, but also that they were stupid enough to leave metaphorical piles and piles of electronic evidence. They clearly thought they were untouchable.

It is precisely this set of behaviours that the “too big to fail” policies were always going to support and encourage. Continue reading