Moments ago, U.S. prosecutors charged three traders who made up the infamous “Cartel” currency rigging chat room, and who were at the heart of a criminal investigation that has ensnared the world’s biggest banks over the rigging of currency rates. Richard Usher, formerly head of G10 spot trading at JPMorgan, Rohan Ramchandani, formerly of Citigroup and Chris Ashton, formerly of Barclays, were indicted Tuesday for conspiring to fix prices. They’re all outside the U.S. and will have to be extradited unless they surrender voluntarily. Richard Usher As first reported back in 2013 when the FX rigging scandal broke out, the three used an online chatroom they dubbed ‘The Cartel’ to coordinate the rigging of foreign-exchange benchmarks by sharing confidential customer information, according to the U.S. charge. Another member, Matt Gardiner, formerly of UBS Group AG, has been helping prosecutors build cases against the traders, Bloomberg reported earlier. Citigroup, Barclays, JPMorgan and Royal Bank of Scotland Group Plc pleaded guilty in May 2015 to conspiring to rig currency rates. UBS Group AG received immunity from prosecution, but its conduct breached an earlier agreement over its role in manipulating benchmark interest rates. The Cartel chatroom ran from at least December 2007 until January 2013, prosecutors have said in court papers. It was limited to specific euro/dollar traders, they said. Many conversations took place just before daily fixes, the brief windows of time when data providers take a snapshot of trading so they can set daily rates. As Bloomberg noted previously, the charges make good on the government’s long-running promise it would hold individuals to account in the case. As far back as September 2014, then-Attorney General Eric Holder said charges against traders were imminent.
Those efforts were hampered by issues of evidence and lack of cooperators, people familiar with the matter told Bloomberg last year. Bloomberg published a series of articles in 2013 exposing how the world’s biggest banks were colluding to rig foreign exchange rates. Some prosecutions are moving forward. Over the past six months, two currency traders were charged and a third pleaded guilty to rigging allegations. This summer, Gardiner and Ashton were banned from the U.S. banking industry for life by the Federal Reserve, which also imposed a $1.2 million fine on Ashton.
Unlike the US, the U.K. Serious Fraud Office dropped its investigation into currency rigging last year citing insufficient evidence for a realistic prospect of conviction. The agency interviewed 19 individuals as part of its probe, according to a freedom-of-information request by Bloomberg in August, including four under caution. Interviews under caution generally mean the person is being treated as a suspect. Some more details from Bloomberg for those unfamiliar with the story:
Citigroup, Barclays, JPMorgan and Royal Bank of Scotland Group Plc pleaded guilty in the U.S. in May 2015 to conspiring to rig currency rates. UBS received immunity from prosecution in the currency case, but its conduct breached an earlier agreement over its role in manipulating benchmark interest rates. During the banks’ Jan. 5 sentencing, a federal judge in Connecticut urged the Justice Department to pursue individuals in the cases. “Mischief will be best deterred if the people responsible are not only fired but that any compensation made to them that was triggered by the wrongful conduct, for example bonuses, are clawed back or disgorged,” U.S. District Judge Stefan R. Underhill said. “Frankly I would encourage the government to consider prosecution of individuals.”
The Narrator @ January 10, 2017
Earlier in the week, president-elect Donald Trump tweeted that:
“It is for the American people to make up their minds as to the truth.”
And now we have the answer.
When CNBC’s Podesta-panderer and Trump-denier John Harwood asked the question yesterday “who do you believe America?” we suspect he was not expecting the answer he received from over 84,000 American citizens…
It would appear that “We, the people” have spoken once more and only 1 in 6 believe in the elite establishment-delivered narrative.
This merely confirms Lou Dobbs’ survey from earlier in the week.
Once again the establishment has learned absolutely nothing from the campaign and election of Donald Trump, and refuses to listen to anything outside of the cozy echo-chamber in which they hamster-wheel their lives away in.
The Narrator @ January 7, 2017
Seven years after being awarded the Nobel Peace Prize for his “extraordinary efforts to strengthen international diplomacy and cooperation between peoples,” despite having been in office for less than one year and having pretty much no actual, tangible foreign diplomacy accomplishments at the time, President Obama will depart the White House having dropped 26,171 bombs on foreign countries around the world in 2016, 3,027 more than 2015.
According to an analysis of Defense Department data from the Council on Foreign Relations, a non-partisan think tank, the majority of Obama’s 2016 bombs were dropped on Syria and Iraq. Meanwhile, Afghanistan, a country President Obama vowed U.S. troops would evacuate completely by the end of his Presidency, was also bombed over 1,300 times, a 40% increase over 2015. Per McClatchy DC:
The U.S. dropped 79 percent of the anti-Islamic State group coalition bombs in Syria and Iraq, totaling 24,287. That figure, along with others analyzed by CFR, is likely lower than the actual number dropped because one airstrike can involved multiple bombs.
Obama did authorize a troop surge in Afghanistan — a conflict he pledged to end during his campaign — where the U.S. dropped 1,337 bombs in 2016. There are currently 8,400 U.S. troops left in the country, more than Obama initially wanted to keep there at the end of his term. The U.S. only dropped 947 bombs in Afghanistan in 2015.
The U.S. also dropped more bombs in Libya in 2016 than it did in 2015. Nearly 500 bombs were dropped in the North African country that has essentially been ungoverned since the fall of dictator Muammar Gaddafi in 2011. He was captured and killed during the Libyan Civil War, kicked off by the Arab Spring protests that also began the Syrian conflict.
The Narrator @ January 6, 2017
The city of Chicago recorded 762 homicides (brothers sisters mothers and fathers) in 2016 – an average of two murders per day, the most killings in the city for two decades and more than New York and Los Angeles combined.
The Narrator @ January 2, 2017
Readers of the Washington Post received some alarming news yesterday when the paper published a story alleging that those pesky “Russian hackers” were up to their no good tricks again and had managed to “penetrate the U.S. electricity grid through a utility in Vermont.” The full headline read as follows:
The opening paragraph of WaPo’s story directly linked the “hack” of the Vermont utility to the same “Russian hacking operation dubbed Grizzly Steppe” that the Obama administration has blamed for the DNC and John Podesta email hacks. Vermont’s Governor, Peter Shumlin, told WaPo that “Americans should be both alarmed and outraged” by these actions perpetrated by “one of the world’s leading thugs, Vladimir Putin,” before seemingly calling for further retaliatory actions from the Obama administration.
Vermonters and all Americans should be both alarmed and outraged that one of the world’s leading thugs, Vladimir Putin, has been attempting to hack our electric grid, which we rely upon to support our quality-of-life, economy, health, and safety. This episode should highlight the urgent need for our federal government to vigorously pursue and put an end to this sort of Russian meddling.
Moreover, Vermont Senator Patrick Leahy took the rhetoric to a whole new level by asserting a diabolical Russian plot to shut down the U.S. electrical grid in the middle of winter…a move that would most certainly kill off half the state’s population in an instant.
Of course, it didn’t take long for the New York Times and ABC to latch on to the story since it fits their “2016 election hacking” narrative so perfectly.
Our Russian “friend” Putin attacked the U.S. power grid.https://t.co/iAneRgbuhF
— Brent Staples (@BrentNYT) December 31, 2016
Alas, there was just one minor problem, namely that the entire article was completely fabricated. Apparently the esteemed “journalists” of the Washington Post didn’t even bother to contact the Burlington Electric Department to confirm their bogus story…and why should they…it fit the “Russian hacking” narrative so perfectly therefore it must be true, right?
Well, apparently not. The quick spread of WaPo’s “fake news” story forced the Burlington Electric Department to issue a clarifying statement assuring worried residents that, indeed, their electricity grid had not been hacked, but rather a single “laptop not connected” to the grid had been found to have a malware virus.
Which forced the embarrassed Washington Post to quickly tone down their provocative headline…
…and supplement their original article with the following “Editor’s Note” admitting the entire premise of their original story was nothing more than “fake news.”
Editor’s Note: An earlier version of this story incorrectly said that Russian hackers had penetrated the U.S. electric grid. Authorities say there is no indication of that so far. The computer at Burlington Electric that was hacked was not attached to the grid.
Which drew quick reactions from twitter…
Statement from the Burlington utility, per that BFP story. pic.twitter.com/25cHENWh0a
…and Glenn Greenwald of The Intercept, who blasted WaPo for their “irresponsible and sensationalist tabloid behavior.”
THIS MATTERS not only because one of the nation’s major newspaper once again published a wildly misleading, fear-mongering story about Russia. It matters even more because it reflects the deeply irrational and ever-spiraling fever that is being cultivated in U.S. political discourse and culture about the threat posed by Moscow.
The Post has many excellent reporters and smart editors. They have produced many great stories this year. But this kind of blatantly irresponsible and sensationalist tabloid behavior – which tracks what they did when promoting that grotesque PropOrNot blacklist of U.S. news outlets accused of being Kremlin tools – is a by-product of the Anything Goes mentality that now shapes mainstream discussion of Russia, Putin and the Grave Threat to All Things Decent in America that they pose.
Ironically, a few weeks ago we noted that The Washington Post was all too happy to promote an anonymous website that described Zerohedge as “‘dark gray’ propaganda, systematically deceiving its civilian audiences for foreign political gain” (see “Washington Post Names Drudge, Zero Hedge, & Ron Paul As Anti-Clinton ‘Sophisticated Russian Propaganda Tools’“), all while presenting exactly zero evidence to support their preposterous claim. Perhaps it’s time for WaPo to dedicate a bit more of its time to self-reflection.
The Narrator @ January 1, 2017
GQ’s Drew Magary has just published his list of “Least Influential People of 2016” and apparently he’s still troubled by Trump’s victory as the entire list is dedicated to the “boobs, liars, and hapless idiots” who “added their own little secret ingredient to the hearty gumbo of American vapidity that gave us President Trump.”
First, even though Magary admits that he “hates” adding her to the list, you know since she won the popular vote despite all the Russian hacking, he laments that “when you lose an election to Donald Trump, you belong on this list. How do you fuck that up??” But, after blaming Russia, at least Magary admits that Hillary is somewhat responsible for her own loss, asking “would it have killed you to visit Wisconsin, Hillary?”
Of course, the entire “Bush Family” was added to the list for their inability to stop Trump during the Republican Primary.
Anthony Weiner, the “breathtaking, unbelievable idiot,” appeared first on the list for being so “destructively horny.”
Matt Lauer took heat as one of the “useless talking bobbleheads who smoothed the way for Donald Trump to take over both the White House and 80 percent of all TV channels” after he apparently let Trump “skate” through his Town Hall “like the captain of a high school football team cheating on a Home Ec exam.” But perhaps the funniest part of the Lauer commentary is Magary’s suggestion that NBC intentionally helped Trump win, you know because of the obvious conservative bias of the mainstream media.
Even God was called out for allowing a Trump victory…”We’re not gonna make it if You just stay up there in the clouds playing backgammon all day and what not. We need help.”
Meanwhile, Trump was apparently on Magary’s list back in 2013…what is that saying about “He who laughs last?”.
The Narrator @ December 22, 2016
Now that the presidential election is finally over, can we talk about something that actually matters?
I’m referring of course to Tobleronegate, meaning the uproar surrounding the Swiss-based (but US-owned) chocolate company, Mondolez International. The company has widened the gaps between the segments of its iconic chocolate bar, reducing its total volume by some 10 percent. Although the reaction has something of an Old Coke-New Coke air to it, one can easily see it as a sign of the inflationary times, an effect of worldwide money creation coordinated by the leading central banks, with Toblerone being just one of many victims.
The economics of the decision shouldn’t surprise an actual student of economics. Since inflation is always and everywhere a monetary phenomenon, and since the world’s central banks have been pumping new money into the global economy at unprecedented rates for several years, we should expect an upward pressure on prices. In a Facebook post, Toblerone explained that it was forced into changing its product in response to “higher cost of numerous ingredients,” adding that
…we had to make a decision between changing the shape of the bar, and raising the price. We chose to change the shape to keep the product affordable for our customers, and it enables us to keep offering a great value product.
Statements such as this cause Toblerone to become, unwittingly, a case study for how firms in competitive markets respond when monetary inflation raises their costs of production. When that happens, firms are less able to pass the cost on to consumers in the form of higher prices because if they do, they face a strong likelihood of losing market share and revenues. Instead, these firms cut back in terms of volume, size, and portions.
We see this all the time. Have you been to a restaurant lately where the menu prices haven’t seemed to change but the portions of food on your plate has? Or opened a bag of chips that hasn’t fallen in size while the volume of chips inside has? Or consumed a product of lower quality than you remembered in less inflationary times because its producer was obligated to change ingredients to break even?
The fact is, Toblerone can’t raise its prices willy-nilly due to the many substitutes available to consumers. Critics claiming otherwise ignore this common side effect of inflation in competitive industries, a phenomenon that especially has applied to candy markets in recent years.
That said, the public’s response to the new Toblerone ranges from the funny to the bizarre. One person photoshopped a KitKat bar from four sections to two, with a large gap in-between. Others are showing that the new Toblerone gaps can be used for makeshift filing systems suitable for toast or electronics. There is even talk that Toblerone will have to change its intellectual property strategy given that its iconic shape has been changed so drastically. IP lawyers see gold in “them thar gaps.”
Then there’s a Brexit angle base, from what I can see, on the argument that (1) some people said bad would come from Brexit, (2) Brexit happened, followed by, (3) Toblerone’s new shape, which obviously then means, (4) Brexit ruined the candy bar. Or something like that. In response, Toblerone claims the change was planned well before Brexit.
We can all agree Toblerone underestimated consumer responses to its decision to reduce the volume in one of its signature candies and this, in itself, is not a big deal. One of the reasons why the free market system isn’t perfect is because the firms that comprise it often make mistakes. Just the same, what makes this system superior to the alternatives is the ability of firms to identify and act on those mistakes, whether by themselves or their competitors. New Coke didn’t last long. GM no longer produces Hummers. Meanwhile, my local post office plugs away, unchanged from what I remember it being 25 years ago.
Toblerone may announce it made a mistake and go back to the previous shaped candy, albeit at a higher price. Or it might revert to the previous shaped candy but at a smaller volume. Perhaps it will look for inferior ingredients, making it the Swiss chocolate equivalent of corn syrup soda. Yuck.
But wouldn’t it be great if, instead, Toblerone turned this incident into a teaching moment for its devoted customers? If it used its social media channels to remind them of the virtues of hard money and the costs of fiat money? If it helped Toblerone aficionados see the relationship between gaps in their candy to mainstream monetary fads that help bring them about?
It was rare but not uncommon for firms to make such arguments during the inflationary 1970s. It would be even more satisfying than good Swiss chocolate to see it again.
The Narrator @ December 1, 2016
Earlier today we reported that in a “summit” organized by Trump’s campaign manager Kellyanne Conway, executives and anchors from the major US media outlets, including CNN president Jeff Zucker, ABC News president James Goldston, Fox News co-presidents Bill Shine and Jack Abernethy, and NBC News president Deborah Turness, visited Donald Trump at his Trump Tower penthouse for an off the record meeting.
Courtesy of the Post, we have a complete list of the participants at the Trump media meeting: the hour-long powwow included top execs from network and cable news channels. Among the attendees were NBC’s Deborah Turness, Lester Holt and Chuck Todd, ABC’s James Goldston, George Stephanopoulos, David Muir and Martha Raddatz, CBS’ Norah O’Donnell John Dickerson, Charlie Rose, Christopher Isham and Gayle King, Fox News’ Bill Shine, Jack Abernethy, Jay Wallace, Suzanne Scott, MSNBC’s Phil Griffin and CNN’s Jeff Zucker and Erin Burnett.
The contents of what was discussed were initially unclear.
Now, according to the Post, we learn that the President-elect “exploded at media bigs in an off-the-record Trump Tower powow on Monday.”
“It was like a f—ing firing squad,” one source told the Post.
According to the Post’s recound of the conversation, “Trump started with Jeff Zucker and said I hate your network, everyone at CNN is a liar and you should be ashamed….”
“The meeting was a total disaster. The TV execs and anchors went in there thinking they would be discussing the access they would get to the Trump administration, but instead they got a Trump-style dressing down,” the source added. A second source confirmed the encounter.
The Post adds that “the meeting took place in a big board room and there were about 30 or 40 people, including the big news anchors from all the networks…”
“Trump kept saying, ‘We’re in a room of liars, the deceitful dishonest media who got it all wrong. He addressed everyone in the room calling the media dishonest, deceitful liars. He called out Jeff Zucker by name and said everyone at CNN was a liar, and CNN was network of liars.
“Trump didn’t say Katy Tur by name, but talked about an NBC female correspondent who got it wrong, then he referred to a horrible network correspondent who cried when Hillary lost who hosted a debate – which was Martha Raddatz who was also in the room.
“Gayle did not stand up, but asked some question, ‘How do you propose we the media work with you?’ Chuck Todd asked some pretty pointed questions. David Muir asked how are you going to cope living in DC while your family is in NYC? It was a horrible meeting.”
Amusingly, since the meeting was off the record, meaning the participants agreed not to talk about the substance of the conversations, it means they will most likely be unable to confirm or deny the Post’s report. It also means that if indeed Trump was as confrontational as reported, that the conventional war between the various US media organizations and Trump is about to go nuclear.
The Narrator @ November 21, 2016
Latest Project Veritas Bombshell: Undercover Journalist In Full Burka Offered Huma Abedin’s Ballot In NYC
As democrats and George Soros continue to funnel millions of dollars into lawsuits to fight voter ID laws around the country, Project Veritas continues to reveal just how simple it is to take advantage of the current system to commit voter fraud. The latest example comes from New York City as an undercover Project Veritas journalist walks into a polling station wearing a full burka and requests the ballot of one Huma Abedin.
Election Official: “But your name is not in the book. For some reason it’s not here, but that doesn’t mean you can’t vote by paper ballot. You just can’t vote by machine.”
Project Veritas Journalist: “So I can vote as Huma Abedin, but just with the paper ballot?”
Election Official: “Whatever you want.”
Of course, this latest example comes after New York City’s Commissioner of the Board of Elections, Alan Schulkin (D), was caught on a secret video slamming Mayor Bill de Blasio’s municipal ID program as contributing to “all kinds of fraud” — including at the polls. Within the video, Schulkin parts ways with the views of many in the Democratic party calling for voters ID laws saying “there is a lot of voter fraud.” At one point, Schulkin even admits that campaign officials bus minorities from “poll site to poll site” so they can vote multiple times.
Here is a summary of some of the key comments from the NY Post (video below):
“He gave out ID cards, de Blasio. That’s in lieu of a driver’s license, but you can use it for anything. But they didn’t vet people to see who they really are. Anybody can go in there and say, ‘I am Joe Smith, I want an ID card.”
“It’s absurd. There is a lot of fraud. Not just voter fraud, all kinds of fraud . . . This is why I get more conservative as I get older.”
“Voters? Yeah, they should ask for your ID. I think there is a lot of voter fraud. You know, I don’t think it’s too much to ask somebody to show some kind of an ID . . . You go into a building, you have to show them your ID.”
“They bus people around to vote . . . They put them in a bus and go poll site to poll site.” Asked which neighborhoods, Schulkin said, “I don’t want to say.” When the undercover mentions black and Hispanic neighborhoods, Schulkin responded, “Yeah . . . and Chinese, too.”
The Narrator @ November 7, 2016
One of the things that caught my attention this morning was that the US government’s debt level has soared to just a hair under $19.7 trillion.
To give it some context, that’s up over $170 billion in just eight business days.
It’s almost as if Barack Obama is intentionally and desperately trying to breach the $20 trillion mark before he leaves office in January.
Of course, this hasn’t been reported anywhere because the media is too busy pretending to be shocked that Donald Trump is a womanizer.
And yet the debt is a much, much bigger story… though admittedly one that is far less entertaining.
The election is merely a fight over who gets to be the band conductor while the Titanic sinks. And the debt is precisely the reason for this.
Total US public debt has skyrocketed over the last eight years by $9 trillion, from $10.6 trillion to $19.7 trillion.
And in the 2016 fiscal year that just closed two weeks ago, the government added a whopping $1.4 trillion to the debt, the third highest amount on record.
Plus, they managed to accumulate that much debt at a time when they weren’t even really doing anything.
It’s not like the government spent the last year vanquishing ISIS or rebuilding US infrastructure. They just… squandered it.
Now, Nobel Prize-winning economist Joseph Stiglitz says we shouldn’t worry about America’s prodigious debt, and anyone who fusses over it doesn’t understand economics.
Stiglitz claims that we wouldn’t judge a private company like Apple based solely on its debt.
We’d look at other factors like assets, income, and growth before making an assessment of the company’s financial health.
And he’s right.
Singapore, for example, is a country with an extremely high level of debt. At first glance, it looks dangerous.
But if you dive deeper into the government’s balance sheet, you see an enormous abundance of cash reserves.
So taking into account just its cash assets, Singapore has absolutely ZERO net debt.
The US, on the other hand, is not in this position.
The Treasury Department publishes regular financial statements detailing its income, expenses, assets, and liabilities.
You already know the income numbers– the government loses billions of dollars per year, and the trend is negative.
As for its balance sheet, the government reports just $3.2 trillion in assets against $21.4 trillion in liabilities, for a NET position of NEGATIVE $18.2 trillion.
Now, when we’re dealing with trillions, it’s clearly not an exact science.
There are many economists who argue that the federal highway system, military, and federal tax authority should count as “assets” that are worth trillions of dollars.
Maybe so. But to be fair, one should also count the trillions of dollars of repairs needed on the highway system as liabilities.
Or the trillions more in cost of wars. Or the $40+ trillion in unfunded liabilities from Medicare, Social Security, etc.
It’s also important to note that America’s debt is growing at a far quicker rate than its economy.
When President Obama took office, US public debt was about 73% of GDP. Today it’s 105%. So even as the economy has grown, the debt has grown much faster.
Any way you look at it, the US government is already insolvent, and its situation is becoming worse.
This leaves essentially two options.
We can choose to willfully ignore this obvious trend and delude ourselves into thinking that the continued expansion of US debt will forever be consequence-free;
Or, we can acknowledge the tiny possibility that maybe, just maybe, there may be some adverse consequence, and plan accordingly.
That’s the great thing about risks– we can take out insurance to protect against their consequences.
That’s why we have fire insurance to protect our homes, life insurance to protect our families.
Of course, there is no policy from Met Life or GEICO which will protect you from capital controls, a default on Social Security, or Global Financial Crisis 2.0.
Yet there are countless options to protect against these consequences.
The premise is simple: if your country is broke, don’t keep 100% of your assets there.
If your banking system is precariously illiquid and questionably solvent, don’t keep 100% of your savings there.
Most of all, it never, ever hurts to have a Plan B and give yourself additional options.
For example, you may be able to take some steps to legally reduce your tax bill; move some funds to a safer, better capitalized bank abroad that pays a higher rate of interest; or obtain a second passport based on your grandparents’ Irish or Polish nationality.
It’s hard to imagine that you’ll be worse off for having taken any of these steps.
And like any great insurance policy, these steps not only protect you against risk, but also give you the chance to make more money and prosper.
(That’s why the ultra-wealthy often invest in insurance policies as an asset class.)
Having a Plan B doesn’t mean hiding in a bunker with a tin-foil hat. Anyone expecting the end of the world is going to be waiting a very long time.
But taking some risk off the table is something that smart, rational people do, especially in light of such overwhelming data.
The Narrator @ October 13, 2016