Thursday, November 7, 2013
Large Meteor Reported Over Southern California Skies On Wednesday Evening
A meteor shower may have been spotted in Southern California skies Wednesday night.
NBC4 viewers flooded the newsroom with phone calls of reported sightings of a meteor shower that looked like a "fireball" and "exploding stars" from as far as San Diego.
"I saw it while I was driving," viewer AnnMarie said via Twitter. "I thought it was a firework!"
NBC4 received reports of sightings in Temecula, San Diego, Coachella Valley, Palmdale, Tustin, Ontario, Palm Springs, Brea, Malibu, Pomona, Chino, Redlands, Seal Beach, Fresno, Long Beach, Anaheim, San Bernardino and Los Angeles.
A viewer from Los Angeles sent a video of what he described as a fireball over a parking lot.
"I saw the meteor. It was huge and broke into three large pieces," viewer Jonathan said.
NBC4 viewer Sylvia said via Twitter she saw a fireball suddenly appear and disappear across the sky.
Another viewer, George, described what he saw as a fast-moving trail that "burned in the atmosphere with a trail of debris."
Credit to NBC Southrn California
Washington planl to let Tehran continue enriching uranium with sanctions relief
Israel announced early Thursday, Nov. 7, that it is utterly opposed to the new proposal for Iran’s nuclear programwhich the United States plans to put before the two-day Geneva conference beginning later today .
Prime Minister Binyamin Netanyahu, when he met US Secretary of State John Kerry in Jerusalem Wednesday night, bitterly accused the Obama administration of yielding to the Russian-backed Iranian position. Should Tehran renege on the deal, the US proposal leaves it with the capacity for enriching enough weapons-grade uranium in 10 days to build several nuclear weapons.
This US proposal calls for Iran to halt enrichment of uranium up to 20-percent grade (a short jump to weapons-grade) and slow construction on the Arak heavy water plant for plutonium production. In return, the US offers a start on selective sanctions relief. This proposal is likely to be approved by the six powers at the Geneva conference.
Kerry was reminded of his pledge that “no deal is better than a bad deal.” This deal is bad, Israel says because it leaves Iran wth all the stocks it has already built up of 20-percent enriched uranium and the ability to continue the production of low 5-percent grade unrestricted.
DEBKAfile’s sources report that the Palestinian issue did not come up in either of the two conversations Kerry held with Netanyahu Wednesday. Both were dominated by the Iranian row and ended with differences as wide as ever.
Israel accused Washington of capitulating to the plan Moscow and Tehran handed in to President Barack Obama last week.
That plan, according to our sources, entails suspending the work of 10,000 centrifuges on all grades of enrichment (3, 5 and 20 percent). However, Iran has a total of 19,000 machines of which only 9,000 are active anyway. Therefore, the offer to freeze 10,000 already idle centrifuges was a subterfuge. It is nonetheless being presented by the Russians – and now by the Americans, too – as a major Iranian concession.
The truth is that Iran is being allowed to keep its full stock of centrifuges intact, operational and available for use at any time.
This means that if Tehran decides tomorrow to renege on its deal with Washington and the world powers - after its approval in Geneva – it will retain the capacity to restart centrifuge operations in full and within 10 days accumulate enough weapons-grade material to build several nuclear bombs or warheads.
By the time Washington or the nuclear watchdog catch on, it will be too late: Iran will have The Bomb.
Last week, Moscow claimed that Iran had agreed to “restrain the weaponization processes.” This admission alone belied Tehran’s insistence that its entire nuclear program was peaceful and exposed as false Moscow’s denials of proofs that Iran was engaged in developing nuclear arms.
According to our sources, the “restraint” on offer refers only to the process of miniaturizing a nuclear bomb for use in a missile warhead or dropped from an airplane.
In sum, therefore, the US president has agreed in essence to “photograph” Iran’s nuclear program and freeze it as it stands now. Tehran would place nuclear development in suspension without, however, relinquishing a single component of its program.
The new American proposal broke surface Wednesday, as the seven delegations gathered in Geneva for the morrow’s session.A nameless US spokesman told reporters that America was now proposing that Iran, as a first step, stop its nuclear program advancing any further and start rolling parts of it back. In return, Washington offered "very limited, temporary, reversible sanctions relief.”
The spokesman said: “This phase must involve levels of Iran's uranium enrichment, its stockpiles of the material as well as international monitoring.”
Israel is not buying this plan.
DEBKAfile
The truth is that Iran is being allowed to keep its full stock of centrifuges intact, operational and available for use at any time.
This means that if Tehran decides tomorrow to renege on its deal with Washington and the world powers - after its approval in Geneva – it will retain the capacity to restart centrifuge operations in full and within 10 days accumulate enough weapons-grade material to build several nuclear bombs or warheads.
By the time Washington or the nuclear watchdog catch on, it will be too late: Iran will have The Bomb.
Last week, Moscow claimed that Iran had agreed to “restrain the weaponization processes.” This admission alone belied Tehran’s insistence that its entire nuclear program was peaceful and exposed as false Moscow’s denials of proofs that Iran was engaged in developing nuclear arms.
According to our sources, the “restraint” on offer refers only to the process of miniaturizing a nuclear bomb for use in a missile warhead or dropped from an airplane.
In sum, therefore, the US president has agreed in essence to “photograph” Iran’s nuclear program and freeze it as it stands now. Tehran would place nuclear development in suspension without, however, relinquishing a single component of its program.
The new American proposal broke surface Wednesday, as the seven delegations gathered in Geneva for the morrow’s session.A nameless US spokesman told reporters that America was now proposing that Iran, as a first step, stop its nuclear program advancing any further and start rolling parts of it back. In return, Washington offered "very limited, temporary, reversible sanctions relief.”
The spokesman said: “This phase must involve levels of Iran's uranium enrichment, its stockpiles of the material as well as international monitoring.”
Israel is not buying this plan.
DEBKAfile
Super Typhoon ‘Haiyan’ to hit Philippines’ quake-hit areas
MANILA Super typhoon ‘Haiyan’ will hit the Philippines and threatened to inflict more damages to the provinces still reeling from the devastation caused by the magnitude 7.2 earthquake in October, weathermen and officials warned on Wednesday.
Experts also warned that Haiyan could equal or could even be stronger than another super typhoon ‘Bopha’ (local codename Pablo) that hit Mindanao in December 2012, killing more than 1,000 people and injuring more than 2,000 others.
Mahar Lagmay, head of Project Noah (Nationwide Operational Assessment of Hazards) told ABS-CBN News: “This incoming typhoon would be much like Pablo (Bopha). When Pablo made landfall, it brought massive rain and strong winds. People should be careful.”
The same warning was aired by Secretary Sonny Coloma of the Malacanang Palace press office and the National Disaster Risk Reduction and Management Council (NDRRMC) as they urged officials and residents to take all necessary precautions with the approach of Haiyan.
Particularly they alerted residents on the island provinces of Bohol and Cebu in the Visayas in Central Philippines who are yet to recover from the magnitude 7.2 quake which rocked the nation in mid-October.
The warning was also directed at residents living in areas prone to floods, landslides and other natural disasters, officials said.
Meanwhile, the Catholic Bishops Conference of the Philippines (CBCP) urged the faithful in this predominantly Catholic nation to recite the ‘Oratio Imperata,’ a prayer aimed at stopping an impending disaster or calamity.
Connie Dadivas, weather forecaster of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa), reported that at 11am on Tuesday, Haiyan was spotted 1,411 kilometres east of Mindanao packing maximum center winds of 150 kilometres per hour and busts of up to 185 kph.
But the US Navy’s Joint Typhoon Warning Center (JTWC) warned that while still at sea, Haiyan could develop into a super typhoon with maximum sustained winds of 251kph.
Dadivas said Haiyan is projected to enter the Philippines on Thursday afternoon and would be given the local codename of Yolanda.
On Friday, Haiyan is expected to make landfall on the provinces of Samar and Leyte in the Visayas and could affect large areas of the Philippines including Metro Manila over an area of 600 kilometres, said Dadivas.
The NDRRMC reported that on Wednesday the provinces of Bohol and Cebu in the Visayas as well as Albay in the Bicol Region already ordered the suspension of classes in all public and private schools as part of the precautionary measures with the projected arrival of Haiyan.
Albay Governor Joey Salceda announced they also started the pre-emptive evacuation of thousands of residents along coastal as well as in low-lying areas to help ensure their safety.
During a press briefing at the NDRRMC headquarters in Metro Manila, Secretary Mar Roxas of the Department of Interior and Local Government and Secretary Dinky Soliman of the Department of Social Welfare and Development assured concerned government agencies and local officials have alerted rescue teams as well as prepared relief items to assist the typhoon victims.
“We have issued advisories to all our local councils that we aim for zero casualty and pre-emptive evacuation must be done if necessary,” the NDRRMC pointed out.
Haiyan is the second tropical cyclone to enter the Philippines in November and the 24th for the year.
Credit to Oman Tribune
Russia And China Prepare For The Day When They Will Nuke The United States
While Barack Obama is busy gutting the U.S. nuclear arsenal, Russia and China are rapidly preparing for the day when they will nuke theUnited States. To most Americans, it sounds very strange to hear that Russia and China are concerned about nuclear war. After all, isn’t the Cold War over? Isn’t that what politicians from both major political parties keep telling us?
Unfortunately, the truth is that Russia and China both consider the United States to be their number one geopolitical threat, and both nations have been systematically strengthening and updating their strategic forces. At the end of last month, Russia held a large-scale military drill that involved the launch of four nuclear missiles, and the Chinese government released a major report for the public which included maps showing what would happen to major U.S. cities in the event of a nuclear attack by Chinese submarines.
Obama may blindly believe that wishful thinking and unilateral disarmament will keep the United States safe, but Russia and China are taking a much different path. Both of them believe that a military conflict with the United States in the future is quite likely, and they are rapidly preparing for that eventuality.
The major nuclear drill conducted by Russia at the end of last month made headlines all over the planet…
Russian strategic forces carried out a large-scale surprise military drill on Wednesday, launching four nuclear missiles that were closely monitored by U.S. intelligence agencies, U.S. officials said.
The drill began around 9:00 am ET and included the test launch of two land-based intercontinental ballistic missiles (ICBMs) and two submarine-launched ballistic missiles (SLBMs).
But this was far from an isolated incident. In fact, it has been reported that Russian missile forces will holdmore than 200 drills during the second half of 2013.
Things have very much changed in Russia since the end of the Cold War era. Back then, Russia did not have a lot of money to put into the military. But now Russian President Vladimir Putin is working very hardto strengthen and modernize Russian nuclear forces…
Russia is developing several new missiles, including a weapon U.S. intelligence agencies have assessed as a covert intermediate-range nuclear missile called the RS-26 that is being developed and tested in apparent violation of the 1987 Intermediate-range Nuclear Forces Treaty.
The Russian government has denied the RS-26 violates the INF treaty and claims it is a new ICBM, which some arms compliance experts say is a violation of the 2010 New START treaty.
Russia is also developing a new submarine-launched ballistic missile and a new class of missile submarines.
The missile submarines are of particular concern. Russia has introduced a new “near silent” nuclear submarine which is far quieter than anything the U.S. currently has…
The Borey Class submarine, dubbed Vladimir Monomakh, has a next generation nuclear reactor, can dive deeper than 1,200 feet, and carries up to 20 nuclear intercontinental ballistic missiles (ICBM).
Each of these “Bulava” ICBM’s can carry ten detachable MIRV warheads, what they call “re-entry vehicles,” capable of delivering 150 kiloton yields per warhead
These subs have the capability of approaching the coastline of the United States without us ever even knowing that they were there.
Most Americans do not realize this.
Most Americans also do not realize that Russia has more spies inside the United States today than it did at any point during the Cold War.
Russia is more of a threat to the United States today than it ever has been before, but the American people are completely and totally oblivious to this.
Meanwhile, China is publicly bragging about what their nuclear submarines could do to us.
Late last month, the Chinese government released a report which included maps which showed the projected results of a nuclear strike on major U.S. cities. This report was heavily covered by government-controlled media outlets in China such as China Central TV, the People’s Daily, the Global Times, the PLA Daily and China Youth Daily.
The following are a couple of excerpts from that report…
“If we launch our DF-31A ICBMs over the North Pole, we can easily destroy a whole list of metropolises on the East Coast and the New England region of the U.S., including Annapolis, Philadelphia, New York, Boston, Portland, Baltimore, and Norfolk, whose population account accounts for about one eighth of America’s total residents.”
“Because the Midwest states of the U.S. are sparsely populated, in order to increase the lethality, [our] nuclear attacks should mainly target the key cities on the West Coast of the United States, such as Seattle, Los Angles, San Francisco, and San Diego.”
In recent years, China has been working hard to develop a new generation of inter-continental and submarine-launched nuclear missiles. The following is from a recent article posted on the Washington Free Beacon…
China is rapidly expanding its nuclear forces with new missiles, submarines, and warheads. At least one of the warheads is based on warhead designs stolen from U.S. nuclear weapons laboratories in the 1990s, U.S. officials have said.
The submarine-launched missiles that they have been developing are of particular concern. The following is from a recent article posted on Investors.com…
China’s sub fleet is reportedly the world’s second-largest, with about 70 vessels. About 10 are nuclear-powered, and four or more of those are nuclear ballistic submarines.
In 2010, the Type 094 Jin class entered the service. It is capable of launching 12 to 16 JL-2 missiles with a range of about 8,700 miles, covering much of the continental U.S. with single or multiple independently targetable re-entry vehicle warheads.
Do you remember a few years ago when a Chinese submarine fired a test missile from just off the west coast of the United States?
The U.S. Navy did not even know that the sub was there. If that missile had been fired directly at Los Angeles, it would have been incinerated long before the U.S. government could ever have responded.
Are you starting to get the picture?
In response, the Obama administration will not even comment on this latest Chinese report…
The Obama administration declined to comment on Sunday on provocative state-run Chinese media reports outlining Beijing’s nuclear war plans, including land-based and submarine-launched missile strikes on U.S. cities that would kill up to 12 million people.
State Department spokeswoman Marie Harf and Pentagon spokeswoman Cynthia Smith would not respond when asked about the highly unusual Chinese reports published Oct. 28 in numerous major Communist Party-controlled television and newspaper outlets.
The Chinese reports included maps showing nuclear strikes on Los Angeles and the Pacific Northwest, along with the resulting radiation plumes stretching thousands of miles across the western United States.
You see, the truth is that talking about what China is doing does not fit in with the Obama administration’s “progressive agenda”. Obama has been systematically disarming America, and most Americans do not even realize that it has been happening.
Most Americans just continue to believe that we still have a very robust strategic nuclear deterrent.
Unfortunately, that is no longer the case.
Back in 1967, the U.S. military had more than 31,000 strategic nuclear warheads.
Since that time, the U.S. strategic nuclear arsenal has been reduced by about 95 percent,
The START Treaty that Obama agreed to back in 2010 will limit both the United States and Russia to a maximum of 1,550 deployed strategic nuclear warheads.
But that is not nearly enough of a reduction for Obama.
Back in June, he declared that “after a comprehensive review” he has decided that the United States can reduce the number of our deployed nuclear warheads by another one-third…
After a comprehensive review, I’ve determined that we can ensure the security of America and our allies, and maintain a strong and credible strategic deterrent, while reducing our deployed strategic nuclear weapons by up to one-third. And I intend to seek negotiated cuts with Russia to move beyond Cold War nuclear postures.
That would leave us with around 1,000 warheads.
And thanks to the various treaties that we have signed, Russia will know where most of those warheads are located.
So this makes a scenario in which Russia and China collectively conduct a first strike against the United States much more conceivable. If Russia or China knows exactly where our warheads are, it would be very easy to take most of them out in less than 10 minutes with a submarine-based first strike.
Of course most Americans never even think about such things anymore, and our politicians certainly are not talking about them.
But Russia and China are thinking about these things, and they are rapidly preparing for the day when war comes and they choose to nuke us before we nuke them.
Credit to Pakalert Press
The major nuclear drill conducted by Russia at the end of last month made headlines all over the planet…
Russian strategic forces carried out a large-scale surprise military drill on Wednesday, launching four nuclear missiles that were closely monitored by U.S. intelligence agencies, U.S. officials said.
The drill began around 9:00 am ET and included the test launch of two land-based intercontinental ballistic missiles (ICBMs) and two submarine-launched ballistic missiles (SLBMs).
But this was far from an isolated incident. In fact, it has been reported that Russian missile forces will holdmore than 200 drills during the second half of 2013.
Things have very much changed in Russia since the end of the Cold War era. Back then, Russia did not have a lot of money to put into the military. But now Russian President Vladimir Putin is working very hardto strengthen and modernize Russian nuclear forces…
Russia is developing several new missiles, including a weapon U.S. intelligence agencies have assessed as a covert intermediate-range nuclear missile called the RS-26 that is being developed and tested in apparent violation of the 1987 Intermediate-range Nuclear Forces Treaty.
The Russian government has denied the RS-26 violates the INF treaty and claims it is a new ICBM, which some arms compliance experts say is a violation of the 2010 New START treaty.
Russia is also developing a new submarine-launched ballistic missile and a new class of missile submarines.
The missile submarines are of particular concern. Russia has introduced a new “near silent” nuclear submarine which is far quieter than anything the U.S. currently has…
The Borey Class submarine, dubbed Vladimir Monomakh, has a next generation nuclear reactor, can dive deeper than 1,200 feet, and carries up to 20 nuclear intercontinental ballistic missiles (ICBM).
Each of these “Bulava” ICBM’s can carry ten detachable MIRV warheads, what they call “re-entry vehicles,” capable of delivering 150 kiloton yields per warhead
These subs have the capability of approaching the coastline of the United States without us ever even knowing that they were there.
Most Americans do not realize this.
Most Americans also do not realize that Russia has more spies inside the United States today than it did at any point during the Cold War.
Russia is more of a threat to the United States today than it ever has been before, but the American people are completely and totally oblivious to this.
Meanwhile, China is publicly bragging about what their nuclear submarines could do to us.
Late last month, the Chinese government released a report which included maps which showed the projected results of a nuclear strike on major U.S. cities. This report was heavily covered by government-controlled media outlets in China such as China Central TV, the People’s Daily, the Global Times, the PLA Daily and China Youth Daily.
The following are a couple of excerpts from that report…
“If we launch our DF-31A ICBMs over the North Pole, we can easily destroy a whole list of metropolises on the East Coast and the New England region of the U.S., including Annapolis, Philadelphia, New York, Boston, Portland, Baltimore, and Norfolk, whose population account accounts for about one eighth of America’s total residents.”
“Because the Midwest states of the U.S. are sparsely populated, in order to increase the lethality, [our] nuclear attacks should mainly target the key cities on the West Coast of the United States, such as Seattle, Los Angles, San Francisco, and San Diego.”
In recent years, China has been working hard to develop a new generation of inter-continental and submarine-launched nuclear missiles. The following is from a recent article posted on the Washington Free Beacon…
China is rapidly expanding its nuclear forces with new missiles, submarines, and warheads. At least one of the warheads is based on warhead designs stolen from U.S. nuclear weapons laboratories in the 1990s, U.S. officials have said.
The submarine-launched missiles that they have been developing are of particular concern. The following is from a recent article posted on Investors.com…
China’s sub fleet is reportedly the world’s second-largest, with about 70 vessels. About 10 are nuclear-powered, and four or more of those are nuclear ballistic submarines.
In 2010, the Type 094 Jin class entered the service. It is capable of launching 12 to 16 JL-2 missiles with a range of about 8,700 miles, covering much of the continental U.S. with single or multiple independently targetable re-entry vehicle warheads.
Do you remember a few years ago when a Chinese submarine fired a test missile from just off the west coast of the United States?
The U.S. Navy did not even know that the sub was there. If that missile had been fired directly at Los Angeles, it would have been incinerated long before the U.S. government could ever have responded.
Are you starting to get the picture?
In response, the Obama administration will not even comment on this latest Chinese report…
The Obama administration declined to comment on Sunday on provocative state-run Chinese media reports outlining Beijing’s nuclear war plans, including land-based and submarine-launched missile strikes on U.S. cities that would kill up to 12 million people.
State Department spokeswoman Marie Harf and Pentagon spokeswoman Cynthia Smith would not respond when asked about the highly unusual Chinese reports published Oct. 28 in numerous major Communist Party-controlled television and newspaper outlets.
The Chinese reports included maps showing nuclear strikes on Los Angeles and the Pacific Northwest, along with the resulting radiation plumes stretching thousands of miles across the western United States.
You see, the truth is that talking about what China is doing does not fit in with the Obama administration’s “progressive agenda”. Obama has been systematically disarming America, and most Americans do not even realize that it has been happening.
Most Americans just continue to believe that we still have a very robust strategic nuclear deterrent.
Unfortunately, that is no longer the case.
Back in 1967, the U.S. military had more than 31,000 strategic nuclear warheads.
Since that time, the U.S. strategic nuclear arsenal has been reduced by about 95 percent,
The START Treaty that Obama agreed to back in 2010 will limit both the United States and Russia to a maximum of 1,550 deployed strategic nuclear warheads.
But that is not nearly enough of a reduction for Obama.
Back in June, he declared that “after a comprehensive review” he has decided that the United States can reduce the number of our deployed nuclear warheads by another one-third…
After a comprehensive review, I’ve determined that we can ensure the security of America and our allies, and maintain a strong and credible strategic deterrent, while reducing our deployed strategic nuclear weapons by up to one-third. And I intend to seek negotiated cuts with Russia to move beyond Cold War nuclear postures.
That would leave us with around 1,000 warheads.
And thanks to the various treaties that we have signed, Russia will know where most of those warheads are located.
So this makes a scenario in which Russia and China collectively conduct a first strike against the United States much more conceivable. If Russia or China knows exactly where our warheads are, it would be very easy to take most of them out in less than 10 minutes with a submarine-based first strike.
Of course most Americans never even think about such things anymore, and our politicians certainly are not talking about them.
But Russia and China are thinking about these things, and they are rapidly preparing for the day when war comes and they choose to nuke us before we nuke them.
Credit to Pakalert Press
Chase Isn't the Only Bank in Trouble
I've been away for weeks now on a non-financial assignment (we have something unusual coming out in Rolling Stone in a few weeks) so I've fallen behind on some crazy developments on Wall Street. There are multiple scandals blowing up right now, including a whole set of ominous legal cases that could result in punishments so extreme that they might significantly alter the long-term future of the financial services sector.
As one friend of mine put it, "Whatever those morons put aside for settlements, they'd better double it."
Firstly, there's a huge mess involving possible manipulation of the world currency markets. This scandal is already drawing comparisons to the last biggest-financial-scandal-in-history (the Financial Times wondered about a "repeat Libor scandal"), the manipulation of interest rates via the gaming of the London Interbank Offered Rate, or Libor. The foreign exchange or FX market is the largest financial market in the world, with a daily trading volume of nearly $5 trillion.
Regulators on multiple continents are investigating the possibility that at least four (and probably many more) banks may have been involved in widespread, Libor-style manipulation of currencies for years on end. One of the allegations is that traders have been gambling heavily before and after the release of the WM/Reuters rates, which like Libor are benchmark rates calculated privately by a small subset of financial companies that are perfectly positioned to take advantage of their own foreknowledge of pricing information.
A month ago, Bloomberg reported that it had observed a pattern of spikes in trading in certain pairs of currencies at the same time, at 4 p.m. London time on the last trading day of the month, when WM/Reuters rates are released. From the article:
In the space of 20 minutes on the last Friday in June, the value of the U.S. dollar jumped 0.57 percent against its Canadian counterpart, the biggest move in a month. Within an hour, two-thirds of that gain had melted away.
The same pattern – a sudden surge minutes before 4 p.m. in London on the last trading day of the month, followed by a quick reversal – occurred 31 percent of the time across 14 currency pairs over two years, according to data compiled by Bloomberg. For the most frequently traded pairs, such as euro-dollar, it happened about half the time, the data show.
The recurring spikes take place at the same time financial benchmarks known as the WM/Reuters (TRI) rates are set based on those trades…
The Forex story broke at a time when the industry was already coping with price-fixing messes involving oil (the European commission is investigating manipulation of yet another Libor-like price-setting process here) and manipulation cases involving benchmark rates for precious metals and interest rate swaps. As Quartz put it after the FX story broke:
For those keeping score: That means the world's key price benchmarks for interest rates, energy and currencies may now all be compromised.
Perhaps most importantly, however, there's a major drama brewing over legal case in London tied to the Libor scandal.
Guardian Care Homes, a British "residential home care operator," is suing the British bank Barclays for over $100 million for allegedly selling the company interest rate swaps based on Libor, which numerous companies have now admitted to manipulating, in a series of high-profile settlements. The theory of the case is that if Libor was not a real number, and was being manipulated for years as numerous companies have admitted, then the Libor-based swaps banks sold to companies like Guardian Care are inherently unenforceable.
A ruling against the banks in this case, which goes to trial in April of next year in England, could have serious international ramifications. Suddenly, cities like Philadelphia and Houston, or financial companies like Charles Schwab, or a gazillion other buyers of Libor-based financial products might be able to walk away from their Libor-based contracts. Basically, every customer who's ever been sold a rotten swap product by a major financial company might now be able to get up from the table, extend two middle fingers squarely in the direction of Wall Street, and simply walk away from the deals.
Nobody is mincing words about what that might mean globally. From a Reuters article on the Guardian Care case:
"To unwind all Libor-linked derivative contracts would be financial Armageddon," said Abhishek Sachdev, managing director of Vedanta Hedging, which advises companies on interest rate hedging products.
Concern over all of this grew even hotter last week with the latest Libor settlement, in which yet another major bank, the Dutch powerhouse Rabobank, got caught monkeying with the London rate.
Rabobank paid over a billion in fines to American, British, Dutch and Japanese authorities and saw its professorial CEO, Piet Moerland, resign as a result of the probe. The investigation revealed the same disgusting stuff all of the other Libor probes had revealed – traders and various other mid-level bank sociopaths laughing and joking about rigging rates and screwing customers all over the world. From the WSJ:
In a July 2006 electronic chat, an unidentified Rabobank trader was informed about the bank's plans to set Libor "obscenely high" that day, according to an exchange cited by the Justice Department. The trader responded, "oh dear . . . my poor customers . . . . hehehe!!"
Here at home, virtually simultaneous to the Rabobank settlement, Fannie Mae filed a suit against nine banks – including Barclays Plc (BARC), UBS AG (UBSN), Royal Bank of Scotland Plc, Deutsche Bank AG, Credit Suisse Group AG, Bank of America, Citigroup and JPMorgan – for manipulating Libor, claiming that the mortgage-financing behemoth lost over $800 million due to manipulation of the benchmark rate by the banks.
And virtually simultaneous to that, JP Morgan Chase disclosed that it is currently the target of no fewer than eight federal investigations, for activities ranging from possible bribery of foreign officials in Asia to allegations of improper mortgage-bond sales to . . . the Libor mess. "The scope and breadth of risky practices at JPMorgan are mind-boggling," Mark Williams, a former Federal Reserve bank examiner, told Bloomberg.
The point of all of this is that any thought that the potential Chase settlement might begin a period of regulatory healing for it and other Wall Street banks appears to be wildly mistaken. If anything, the scope of potential liability for all the major banks, particularly in these market-rigging furors, appears to be growing in all directions.
A half-year ago, it looked like the chief villains in the Libor mess at least were going to get away with writing relatively small checks. Back in March, a major private class-action suit filed by a gaggle of plaintiffs against the banks for Libor manipulation was tossed by a federal judge here in the southern District of New York on the seemingly preposterous grounds that a bunch of banks getting together to monkey with the value of world interest rates in this biggest-in-history financial collusion case was somehow now an antitrust issue.
The banks in that case humorously implied that the victims might have done better to sue for fraud instead of manipulation ("The plaintiffs, I believe, are confusing a claim of being perhaps deceived," one bank lawyer put it, "with a claim for harm to competition"), and the judge seemed to agree.
Moreover, when the plaintiffs' lawyers tried to make a point about the seemingly key fact that a series of governments had already concluded settlements with the banks for manipulating Libor, the judge – the Hon. Naomi Rice Buchwald – mocked the plaintiffs' lawyers for trying to ride to civil victory on a wave of government settlements:
Wait a second. Your job here, as plaintiffs' counsel, looking for whopping legal fees, is not to piggyback on the government. Indeed, the reason that there are statutes that provide plaintiffs' counsel with attorney's fees is a recognition that the government has limited resources.
The banks must have thought they'd hit the lottery, with this potentially deadly Libor suit suddenly stopped dead in its tracks by a grumpy federal judge with an apparent distaste for plaintiff lawyers who collect "whopping" legal fees. So the victims tried to take a different tack, appealing to a federal panel in an attempt to allow them to file their suits against the banks on a state-by-state level.
But then, in a seemingly fatal blow to the private claims, the U.S. Judicial Panel on Multidistrict Litigation ruled in favor of the banks, sending the case right back into the courtroom of the same judge who'd dumped on the plaintiffs' lawyers and their "whopping fees."
That was just a month ago, at the beginning of October, and back then it seemed like the banks might somehow escape the Libor mess with their necks intact.
Now, a month later, yet another bank has been forced to cough up a billion dollars for Libor manipulation, Fannie Mae has filed a major suit on the same grounds, and the Guardian Care Homes case is not only alive but looking like a threat to cancel billions of dollars' worth of Libor-related contracts. Not only that, many of those same banks are being sucked into what potentially is an even uglier scandal involving currency manipulation.
One gets the feeling that governments in all the major Western democracies would like to sweep these manipulation scandals under the rug. The only problem is that the scale of the misdeeds in these various markets is so enormous that even the most half-assed attempt at regulation will cause a million-car pileup.
There's simply no way to do a damage calculation that won't wipe out the entire finance sector when you're talking about pervasive, ongoing manipulation of $5-trillion-a-day markets. That's the problem – there's no way to do a slap on the wrist in these cases. If they're guilty, they're done.
Read more: http://www.rollingstone.com/politics/blogs/taibblog/chase-isnt-the-only-bank-in-trouble-20131105#ixzz2jugjgxvT
The Entire Financial System could Collapse
In a interesting interview in King World News Mr. Art Cashin, who is Director of Floor Operations at UBS ($650 billion under management). said:
The Federal Reserve’s balance sheet holds $3.84 trillion in assets, with capital of just $54.86 billion, putting the Fed at 70-to-1 leverage against its stated capital.
Given the relatively long maturity of Fed asset holdings, even a 20 basis point increase in interest rates effectively wipes out the Fed’s capital.
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