Everything Is Rigged: This Time, It’s Currencies
I’ll get into this in more detail later (I’m on deadline for a magazine feature), but this story just landed. Given the LIBOR story, the Interest Rate Swap manipulation story, the Euro gas price manipulation story, the U.S. energy price manipulation story, and (by now) countless others of the “Everything is Rigged” variety, this screams out for immediate notice. Via Bloomberg:
Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice . . .
Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.
This time the rates allegedly being rigged are in the foreign-exchange or “FX” markets, meaning that if this story is true, it would almost certainly trump LIBOR for scale/horribleness.
As one friend of mine who works on Wall Street put it, “It’s endless! This is the biggest market in the world.” Bloomberg suggested the story is just the tip of the iceberg:
“The FX market is like the Wild West,” said James McGeehan, who spent 12 years at banks before co-founding Framingham, Massachusetts-based FX Transparency LLC, which advises companies on foreign-exchange trading, in 2009. “It’s buyer beware.”
The $4.7-trillion-a-day currency market, the biggest in the financial system, is one of the least regulated. The inherent conflict banks face between executing client orders and profiting from their own trades is exacerbated because most currency trading takes place away from exchanges.
Again, more on this later. But the key thing here is the, uh . . . well, the consistent leitmotif of all these stories. One after another, it’s the same thing: Insiders rigging benchmark rates, shaving money from basically everyone on earth, systematically and over periods of many years. It’s the ultimate taxation-without-representation story – crazy stuff.
Matt Taibbi is a contributing editor for Rolling Stone. He’s the author of five books and a winner of the National Magazine Award for commentary. Please direct all media requests to email@example.com.
DISCLAIMER: The statements, views and opinions expressed in pieces republished here are solely those of the authors and do not necessarily represent those of TMS. In accordance with title 17 U.S.C. section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. TMS has no affiliation whatsoever with the originator of this article nor is TMS endorsed or sponsored by the originator. “GO TO ORIGINAL” links are provided as a convenience to our readers and allow for verification of authenticity. However, as originating pages are often updated by their originating host sites, the versions posted may not match the versions our readers view when clicking the “GO TO ORIGINAL” links. This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
Click here to go to the current weekly digest or pick another article:
- New US Indictment of Julian Assange Not Served in UK Courts
- In Letter to the Lancet, Doctors Condemn Torture of Assange and Demand His Release
- Why Julian Assange Must Urgently Be Freed
- Presumptuous Pompeo Pushes Preposterous ‘Peking’ Policy
- The Commodification of Black Death
- Momin Khawaja--The Forgotten Canadian Detainee of 9/11
- While EU Leaders Squabble, the Elephant in the Room Remains Unnoticed
- EU Summit Agrees to €750 Billion Fund for the Banks and Corporations
- Crisis at the Commission: Inside Europe’s Response to the Coronavirus Outbreak
- Why Bitcoin Is Not a Socialist’s Ally – Reply to Ben Arc
- Global Economy: Oil vs COVID-19
- Oil Plunges below Zero for First Time in Unprecedented Wipeout
- Only Bold State Intervention Will Save Us from a Future Owned by Corporate Giants
- The Rich Just Keep on Getting Richer
- “Goldman Sachs Is Still Goldman Sachs”: Investment Banks Soar as COVID-19 Rattles Economy
- Bolsonaro Puts Up Brazilian Richest Oil Wells for Sale to Foreign Companies
- The Neo-Liberal Project in the World and in Brazil Is Anti-Life and the Enemy of Nature
- Who's Responsible for the Ecocide in the Amazon