U.S. Justice Department Opens Criminal Probe Into Currency Market Manipulation

Currency markets are massively rigged.

Bloomberg reports today:

The U.S. Justice Department has opened a criminal investigation of possible manipulation of the $5.3 trillion-a-day foreign exchange market, a person familiar with the matter said.

The Federal Bureau of Investigation, which is also looking into alleged rigging of interest rates associated with the London interbank offered rate, or Libor, is in the early stages of its currency market probe, said the person, who asked not to be identified because the inquiry is confidential.

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Swiss regulators last week said they were “coordinating closely with authorities in other countries as multiple banks around the world are potentially implicated.”

The U.S. investigation comes as the U.K. Financial Conduct Authority said in June it was reviewing potential manipulation of exchange rates.

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Earlier this week, European Union antitrust regulators said they were examining the possible manipulation of currency rates by the financial industry, while Switzerland’s Financial Market Supervisory Authority, or Finma, and the nation’s competition commission said they were probing similar potential wrongdoing.

The U.S. Commodity Futures Trading Commission has also been reviewing possible currency market rigging, said a separate person with knowledge of the matter.

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RBS, Deutsche Bank and Citigroup are among firms reviewing e-mails, instant messages and phone records of their foreign-exchange employees for evidence of potential manipulation, according to three people with knowledge of those probes.

(Don’t get too excited.  The Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar … a form of stealth bailout.  It is also arguably one of the main causes of the double dip in housing.  Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements.)

It’s not just currency markets. As shown below, big banks have manipulated virtually every market – both in the financial sector and the real economy – and broken virtually every law on the books.

Interest Rates Are Manipulated

Interest rates are rigged:

Derivatives Are Manipulated

The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.

Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed: through gamed self-reporting.

Oil Prices Are Manipulated

Oil prices are manipulated as well.

Gold and Silver Are Manipulated

The Guardian and Telegraph report that gold and silver prices are “fixed” in the same way as interest rates and derivatives – in daily conference calls by the powers-that-be.

Energy Markets Are Manipulated

The Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011.

Commodities Are Manipulated

The big banks and government agencies have been conspiring to manipulate commodities prices for decades.

The big banks are taking over important aspects of the physical economy, including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity.

And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year.

Everything Can Be Manipulated through High-Frequency Trading

Traders with high-tech computers can manipulate stocks, bonds, options, currencies and commodities. And see this.

Manipulating Numerous Markets In Myriad Ways

The big banks and other giants manipulate numerous markets in myriad ways, for example:

  • Engaging in mafia-style big-rigging fraud against local governments. See this, this and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
  • Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this
  • Participating in various Ponzi schemes. See this, this and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments

The Big Picture

The big picture is simple:

  • The big banks manipulate every market they touch
  • The government has given the banks huge subsidies … which they are using for speculation and other things which don’t help the economy. In other words, propping up the big banks by throwing money at them doesn’t help the economy
  • The big banks own the D.C. politicians … so Congress and the White House won’t do anything unless the people force change

Category: Currency, Legal, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “Currency Markets Are Rigged”

  1. stonedwino says:

    The TBTF banks have their fingers everywhere! We are paying more for Ethanol, Oil, FX, Commodities, The Stock Market feels rigged too…Why shouldn’t they be broken up? They must be broken up. Whiel we’re at it bring back Glass-Steagall…for the Love of God…

  2. panskeptic says:

    If his articles were half as long, they’d be twice as powerful.

    He starts by energizing his readers, and finishes by bludgeoning them into insensibility.

    Less is more.

  3. viplav says:

    Awesome post. Well documented. TBTF banks only got bigger by blackmailing after the financial crisis they caused.

  4. nmaier says:

    So what else is new? The TBTF banks are the government and the government is the banks. The Government will shake down the TBTF banks and extort billions in settlements from them and use the money to fund itself, while allowing them to not admit guilt. We need a financial collapse to purge the system of this crony capitalism.