I still have no idea of what the heck went on in the dealing rooms of Barclays but I am 3 hours poorer for trying to find out. There was admitted rate fixing which was called "reprehensible" behavior by former CEO Bob Diamond today at the select committee hearing. He is indeed correct but he added that the effort was limited to 14 traders out of 2000 which makes it no less reprehensible but something considerably less than wide-spread. There was much tooing and frowing back and forth as to when poor Bob knew about this thing (late in the game apparently) and how could that possible be, tut-tut, and not a word about what the real fall-out in dollars and sense was as a result of the fabulous fourteen which has either been forgotten or never figured out in the first place. Unless more is revealed, it would appear that a few boys with sharp pencils might have made a bob or two at the expense of some poor bugger down the road but in the great, wide world of international finance I suspect no one is going to lose sleep over that. Reprehensible, yes. Game changing...well, we await developments.
There was very little said about what was going on during part of the time when all of this was going on. It is of course a long four years ago but the bloody world was about to end in a financial sense and in many cases there was less concern about the cost of a bank's funding as opposed to whether there was any funding to be had at all. Having been involved in the past in events akin to what we then witnessed, I can state with some conviction that a calm, well-considered decision making process does not exist; there is more of a "*&^%$, what the ^&)@ do I do now" attitude permiating the premises. It came as no surprise that Diamond speculated that the then CEO probably feared for the bank's future existence when faced with inquires governmental officials as to why Barclay's funding costs appeared to be out of line on the high side. "Can you fund yourself" would be the question and the fear of being nationalized would certainly enter into peoples' minds. According to Diamond, there was a true misunderstanding as to whether Barlays was being asked to muck about with it's funding costs or not which then led to the most interesting and possibly important issue of the hearings; namely who was involved.
Surely, as I indicated yesterday I thought the Bank of England or the FSA--somnolent throughout the entire crisis and the run-up period--would be named. Not so. Diamond named the then Labor Government who was involved. To say that this put a cat among the pigeons is to understate the case. We now have the makings of a full-blown political crisis and along with royal wedding and funerals no one does that better than the Brits. This promises to be great fun, although I still can't figure out what was the damage done or cui bono? I also can't figure out whether I should be spending any more time on this but another day or two probably wouldn't hurt. Not much else is happening save for the slow slide of the world economy and the fall of Euroland. It is the Silly Season after all.
One other point directed towards Mr. Diamond: Bob, you might have noticed that every member of the select committee referred to you as "Mr. Diamond" and you referred to every one of them by their Christian names. Bobby, Bobby, Bobby, they're Europeans and MPs. That isn't Kansas, Toto. They don't like it...which is one of the reasons you no longer have your job. Being a rude American is one thing. Rubbing it in on July 4th. in London is quite a bit different
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