Yesterday, we read with some amusement that Goldman has moved Guy
Saidenberg, reportedly one of the greater profit centers at the firm - and
how could he not be when he always traded against Tom Stolper's
recommendations which led to tens of thousands of pips in losses to those
who listened to him over the past five years - from head of global
foreign-exchange trading to a new role, as co-head of commodities.
Why did Goldman decide to scrap its once uber-profitable FX vertical and
redo it from scratch? Simple - the ability to rig and manipulate FX
markets, which are now under every global regulator's microscope after the
"Cartel" members so foolishly let themselves be exposed to the
entire world, is no longer there, as confirmed last night by news that a
dozen large investors have filed a joint lawsuit against 12 banks for
"allegedly conspiring to rig global foreign-exchange prices."
Allegedly? Hasn't everyone read the Cartel chatroom transcripts yet?
WSJ reports:
The class-action lawsuit, filed in U.S. District Court in the Southern
District of New York late Monday, was from a group of investors across the
U.S. and Caribbean, including city and state pension plans.
They accused the banks of communicating "with one another,
including in chat rooms, via instant messages, and by emails, to carry out
their conspiracy," and for rigging foreign-exchange rates as far back
as January 2003, the lawsuit said.
The bank sued are BofA, Barclays, BNP, Citi, Credit Suisse, Deutsche,
Goldman, HSBC, JPM, Morgan Stanley, RBS and UBS, or, in other words,
everyone. And certainly all the Too Big To Prosecute banks. So best of luck
there, even though the plaintiffs include some very recognizable public
investment funds:
The investors behind the consolidated lawsuit are: Aureus Currency Fund
LP, a Santa Rosa, Calif., investment fund; the City of Philadelphia and its
board of pensions and retirement; the Employees' Retirement System for the
Government of the Virgin Islands; the Employees' Retirement System of
Puerto Rico Electric Power Authority; Fresno County Employees' Retirement
Association; Haverhill Retirement System for the city of Haverhill, Mass.;
Oklahoma Firefighters Pension and Retirement System; State-Boston
Retirement System; Tiberius OC Fund, a Cayman Islands fund; Value Recovery
Fund LLC, a Delaware fund with offices in Connecticut; Syena Global
Emerging Markets Fund LP, a hedge fund in Connecticut; and the United Food
and Commercial Workers Union.
In the complaint, the investors accused the banks of controlling
foreign-exchange rates via a "small and close-knit group of
traders." They alleged it became possible for banks to rig the market
because the traders "have strong ties formed by working with one
another in prior trading positions" and by in many cases living
"in the same neighborhoods in the Essex countryside just northeast of
London's financial district."
"They belong to the same social clubs, golf together, dine together
and sit on many of the same charity boards," the complaint adds.
Of course, the rigging of FX markets, disclosed hot on the heels that
Libor too was massively manipulated (to the delight of "conspiracy
theorists" everywhere) is by now well known.
But the punchline is not that FX is rigged, and as a result virtually
all carbon-based traders are now gone, leaving the FX market at the mercy
of Virtu and GETCO algos (those USDJPY momentum ignitions at specific, recurring
times of the day are just that), but that as Goldman has shown by
relocating Saidenberg, the commodity market is the only one where
manipulation, rigging and fraud are not only possible but smiled upon by
regulators. Because one of the key commodities in said market is gold. And
as everyone knows, alongside getting the Russell 200,000 to all time highs,
the other core mandate of central bankers everywhere is to push gold to 0.
The worst news: we are rapidly running out of "conspiracy
theories" that haven't become conspiracy facts yet.
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