YouSaid · the spoken record

Andy Verity

lines on the record: 128
first: 2024-01-16
most recent: 2024-01-16
sittings or episodes: 1
sources: podcast

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“They were choosing a variety. There was a band of truth and they were choosing a basis point here, a basis point there within that band of truth that benefited their positions or benefited the position of the other trader at the bank who was asking for the favor, but it was not a lie.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Bank's lawyers and the UK banks' lawyers. The bank's lawyers essentially did. The regulators and prosecutors work for them. And the fact that the regulators and prosecutors allowed them to do that meant that the bank's lawyers could manipulate justice. Basically, this is power and wealth manipulating justice. Here you go. I tell you, don't blame the guys at the top. Don't blame the central banks or the governments. Don't blame the boards. That evidence that points it to the board of BART, please, which set out in my book was kept out of the trials of the Barclays traders, lots of it. because it was said it was it was not relevant the barcles traders the case against them it's complicated but basically it was not regarded as criminal at the time whereas lowballing what we've just been describing shows interest rates way below the real cost of borrowing cash what the traders were doing were just asking for a squeak here a squeak there up or down within the range where cash was actually trading so they weren't asking for anything false”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Was retrospectively created the law to prosecute the traders essentially. And now it's been overturned in the States. And since the book came out last year, there's a court of appeal hearing now in the UK which may overturn that in the UK. The implications of that in the UK, nine people were jailed. In the US, no one went to jail, although some people were convicted, but 37 altogether were prosecuted, including Americans. Some Americans went to jail in the UK. some Brits who were tried in the United States. And one woman, when on something that the US court now says, wasn't even against any rules. And the banks paid all those fines to get the regulators off their backs. And this is the really unsettling thing. It shows the whole story shows how the US”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Down to try to get the crisis under control. But that, unfortunately, was involving them in exactly the sort of manipulation for which traders were later prosecuted while all the evidence of their involvement was covered up not only from Congress and Parliament, but also from the juries in their trials. And that's why it's such a scandal when you have highly relevant exculpatory evidence like that and people can go through a whole trial and the judge say, oh, it's not relevant. The fact that a central bank did something hundreds of times bigger than this defendant here is not relevant to this particular trial. Now, the central banks themselves, I've gone to them for comment on this. They either don't comment or they say they never instructed the banks to do anything illegal. And that's interesting because the law on this that locked up the traders was retrospective. There was no law at the time to say you can't manipulate LIBOR or Euroborough. They weren't even really rules.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Rates in the market went up. When they moved them down, it moved down. But the credit crunch, because it meant that fear was operative and the real cost of borrowing was determined as much by fear of how much you'd lost on subprime mortgages as it was by whatever the Fed said, suddenly they'd lost control of interest rates. And this is terrifying for a central bank. That's its key power. How do we regain control of interest rates? Well, there's two ways you can do it. One is legitimately. You can put schemes out there as they did with TARP and various other things. We'll take all your rubbish, all your bad loans that you've made, and we'll pretend there was something and we'll lend you money on them. That was what TARP was. And it did eventually solve the problem, but they were impatient for it to be solved. They wanted to see results straight away. So all of the central banks, the evidence in the book suggests that all of the central banks, not just the Bank of England, not just the Fed, but also the ECB, the European Central Bank, and the Bank de France, Bank of Italia, Banca de Espagna, that they were all involved in telling the banks in their countries to push LIBOR and Urania.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Telling the Fed that, and he's telling the Fed that it's too low by about a percentage point on the money markets, that's huge, so about 100 basis points. What does the Fed do a few days later? Well, the evidence suggests that it asks Chase Manhattan to get into the market and put in a lower offer, a below market offer when no one else was lending. Suddenly, Chase Manhattan, New York puts in an offer much lower. And the rumor is it's never quite been proved that the Fed was involved. But what isn't just a rumor, because we have evidence of it, was that the Bank of England was intervening in Stirling Libor and instructing Berkeley's to put its LIBORs much lower, way below the real cost of borrain. Because the problem is, for central banks, before the credit crunch came along, the real interest rates on the market has shown by LIBOR moved in lockstep when the Fed moved rates up.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“liable is going to come out at 353 but please don't believe it it's absolute rubbish I'm putting my libel at 4% and I can tell you I've just gone through three money brokers in London pre-bon i cap and tradition pre-bon have no offers at all in the market iCap have no offers when I said where can I get money if I wanted it they said four and a half tradition have got no offers they can have one offer out of Hong Kong at 4% he's gone home and I think the problem is that the market so desperately one side will lower that it's actually putting wrong rates in I have to say dollar libards are incorrect and they're too low”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“So, you keep on getting instructions like that throughout 2007-2008 throughout the crisis. He blows the whistle. He tells the Bank of England about it. He tells the Fed about it. And there's a phone call where you can hear that. And in that phone call, he tells a Fed official that libels are absolute rubbish. In other words, the cost of buying dollars that's officially being published, which is also being used to set the interest rates on trillions of loans is rubbish. It's absolutely rubbish.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“On the 29th of November 2007. Another day later, you hear him on another call. These calls were all recorded at the time because traders' calls were all recorded for administration purposes, where he's been instructed by a middle manager on orders from the board, the 31st floor of Barclays not to tell the truth and to put his LIBOR lower down where the lowballing lying pack of banks is rather than trying to be honest and tell the truth and stand out.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“These assholes, like you've got Deutsche set at 518. Well, we all know he's in a ship. HSBC set at 520. Well, we all know that he's just taking on 45 billion dollars worth of sieve. West LB said at 522, he's in the ship. Royal Bank of Scotland, 518. Well, if Royal Bank of Scotland are setting at 518, why is ABM, who I believe they took over paying 540? So that's one to think about. He was set at 518. Lor Bank of Canada doesn't even trade dollars in London. He set at 520. And UBS in a ship 520. whether those libels are right, you know, they're wrong. They are so fucking wrong. And unfortunately, I don't feel that I can, you know, unless I'm given the green light, go ahead and put rates where I think they are, I don't think I can have any influence. If I had my say, I'd have gone five and a half.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Johnson. Hey, Peter Tryon. This is so fucking sick. so fucking wrong should be higher much much higher really much much higher believe me you get no idea how much higher wow the only reason i went 30 in one month was because that's the highest that anybody else was going to go and i didn't want to be seen to be an outsider i wanted to go 50 for one month yeah i mean it's just ridiculous in one month for instance abnstrom was it is still paying 40 during the morning he got 300 million of 40 the best offer of cash is at 60 which is chase slam if you if you pay euro liboy and swap it back to dollars you're paying 570 wow you sort of get the drift people are setting these so ridiculously low it's just getting to be a laugh and i'm actually quite worried that there's some kind of reputational risk here for any bank which sets them this low you look at some of the people”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“And you can hear it on the tape to his frustration. He confides at one point in a colleague to Ryan Reichers in New York. He's like 25, he's young, he's keen, and he's talking to this older cash trader in Berkeley's in London, Peter Johnson, who's telling him, this is so, I'll be polite and use the word effing, sick. This is so effing sick, the rates that everybody are putting in. All the banks were lying. And he goes through them one by one. You can hear it on the tape. He says they're all understating what they're paying to borrow cash.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“The next Bear Stearns is going to run into trouble. It's going to need a bailout, et cetera. And people start selling the shares. And so he starts getting calls from the top from his head office. First of all, from the managers above him who are talking to the boardrum. And this is one of the things that was covered up. The boardroom was sending instructions down to Peter Johnson, who was on the trading floor, saying, you can't tell the truth. We don't want you to tell the truth. We want you to get down in the lying, low-balling pack. They wouldn't put it quite that way. Of all banks who are understating the real cost.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. So he tried to put that rate in in August 2007 at reflecting the actual cost, higher cost, he'd now pay to borrow money because people were saying, look, if I'm going to take the risk of lending you money, I will, but I'll charge you a lot more for it. So effectively, the cost of borrowing had gone up. But LIBOR wasn't reflecting that because the banks were too afraid to tell the truth. So they all collectively understated basically all the banks were lying about the real cost of borrowing dollars in bulk. And he was trying to tell the truth. What happened was because Berkeley stood out on the libel rates, a Bloomberg journalist wrote a story saying, oh, Barclays looks like it's in trouble because it's paying more. So that must mean that its competitors are charging a premium because it's weak.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“It's cheaper to borrow dollars than it really is. In order to try to be honest, he said, look, I'm going to put it where it really is, where the market where I can get money here. But everybody else was saying here.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“That's the background, you know, and in a way, all you need to know is that LIBOR is supposed to be the measure of the real cost of borrowing, and each of the banks are supposed to give an honest estimate of how much it costs them to borrow money. So each of 16 banks, they take an average and they strip out the top four and the bottom four. That's important because they're trying to avoid manipulation and then they take an average of the middle eight. Traders like Peter Johnson at Berkeley's were asked every morning at 11 a.m. to say, I reckon I could borrow dollars at 3.5%. And then somebody else would say 3.51 and 3.52 and they'd take an average of all of those. That would be the LIBOR rate for the day. Now, what happened during the crisis, as you said, was that because the credit markets are frozen up, they can only get cash if they paid much higher interest rate, but they weren't willing to admit how much more they were going to have to pay. Peter Johnson tried to be honest and say, no, look, this is rubbish. Everybody's understating what they're really paying. They're lying and protecting.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“The price of dials of a loan that is not going to be made at all. And so that's how sort of your book starts is people at Barkley's, who actually were dared to tell the truth. Everyone was lowballing because... And the Bank of England encouraged that lowballing at some point.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“1%. And that's stated rate officially matched what Barclays was lending to Barclays. In 2007, if you looked up, you pulled up your blooming terminal, it still said LIBOR was 5.1%, but you're saying the markets had frozen up. JP Morgan wouldn't lend to Barclays unless they were paid 5.3%. Or in some cases zero. I mean, what is the price of no apples?”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And so people think about the great financial crisis. I think the story about subprime mortgages and mortgage-backed securities, CDOs, that's pretty well understood. That's on the asset side. LIBOR, a lot of this is how banks fund themselves on the liability side. And banks did not have a lot of equity. They were not very well capitalized. The commercial paper markets were freezing up. So they had to fund themselves in the cash market. And this is they fund themselves based on LIBOR. How much will Barclays lend to JP Morgan? Or probably more likely, how much will JP Morgan lend to Barclays? Oh, it's $3.5%. So let's say the Fed funds rate, the risk-free rate basically set by the Federal Reserve is to say it's 5%, you'll probably slightly higher than that. And normally it's 5.1%. And in 2005, it was 5.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, they were lowballing it effectively, so they were pretending they could borrow at 3.2% when actually they were at the same time going into the foreign exchange markets and borrowing at 3.5%. Now, 30 basis points doesn't sound like that much, but if you work on the foreign exchange markets, you know that's huge. Like after September the 11th, you had a move of like less than 20 basis points. So if it's 30 basis points out, that's vast. So the banks were all massively understating the real cost of borrowing cash.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“$100 billion over three months. And then Barclays would say, Well, we think it's going to cost us 3.41%. And they'd all be within a hundredth of a percentage point or two up until the credit crunch. But when the credit crunch came along and no one was lending cash, suddenly 2007, people think, well, I can't tell how much it's going to cost me to borrow cash. So it's finger in the wind. You know, it's pin the tail on a donkey. So they started guessing. Now, when they're guessing, they have a bias. They didn't want to be too realistic too close to the much more expensive real cost of borrowing cash. Was a lie”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“The London Interbank offered rate. So even in dollars, we're measuring interest rates by the London Interbank offered rate. What's that? It's this thing that was invented back in the late, well, it's actually invented in the late 60s. And what was going on there was big loans made for things like power projects, big ships, et cetera, where you'd have a syndicate of banks lending the money. You wouldn't be able to set a fixed interest rate because interest rates might move before the deal was done, months after. So they came up this way with this way of tracking, fluctuating interest rates by taking a sample of the cost of borrowing in the money markets every day. That's how it started. And what they do is every day, a trader on the cash desk of each of the banks, each of 16 banks, would submit an estimate of how much they thought it would cost them to borrow cash. So they'd say, for example, JP Morgan might say, we think it's going to cost us 3.5% to borrow.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Ben Bernanke in about May 2007 gave an assessment of the scale of the problem. He said it's about $100 billion. Suddenly all the banks seized up in fear. Oh my God, I can't lend anything because I don't know how much I've lost on subprime US mortgages, mortgages lent to people with poor credit records. So I don't know how much I've lost and I don't know how much you've lost my counterparty. So they stopped lending to each other until they can work out how much they'd lost. That was the credit crunch, basically the credit markets froze up and no one was lending to each other anymore on the money markets. That created a problem for the measure of lending on the money markets. That's LIBOR. So your mortgage, your car loan really depends on the real cost of borrowing in the money markets. That's tracked by a thing called LIBOR, the London Interbank offered rate or was until about a year or two ago for 35 years, all loans were set at LIBOR plus 1% plus 2%, etc. around then. What's LIBOR?”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“The banks first of all convinced governments to deregulate in the late 90s, and that enabled them to lend lots more. And then they paid themselves bonuses based on how much they lent. And then they got really reckless because they wanted bigger bonuses. So they started lending to people they wouldn't normally lend to, including things like single mums in Cleveland, Ohio who wouldn't normally think of buying a home, but were offered these super cheap interest rates really, really low. What they weren't necessarily told is that two years on, those rates wouldn't be so low. They might double or treble. And so you had this phenomenon called jingle bail, where a lot of those people who couldn't afford to pay their mortgages anymore because their repayments have doubled or trebled, a bit like some people's are now, those people who couldn't afford to pay those mortgages were sending in their keys, jingle mail. In the United States, you have what's called non-recourse loans, so they don't follow you around. In Britain, unfortunately, if you get into trouble, it follows you around. Doesn't matter if you leave your house. But lots of people are just sending these in, and it meant that those loans would never be repaid.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so basically, interest rates, we think of interest rates when we hear from the Fed, when we hear from the Bank of England. But what is the actual interest rate that dictates what you pay on your car loan, on your mortgage, et cetera? That's not dictated by those official rates set by central banks. That's dictated by the cost of borrowing on the wholesale money markets. So if the cost of borrowing between the banks or the cost of borrowing from money market funds lending on the wholesale money markets is going up, then your mortgage is going to cost more. Your car loan is going to cost more. Not the official rate. And the difference between those two became important in the credit crunch. So in the credit crunch, as some of your readers will recall, you'd have been quite young at the time. Through the noughties, there was this huge irresponsible, reckless lending went on. This is detailed in things like, you know, margin call in the big short. It's now the stuff of legend, how in the north.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“So, in Europe, in the UK, and in the United States, there's evidence in rigged, my book, which says shows you exhibits the actual words people were saying when they were carrying out instructions from those central banks to manipulate interest rates on a much bigger scale than any of the traders who are jailed. But I should probably explain what we're talking about. Should I give you a quick rundown?”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“At the beginning of 2022, and agreed that the case against the traders, the supposed crooks down the ranks, was bullshit. It was all wrong. There was not even a rule that they'd broken. And that's what's so incredible. Banks have paid $9 billion of fines for manipulating interest rates, specifically two rates called LIBOR and URIBOR. I'll explain what those are in a second. And they've paid those $9 billion in fines, despite the fact that years later, the US court said they'd done nothing wrong. So that's why I've got the word incredible on the front cover. If you're a journalist, you think twice before you overhype your story, you know, you don't, if you call it incredible, then your editor comes back a few months later and says, that's not incredible. They feel a bit, you know, disappointed. You don't want that. But this really is incredible. It's hard to believe that the authorities would do this. It's also hard to believe that the real manipulation of interest rates was done by central banks internationally.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT
“The story is completely upside down, basically, Jack. And the story that some of your listeners will have heard over the years is that there's this interest rate called LIBOR that's been manipulated by a bunch of dodgy traders, people down the ranks of the banks, nothing to do with people at the top, nothing to do with government or central banks. No, it's all about crooks down the ranks of the banks. They've done something dodgy and gone to jail for it and the banks paid billions of dollars of fines. That's the official receive narrative, the narrative that's been the subject of a few books actually, which very much follow the prosecutor's story, the regulator's story. But if you read my book, you'll realize that the story you've been given by the regulators, by the prosecutors, by the governments on both sides of the Atlantic is not the true story. And in fact, 37 people have been prosecuted and the American courts years after they were started to be prosecuted suddenly turned around.”
2024-01-16 · Forward Guidance · Andy Verity on LIE-BOR: Shocking New Evidence Suggest Interest Rate Scandal Is Much, Much, Bigger Than Originally Reported · IDENTIFIED FROM THE TRANSCRIPT