Credibility Trap: Barclays' Bob Diamond Threatens British Parliament With 'Embarrassing Revelations'

"Oh what a tangled web we weave,
When first we practise to deceive."

Sir Walter Scott, Marmion

This is the credibility trap for government regulators and officials who have played fast and loose with market manipulation when it suited their purposes in the past.

I wonder if Jamie Dimon has similar 'dirt' on the Congress and the regulators. JPM would be in a good position for that, given their past involvement with the Exchange Stabilization Fund and their major role in the metals markets.

The power brokers say that bribery is good, but blackmail is better, more reliable. And so it may be.

Let's see if Mr. Diamond can intimidate the British Parliament and make them dance to his tune. He has certainly thrown down the gauntlet as they say.

Financial Times
Barclays chief threatens to hit back
By Patrick Jenkins, Brooke Masters and George Parke

Bob Diamond is threatening to reveal potentially embarrassing details about Barclays’ dealings with regulators if he comes under fire at a parliamentary hearing on Wednesday over the Libor rate-setting scandal, according to people close to the bank’s chief executive.

“If he is attacked, he will fight back,” said one person familiar with preparations for the Treasury select committee hearing...

Read the entire story here.

Gold Daily and Silver Weekly Charts - Silver Manipulated, and a Silver Exchange Holiday

There has been some significant intraday commentary.  I wished to highlight the portion of it that deals with the disposition of the metals markets.

There was a remarkable admission on a major US television network that the silver market is being manipulated.

And having thought about this for some time, afterwards I put forth a possible scenario about what comes next given the inevitability of some event on the exchange, given the severe imbalance of claims to legitimate supply, which are estimated at 40, 50, and even 100:1.

I can envision a holiday for the American silver exchange and the forced settlement of all paper bullion claims for a set price, much lower than what will follow next.  This might include gold as well.

It is difficult for a manipulation scheme to come to any other end, given the length of time it has been in place and the size of the positions still being held by the untouchable Banks and Very Important People.  I imagine they will blame some defunct scapegoat, like a Bear Stearns.

If you do not think that this is possible, read the description.  It sounds very much like the sudden decline and fall of MF Global.

Knowledge grows when shared. If you enjoy these things, then you may wish to consider passing them to others.

Banker Fraud Is Undermining Confidence in the Markets

People forget, but there are times in history when the financial markets fall out of favor with investors because they lose confidence..

And they now have very good reasons to doubt just about anything that Wall Street says.

I think the low volumes indicate that the Wall Street wiseguys are pushing their luck.  Once trust is lost, it is difficult to get it back. 

And if justice long denied comes in a rush to Wall Street, hell may come with it.  History shows us that.

Telegraph
Bank forecasts futile now all trust has gone, says analyst
By Alistair Osborne
6:23PM BST 02 Jul 2012

Sandy Chen, bank analyst at Cenkos Securities, said it was pointless revising forecasts until Barclays came clean over what had gone on.

 “Analysts spend 99pc of their time crunching numbers, but underneath the complicated edifice of earnings forecasts lies a basic foundation of trust,” he said.

“In essence, the price movements in markets track the flow of conversation around one basic question – 'Do I trust them and their promised returns?’ Without the trust, nothing stands.”

Mr Chen said revelations that Barclays chief executive Bob Diamond had held talks in 2008 with the Bank of England over Libor simply clouded the issue further.

“The trust has been breached. Until the banks clear their names, we expect the markets for their shares and bonds will remain dysfunctional,” he said. “Without full management clarity, transparency and responsibility... we think forecast revisions are futile.”