Libor Scandal: Deutsche Bank Went ‘All In’

 | Jan 11, 2013 04:18AM ET

“Investment capital goes where it’s welcome and stays where it’s appreciated.”

Maine governor Paul LePage

The more information one holds, the better positioned he is to take increased risk. If that information were to include the ability to influence if not outright manipulate a game/market, then one’s risk profile —that is, the size of one’s position — is likely to really increase.

Can you imagine if you were playing the tables in Vegas and you had knowledge as to what the dealer held and what he was likely to pull, what would you do?

Increase your bet, of course. We see a Wall Street iteration of this very scenario in news emanating from Deutsche Bank that The Telegraph

reported as much about the “officials” at UBS in writing,

Mr Orcel, who was grilled by the commission alongside chief risk officer Philip Lofts and global head of compliance Andrew Williams on the practice of Libor-rigging at the bank, maintained the scandal stemmed from a small subset of traders, and top management was unaware.

Tell me another one.

To think that a desk could ring up “at least” $654 million in a year and that senior management was not aware of EVERY detail as to how that revenue was generated is laughable. Wall Street does not work that way.

Regrettably “laughable” is also the appropriate description for the manner in which our financial regulators and judicial officials deal with these firms and executives.

Any wonder why trading volumes are down so much across most market sectors? Remember what Maine governor LePage says, ” “Investment capital goes where it’s welcome and stays where it’s appreciated.”

Navigate accordingly.

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Larry Doyle

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