Stephen: I remember reading some time back that the currency markets have been rigged for many,many years and that some of the world’s richest can make up to a billion dollars at a time, simply by ‘knowing’ which currency to buy and which to sell – and at which exact moment. The bankers have manipulated everything else, so the fact they ‘play’ with the foreign currency exchange rates to their advantage comes as no surprise.

The FX is In

From The Economist – October 12,2013

http://tinyurl.com/ln84wvy

It has been a dreadful couple of years for financial benchmarks. Banks turn out to have rigged LIBOR, an interest rate used to peg contracts worth trillions.

Its equivalent in the world of derivatives, ISDAfix, has also come under question. Commodities prices from crude oil to platinum have been the subject of allegations and inquiries.

Now prices in global currency markets, where turnover is $5 trillion a day, are being scrutinised by authorities, who suspect bankers have tampered with those too.

Switzerland’s financial watchdog announced on October 4th that it was investigating a slew of banks it thinks have manipulated currencies. Britain and the European Union also have probes under way. None has detailed its suspicions, but concerns reportedly centre around abnormal movements ahead of a widely-used daily snapshot of exchange rates, known as the 4pm “London fix”.

It represents the average of prices agreed during 60 seconds’ trading, and is used as a reference rate to execute a much larger set of currency deals. Bankers, who are big participants in the market, have huge incentives to nudge the price of a given currency pairing ahead of the fix. With billions of dollars changing hands, a difference of a fraction of a cent can add a tidy sum to the bonus pool.

If proven, the charge would amount to banks fleecing their clients. Banks know the big trades they are about to execute on others’ behalf, and are often themselves the counterparty. By moving the markets ahead of the fix, they could alter the rate to their profit and their clients’ loss. One suspected method is “banging the close”: submitting a quick succession of orders just as the benchmark is set, to distort its value.

Though indicators based on real trades are meant to be harder to game than those using hypothetical figures (such as LIBOR, a daily poll of banks’ estimated borrowing rates into which respondents fed duff data), they are clearly not incorruptible.

The 4pm fix is used to calculate the value of all sorts of assets, such as the foreign holdings of mutual funds. Fiddling the rates could thus have an impact far beyond the banks and their clients.

Worse, if the bankers talked to each other ahead of their trades, as regulators think they may have, collusion will be added to the charge sheet. Investigations into other fiddled benchmarks have unearthed reams of messages between traders blithely discussing their swindles.

The risk of manipulation could be vastly diminished by using a benchmark that relies on more than just 60 seconds of trading, points out Mark Taylor, dean of Warwick Business School and a former currency-fund manager.

The damage to implicated banks’ reputations will be harder to fix.

Cyclone Phailin kills 7, leaves trail of destruction in India

By Neha Sharma and Faith Karimi, CNN

October 13, 2013 -- Updated 0908 GMT

India surveys damage from Cyclone Phailin

Watch video

STORY HIGHLIGHTS

• NEW: Relocating the nearly a million evacuees a challenge, official says
• NEW: Most are housed in nearly 250 emergency shelters
• "Our first priority is to clear the roads," official says
• To avoid electrocution, authorities cut the electricity in affected districts

New Delhi, India (CNN) -- Hours after it snapped power lines, overturned cars and ripped away bamboo homes, the most powerful cyclone to hit India in years weakened Sunday, but not before it left at least seven dead.

Morning light revealed damage from Tropical Cyclone Phailin after it pounded the eastern coast, the strongest storm in India in 14 years.

Debris littered wet streets; gaping holes replaced roofs and windows in buildings.

At least seven deaths were confirmed, said Prabhat Mohapatra, a special relief commissioner in Odisha state, where the cyclone landed.

Strong winds overturned cars like toys across Brahmapur city, where the center of the storm struck Saturday along the Bay of Bengal.

"Ganjam is the worst affected district with massive destruction," said Kamal Lochan Mishra, a state disaster management official. "Our first priority is to clear the roads and we expect all the roads across districts to be cleared by noon."

Cyclone slams India's east coast

See Cyclone Phailin make landfall

Powerful cyclone makes landfall in India

Brahmapur is in Ganjam district. As a precautionary measure, authorities cut the electricity in the affected districts.

Like a fierce hurricane

Hurricanes are known as cyclones in the Indian Ocean.

At 140 mph wind speed, Phailin made landfall the equivalent to a Category 4 hurricane. The strongest hurricane is a Category 5, which comes with winds greater than 155 mph.

By Sunday, some 13 hours later, it was the equivalent of a Category 1 hurricane with winds of about 80 mph.

'Zero-casualty approach'

India evacuated nearly a million people before the storm to avoid a repeat of what happened in 1999, when a cyclone killed 10,000 people.

"We have taken a zero-casualty approach," said Kamal Lochan Mishra, the Odisha state disaster manager. "If people do not move, force will be used to evacuate them."

Phailin has brought nearly 8 inches of rain to Odisha's capital of Bhubaneswar, about 30 miles from the coast. The city's average rainfall for October is 6.5 inches.

The storm will continue to fall apart as it moves over land, but tropical-storm-force winds are still possible through early Monday, said CNN Meteorologist Judson Jones. Rainfall will also be a problem as Phailin moves up toward the Himalayas in Nepal.

Multiple states in the region were under weather warnings for excessive rainfall and thunderstorms.

Hundreds of emergency shelters

About 900,000 were evacuated in Odisha alone. Most in low-lying coastal areas of the state left on foot or by bicycle, Kamal Lochan Mishra said.

Relocating evacuees is a major challenge because of property damage and losses caused by the storm, said Naveen Patnaik, chief minister for Odisha state.

Most are housed in nearly 250 emergency shelters set up in sturdy buildings like schools and government offices.

The India Meteorological Department warned of extensive damage to houses made of flimsy materials like mud and bamboo, as well as damage to old buildings.

Power and communication lines got disrupted. Extensive flooding also affected rail and road traffic, and crops are likely to suffer major damage, it said.

In Gopalpur, a coastal resort town in Ganjam, restaurants were shuttered and streets deserted. Tourists and local residents left the town.

Military deployed

In October 1999, Cyclone 05B, also known as the Odisha Cyclone, made landfall in the same area, killing 10,000 people. It was the strongest tropical cyclone recorded in the Bay of Bengal, with winds of 155 mph at landfall,. It caused more than $2 billion in damage.

In advance of Phailin, military units and National Disaster Response Force personnel were deployed to coastal areas with relief supplies and medical aid, CNN-IBN said.

All flights to Odisha have been canceled and train services in the state are also disrupted, CNN's sister network reported.

Disaster preparedness

International humanitarian organization World Vision said it was helping local community groups prepare for the cyclone's arrival.

"In a storm of this magnitude there is the potential for widespread damage to crops and livestock in the low-lying coastal areas and houses completely wiped away," said Kunal Shah, the head of World Vision's emergency response in India. "So while we are praying this storm loses intensity, we're also preparing."

The organization has worked for years to train local people in disaster preparedness, including search and rescue, basic first aid and how to protect livestock . It has thousands of emergency response kits ready to hand out where needed.

CNN's Neha Sharma reported from New Delhi, and Faith Karimi wrote and reported from Atlanta. CNN's Pedram Javaheri and Radina Gigova contributed to this report.

Cyclone weakens after hitting landfall

The strongest storm to hit India in more than a decade slows down significantly overnight.
Still caused major damage

Bus Plunges Off Cliff in Peru, Killing 51

Published: October 12, 2013

Bodies of victims lie under plastic sheets after they were recovered from a ravine near the tow of Santa Teresa, Cuzco province, Peru Photo: AP

LIMA, Peru — A makeshift bus carrying 51 Quechua Indians back from a party in southeastern Peru plunged off a cliff into a river, killing everyone on board, including 14 children, rescue workers said Saturday.

The accident occurred Friday night as the bus, which was actually a cargo truck, made its way back from the provincial capital of Santa Teresa, an area about 310 miles southeast of Lima. It went off the road and fell about 650 feet into a deep ravine, ending up in the Chaupimayo River.

“We haven’t found a single survivor,” said Capt. David Taboada, a firefighter who was leading the rescue operation. The cause of the accident had not been determined, he said.

Fedia Castro, the mayor of the district where Santa Teresa is, told Canal N, a Peruvian television network, that rural farmers must rely on informal means of transport, like the cargo truck, because of a lack of public buses.

The high-altitude roads of the Peruvian Andes are notorious for bus accidents like Friday’s. Last year, more than 4,000 people were killed in such accidents.

A version of this article appears in print on October 13, 2013, on page A7 of the New York edition with the headline: Bus Plunges Off Cliff in Peru, Killing 51.

Bus plunges off cliff into river, killing 51 people, including 14 children

Publicado el 12/10/2013

Peru Bus Bus plunges off cliff into river, killing 51 people, including 14 children