• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

LIBOR 4-1-9

williambanzai7's picture


I remember the first time I had to toil through the turgid definitions and legal boilerplate constituting the LIBOR provisions of a typical syndicated loan agreement. I remember saying to myself I hope I never have to look at this shit again.

But it was not to be.

During the course of my career I had to read the same whiteshoe goobldygook over and over, including when I took out my last mortgage. Why? Because it is ubiquitous in modern finance. Interest rate clauses are one of the basic foundations of debt.

Yet LIBOR is not the kind of thing that the average man on the street or paid political hack thinks about or even recognises by reference.

Search "LIBOR" in google news. Better yet, search " LIBOR cesspit." You will see that there are literally thousands of news stories covering the nascent LIBOR scandal, which obviously encompasses Barclays and the entire TBTF banking system. 

Suddenly English politicians are calling it a "massive cesspit." These are the same people who chose to ignore that every facet of the ongoing global financial crisis somehow winds its way back into the financial Liberia known as the City of London (e.g. AIG Financial, Lehman, MF Global, London Whale to name but a few). 

The truth is what we all ready know. You would be very very hard pressed to find a pristine ungamed corner of TBTF banking. It is not that the politicians don't know this. It is that they have been paid to shut their mouths.

And now they will be paid to control the damage from this unfortunate LIBOR situation as best they can.

There are three things you can say about every TBTF CEO: 1. They are grossly incentivized to push the envelope as far as possible, 2. They all claim there is too much regulatory oversight and 3. They all say they are unable to monitor the reckless and criminal activities of their far flung operations.

The answer: Bust them up and start throwing the culprits in the big house you sack of useless good for nothing political/regulatory porn turds!

Incidently, I have yet to see any American politician mention this. Certainly not Chuck the Bankster Schmuck.












Barclays has something to hide
They've taken the world for a ride
By fixing the rates
Their profit inflates
All Banksters have cheated and lied

The Limerick King











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Mon, 07/02/2012 - 18:52 | 2582030 resurger
resurger's picture


Sun, 07/01/2012 - 21:29 | 2579588 GlassSteagall
GlassSteagall's picture

"Incidently, I have yet to see any American politician mention this. Certainly not Chuck the Bankster Schmuck."

It's the "October Surprise"  ... Obama will wait until all the dollars are donated and then will start on "Banks and Bush are the reason for your crappy state ... Oh, and by the way isn't Bain Capital really a bank?" 

Sun, 07/01/2012 - 21:06 | 2579573 GlassSteagall
GlassSteagall's picture

Your Best yet ... 

The UK has it's LIBOR .. the US has it's LIEMORE

Sun, 07/01/2012 - 18:43 | 2579375 Yen Cross
Yen Cross's picture

 One thing is for certain WB-7!   Ain't no transaction tax coming to London anytime soon!  Long LIVE LONDON!   The last safe haven from ECB subordination!


  Plus 10 WB-7

Sun, 07/01/2012 - 19:06 | 2579408 Buck Johnson
Buck Johnson's picture

Of course they won't have ECB subordination, but you have to remember people go to the UK because of their lax banking laws.

Sun, 07/01/2012 - 19:27 | 2579443 Yen Cross
Yen Cross's picture

  Just like Hong Kong  & Singapore  Buck?  Thanks for making my point.

Sun, 07/01/2012 - 17:48 | 2579245 General Debility
General Debility's picture

The answer: Bust them up and start throwing the culprits in the big house you sack of useless good for nothing political/regulatory porn turds!

The Not so Real News speculates about whether people should lose their jobs or not...when what should happen is that they be ceremoniously tossed into the oubliette, one after the other. I have taken to YELLING at the television. Very therapeutic!

Awesome work as ever WB7!!!

Sun, 07/01/2012 - 13:08 | 2578677 Grand Supercycle
Grand Supercycle's picture

More Equity Rally Expected.

Any traders predicting a multi month equity rally apart from me ?

As of June 30th I am.

Last week was the turning point.

Further equity upside and USDX weakness expected this year according to my analysis.

However the SPX big picture remains very bearish and unfortunately this will not change.


Mon, 07/02/2012 - 12:03 | 2580821 justinius1969
justinius1969's picture

what is your count on SPX. and wher is your upside target?


Sun, 07/01/2012 - 16:55 | 2579152 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Fuck off

Sun, 07/01/2012 - 14:07 | 2578850 Non Passaran
Non Passaran's picture

Fuck off

Sun, 07/01/2012 - 18:13 | 2579311 Golden monkey
Golden monkey's picture

You (probably) mean your wife is unfuckable now man? 

Sun, 07/01/2012 - 12:02 | 2578544 Downtoolong
Downtoolong's picture

2. They all claim there is too much regulatory oversight and 3. They all say they are unable to monitor the reckless and criminal activities of their far flung operations.

In other words, we can’t regulate ourselves, but, we sure as hell don’t want anyone else trying it.

We see these polar conceptual conflicts everywhere in the system. Even when they experience a huge loss they typically blame it on flaws inside their own system. We’re told that no one saw it coming, or it was the exchanges fault (Facebook IPO).

What choices we’re given to identify these frauds, as if to suggest they should be excused because we can’t definitively say whether they are crooks or just incredibly stupid. That’s salesmanship alright, when you can sell that kind of bullshit for big bucks and get away with it.

Sun, 07/01/2012 - 11:53 | 2578519 GCT
GCT's picture

Only moneys exists Peter.  People are just fodder for the banksters.  Especially people that are not in debt.

Sun, 07/01/2012 - 11:22 | 2578467 Peter Pan
Peter Pan's picture

Is it just me or do some of you also get the feeling that these banksters and the regulatory authorities treat us as if we don't exist or as if the system is not ours as well.

These mongrels have done the equivalent of defecating into the communal water supply knowing full well that their supply of champagne will see them through.

Unbeknownst to them they are tempting fate and either a catastrophic turn, an avenging angel or some nut will seek retribution.

The question of course remains.....when is enough enough for them in terms of money and for us in terms of insults?

Sun, 07/01/2012 - 10:35 | 2578413 williambanzai7
williambanzai7's picture


Sun, 07/01/2012 - 10:33 | 2578411 cherry picker
cherry picker's picture

Reminds me of a story of two dogs.

The dogs were friends and met at the US/Mexican border.  The American dog was healthy, cared for, its coat brushed and shining.  The Mexican dog was underfed, its coat was not brushed and it survived on its own.

The American dog looked at his friend, "Why don't you come here?  You will be looked after, fed and have a place to sleep."

The Mexican dog replied, "That sounds wonderful.  I think I will join you," and jumped over the fence to join his friend and they started walking together.

The American dog smiled, "You will need a collar and leash, so the master can take you for a walk to do your business."

After a moment the American dog noticed his friend was no longer walking beside him but returning to Mexico.

"Hey, where are you going!.  Don't you want the good life?" he cried out.

His friend turned and replied, "No thank you, I am going home.  At least I can still bark there."

Sun, 07/01/2012 - 18:14 | 2578267 Golden monkey
Golden monkey's picture

I'm desperate now Banzai, cuzz the Joows stuck a 10 millions dollars contract on my head.

Unfortunately, I'm coming to stick a few 20$ bills in their slots.

It's never raining over Quebec cuzz the HAARP  machine now. Satellite surveillance : the next big thing, beside the orgies.

Beware : they pick your wife with their poison, and she's not your anymore. Life is so funny man.

Sun, 07/01/2012 - 06:30 | 2578225 Tic tock
Tic tock's picture

Novus Ordus Secloram - right through the middle.

Sun, 07/01/2012 - 06:21 | 2578219 williambanzai7
williambanzai7's picture

Every week we are exposed to further unsavory revelations concerning the global financial fraudplex. Yet we are constantly told that these reckless and corrupt institutions are absolutely essential to the smooth and efficient operation global economy. Whose operation?

Please pass the bath salts...

Sun, 07/01/2012 - 19:05 | 2579407 cgbspender
cgbspender's picture

I've done a decent amount of 'bath salts' (a catchall phrase for an assortment of amphetamine-like derivatives).

I've had some of the best conversations regarding financial fraud and economic theory than I've ever had while being sober.

Just saying...

Sun, 07/01/2012 - 12:18 | 2578582 ptoemmes
ptoemmes's picture

Very much agreed. Ever since reading Matt Taibbi'a article on the muni bid rigging trial I am more of the opinion that these criminals almost, if not completely, believe that what they do is not "wrong". Sociopaths perhaps?

To wit: http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-f...


But as the weeks passed, I started to get a feel for the defense strategy, which made a kind of demented sense. The lawyers for Carollo, Goldberg and Grimm didn't even bother trying to argue the facts of the case. Instead, in one cross-examination after another, they kept hitting the same theme. Despite the fact that the rigged bids resulted in lower returns, wasn't it true that the cities and towns still received, technically speaking, the highest bid? If a town received a 5.00 percent return on a $219 million bond instead of 5.04 percent, who's to say that wasn't a good price? John Siffert, the gray-faced and unlikable attorney for Steve Goldberg, put it this way in his cross-examination of CDR executive Stewart Wolmark. Asking about the Allegheny deal, he boomed: "Isn't it fair to say that you believed that by lowering... Steve's bid to 5 percent, Steve's bid was still a fair price to pay?" Wolmark's answer was both quick and sensible: "I don't determine the fair price," he replied. "The market does." GE was supposed to pay the highest price the market would pay. It wasn't a competitive auction, as required by law. But Siffert had made his point, and his rhetoric got right to the heart of the defense, which was going to center around the definition of the word "fair." The men and women who run these corrupt banks and brokerages genuinely believe that their relentless lying and cheating, and even their anti-competitive cartel­style scheming, are all legitimate market processes that lead to legitimate price discovery. In this lunatic worldview, the bid­rigging scheme was a system that created fair returns for everyone. If a bunch of Pennsylvanians got a 5.00 percent return on their money instead of 5.04 percent, and GE and CDR just happened to split the extra .04 percent, that was a fair outcome, because that's what the parties negotiated. True, the Pennsylvanians had no idea about the extra .04 percent, and true, they had hired CDR precisely to make sure they got that extra 0.4 percent. But hey, it's not like they were complaining: Until someone told them they were being brazenly cheated, they were happy with their bond service. And besides, it's not like ordinary people understand this stuff anyway. So how is it the place of some busybody federal prosecutor to waltz in here and say what's a fair price?



Furthermore, low level sacrifical lambs may go to the slammer and the firm may pay what amounts to a "cost of doing business" fine.  How about the 'death penalty" for that firm ever doing business in the subject market place again: http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-f...


In the end, though, the conviction of a few bit players seems like far too puny a punishment, given that the bid rigging exposed in Carollo involved an entrenched system that affected major bond issues in every state in the nation. You find yourself thinking, America's biggest banks ripped off the entire country, virtually every day, for more than a decade! A truly commensurate penalty would be something like televised stonings of the top 10 executives of every guilty bank, or maybe the forcible resettlement of every banker and broker in Lower Manhattan to some uninhabited Andean wasteland... anything to address the systemic nature of the crime.

No such luck. Instead of anything resembling real censure, a few young executives got spanked, while the offending banks got off with slap-on-the-wrist fines and were allowed to retain their pre-eminent positions in the municipal bond market. Last year, the two leading recipients of public bond business, clocking in with more than $35 billion in bond issues apiece, were Chase and Bank of America – who combined had just paid more than $365 million in fines for their role in the mass bid rigging. Get busted for welfare fraud even once in America, and good luck getting so much as a food stamp ever again. Get caught rigging interest rates in 50 states, and the government goes right on handing you billions of dollars in public contracts.






Sun, 07/01/2012 - 13:43 | 2578771 overmedicatedun...
overmedicatedundersexed's picture

will, more regulations you say? come on you are one sharp pencil..the more reg books you fill up the better for the TBTF..a book never brought justice to any case, a reg never stopped one mega bank or elite criminal, they just buy off the cops. and let the regs bury the little guys..it's good to own the government and very profitable to.

Sun, 07/01/2012 - 09:06 | 2578323 PoorByChoice
PoorByChoice's picture

WB, how the hell do you do these so quick?

Making brilliant appear easy as usual.


And to think I once considered signing up to put myself in harms way to protect this shit of a system! good grief!.....

Note to self: smack children every time they say "when I grow up I want to be a soldier\fighter pilot\navy officer\policeman" 

Sun, 07/01/2012 - 09:55 | 2578368 williambanzai7
williambanzai7's picture

I'm really in the flow now.

I know the audience, which is very responsive, I know the targets, I have a stockpile of work that can be modified according to the circumstances, I know what I want to do stylistically and the stuff is moving around the Internet.

I never feel short of ideas. But there are a few things that I have always loved doing, complicated charts and history mashing.

Sun, 07/01/2012 - 06:30 | 2578224 Chartist
Chartist's picture

The people still have too much accumulated wealth to reach the point of revolution, ala France.  But it's coming.

Sun, 07/01/2012 - 10:38 | 2578414 Bastiat009
Bastiat009's picture

Honestly, the French revolution is the worst thing that happened to the country. It used to be rich and powerful but lost everything during the "terror" ... Replacing a bad system (because of one bad man) with a worse system (because the system itself is bad) is not a good solution. The US just needs to go back to basics: "Life, Liberty and the Pursuit of Happiness." 

Sun, 07/01/2012 - 05:50 | 2578191 falak pema
falak pema's picture

wow what a poetic driver, even Tiger Woods would agree to that; he never uses it anymore! A tiger without his woody! 

Iconic image for the Oligarchs of financial world in trouble, cauldron bubble, toil and turmoil. Lets keep pouring on the oil! 

Sun, 07/01/2012 - 04:01 | 2578155 Lets Hang Parliament
Lets Hang Parliament's picture

The Barclays "Boris" bike is just the best ever Banzai. Maaaaaarvellous!

Frankly anyone mad enough to ride a push bike around London is either barking or a Barclays "banker"

Sun, 07/01/2012 - 01:40 | 2578106 Idiocracy
Idiocracy's picture

Bravo WB7, brilliant stuff.  Now if we can only get it painted onto the sides of buildings in NYC & London

Sun, 07/01/2012 - 04:05 | 2578158 Kimo
Kimo's picture

What you just read, is the result of the cover-up.

And behind the curtain?  .......


Sun, 07/01/2012 - 04:42 | 2578172 williambanzai7
williambanzai7's picture


Sun, 07/01/2012 - 20:09 | 2579492 monad
monad's picture

He lives with me but he is not my monkey. One day I come home and I found him sitting in the living room. I let him stay, he pays his own room and board...


Sun, 07/01/2012 - 19:47 | 2579465 Goldilocks
Goldilocks's picture

http://www.youtube.com/watch?v=CEiF3tYV7XQ (0:57)

Sun, 07/01/2012 - 12:35 | 2578613 mudduck
mudduck's picture

The monkey doesn't tell me what to play, and I don't tell him how to spend his money.

Mon, 07/02/2012 - 11:30 | 2580735 Phil Free
Phil Free's picture

Bing! Bing! Bing! Bing! Bing! A thousand gold stars for the 'Return of the Pink Panther' reference!


Sun, 07/01/2012 - 11:12 | 2578452 LeisureSmith
LeisureSmith's picture

That is some flawless photoshopping WB7. Monkey face timmah is just ace. I think that would make a great T-shirt, kinda like in the style of that Che Guevara pic, or the 3 monkeys.

Sun, 07/01/2012 - 10:48 | 2578419 RocketmanBob
RocketmanBob's picture

Another instant classic courtesy of Banzai7!

Sun, 07/01/2012 - 06:00 | 2578215 Wakanda
Wakanda's picture

Ben's organ is out of tune and Timmah can't dance worth shit.

Can't we do better than this?

Thanks WB7 and LK for a peek into the turgid world of Lie Bor(ing).

Mon, 07/02/2012 - 11:41 | 2580760 DaddyO
DaddyO's picture
Turgid, as in nipple or penis!?! Methinks the definitions fit the situation well, any of them, eh? turgid Definition tur·gid [ túrjid ]

ADJECTIVE 1. pompous and overcomplicated: pompous, boring, and overcomplicated
"a turgid speech" 2. overflowing: swollen and overflowing 3. medicine distended: swollen or distended by a buildup of fluid [ Early 17th century. < Latin turgidus < turgere "swell" ] DaddyO

Sun, 07/01/2012 - 00:54 | 2578080 world_debt_slave
world_debt_slave's picture

Hopefully this scandal takes traction and the 99% that got, get and will continue getting screwed, rise up and overthrow these corrupt govs and banks.

Sun, 07/01/2012 - 00:00 | 2578026 cherry picker
cherry picker's picture

The biggest problem is how authorities and societies treat corporations.

In my opinion, if a corporation continues to flout the law, it should pay a price similar to that of an individual.  To me, a  Goldman Sachs, Barclay's etc., which have paid millions in fines during the past decade, should lose its license to operate and be shut down for a period of time or for "life".

The stockholders and employees will lose big time, but those who navigated the corporation to break the law will face the fury of those most affected by the corporation's closing.

If they only had the balls to do this simple thing, we would see the moral hazard decrease significantly.

Sun, 07/01/2012 - 13:31 | 2578736 TruthHunter
TruthHunter's picture

"In my opinion, if a corporation continues to flout the law, it should pay a price similar to that of an individual."

When does a Corporation become a "habitual criminal"? When does a potientially immortal corporation commit a capitol offense?

Mistakes are made, lower level people overreach, but when a corporation has persistent criminal policies, penalties need to be higher.

At the very least, fire Officers and board plus fine shareholders a percentage of holdings.  Maybe those concerned would take more interest

in the criminal activity of their holdings.

Sun, 07/01/2012 - 13:19 | 2578701 dizzyfingers
dizzyfingers's picture

Cherry Picker:

"The biggest problem is how authorities and societies treat corporations. In my opinion, if a corporation continues to flout the law, it should pay a price similar to that of an individual. To me, a Goldman Sachs, Barclay's etc., which have paid millions in fines during the past decade, should lose its license to operate and be shut down for a period of time or for "life". The stockholders and employees will lose big time, but those who navigated the corporation to break the law will face the fury of those most affected by the corporation's closing."

Very insightful, because if corporations want to be individuals -- which they do when it suits them (courtesty of Supreme Court ruling), then doesn't it stand to reason that if corporations misbehave, they DO (MUST BE) stopped from doing to and punished?


Yeah, I know, until hell freezes, but perhaps there's a way to make this happen.

Pull all funds from all banks? Don't use credit? Stop signing debt-related contracts? (Is there any other kind?) Pay wish cash, not plastic? Rent, don't purhase? Something CAN be done; it's only a question of willpower.

Sun, 07/01/2012 - 00:12 | 2578039 williambanzai7
williambanzai7's picture

I just read about the ridiculous thought process being applied by some of Barclays top 15 shareholders.

"If he leaves who will lead the bank?"

This is the kind of stupidity that results from the failure to prosecute.

The reason they don't worry about being shut down is the system is being held hostage by financial suicide bombers.

Sun, 07/01/2012 - 12:41 | 2578624 mudduck
mudduck's picture

"If he leaves who will lead the bank?". Tony Hayward is available.

Sun, 07/01/2012 - 17:12 | 2579182 Herd Redirectio...
Herd Redirection Committee's picture

So do 'the Crown' and the Rothschilds admit to being Top 15 shareholders (in every TBTF bank worldwide), or do they have so many holding co.s and fronts that they only occupy spots 16-120?

Sat, 06/30/2012 - 23:48 | 2578015 williambanzai7
williambanzai7's picture

Oh, I forgot to mention the latest ploy: "I'll fall on my sword by foregoing this year's bonus..."

Cry me a river.

Sun, 07/01/2012 - 01:32 | 2578097 ACP
ACP's picture

Just a thought for a graphic...someone made a comment about Panzers protecting Germany against the countries coming after Germany's money and I immediately thought of Kelly's Heroes. Maybe a "Merkel's Heroes" graphic or something. It would be interesting to see what you come up with? Again, just a thought...

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