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US Homeowners Launch Class Action Suit Against LIBOR-Manipulating Banks

Tyler Durden's picture


Nearly four years ago, we started a series of articles in which we methodically presented evidence that LIBOR was manipulated. Then, in late June, the biggest (to date) bank conspiracy was exposed, in which it was found beyond a reasonable doubt that at least one, and in many case all (including the BOE and Fed) were if not engaging, then certainly aware of numerous instances when daily USD LIBOR fixing was fudged one way or another for various non-fiduciary, read illegal purposes. When our conspiracy theory was confirmed to be conspiracy fact (as usual), we suggested the following: "Our advice to anyone who had an adjustable rate mortgage in the period between 2005 and today: speak to a lawyer immediately about suing the living feces out of Barclays, and all other banks who crawl out of the woodwork with purported settlements. Because due to their undisputed mark manipulation, it is absolutely safe to say that ARMs, which rely on Libor for interest rate formation, were grossly manipulated by the same idiot traders who left written evidence of their manipulation year after year. Now it is their turn to pay." As of last night, this too has occurred, after several homeowners, aka Adams et al (Southern New York, 12-cv-07461) launched a class action lawsuit against Bank of America and all other LIBOR banks, accusing the defendants of "unjustly enriched themselves" by manipulating the rate, which allowed them to increase the payments by homeowners on adjustable rate loans, and boosting profits.

This is merely the beginning: very soon, as expected (and as confirmed by surging legal fees and rapidly rising, but nowhere near rapidly enough, legal reserves) any and every homeowner will be seeking some form of equitable treatment for being taken advantage of in what until now was seen as an impossible act of mega collusion, for the very same reasons why time after time the sanctity of BLS and other US-sourced data is taken for granted: it just can not happen. Until it does that is, and it is in the interest of some overzealous DA to expose the corruption to its rotten roots.

Form Bloomberg:

The plaintiffs asked for class-action status, a jury trial, cash compensation and an order permanently blocking the banks from rigging Libor. Class-action status allows plaintiffs more leverage in negotiations with defendants. Lead plaintiffs direct the litigation on behalf of the group, determining strategy while usually reaping the largest share of any verdict or settlement.


Barclays Plc (BARC), Britain’s second-biggest lender by assets, is the only bank to have settled with regulators over the rigging of Libor. The London-based company paid a record 290 million pound ($469 million) fine in June. Chief Executive Officer Robert Diamond and Chairman Marcus Agius resigned in the aftermath.

Those wishing to enjoing the class action lawsuit are urged to write to the Plaintiff's attorney:

John Walter Sharbrough
John W. Sharbrough, III, PC
114 Eaton Square
Mobile, AL 36608
(251) 432-1441
Fax: (251) 432-5297

Full complaint presented below in its entirety.



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Mon, 10/15/2012 - 10:58 | 2890467 Lost Wages
Lost Wages's picture

Ben will need to leave the printing press on overnight to pay the settlement for the banks.

Mon, 10/15/2012 - 12:11 | 2890719 prains
prains's picture

24' cube vans will be in short supply very soon

Mon, 10/15/2012 - 10:59 | 2890470 fonzannoon
fonzannoon's picture

I am a little lost here. Didn't anyone with an adjustable rate loan in that period, and ever since, benefit from rates being manipulated down? I would think it would be municipalities and certain bond holders (floating rate?) that would be pissed off and launching suits.

Mon, 10/15/2012 - 11:02 | 2890480 Seasmoke
Seasmoke's picture

yes i am missing this one too.....its seems ARM were able to pay less and the fixed rates seemed to pay more

Mon, 10/15/2012 - 11:37 | 2890578 Plymster
Plymster's picture

Yes, you would think it would be savers and bond holders suing the fuck out of the banks.  For example: Injured party stashed $100,000 in a CD yielding 1% based on the fact that the bank can get a better rate from LIBOR.  But for that manipulation, the CD should have been yielding 2%.  Injured party wants his $2k per year for the last 20 years of known LIBOR manipulation.

Mon, 10/15/2012 - 11:38 | 2890584 ParkAveFlasher
ParkAveFlasher's picture

I had an ARM at that time but I lost it in a boating accident.

Mon, 10/15/2012 - 11:03 | 2890484 CPL
CPL's picture

Why?  Municipalities took it as a boom and adjusted property taxes accordingly.  They benefitted while the market was hot, now that it is not.  Everyone is fair weather friends in that situation.  

The home owners, the banks, townships and municipal levels are all in the same greed powered boat that is out of fuel.  Again...nobody but the lawyers benefit here.  Waste of money and time.

Mon, 10/15/2012 - 11:19 | 2890511 fonzannoon
fonzannoon's picture

Muni's could have been issuing bonds at much higher tates. They would have "adjusted" property taxes anyway.

edit- I meant rates but I am leaving tates. It looks funny.

Mon, 10/15/2012 - 11:11 | 2890513 waterhorse
waterhorse's picture

"Again...nobody but the lawyers benefit here."

So your answer is to ignore outrageous frauds because the lawyers will profit.  Got it.  Which TBTF do you work for?

Mon, 10/15/2012 - 12:17 | 2890667 CPL
CPL's picture

It's a moot point.  System is broken and like NDAA, SOPA and all the rest, guess what?  Nobody in the government gives a flying fuck.  Nobody.  You've been bamboozled, screwed, scammed, stolen from and here you are alive and hopefully healthy.


I'll restate, waste of time and energy.  If you were given the opportunity to attempt to salvage less than 2% of your price in court is that a tiny boon, a boon you could gain back by the numerous opportunities in scrap and salvage.  Or a minor distraction from other major problems both local, domestic and international.


Seriously they are only talking a couple of grand here.  If you junked and scraped 40 tube tv's (copper, aluminium, nickle...older the tv the better) that's around 1500 in your pocket for about a day's work.  Believe me, put an ad in craigslist and say you do electronics recycling, pick up an old tub to contain the glass from the tube.  Bam.  Money in your pocket.


That generous "offer" by the lawyers is faustian at best, then a complete and total paper work nightmare at worst.  Do yourself a favor and let it go.  The price isn't coming back and things need to get done regardless of the wishes of a bunch lawyer thinking up ways to shake the pennies left out of people's pockets.  There is a small and insignificant "win" if waiting for that train to come in.  If you are proactive and put your energy into other things, you win, not lawyers, courts, banks or the government.  You win.


How's that for an offer?

Mon, 10/15/2012 - 13:05 | 2890930 MachoMan
MachoMan's picture

Realistically, as an individual, it would be cost prohibitive to pursue a lawsuit...  However, as a class, it is not.  At the end of the day, these folks are going to have to sign up for the class and send in de minimis paperwork...  someone else will likely be doing everything else.  Sit back and collect a check.  Cash the check and split it between deleveraging and the purchase of inflationary hedges. 

Mon, 10/15/2012 - 13:22 | 2890986 CPL
CPL's picture

It's the amount of time involved.  It is the only commodity on the planet that is really worth anything.  Gold, silver, dollars, oil are all methods of transferring time and effort.

A couple of grand might make the difference in someone's household, agreed, but legal stuff is a "hurry up and wait" situation.  It might be ten years, might be never.  This is only the lawyers putting out the call for clients, it's not the class action suit itself.  This is the paper work time.  I'm hoping people keep the reward in perspective to what it really is worth.


If the settlement comes in five years, what is a couple of grand going to be worth?  Nothing if the printing continues.


In the current print hell or come high water situation, the unintended consequence is people waste the one thing they can never buy or get back.  Their time.  Salvage that and any individual wins, system loses.  Four years ago I was spitting teeth with the Tylers and everyone else in the Alt-econ circles on the matter.  If the suit came out might have been worth the effort.


Now medium ground beef is 5 bucks a pound, bread made with real flour is 4 bucks a loaf and milk is breaking it's regressive pricing structure to 10 bucks in Canada, not just here in a resource rich nation, it's everywhere now.  Those three things count for more than a lawyers legal wet dream.  The civil suit serves no purpose but strawman to slap around and is as contrived as the US presidential elections.  It sucks ass, but that's the world now.

Mon, 10/15/2012 - 13:43 | 2891333 MachoMan
MachoMan's picture

You're dancing all around it...  How does someone waste their time filling out paperwork for a couple hours to make a few grand?  The lawyers are doing all the work...  all the claimants need to do is fill out a claim and provide de minimis documentation...  [even if they won't provide it, the documentation should be available through discovery, in which case the claimants won't have to do anything to prove their own cases].

The time is going to be nothing for the claimants.  You might say it's a waste of time to file, and you may be correct, but it isn't your decision...  if time is going to be a real constraint, then I can't fathom how you would overlook opportunity cost in your evaluation.  The simple fact is that most people have ZERO opportunity cost in spending a few hours filling out a claim...

The lawyers may win some incredibly large spoils...  but this is also what incentivizes them to be the first mover...  and to get these cases heard and in the spotlight.  Right or wrong, it's the policy decision we have made.

Mon, 10/15/2012 - 14:57 | 2891578 CPL
CPL's picture

Correct, but do you really want to feed the beast more money?  This is a systemic problem, not a legal one at this point.  The system rewards loss as frequently as gains, legitimate or not.  Morally it's the correct course of action.  Ethically it is the exact reason we are in the place we are today.


No, starve it to death and let it die.  If I want to keep rabbits out of my garden, I could sit next to my garden armed and ready.  Or I could invest into the high technology of a stick, a string and a pie plate to spook critters that eat my garden.  My folly in the situation is if I buy into letting the rabbits into my garden paradim is in eight weeks I'll have more rabbits and less garden.

Mon, 10/15/2012 - 15:47 | 2891715 MachoMan
MachoMan's picture

How does extracting money from the banks via a class action lawsuit "feed the beast more money"?  Further, if money will be printed either way, then what negative impact does mitigating the cantillon effect have?  You're dancing around it still...

Mon, 10/15/2012 - 16:42 | 2891851 CPL
CPL's picture

It's called insurance.  The Banks have it, they own the insurance industry.  We live in a FIRE economy with all the worst aspects of keynesian ideology and complete and total hegemonic control over all aspects of it.

Who will the cost of the settlement be downloaded to?  

You and I and because the cantillon effect is not just reserved for commodities and goods.  The Insurance industry will, can and does pass those costs to everyone.  They are the industry that wrote the book on paying Peter, to pay Paul to pay Mary.  The insurance industry, just like a casino will squeeze the "winnings" out of their hands regardless.


Expecting the devil to cut you slack under contract is a little stupid.  Especially the banking and insurance industry, which are one and the same beast.

Mon, 10/15/2012 - 17:26 | 2891962 MachoMan
MachoMan's picture

Are you planning on ever addressing my point?  What does any of that have to do with whether or not it is good for someone to participate in the class action suit?  All you're telling us is that the banks will be bailed out from any losses.  Ok.  However, that is irrelevant.  The entire post is off the mark.

If you're attempting to impose some mathematical nullity, then that too is overbroad in that not all of the claimants will pay insurance premiums equally...


Mon, 10/15/2012 - 15:51 | 2891728 pufferfish
pufferfish's picture

Agreed, if you chase this: Your a welfare queen. We all know where the money for the settlement came from. Your own pocket.

Get off your ass and aid the changing of the system. If enough people did this rather than chance further.


There again, maybe this is aiding the system…


Who knows, its a real mess in there.

Mon, 10/15/2012 - 16:48 | 2891859 CPL
CPL's picture

Like the Chinese Fin Minister talked about last week.  It's a mess, everyone should catch their breath for a year and take stock of what the options are.  

Too much reaction, too many committees, too much linear scale, too broad of a lateral scale.  We live in an age of excess and there is no greater temple to it than the FIRE industries.

Mon, 10/15/2012 - 21:05 | 2892683 emersonreturn
emersonreturn's picture

i know lawyers totally pissed and totally willing to work for free simply to begin to take back some power, basically to  begin...they are as abused by TPTB as i am.  it's important to fight on as many fronts as possible. IMO. dissent one step at a time.  refuse to pay taxes...IMO, that's the next step, after refusing to enter the world of credit and banks.

Mon, 10/15/2012 - 14:07 | 2891427 Thisson
Thisson's picture

Perhaps, but here there are no provable damages.  Causation is also at issue.  This case is a LOSER.

Mon, 10/15/2012 - 15:45 | 2891710 MachoMan
MachoMan's picture

Damages will be proven by a battle of the experts...  as will causation.  In the end, it's going to be poor pitiful harriet homeowner versus assclown bank...  who is the jury going to side with?

Mon, 10/15/2012 - 16:57 | 2891885 CPL
CPL's picture

These are the same experts that were ignored and belittled for their findings in 2006-2007.  Nothing has changed in their presentation and optics.  Slightly more people understand the situation now and are waking up to the fact they don't have a home anymore or a pot to piss in.


...and why would you assume a Jury would be involved?  Deliberations can also be done by a single judge assigned to the court appointment out of a pool.  I hardly expect the same amount of coverage as something like OJ simpson in the 90's.  I would accept in a fair legal universe that there would be a hope in hell of seeing justice and remittance given but we don't live in that universe.  We live in this one where shenanigans and loading a court room is easy as court process submissions for a couple of bucks.  

Again.  The rule of law is no longer appearent so expect an outcome that reflects that.

Mon, 10/15/2012 - 17:33 | 2892137 MachoMan
MachoMan's picture

False dilemma....  and misdirection through argument from induction...  the fact that people were ignored in 2006 as general market announcers has nothing to do with what a jury would decide when presented solely their testimony and tasked with choosing a winner.  Whether a juror is an expert about a particular issue going into the lawsuit has nothing to do with whether they will have any knowledge coming out of the lawsuit...

A jury will be involved because a jury trial has been demanded...  as a matter of right...  [it helps if you would actually look at the complaint].  A judge will handle class certification, among many other things, but this one will go to the jury if it isn't knocked out via dismissal or summary judgment.

You are speaking about general ills of the legal system without applying them to this case.  Complaining because this case will not get as much coverage as the OJ case has nothing to do with whether there will be a fair trial... 

The rule of law is completely apparent...  it is the law after all...  the question is whether it will be upheld, as written... 

Tue, 10/16/2012 - 09:54 | 2894438 CPL
CPL's picture

Then there is nothing I could do to convince you of the potential of time wasted, you are programmed to believe that the system can generate an outcome to the home holders benefit and you are happy enough chewing on that bone. 

As the devils advocate in this discussion, I see it as the defense's position to illustrate fault of homeowners for ignoring due diligence and caveat emptor.   I personally would examine every last one of the names on list to see if any of the claimants had reneged on their contractual obligation to pay their mortgage.  All it would take is a handful for a Judge to tell the lawyer's acting on behalf of the litigants to go sharpen the pencil and come back later.


If the lawyers acting on behalf of the US Homeowners Association wanted to effectively put target on the back of someone they would perform a tactical raid.  Always with the individual court cases when the subject should be broken down into smaller litigation chunks.  David and Goliath nonsense, better to swarm and occupy their entire defense team with 1000's of legal requests.

You want to win fast?  Zerg the fuckers. 

Don't let their lawyers catch their breath and as another poster mentioned, there are thousands of lawyer eating dog food right now.  There's your paper processing army.  Don't care how many senior partners they have on staff, you go after their logistics. 

You have the numbers.  Act like it.  You can make sure all their precious sailing weekends are simply ruined for five years.  By the end of it your end goal is to burn them out professionally.  Give them no sleep for years, break them from mind to soul.  Crush them with their job.  You can do nothing to change the shape of the world, but you can take chess pieces off the board.  Run them to the end of the world with Entropy and beg for death or a new career.   

Again.  Waste of time in the current form.  You want to go to war, you bring an army, not a greeting party.  Feel like I'm having a conversation with the OWS organizers on operational placement....shades of last year

Mon, 10/15/2012 - 11:04 | 2890491 Dr. Engali
Dr. Engali's picture

Yeah it doesn't make much sense to me either. I must be missing something.

Mon, 10/15/2012 - 11:26 | 2890555 francis_the_won...
francis_the_wonder_hamster's picture

Keeping rates artivicially low enticed homebuyers to make imprudent purchases that they otherwise probably would/could not have made.  Lower rates mean more people can buy, even when they shouldn't.  That's basically the lawsuit......although I'd love to hear the case made against the destruction of proper price discovery in home prices.

Mon, 10/15/2012 - 11:41 | 2890593 ParkAveFlasher
ParkAveFlasher's picture

Listen, to dispel the myth yet again, if you bought the right house in the right location at the right price it doesn't matter who what where how and why you financed it. 

If you didn't buy the right house in the right location at the right price, I feel for you, but only a little bit.

Mon, 10/15/2012 - 12:19 | 2890756 Nobody For President
Nobody For President's picture

Better was to buy the right land at the right time and the right price and build your own fucking home - a home to live in, not a god damned investment - and build it a month at a time, a few boards at a time - no mortgage, no debt, no payments to the steenkeen bankers.

Worked for me - can for you young 'ens.

Mon, 10/15/2012 - 12:31 | 2890801 ParkAveFlasher
ParkAveFlasher's picture

Get me on that boat! 

Did you rent equipment to dig the foundation as well?  Just curious.  I put a lot of sweat equity in my own home, replacing the kitchen and bath myself as well as all electrical, water and waste. 

Mon, 10/15/2012 - 17:10 | 2891914 CPL
CPL's picture

Depends on the type of foundation.


Concrete slab is cheapest and shittiest in terms of resale but it is the easiest to maintain obviously.   Cracked foundations on a slab doesn't matter much, your subfloor, insulation and placement of the plumbing does. 

Make plans to include 400 sq ft on the main floor of the building to keep HVAC/Electrical/water otherwise you'll build a beautiful place with zero home services...well unless you are building a cottage.  Then think tiny and subsitution.  My parents place is on a slab on the Canadian Shield, but with some tweaks to how the wood stove distributes heat and some forced air duct work acting as a boiler for both the water and the central house heating.  We've nearly got it off the grid completely. 

Concrete basement acting as your "container" for heat/water/electrical is more expensive.  My second oldest son works in construction after school and for a 45 by 80 basement insulated and with weeping tile starts at around 70-110k (depending on quality of concrete and the person pouring it, not the company) with permits and inspection.

Mon, 10/15/2012 - 12:11 | 2890723 Dr. Engali
Dr. Engali's picture

By that measure shit maybe Sueing the Federal Reserve too? The Federal Reserve is the largest manipulator of rates in the world.

Mon, 10/15/2012 - 12:29 | 2890797 koncaswatch
koncaswatch's picture

Your comment on "price discovery"... priceless!

Mon, 10/15/2012 - 11:35 | 2890572 fuu
fuu's picture

Didn't the manipulated rates induce the bubble/boom?

Mon, 10/15/2012 - 11:24 | 2890549 jayman21
jayman21's picture

I am a little lost here. Didn't anyone with an adjustable rate loan in that period, and ever since, benefit from rates being manipulated down? I would think it would be municipalities and certain bond holders (floating rate?) that would be pissed off and launching suits.


I had the same thought.  I had a look at the compliant.


page 14:

61.Defendants, the banks that comprised the U. S. dollar LIBOR panel during theClass Period (as defined below), were motivated to manipulate and increase LIBOR on or aboutthe first day of each month because they knew that most adjustable rate mortgages and promissory notes contained a clause establishing the first day of the month as a “Change Date”and that the new rates would be set on that day.

Mon, 10/15/2012 - 11:27 | 2890556 fonzannoon
fonzannoon's picture

This is why I was a B- student and you were obviously an A student. You made it to page 14 and I made it to "US Homeowners Launch Class Action Suit Against LIBOR-Manipulating Banks"

I still think the municipalities and floating rate bond holders have a real case. I will hold my breath and wait for Fidelity to do the right thing...

Mon, 10/15/2012 - 11:38 | 2890586 jayman21
jayman21's picture

I would love to see something done.  The whole system is rotting to its core.  Maybe enough of the sheep will wake up and begin the reset process.  From here, I have not see any reset and in fact I would argue that the cronyism has gotten worse.  Where is Jon Corzine?

Mon, 10/15/2012 - 11:42 | 2890595 fonzannoon
fonzannoon's picture

If I had a silver dime for everytime someone around me shrugged their shoulders and mumbled "there is nothing we can do about it" I would have a lot of silver dimes.

Mon, 10/15/2012 - 12:18 | 2890750 jayman21
jayman21's picture

I think you would very quickly see a shortage of silver dimes.

Mon, 10/15/2012 - 11:43 | 2890601 AlaricBalth
AlaricBalth's picture

On July 13, 2012 I posted the following;
"Large pensions use asset-swapped derivatives to receive Libor plus margin in an attempt to maximize their return. Suppression of Libor rates would have lowered the yield of these swaps."

If anyone has a case against the Liborgate banks it is the large public and private pension plans. Basically, any receiver of interest indexed to Libor.

Mon, 10/15/2012 - 14:13 | 2891438 Thisson
Thisson's picture

I think you're incorrect, because most pensions can't invest in instruments of that nature.  Municipalities, yes.  Pension funds, no.

Mon, 10/15/2012 - 14:34 | 2891489 AlaricBalth
AlaricBalth's picture

You would be correct in stating that individual pensions (401K and IRA) cannot invest in those types of instruments. But I am referring to State, Municipal and Corporate (such as GM or Boeing) pensions. If you go back to your comments on July 13, you and I covered this issue before.


Large pensions such as CalPERS and New York City Retirement use Libor Swaps to hedge risk, usually interest rate risk, or to maximize returns. The Illinois State Teachers Pension took massive losses 2 years ago due to derivatives.

"Dale Rosenthal, a former strategist for Long Term Capital Management, the hedge fund known for its epic collapse in 1998, and a proprietary trader for Morgan Stanley, has seen his share of financial complexities.

But when shown a seven-page list of derivatives positions held by the Illinois Teachers Retirement System as of March 31, obtained by Medill News Service through a Freedom of Information Act request, the University of Illinois-Chicago assistant professor of finance expressed disbelief.

“If you were to have faxed me this balance sheet and asked me to guess who it belonged to, I would have guessed, Citadel, Magnetar or even a proprietary trading desk at a bank,” Rosenthal said."


Mon, 10/15/2012 - 11:23 | 2890551 Benjamin Glutton
Benjamin Glutton's picture

the rates were not always manipulated lower...


  • Lawsuit claims the Libor rate rose ‘artificially’ on the first day of the month – the days when many mortgage rates are calculated
  • Barclays, RBS, Lloyds and Bank of America all named in class-action lawsuit

A 65-year-old American woman who lost her home in the credit crunch is leading a class-action suit against 12 of the world’s major banks for their part in the financial crisis.

Annie Bell Adams claims banks including Barclays, RBS and Lloyds, manipulated the Libor rates to make mortgage repayments more expensive than they should have been.

The suit alleges the Libor – the rate at which banks lend to each other – was artificially changed at times when it would have a big impact on adjustable mortgage rates, ‘unjustly enriching’ the bankers at the cost of mortgage-holders losing their homes.

The class action lawsuit, originating in Alabama, alleges the rate-fixing meant homeowners paid thousands more than necessary between 2000 and 2009 – with the knock-on effect causing many families to lose their homes.
Mon, 10/15/2012 - 11:44 | 2890606 serog
serog's picture

Agreed.  I had an ARM during this period and the rate kept going lower.  If I join this suit I'll probably get counter-sued and have to pay them the difference.

Mon, 10/15/2012 - 11:48 | 2890632 fonzannoon
fonzannoon's picture

holy shit that was funny. It's a trap!

Mon, 10/15/2012 - 12:34 | 2890810 Stoploss
Stoploss's picture

For the past ten years anyone who bought property with or without an ARM did so in a FED funds rate environment of around 5%.

The majority of ARMS were sold between 04 and 07.

ARM's are tied to libor, not FFR.

Anyone remember what happened when libor was 7+% in late 07 - 08??  The ARM holders abandoned their properties, that's what happened. ARM's are designed to reset UP, not down. 

Then, all of a sudden, LIBOR, dropped to below 2% along with the FFR being brought down as well.

Now.. Who did that help?


The final result is what we have now, basically zero rates across the board. Who benefits from low rates?

What do low rates do to savers and job creators? Especially job creators?

So, the newest ARM recipients have benefitted the most from zero rates and low libor, not prime borrowers.

But no matter how low rates go, you can't pay for the privelage, unless you have a job.

Low rates kill job creation, but allow for lower payments due to reduced rates that kill job's to allow for lower payments due to reduced rates that kill job's to allow for lower payments due to reduced rates.................


Rarouk, where the fuck are you???

Mon, 10/15/2012 - 11:00 | 2890472 Seasmoke
Seasmoke's picture

homeowners will get thousands, lawyers will get millions and banks will keep billions......

Mon, 10/15/2012 - 12:33 | 2890809 Peter Pan
Peter Pan's picture


Beautifully said.

Mon, 10/15/2012 - 11:00 | 2890475 CPL
CPL's picture

What are they going to do?  Sue them because their homes flatlined and readjusted themselves to market value after the bubble burst and destroyed the economy?  The home owners are just as culpable as the banks, just as greedy and stupid.  The consumer drove the price up with property agents and they are going to cry hard now?  The banks gave them the rope to hang themselves with.


What a waste of time for both the US home owners association and their members.  Only ones getting rich in that situation are the lawyers, all they are doing is adding to total cost on a depreciated asset.


aka throwing good money after bad.  

Mon, 10/15/2012 - 11:08 | 2890505 waterhorse
waterhorse's picture

"The home owners are just as culpable as the banks, just as greedy and stupid."

Remind me again HOW the homeowners manipulated LIBOR, came up with derivative Ponzi schemes, created the MERS system, participated in robosigning fraud and committed REMIC fraud.

Mon, 10/15/2012 - 11:14 | 2890524 walküre
walküre's picture

Banksters "you scratch my back, I scratch yours" and at the end of the year we pay ourselves million Dollar bonuses on a rigged $800 trillion Dollar derivatives casino.

Forget class action lawsuits.Only gallows and guillotines will reestablish something that resembles normalcy and allows a restart of the system.

Throwing all their collective asses in jail won't solve anything. Baby drowned and bathwater has been thrown out.

This is completey FUCKED UP and irreversible with our current system of central banks and governments. Politicians are funded by banks which are funded by central banks. They rig, manipulate, lie, cheat and corrupt every fiber of our economies and nations.


Mon, 10/15/2012 - 11:18 | 2890533 donsluck
donsluck's picture

+1 and although I agree with you, don't forget the home "owners" (hahahaha) did some lying too. Still, it is incumbent upon the lender to vet the qualifications of the borrower to pay back the loan. In any case, fraud is fraud and letting it go is a big part of our current problems.

Mon, 10/15/2012 - 21:33 | 2892780 StychoKiller
StychoKiller's picture

                   Excerpt(s) from "The Big Short":

"In Bakersfield, CA., a Mexican strawberry picker with an income of $14,000/yr and no English was lent every penny he needed to buy a house for $724,000."

"By May 2007, however, there was a growing dispute between Howie Hubler and Morgan Stanley.  Amazingly, it had nothing to do with the wisdom of owning $16 Billion in complex securities whose value ultimately turned on the ability of a Las Vegas stripper with five investment properties, or a Mexican strawberry picker with a single $750,000 home, to make rapidly rising interest payments."

"'Who takes out a home loan and doesn't make the first payment?' asked Danny Moses, putting the matter one way.  'Who the fsck lends money to people who can't make the first payment?' asked Eisman, putting it another."

Mon, 10/15/2012 - 12:11 | 2890710 CPL
CPL's picture


Who cares.  Seriously.  

Let's break it down.


  • The best action offered is a civil suit for a couple of billion dollars.  Correct me if I'm wrong but the number is around 4 trillion lost in capital and around 120 trillion in derivatives, correct?
    • Who really wins in this situation?
    • Does a couple of billion even light a candle to the true issue?  No.  
  • Do people go to jail for decades over this?  Doesn't look like it in this current situation.  
    • So far it's musical chairs.  The bastards that did the manipulating are now in BETTER paid positions with MORE power
    • The rule of law is meaningless, everywhere.
  • It's a manufactured strawman to get angry at.
    • It's so easy to get pissed at it, slap around, bad banks..BAD banks!
    • Same banks in the meanwhile have absorbed 100's of trillions of dollars of printed capital over the last five years.

So is the number next to the civil suit remotely realistic, or does it smell like fifty lawyer trying to get a cash money cheque.  I would believe the suit was legitimate if it walked in with a multi TRILLION dollar settlement statement.


Don't get me wrong, people got very badly hurt with this bullshit.  But it certainly didn't cause them to beg for it to stop either.  The Mob and the Banks are justs as responsible.  Greed versus need.  What the fuck did people think their RRSP/401k's were doing while buying homes for low or no money down?


Complete nonsense.  Takes two to tango and buying things you don't understand doesn't excuse anyone from responsibility.

Mon, 10/15/2012 - 12:55 | 2890888 waterhorse
waterhorse's picture


"Complete nonsense. Takes two to tango and buying things you don't understand doesn't excuse anyone from responsibility."

False equivalency.  The deck is badly stacked against the 99% and this is not a level playing field by any means.  As far as apportionment of blame for the mortgage fraud, the FBI states 90% caused by industry insiders.

Mon, 10/15/2012 - 13:21 | 2890976 MachoMan
MachoMan's picture

The reason why the country (world) continues to muck around in the cesspool is ultimately the failure to admit fault.  Once homeowners and the public in general can collectively admit that it was greed that drove them and that their materialistic fantasies were not only impractical, but completely idiotic....  then, and only then, can we collectively move forward.  If we fail to make this collective acknowledgment, then we are doomed to repeat our mistakes.

At the end of the day, bankers are merely drug pushers.  Inherently, humans demand to receive today and pay tomorrow.  Those humans with discipline in these regards have a better chance of overcoming the grinder.  Those humans who seek to exploit these inherent traits tend to rise and succeed in our society.  There is absolutely, positively culpability with one desiring material things to borrow into the future to receive them.  Time to quit fighting reality.  If you borrow to pursue an endeavor, you are by definition a speculator.  If your endeavor fails, then you must repay your loan...  If your endeavor succeeds, then you may receive the spoils.  Homeowners are crying over nothing but sour grapes.  While the prices are increasing (and wealth being miraculously created on paper), we heard nothing of the immoral practices...  it is only after the ATM gets shut off and the decision becomes objectively imprudent...  do we hear the first complaint.  Again, sour grapes.

If we fail to make this acknowledgment, we'll be right back here in 60-80 years...  maybe longer with more sophisticated monetary mechanisms (obfuscation).

Mon, 10/15/2012 - 13:36 | 2891208 CPL
CPL's picture

The FBI has it's own problems and rate manipulation of LIBOR while disgusting was very appearent at that time.  


I don't buy a car with no ability to drive it.

I don't buy a home with no ability to maintain it.

I don't invest and manage the macro level of my investments and property by believing Infotainment TV channels (CNBC, Bloomburg).


I get the fact everyone is starting to wake up and they are PISSED.  But they are pissed five years too late.  The warnings from Analysts started in 2006.  Anyone with a brain knew that minimum wage could never possibly ever in a million years afford a half million dollar home.  When it was happening everyone and their brother was figuring out how to manipulate the system to stay LONGER.


Remember all this stuff?


It was two years ago.  Memory is short.  The homeowners themselves took the issue to task and repoed their own costs back.  Now that was an effective method of adjustment.  So I wouldn't be holding your breath on people getting a thin red dime out of the courts.  The courts only have to refer back to those that defaulted and summarily shit all over the legal party of the US Home owners association.

The civil case hasn't got a hope in hell, because venegance was already done.  


So to those thinking of joining the class action suit, if you defaulted on your home and are still living in it YOU WON'T GET SHIT...because you've already taken your pound of flesh.


Again, this a is legal party.  nothing more.  Read the damn offer.  Too good to be true, usually is.

Mon, 10/15/2012 - 12:23 | 2890769 Nobody For President
Nobody For President's picture

Hey, the US of A IS a service economy, and lawers are providing a service.

We sure as hell are not making much of anything these days except piles of paper.

Mon, 10/15/2012 - 11:02 | 2890479 Hacked Economy
Hacked Economy's picture

Can I get in on that lawsuit?  Oh wait...I selected a smaller house that met my needs, set up my shorter-term fixed mortgage through a smaller, more reputable bank, and then proceeded to pay it down quickly.  I didn't get screwed because I acted responsibly.

Can I get an honorable mention, though, if the lawsuit leads to a payout?

Mon, 10/15/2012 - 11:30 | 2890557 Aegelis
Aegelis's picture

Since you're part of the good example, no years of litigation for a hand-out for you, but you also won't have someone else putting corks on your forks so that you don't injure yourself in the future.  Enjoy the steak, others have to spoon themselves government issued baby food.

Mon, 10/15/2012 - 13:22 | 2890984 ParkAveFlasher
ParkAveFlasher's picture

Clearly, Hacked Economy should be punished.

Mon, 10/15/2012 - 13:23 | 2890987 MachoMan
MachoMan's picture

No.  If there is one thing you must learn about our recent past and foreseeable future, it is that all acts of prudence will be mercilessly punished.

Mon, 10/15/2012 - 11:03 | 2890482 realtick
realtick's picture

Is The Data Better Off Than It Was Five Years Ago: Industrial Production

Mon, 10/15/2012 - 11:07 | 2890485 Cognitive Dissonance
Cognitive Dissonance's picture

At some point or other lawsuits such as this will be deemed illegal or counter to the greater (bankster) good and thus null and void.

Many of us have no idea how far they will push this farce because we (for the most part) are always behind the curve with regard to accepting that the current state of affairs in fact exists. No sooner do we push past our denial and realize that "A" has happened, but the powers have already begun to push "B" and "C". 

False hope chains us to the past.

<Shock and awe is all its domestic glory.>

Mon, 10/15/2012 - 11:09 | 2890509 waterhorse
waterhorse's picture

"At some point or other lawsuits such as this will be deemed illegal or counter to the greater (bankster) good and thus null and void."

I'm afraid you are absolutely right.

Mon, 10/15/2012 - 13:25 | 2890995 MachoMan
MachoMan's picture

Not in the slightest.  Why would you bother to make an express, objective indicator of your control over a society when you can simply continue under the status quo and end with the same result (control)?  Pay out the settlements and then continue to backstop the culpable parties with freshly printed notes.  Ratchet up taxes, if necessary, to pay for this bailout.

Mon, 10/15/2012 - 11:32 | 2890568 Drachma
Drachma's picture

Ah, fear, belief and hope, truly the milieu of the ignorant.

In my youth I use to dream

Of love and peace and pastures green

I did not see the telltale signs

I could not read between the lines

And when the clouds came rolling in

I wept, I cringed and finally with a grin

For in my soul there is a light

And since my youth I've learned wrong from right

There is no denying that which exists

Except for those whose delusion persists

In keeping them tangled in endless untruth

In a perpetual state of coddled youth

Mon, 10/15/2012 - 12:46 | 2890858 CPL
CPL's picture

Very nice.  Would make a nice ballad.

Mon, 10/15/2012 - 11:04 | 2890487 1eyedman
1eyedman's picture

as i understand it libor was manipulated --lower---, which helped homeowners (myself included) order to win, they need to show they were damaged somehow.....

Mon, 10/15/2012 - 11:05 | 2890488 GolfHatesMe
GolfHatesMe's picture

Lawyers Manipulate US homeowners to launch class action suit against LIBOR manipulating banks,


Headline fixed

Mon, 10/15/2012 - 11:05 | 2890494 rajc
rajc's picture

"ompany paid a record 290 million pound ($469 million) fine in June"  which was noted as drop in ocean.

Mon, 10/15/2012 - 11:06 | 2890496 alstry
alstry's picture


But when we all milk off a system that relies on fraud to function, we better start thinking about a new system because you know it's an

It is amazing that people are still employed in the financial services industry when IBM Watson and AI could instantly transform brick and mortar financial institutions to NetFlix...there are already banks in Europe that no longer accept cash and Google Wallet type apps is transforming everything.

Mon, 10/15/2012 - 11:21 | 2890544 donsluck
donsluck's picture

Sure, rely on electronic money,'s gone.

Mon, 10/15/2012 - 11:06 | 2890499 Gunga
Gunga's picture

10/15/12- US Homeowners launch class action lawsuit against banks for LIBOR manipulation

dateline 10/16/12- US Justice Department settles lawsuit with banks for a trivial fraction of the losses incurred by the American people and an apology to the banks for causing them to have to do so much paperwork to clear the air on this trifling concern of the people. Oh and of course no criminal wrongdoing will be found or admitted . Not that the Justice Department would dare accuse the banks of wrongdoing, it's those upset mundanes that caused the unnecessary investigation. Sorry again about all that paperwork, charge us back for it if you want Jamie.

Mon, 10/15/2012 - 11:12 | 2890519 LongSoupLine
LongSoupLine's picture

a win for lawyers, homeowners will be rewarded enough for a cup of 7-11 coffee

Mon, 10/15/2012 - 11:21 | 2890546 donsluck
donsluck's picture

It's easy to deride and hate lawyers until you need one.

Mon, 10/15/2012 - 11:28 | 2890560 exi1ed0ne
exi1ed0ne's picture

And we need them because lawyers are writing the laws. 

Mon, 10/15/2012 - 11:46 | 2890618 LongSoupLine
LongSoupLine's picture

hence why we "need", no, it's easy to deride them even when you need one.

Mon, 10/15/2012 - 11:48 | 2890625 Schmuck Raker
Schmuck Raker's picture

A single drop of Banker blood in a cup of 7-11 coffee would make it the most delicious thing I've ever tasted.

Mon, 10/15/2012 - 12:12 | 2890725 Terminus C
Terminus C's picture

be careful with that blood... it will turn you into a vampire.  Drink enough and you'll turn into a squid too.

Mon, 10/15/2012 - 16:32 | 2891825 exi1ed0ne
exi1ed0ne's picture

This thread reminds me of the joke about a vampire making tea. . .

Mon, 10/15/2012 - 11:13 | 2890522 FiatFapper
FiatFapper's picture

How come there's no article about RBS trying to fob off branches to Santander?

They split Northern Rock into 'good bank' / 'bad bank', guess who got shafted with bad bank toxic debt?

Then a consortium of Americans and Arabs under the disguise of Branson bought 'good bank' for cents on the dollar of the supposed £747million.

So the RBS headline wreaks of conspiracy and to Spain of all places; they don't even bother hiding their corruption anymore.

Mon, 10/15/2012 - 11:23 | 2890547 razorthin
razorthin's picture

What about ARMs adjusted based on 1yr TBill?

Mon, 10/15/2012 - 11:36 | 2890576 shovelhead
shovelhead's picture

In a few years, after racking up millions in billable hours, the lawyers will reach a settlement which will net homeowners 12 cents after costs, a few dollars of fines and a weak, easily circumvented ruling limiting LIBOR fixing will complete the charade that all is resolved.

This is the positive scenario.

The black swans that will moot this whole issue is the ugly duck we'll ignore until he wings in.

So many to choose from...Market folds, derivatives or bonds implode, soverign defaults, full scale war...

The excitement will be much more compelling than a point or two fudge in LIBOR.

Mon, 10/15/2012 - 11:38 | 2890587 Schmuck Raker
Schmuck Raker's picture

Fuck you Dimon!

Mon, 10/15/2012 - 12:02 | 2890686 Winston Churchill
Winston Churchill's picture

Hard as I try I cannot think of anything the banks have done in the

last 10 years that was legal.

Can anyone ?

Mon, 10/15/2012 - 12:34 | 2890812 AnAnonymous
AnAnonymous's picture

How does class action suit work? 90pc of the compensation for the lawyers in charge and 10pc for the plaintiff?

Mon, 10/15/2012 - 13:12 | 2890956 akak
akak's picture

How does Chinese Citizenism human waste disposal work?  90pc of the human waste onto the roadsides and 10 pc into flush toilets?

Mon, 10/15/2012 - 18:53 | 2892422 Bazza McKenzie
Bazza McKenzie's picture

You nailed it, unfortunately.  Most "class action" suits are legalized extortion for the benefit of lawyers.  The money is paid out by the shareholders who have already been ripped off by company management.  If the suit were directly against the officers of the company who allegedly engaged in the malfeasance, that would be fine.  But in fact they don't have enough accessible money to pay the lawyers conducting the suit and would fight a damn sight harder to protect it than they do when it is only shareholders' money at risk.  So they settle, lawyers walk away richer, company officials keep their jobs milking the shareholders and everyone that matters is happy.

Mon, 10/15/2012 - 12:41 | 2890845 TheCanadianAustrian
TheCanadianAustrian's picture

Homeowners weren't damaged by manipulation. Everyone else was through inflation. Good luck proving that though, especially in a world where the majority believes that we're in a mild deflationary funk.

Mon, 10/15/2012 - 13:01 | 2890913 10mm
10mm's picture

I love the title"Homeowners"LOL.

Mon, 10/15/2012 - 13:34 | 2891150 AGuy
AGuy's picture

Perhaps I complete misunderstood LIBOR Manipulation, but wasn't LIBOR rates suppressed down, not up, meaning home owners got a better deal then if LIBOR was permitted to float? My understanding is the LIBOR was manipulated down so that banks would appear stronger than they were, thus avoiding credit downgrades and other negative actions against the banks. From my point of view, is that homeowers are sueing because the they got a better deal then they should have.



Mon, 10/15/2012 - 15:18 | 2891637 CrabGrassKila
CrabGrassKila's picture

Money only soothes Super-Ficial wounds and at that ...... Only Temporarily.......

Chess anyone???

Mon, 10/15/2012 - 18:06 | 2892309 jplotinus
jplotinus's picture

"At the end of the day, bankers are merely drug pushers"

Precisely. Drug pushers go to jail for decades, drug users go for a few months, if that. The law clearly recognizes users as being more victims than perpetrators because of the addictive quality of drugs. People are as addicted to money as to drugs, if not moreso.

Plus, like drugs, banks control the issuance, the terms, the conditions under which the money is passed from bank to people. Further the people have to pay it back based on the assumption home values only ever rise, not fall. That assumption was fostered and joined in on by the banks.

Plus, at the end of the day, banks have always and ever had the final say on whether or not to make a loan. Until the fraud era, "no" was more likely than not absent adherence to stringent standards.

This is not a situation of equal fault by any stretch of the imagination.

To jail with the bankstas.

Mon, 10/15/2012 - 19:20 | 2892473 toomanyfakecons...
toomanyfakeconservatives's picture

Jail for Banksters?


Watch the ending scene of 'Boiler Room" when the paddy wagons and prison buses pull up to the "JT Marlin" headquarters to arrest all the financial criminals. Once the pending liens are enforced on the FED banks, the Federal Marshalls can direct large scale MASS ARRESTS... http://tinyurl.coim/cd5cyjo/

Mon, 10/15/2012 - 19:16 | 2892466 toomanyfakecons...
toomanyfakeconservatives's picture

This lawsuit is nice, but it not in the same realm as placing liens on the FED. It's either the slammer for the global cabal clowns or it's WWIII, and everybody knows it. The FED banks and the BIS have had liens placed on them by the BRICs alliance of nations and THE WORLD WANTS IT'S GOLD BACK. The end of debt-slavery, the end of dollar-denominated trade, and the return of the Republic are all within sight.

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