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The Fed And LIBOR - The Biggest Manipulator Of Them All

Tyler Durden's picture




 

Via Peter Tchir of TF Market Advisors,

The Fed does everything it can to keep LIBOR low.

This chart says it all.

 

 

The Fed cannot affect LIBOR directly, but in general LIBOR trades in line with Fed Funds.  You can see that historically as Fed Funds was changed, LIBOR responded appropriately.  There was typically some small premium to reflect the "credit risk" of banks versus the Fed, but it was relatively small, and fairly stable.  3 Month LIBOR would deviate a bit as rate cuts and hikes were anticipated in the market, but in general, it was a fairly stable game.

That all started to break down in 2007.  We saw the first real signs of LIBOR deviating from its normal spread to Fed Funds in the summer of 2007. The Fed responded by cutting the "penalty" rate for using the discount window, and in fact encouraged banks to use the discount window (I still can't shake the mental image of someone sitting in a dark basement with a green eye-shade doling out money to banks that request it).  Then the crisis got worse.  Bear needed to be rescued.  Facilities such as the Term Auction Facility that had been put in earlier were increased in size.  The Fed backstopped some portfolios that JPM acquired as part of the Bear Stearns deal.

As the crisis re-ignited in the late summer of 2008 and peaked after Lehman and AIG, the Fed took step after step to reduce borrowing costs.  The Fed was blatantly clear that it wanted borrowing costs to go down.  They had the obvious tool of reducing Fed Funds to virtually zero, but when LIBOR didn't follow, the Fed took further action.  The Fed did not want bank borrowing costs to be high.

They increased dollar swap lines so foreign banks could borrow.  The Fed stepped into the commercial paper market so banks wouldn't have to use money to meet drawdowns on revolvers.  TALF was another creation to take pressure of bank lending.

The FDIC allowed banks to issue bonds with FDIC backing (so not quite Fed program, but who is going to quibble).

Fears that MS and GS and GE would topple the banks were alleviated by making them banks.

The list goes on.  The Fed has done a lot and trying to control LIBOR as a key borrowing rate is one of the things they have worked on, both directly and indirectly.

 

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Wed, 07/04/2012 - 12:34 | 2586943 veyron
veyron's picture

Lies-man, Lie-bor, ...

 

Is there anything that isn't a lie?

Wed, 07/04/2012 - 12:41 | 2586976 Kyron95131
Kyron95131's picture

not that i have found

Wed, 07/04/2012 - 13:12 | 2587062 Nothing To See Here
Nothing To See Here's picture

The government only wants your good

Wed, 07/04/2012 - 13:16 | 2587075 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

On July 13th, End the Fed!

Buy Silver!

Wed, 07/04/2012 - 14:08 | 2587124 SheepRevolution
SheepRevolution's picture

It's not about trying to organize everyone into buying as much silver as possible on a particular day. Being consistent with teaching the sheeple about the monetary system and how banks work, and also teaching them why gold/silver is better than fiat, is the way to go. You would do more good in teaching your neighbour about these things and getting him purchasing gold/silver regulary, than just trying to get everyone to buy on a certain day. I buy silver every month once I get my salary, and this I believe is a far better advice than Friday the 13th, the 5th of November, Independence Day etc.

Wed, 07/04/2012 - 14:53 | 2587180 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

July 13th Silver Bomb!

Buy Silver!

I understand your point, which may be how I grabbed the idea to "Buy Silver and Crash JPM" out of the vapors.  And you are right, an idea that is not expressed is wasted.  So spread the good word, tell your friends that silver is real money.  Tell them fiat has no intrinsic value.  Tell them that the definition of money, in all economic textbooks, states "Money must store value".  What is value?  Molecular structure best defines this.  Therefore silver is money.  That and there is no counterparty risk.  That and it is a great medium of exchange, which is why for thousands of years we have minted bullion coins.

Yet there is a financial war taking place.  On the surface it may appear to be East vs West, but really it is the People vs the Goverment/Corporations.  Either way one looks at it, the best thing to do is for us to arm ourselves.  We do this by taking control of the real money supply.

Tell your friends to buy silver.  Tell them to do it whenever they can.  But there is not much time left.  The system has been unravelling since the day it began due to a false economic paradigm, done purposefully or not by the Jekyll Island Mob. 

So on July 13th we will move an amount off of the shelves that will shock the system; we will take back the money supply and rectify our rights.

On this day, Buy Silver!

Wed, 07/04/2012 - 15:06 | 2587294 ebear
ebear's picture

Buy silver, crash JPM?  LOL.  

Would somebody please call Myth Busters and have them explain how the Comex actually works?

Wed, 07/04/2012 - 15:16 | 2587312 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Are you familiar with how price is determined by supply/demand?

If there was a shortage of supply in silver for industrial demand and investment demand, it would raise the price.  If the price raised JPM would be forced to cover, and they are naked short silver, which means they would have to go into the market and procure bullion, which would squeeze the price more.  Or they would write big checks to cover and those that asked for delivery would take the cash and move into bullion themselves, causing a further squeeze.

Any defeatist attitude will get you nowhere fast; I'll tend to my task.

Buy Silver!

Thu, 07/05/2012 - 03:35 | 2588079 ebear
ebear's picture

Buy as much silver as you like, but if you think that will crash JPM, I reiterate... LOL.  Silver is a tiny market.  So, how big is JPM's position relative to their total book?  1%?  .01%?  .0001%?   It's like trying to kill a bear by swatting a fly on the end of it's nose.  All you get is a slightly annoyed bear.  Anyway, no need to bring down JPM - they're doing a smashing job of it all by themselves.

http://www.youtube.com/watch?v=KbtVaTWs6II

Wed, 07/04/2012 - 18:00 | 2587605 Kyron95131
Kyron95131's picture

it works like it does cause poeple think ninjas have GPS on every piece of silver and gold in existence and they visit your house daily dressed as mailmen... so they buy paper to gain a false sense of security. so they trust the same institutions to say their investment is safe even though they are safeguarding themselves against the same fraud. lols?

if 5-10% of poeple took what they actually owned the comex's jig would be up as a fractional reserve exchange and the shit would hit a wall of fans. we'd prolly see another Corzine esc event to cover some contracts. 

but most investors of this idea are of western civilization to say that which motivations are driven buy fear of everything, which is ironic.

when i buy, i take delivery.

i love ninja movies, but know they are movies.

Wed, 07/04/2012 - 14:13 | 2587186 debtor of last ...
debtor of last resort's picture

I did my job for today. And yesterday, and...

Wed, 07/04/2012 - 16:00 | 2587421 Kasperfx
Kasperfx's picture

What good is buying if the banking cartels can simpley menipulate the markets prices ? I mean even if everone startes buying and prices spike up do to the volums all thya have to do is sell or even easier, adjust the price at the feeds sources to their liking.  what we need is a new exchange out of the banking gov reach this will show the true free market prices . 

Wed, 07/04/2012 - 15:55 | 2587406 world_debt_slave
world_debt_slave's picture

I started buying Silver in 2004 after reading "The Creature from Jekyl Island", then in 2007 the Feds stole my Silver from a NORFED warehouse raid ( still haven't gotten it back).

Start buying your Gold and Silver and if you can, do it every chance you can, get the metal in your hands and put it in a safe place.

Wed, 07/04/2012 - 15:58 | 2587417 alangreedspank
alangreedspank's picture

Please don't. Don't buy when everyone else is.

Wed, 07/04/2012 - 13:40 | 2587121 I am more equal...
I am more equal than others's picture

Wasn't it Benjamin Franklin who said 'neither a borrower or lender be'? 

When prostitutes lower their prices/costs does it entice you more or less?

There is an inevitable inversion somewhere in our future.  Culling to killing. 

Wed, 07/04/2012 - 14:31 | 2587219 WmMcK
WmMcK's picture

The Bard's Polonius. Bill also said something about "get thee to a nunnery".

Wed, 07/04/2012 - 14:41 | 2587234 vast-dom
vast-dom's picture

please copy and paste this article to Fed fraud hotline:

 

Federal Reserve Consumer Help: ConsumerHelp@federalreserve.gov

 

I have been saying for years that the fed is destroying the markets by altering all rates. doubtful and most unfortunate that some brave soul will not step up and use this oppurtunity to leverage Barclays et. al. against The Fed. 

 

Wed, 07/04/2012 - 12:46 | 2586996 Stoploss
Stoploss's picture

Storms on Jupiter.

Wed, 07/04/2012 - 14:07 | 2587174 gojam
gojam's picture

Scientists Announce Discovery of the ‘God’ Gene.

"Scientists are 99.999% sure that they have found the ‘God’ gene, the gene which makes some members at the top of our society act as if they were gods."

http://theneedleblog.wordpress.com/2012/07/04/scientist-announce-discovery-of-the-god-gene/

Wed, 07/04/2012 - 14:49 | 2587233 palmereldritch
palmereldritch's picture

I guess that makes them LIeBORtines...well to them it was free money after all...moral hazard anathema.

Wed, 07/04/2012 - 14:57 | 2587269 Bansters-in-my-...
Bansters-in-my- feces's picture

"Is ther anything that isn't a lie ? "

NOPE, even the Joo lie 4th lie,aint no independence.

Thu, 07/05/2012 - 13:12 | 2587618 All Risk No Reward
All Risk No Reward's picture

How about the Fed criminally breaking their mandate for 25 years running? 

Weapons of Mass Debt

http://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

Why don't that FACT get any press?

What about the fraudulent mechanics of a debt money system that systematically assets strips the suckers in society?

Debt Money Tyranny

http://www.keepandshare.com/doc/3325954/debt-dollar-tyranny-2-54k?tr=77

Wed, 07/04/2012 - 21:34 | 2587792 philipat
philipat's picture

As I understand it, LIBOR is set based on quotes from 15 Banks. The top four and bottom four rates are eliminated then an average is taken of the remaining seven. So one Bank alone cannot even scew LIBOR. let alone fix it. I wonder who is next? It should be one of the US Banks involved so that the US regulators have less excuses to look the other way as usual.

Wed, 07/04/2012 - 12:35 | 2586945 LMAOLORI
LMAOLORI's picture

Janet Calls Out The Media

Reprinted with permission:

“Sometimes Being Responsible Means*****ing People Off”

By Janet Tavakoli – July 3, 2012

Last week, Gillian Tett of the Financial Times wrote how five years previously, she and her fellow journalists were intimidated into backing off of a huge story about banks manipulating LIBOR. This is the London Interbank Offered Rate set by a poll of leading banks to determine the benchmark interest rate referenced by many home mortgage loans, floating rate notes, collateralized debt obligations, and many other financial instruments:

“At the time, this sparked furious criticism from the British Bankers’ Association, as well as big banks such as Barclays; the word “scaremongering” was used. But now we know that, amid the blustering from the BBA, the reality was worse than we thought. As emails released by the UK Financial Services Authority show, some Barclays traders were engaged in a constant and pervasive attempt to rig the Libor market from 2006 on, with the encouragement of more senior managers. And the British bank may not have been alone.”

(“LIBOR Affair Shows Banking’s Big Conceit,” Financial Times, June 28, 2012.)

At the heart of the allegations is what appears to be a blasé criminal conspiracy within Barclays. Moreover, Tett is correct. Barclays is far from alone.

Unfortunately, the intimidation was a success. The BBA and Barclays chose their word carefully, because accusing journalists of “scaremongering” suggests they are irresponsible sensationalist hacks. In essence, through lies and intimidation, they threatened to ruin careers.

The Financial Times backed off. As a result, the best coverage of the ongoing scandal came from a controversial blog with mostly anonymous writers called ZeroHedge. It pounded on the story harder than mainstream financial media. Not only are other banks implicated in the scandal, the Bank of England, a bank regulator, is also implicated.

more

http://market-ticker.org/akcs-www?post=208144

Wed, 07/04/2012 - 13:17 | 2587077 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

With permision?

Janet??

Wed, 07/04/2012 - 13:24 | 2587092 LetThemEatRand
LetThemEatRand's picture

The Financial Times is owned by Pearson, LLC, the largest publisher in the world.  Any illusion of objectivity when it comes to reporting on other multi-national companies is just that -- an illusion.  No doubt Pearson and the few other gigantic companies that control our international media will come together and explain to the few sheep who are even aware of this story why the manipulation was really no big deal, that the banks were just trying to save the world from collapse and protect their depositors, etc.

Wed, 07/04/2012 - 13:43 | 2587125 Not Too Important
Not Too Important's picture

ZeroHedge rules the universe! Pound those stories, bitchez!

Wed, 07/04/2012 - 13:55 | 2587151 sampo
sampo's picture

Check it out how London shills try to border the problem, as Max nails them!

http://maxkeiser.com/2012/07/04/max-goes-ballistic-al-jazeera-talking-barclays-libor-cameron/

Wed, 07/04/2012 - 12:37 | 2586955 max2205
max2205's picture

Let's add derivatives to the FDIC load...., oh, BAC ... Done that

Wed, 07/04/2012 - 12:46 | 2586989 falak pema
falak pema's picture

Citi bank has publicly said, the US government won't let us banks go down ever. They repealed G-S for Citi in Sandy Weill days. So they should know. 

Libor is just a crony instrument of that dictat. Print to infinity, Zirp n control interbank, you own the shooting match. And who is the FED? Is it the people? No its those very banks. So basically the whole show is theirs and as long as USD is reserve it will stay that way. Its poured in concrete. You have no say. Thats Oligarchy rule #1. 

Wed, 07/04/2012 - 13:45 | 2587130 Not Too Important
Not Too Important's picture

Repealed G-S, courtesty Clinton, Rubin and Greenspan.

Lest we forget.

Thu, 07/05/2012 - 13:56 | 2589448 All Risk No Reward
All Risk No Reward's picture

Don't forget 8 years of Bush approval, the same guy who sued the state of New York to preven tthem from making "ability to repay" a requirement for making a loan.

"Hope and Change" also signed his name to the exact same program, so the only real conclusion is they all work for the money power behind the mega bank, criminal societal asset stripping criminal Ponzi operators.

Weapons of Mass Debt

http://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?tr=77

Debt Money Tyranny

http://www.keepandshare.com/doc/3325954/debt-dollar-tyranny-2-54k?tr=77

Who is doing this to us?  Let John Taylor Gatto try and explain with sourced documents: The Ultimate History Lesson:   http://www.youtube.com/playlist?list=PL463AA90FD04EC7A2

The Ultimate history Lesson Commentary: https://www.tragedyandhope.com/th-films/the-ultimate-history-lesson/comm...
Wed, 07/04/2012 - 12:52 | 2587012 Joshua Falken
Joshua Falken's picture

Bank of England Governor, Sir Mervyn King shared an office at MIT with Ben Bernanke.

As Tony Blair's government played poodle to America, I am sure Mervyn was happy to accomodate his old buddy Ben in those trying times.

Wed, 07/04/2012 - 13:00 | 2587036 Trimmed Hedge
Trimmed Hedge's picture

Doez this mean Teh Bernank will resign..??

 

Have a Happy & Safe Fourth, y'all!  :)

Wed, 07/04/2012 - 13:04 | 2587045 dolce vita
dolce vita's picture

its like playing yourself in chess ...no bad moves, you own the board, pieces, clock, make rules as you go.

 

two words; paw-thetic

Wed, 07/04/2012 - 13:11 | 2587064 moskov
moskov's picture

So I was right.

The Fucking FED did Fucking Manipulate the Fucking interest rate of the Fucking T-bills

Wed, 07/04/2012 - 16:31 | 2587469 francis_sawyer
francis_sawyer's picture

Fuck yea!... (& 'tits')...

Wed, 07/04/2012 - 18:16 | 2587625 Mentaliusanything
Mentaliusanything's picture

It would not be to hard to imagine that the Fed approached the banks it was supporting with an edict - 'Because you owe use for allowing you to continue breathing, we would like in return that all of you who have input to the daily overnight bank lending rate, do all in your power to manipulate it to reflect what we want"

Not to hard at all.

This is becoming "Liborgate" for the 20 "dirty deeds done dirt cheap" Banking brigade

Wed, 07/04/2012 - 13:19 | 2587083 Landrew
Landrew's picture

 

It's so fascinating and connected like the universe! Who would ever have thought you could derive the grand unified theory of the universe from the financial services industry. Like our universe (one of eleven) it will end and begin again with a singularity.Working in dark energy and dark matter nothing surprises me anymore ha! http://www.ctio.noao.edu/new/Sky%20Conditions/Webcam/blanco.php 

 

Wed, 07/04/2012 - 13:37 | 2587115 Plymster
Plymster's picture

The Fed's interest rate "decisions" tend to follow Treasury yields (or at least they have since the 80s), so wouldn't it be more appropriate to say that the Treasury Yields are what's "manipulating" Libor?

Of course, now that the Fed is openly printing money to buy Treasuries (thus manipulating Treasury yields since 2008), it's most accurate to say that the Fed is manipulating Treasuries to manipulate Libor.  At best, the Fed is manipulating Libor in this way as bonus from its actions manipulating Treasuries.

Wed, 07/04/2012 - 13:39 | 2587120 OutLookingIn
OutLookingIn's picture

There are NO "free" markets any longer.

Just interventions and manipulation.

There are NO accurate government statistical releases any longer.

Just manipulation.

There is NO "rule of law" any longer.

Just one law for the law breakers and all the rest of laws for everyone else.

George Carlin said it best;

http://www.youtube.com/watch?v=acLW1vFO-2Q  

Wed, 07/04/2012 - 14:00 | 2587158 Ima anal sphincter
Ima anal sphincter's picture

+1000

Just one law for the law breakers and all the rest of laws for everyone else.

People ARE waking up. The question is, can we rip this back and destroy the bankers or will "they" squash us and achieve their ultimate goal?

Wed, 07/04/2012 - 15:49 | 2587393 Kasperfx
Kasperfx's picture

your right on that and as long as we the people place our weath with the banks and suport the gov by paying taxes it will aways remain the same, i propose a new free market were price out of the banking and gov hands. theirs more brilliant minds outside the gov and banking so why not organize and do something about this. 

Wed, 07/04/2012 - 15:15 | 2587144 Not Too Important
Not Too Important's picture

This is the end of it all - trust. Everything else has been a skirmish - Linda Green, Madoff, Corzine, etc. This is killing any trust in the Central Bank system, around the globe. It doesn't matter what the poor and broke think, this kills off any one with money investing.

As far as OPM, the lawyers will be cancelling contracts and suing for clawback. No new investments until the lawsuits are cleared up, which will take years. There will be no 'global class-action' settlement. The lawsuits will total into the hundreds of trillions.

The system will be shutting down. If 'they' do offer something different, the sheeple might accept it, but no one with money will. All trust is gone.

'They' screwed themselves with Fukushima, and 'they' screwed themselves with all the massive financial fraud. It's going to get ugly. Or uglier, depending on your point of view.

Wed, 07/04/2012 - 15:26 | 2587342 Kasperfx
Kasperfx's picture

Time to exchange your corrupted cash/money for hard untaxable assets.. 

Wed, 07/04/2012 - 13:56 | 2587146 Arnold Ziffel
Arnold Ziffel's picture

ZIRP is here to stay for a looong time with gradual (and continued) loss of purchasing power of the dollar. The loss has been somewhat muted by the slow collapse of the euro...but the Fed's goal (besides banker bonuses) is to force rates lower to perpetuate low mortgage rates and slow the inevitable House Price Plunge...or 'HPP' as my financial advisor calls it.

 

 

Wed, 07/04/2012 - 14:05 | 2587169 jomama
jomama's picture

holy shit.  that chart tells a hell of a fucking story.

Wed, 07/04/2012 - 14:06 | 2587172 El_Puerco
El_Puerco's picture

“The Bottom line here is, accounting fraud, is now Wall Street business model "...

Wed, 07/04/2012 - 14:20 | 2587201 Quinvarius
Quinvarius's picture

If the banks are all borrowing from the Fed and not each other, LIBOR means nothing anyway.

Wed, 07/04/2012 - 14:49 | 2587255 straightershooter
straightershooter's picture

Back off, ZH, What I did was not fraud at all, it was a policy response (Read, ZH, I have the license to do anything I want, fraud or not. Unless the sheeple woke up and a total collapse ensues, nothing could happen to me. Doubt me, Just ask Congress.), so says BB.

 

Conclusion:

Fraud can't never be committed by authorities-in-charge, i.e., regulators. To regulators, all frauds committed by regulators are simply policy response, deemed necessary and in the interest of public.

Anybody printed money, based on the coinage law, death sentence is the only penalty. For BB, print money is his mandate. See the point?

Wed, 07/04/2012 - 15:06 | 2587293 falak pema
falak pema's picture

That is straight shooting on target of totalitarian magnitude. They ARE judge and party; to define the perspective of these so called "regulators"; and there AINT no separation of powers. Oligarchs throw down the gauntlet for the people to pick up; if they be not muppets. Death is no punishment but blessing when freedom of basic collective well being is at stake. We are not individuals in front of despotic oligarchy, individual dead wood to be collected and burnt,  we ARE a NATION; alive and vibrant if we be people of substance as declared by that declaration of founding fathers. 

Wed, 07/04/2012 - 14:58 | 2587272 dimitar
dimitar's picture

fake debate about LIBOR, manipulating the system/clients is legitimate tool/move in this game

Wed, 07/04/2012 - 15:03 | 2587279 Crack Daddy
Crack Daddy's picture

United States adjustable mortgages are tied to Libor.  Check your local clerks office and read through some adjustable loan documents.  The fraud is to keep loan rates artificially low when they should be sky high.  The entire system is artificial.  When a deadbeat car buyer goes to get a loan he pays a massive premium, not a reduced rate.

Wed, 07/04/2012 - 15:53 | 2587404 Not Too Important
Not Too Important's picture

And they certainly can't let the rates go up to where they should be. Complete financial devastation.

It's over.

Wed, 07/04/2012 - 15:58 | 2587419 straightershooter
straightershooter's picture

The new Fancy world for 2012:

Federal Reserve--definition: 1. A lie so subtle to manipulate everything and anything without being detected

                                             2. A legally sanctioned lie that will not subject to any law in the land

Example:

Don't you federal reserve me! Just tell me the truth.

That Die Frau Merkel was federal reserved! What a fool.

 

That poor BB was federal reserved by his own ZIRP.

Wed, 07/04/2012 - 16:02 | 2587423 blindman
blindman's picture

stress test.
the things a stress test can teach a ceo
with a handle on product development.
good question.

Wed, 07/04/2012 - 16:22 | 2587451 Justaman
Justaman's picture

Who controls the prime rate?  The FeRB.  Who controls the US yield curve as it has become the buyer of last resort?  The FeRB.  Who is the biggest price, rate manipulator of them all? The FeRB.  Manipulate, bitchez!

 

Wed, 07/04/2012 - 17:00 | 2587515 Tom Green Swedish
Tom Green Swedish's picture

Communism is the answer.  You won't find this kind of manipulation under a communist system. Of course the two big examples of Communism distorted it badly, it is a better system.

Wed, 07/04/2012 - 18:02 | 2587609 jomama
Wed, 07/04/2012 - 17:28 | 2587562 blindman
blindman's picture

yea, the boomers, to the fed res,
they all just looked like "someone
who needs a haircut". it was in their
dna, in their collective unconscious and
in their retirement accounts. there was
a will and the bankers found the way and
found it long ago, timing being/is everything.
it is absolutely fractal and as simple as
systemic freedom-money-debt
permutations under the influence of feeling,
math and someone else's opposable thumb.
and ... etc. see it here.
Born To Be Wild and Easy Rider (Slipshotfilms)
http://www.youtube.com/watch?v=mJS8j9YYB9w
.
Alex McMurray @ Louisiana Music Factory JazzFest 2009
http://www.youtube.com/watch?v=rOR8nmw97ro&feature=related
.
" you got to be crazy to live in this town ". a.m.

Wed, 07/04/2012 - 17:47 | 2587589 Bullish Bear
Bullish Bear's picture

If Fed emails were released, they'd look just like those at Barclays.

Wed, 07/04/2012 - 18:53 | 2587660 Quinvarius
Quinvarius's picture

This LIBOR thing is actually not something I find all that criminal.  Banks loan as a part of business to make money.  If loaning at a certain rate makes them more money because they have a trade on, I have no problem with that.  It is only a problem if they refused to honor their stated LIBOR rates.  Jamie Dimon still trading with customer money, and it is customer money unless he has all their deposits on hand plus extra, pisses me off a whole lot more than this.

The thing is, LIBOR is a meaningless appendage.  It can be set anywhere in this day free credit to banks from central banks.  Banks don't need to borrow from each other.  They would be stupid to do so because they are all bankrupt.  It is unfortunate that people are stupid enough to use LIBOR for anything now that it has been rendered meaningless.  It is a ghost in the machine. 

Wed, 07/04/2012 - 22:35 | 2587832 spooz
spooz's picture

Not such a meaningless appendage when, for example, it is used to settle the eurodollar contract at the Chicago Mercantile Exchange. Price fixing is a violation of the Sherman Antitrust Act, whether YOU find it criminal or not.

Reporters from the Financial Times were intimidated into backing off of the story, after being called irresponsible scaremongers by the British Bankers Association and Barclays.  Janet Tavakoli writes,

"The Financial Times backed off. As a result, the best coverage of the ongoing scandal came from a controversial blog with mostly anonymous writers called ZeroHedge. It pounded on the story harder than mainstream financial media. Not only are other banks implicated in the scandal, the Bank of England, a bank regulator, is also implicated."

This is why I read Zerohedge.  I may not agree with every post, but it is one place where I can find some truth.

Wed, 07/04/2012 - 19:31 | 2587701 AUD
AUD's picture

I pointed out exactly what this article is saying, a few days ago, & got well junked by the expert readers of ZH.

No wonder government laughs at bitch club.

Wed, 07/04/2012 - 20:29 | 2587725 Catflappo
Catflappo's picture

The mystery of LIBOR as I see it is far more recent - it is "when Europe was hitting the skids in Q3 2011 and we were told the interbank lending market was 'freezing up' - how come LIBOR moved up no more than 10 basis points or so?    

 

Now, THAT looks a lot like manipulation - it is far more recent, and I would suggest probably involved a range of authorities absolutely desperate to keep a lid on things and show that everything was normal, please move along.... 

Wed, 07/04/2012 - 22:02 | 2587807 slewie the pi-rat
slewie the pi-rat's picture

<--< bush did it

<--< it is all just a random coincidence

Wed, 07/04/2012 - 22:12 | 2587814 chinaboy
chinaboy's picture

Mirror, mirror on the wall, who is the ugliest manipulator of all?

Thu, 07/05/2012 - 00:58 | 2588002 Temporalist
Thu, 07/05/2012 - 06:22 | 2588153 Disenchanted
Disenchanted's picture

 

 

 

Diamond Dropping Fundraising Role for Romney in London

 

Robert Diamond, who today stepped down as chief executive of Barclays Plc (BARC), will no longer co-host a London campaign fundraiser this month for presumptive U.S. Republican presidential nominee Mitt Romney, campaign spokeswoman Andrea Saul confirmed.

 

The July 27 Romney fundraising dinner, scheduled for a day when Romney is in town for the Olympics, will proceed without Diamond. The financial sector has been one of Romney’s top sources of campaign contributions. Romney is a former Massachusetts governor and co-founder of Bain Capital LLC, a private-equity firm based in Boston.
continued at link...
Thu, 07/05/2012 - 12:02 | 2589147 Mediocritas
Mediocritas's picture

Yep, here's a post that pins the real story. Braclay's LIBOR "scandal" is a yawn-fest really. Scalping a few points here and there, sure it adds up to billions ripped off from us, but it's nothing compared to the Fed's manipulations.

The Primary Dealer Credit Facility (PDCF) was the real game-changer in this story. Traditional channels didn't extend to where money was needed as the Fed was out of touch with the shadow banking system. The PDCF did a lot to resolve it, including opening borrowing at the Fed Funds Rate to international banks that formerly had little or no access.

It took a while for the word to get out, but when it did, the PDCF really took off and closed the spread in late 2008. Although it's now officially closed (small spike in spread in 2010 after closure) the fact that LIBOR continues tracking the FFR means that other channels have simply opened to continue enabling anyone and everyone in the financial world to maintain access. The window wasn't intended to be international when originally established, but the Eurodollar system ensured that it eventually would be.

Anyway, nobody around here needs an explanation of how bad this situation is over the longer term. Financial parasites continue to destroy the host.

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