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On Lie-borgate: "Everyone Knew, And Everyone Was Doing It"

Tyler Durden's picture




 

"I wish I could say that this was an isolated case... You will hear more on this in due course" is how the UK FSE's Director of enforcement described Lie-borgate to Reuters this weekend. It seems incredibly that the US regulators and investing public alike are shunning this interest rate rigging scandal as the UK goes to DEFCON 1 with more than a dozen other banks being investigated in the long-running global probe. The Barclays Chairman quit over the weekend (and we assume will not be the last casualty) as The Telegraph notes the 'dislocation of libor from itself' - since banks could not be seen borrowing at higher rates for fear of liquidity repercussions, as widespread. According to the trader the BBA asked for a rate submission but there were no checks and "everyone knew" and "everyone was doing it". What is incredible is the level of nonchalance that this illegal act had taken on with entire teams of people well aware as open discussion occurred (not clandestine blue-horseshoe-likes-low-libor-style). Indeed this widespread and well-known action of dislocating libor from itself (since in a trader's words "everyone knew we couldn't borrow at Libor, you only needed to look at CDS to see that... with real Libor rates 3 to 4 per cent higher than the BBA's submitted Lie-bor") has now led George Osbourne, as per the FT, to launch a 'Leveson-style' probe into standards in the banking industry - a full, public independent inquiry into the $504 Trillion market's underlying integrity. Libor had dislocated with itself for a very good reason – to hide the true issues within the bank.

 

The Telegraph: Libor scandal: How I manipulated the bank borrowing rate

According to the trader, "everyone knew" and "everyone was doing it". There was no implication of illegality. After all, there were 20 to 30 people in the room – from management to economists, structuring teams to salespeople – and more on the teleconference dial-in from across the country.

 

The discussion was so open the behaviour seemed above board. In no sense was this a clandestine gathering.

 

The main business of the day was to deal with the deepening crisis. And questions were raised about what we, in one of the bank's sales teams, could be doing to earn our wages.

 

The answer was fire-fighting. Helping the corporate bank with clients – predominantly explaining why the customer's loan was being moved from base rate to Libor and why their interest margin was increasing sharply. It wasn't easy for the corporate bankers. They were under orders from the credit committee, and powers at the top, to change a client's borrowing rate to Libor and increase the margin if any covenant was breached, no matter how small.

 

We accompanied the relationship managers to meetings to explain what was happening in the economy – why base rate lending could not be sustained, why margins had to increase, and of course to explain the general economic backdrop.

 

As part of that, we had to explain the "dislocation of Libor from itself". As the trader put it, everyone knew that we couldn't borrow at Libor, you only needed to look at the price of our credit default swaps – effectively survival insurance for the bank – to see that.

 

What that meant was that even though Libor may have been, for example 2pc, the real Libor rate the bank was paying was more like 5pc or 6pc. So in fact, we needed to be lending money at Libor plus 3pc or 4pc just to break even. That is what we were telling clients.

 

Looking back, I now feel ashamed by my naivety. Had I realised what was going on, I would have blown the whistle. But the openness alone suggested no collusion or secrecy. Management had been in the meeting, and so many areas of the Treasury division of the bank represented, that this was clearly no surprise or secret.

 

Libor had dislocated with itself for a very good reason – to hide the true issues within the bank.

 

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Mon, 07/02/2012 - 08:56 | 2580279 SheepDog-One
SheepDog-One's picture

It's OK....EVERYONE was doin it, see?

Mon, 07/02/2012 - 08:58 | 2580288 SeverinSlade
SeverinSlade's picture

Just like QE.  Forget about inflation, EVERYONE IS DOING IT.

Mon, 07/02/2012 - 09:29 | 2580384 Stoploss
Stoploss's picture

So, how many politicians were doing it??

Also claiming "we didn't know" won't cut it either. since the admission by itself would indicate the law makers are just as oblivious as the bank CEO's.

Eh, Jaime?

When all of the creators of this fiasco no longer have a clue, and are now making it up as they go along, is a pretty good indicator we are completely fucked..

Mon, 07/02/2012 - 10:15 | 2580505 Oh regional Indian
Oh regional Indian's picture

The surprise is that thsi is a surprise.

Fox, guards hen-house, chicken population is manipulated. 

Shocking I say, old chap, shocking.... really? It's like the Gold Pool or wherever Oil "prices" are "Fixed".

Fixed. See? The fix is in!

ori

war-of-the-worlds

Mon, 07/02/2012 - 11:01 | 2580664 Joshua Falken
Joshua Falken's picture

Everyone knew

The Chairman of the UK regulator at the time was an ex-Barclays CEO and is now a non-executive board member of HM Treasury.  The CEO of the UK regulator at the time was an ex DLJ banker.

This is a global problem and goes way beyond LIBOR fixing

The investigation needs to cover current market abuses that need investigation are co-location, HFT and algo trading, rehypothecation, insider trading, dark pools, shadow banking repo's, ETF's, money market funds, MBS, CDS's, CDO's, asset backed securities, commercial paper, securities lending and wilful manipulation of official statistics and indicators.

 

Unfortunately, by uncovering and investigating this abuse, the UK and the City of London will be vilified by all foreign central bankers and regulators as corrupt and evil English villains (just like Hollywood), whilst defending the integrity and honesty of their domestic institutions.

This is going to get messy and it has only just started.

Mon, 07/02/2012 - 09:05 | 2580307 ArkansasAngie
ArkansasAngie's picture

Banksters are above the law ... so long as they have the law in their pockets

Maybe we should go after the minnons who facilitate the banksters' law breaking as our means to the banksters' end.

Mon, 07/02/2012 - 09:43 | 2580414 fnordfnordfnord
fnordfnordfnord's picture

It was for all of our collective good. That's why it was okay.

Mon, 07/02/2012 - 10:29 | 2580555 Oh regional Indian
Oh regional Indian's picture

Unfortunately, a ready slave-pool with willing, pliant sheep seems available to do the master's bidding.

Baa...

ori

Mon, 07/02/2012 - 09:05 | 2580312 d edwards
d edwards's picture

About a week ago didn't someone predict a coming "Lehman moment?" This could be it, on a global scale.

Mon, 07/02/2012 - 09:07 | 2580318 SeverinSlade
SeverinSlade's picture

We can only hope.  Difficult to make predictions in bizarro world where bad econ numbers are good and good econ numbers are good.

Mon, 07/02/2012 - 09:18 | 2580346 Buckaroo Banzai
Buckaroo Banzai's picture

But but but...the global financial system is built on a foundation of lies???

Of course it is...we all knew that already. I'm more interested in who blew the whistle on this particular aspect, and why. And why NOW?

Mon, 07/02/2012 - 09:37 | 2580397 kraschenbern
kraschenbern's picture

Can't help but think of a bunch of guys at the top of the food chain, all looking for their next meal... IMO, this will make a decent distraction while the political machinations for a European fiscal pact move forward.

Mon, 07/02/2012 - 09:15 | 2580336 d edwards
d edwards's picture

The difference between the posted libor of 2% and the actual 4-6%-wouldn't the MOB call that the "vig"?

Mon, 07/02/2012 - 09:43 | 2580416 azzhatter
azzhatter's picture

pigmen doing what pigmen do. and govt's doing what govt's do

Mon, 07/02/2012 - 09:53 | 2580442 philipat
philipat's picture

I agree that manipulation of anything is bad. But I must be missing something here. If Barclays and other Banks were artificially manipulating LIBOR lower to appear to be "Him big and strong", wouldn't that also result in lower rates for the muppets borrowing against LIBOR?

Confused.

Mon, 07/02/2012 - 10:40 | 2580601 Kayman
Kayman's picture

"But I must be missing something here."

1. Savers are getting ripped off.

2.Many Corporate bonds throughout the world are set to Libor

3. The truth would prove that ZIRP is a thumb in a sandy dike.

Mon, 07/02/2012 - 11:39 | 2580757 Winston Churchill
Winston Churchill's picture

Its the credit rate swaps.

Those were hundreds of trillions in liability,the interest lost was peanuts

in comparison.

Mon, 07/02/2012 - 10:36 | 2580577 William113
William113's picture

How come all these scumbags have the same common denominator as Jerry Sandusky ?

Mon, 07/02/2012 - 08:56 | 2580284 Ivanovich
Ivanovich's picture

Does anyone have any real faith that this will amount to anything significant?  I'm guessing the banks make it go away just like everything else.

Mon, 07/02/2012 - 08:57 | 2580286 LawsofPhysics
LawsofPhysics's picture

Another Monday morning "same as it ever was" report.

Prosecute the fucking fraud and restore the rule of laws and contracts nothing changes until then, that is all.

Mon, 07/02/2012 - 08:59 | 2580292 SheepDog-One
SheepDog-One's picture

And yet they keep wondering why the retail investor will no longer touch any of it with a 10 foot pole.

Mon, 07/02/2012 - 11:22 | 2580719 MachoMan
MachoMan's picture

that and the retail investor is a turnip...  having been bled dry ages ago...  and now having no viable mechanism in which to generate new blood.

they killed the golden goose.

Mon, 07/02/2012 - 09:20 | 2580350 Al Capowned
Al Capowned's picture

@ LawsofPhysics  + 10000000

Mon, 07/02/2012 - 08:58 | 2580287 Lost Wages
Lost Wages's picture

If everyone jumped off a bridge into a rocky canyon... oh never mind.

Mon, 07/02/2012 - 08:58 | 2580291 Oquities
Oquities's picture

i have owned LIBOR-adjusted bonds for years - who will make me whole?

Mon, 07/02/2012 - 09:19 | 2580347 Buckaroo Banzai
Buckaroo Banzai's picture

That's easy! Nobody.

Mon, 07/02/2012 - 09:37 | 2580398 falak pema
falak pema's picture

an unlibored bond maiden with uninhibited, unrehypothecated, nonsiliconed, upward looking, rosy teinted, red cherry blossomed tits.

Hows that for a purty picture to get you bright eyed and bushy tailed? 

The cherry blossom girl

Mon, 07/02/2012 - 09:00 | 2580298 Cursive
Cursive's picture

All roads of the global financial corruption lead back to The City.  Break the ring fence and bust 'em in the chops.

Mon, 07/02/2012 - 09:03 | 2580302 Everybodys All ...
Everybodys All American's picture

Prepare for a slap on the wrist for all. While charges under Rico would be more appropriate. Meanwhile what happens in the US markets that have become more or less a total fraud with HFT?

Mon, 07/02/2012 - 09:05 | 2580314 SheepDog-One
SheepDog-One's picture

Well the way I see it the time for the spotlight to swing back to depression USA and her totaly fraudulent markets is about when Romney pulls cleanly ahead of ObaMao....it will all be STAGED of course, but then the banksters will have cover to pull the rug out from the markets and leave everyone in a panic for the next phase of criminality.

Mon, 07/02/2012 - 09:03 | 2580304 LULZBank
LULZBank's picture

"everyone knew" and "everyone was doing it"

Sounds like an honest scam to me.

Mon, 07/02/2012 - 09:21 | 2580352 Buckaroo Banzai
Buckaroo Banzai's picture

When it's everybody's fault, it's nobody's fault.

That's the criminal logic of our financial system.

Mon, 07/02/2012 - 09:23 | 2580360 Everybodys All ...
Everybodys All American's picture

that is an admission of an organized crime and should be prosecuted under RICO.

Can't wait for Holder to go after them </sarc>

Mon, 07/02/2012 - 09:06 | 2580306 BBullionaire
BBullionaire's picture

the Missus banks with Barclays should she change banks?

 

http://bulletsbeansandbullion.blogspot.co.uk/

Mon, 07/02/2012 - 09:05 | 2580308 world_debt_slave
world_debt_slave's picture

everyone's finger is in the pie,

Mon, 07/02/2012 - 09:05 | 2580309 q99x2
q99x2's picture

Wish it to the cornfield.

Mon, 07/02/2012 - 09:25 | 2580368 Vince Clortho
Vince Clortho's picture

One of my favorite Twilight zone episodes.  Well done.

If young Anthony were here today, the financial parasites would have a whole nuther thing to worry about.

Mon, 07/02/2012 - 10:07 | 2580474 Citxmech
Citxmech's picture

Was little Ronney Howard in that episode as the Malachi character?

Mon, 07/02/2012 - 09:05 | 2580313 LetThemEatRand
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"It seems incredibly that the US regulators and investing public alike are shunning this interest rate rigging scandal..."

Not really.  We have a president who is bought and paid for by the bankers, a challenger who is a banker, and a Congress that either doesn't know what Libor is or who defer to their banker contributors that it's really no big deal to manipulate rates for the benefit of the banks so they can do God's work.  The vast majority of the public isn't paying any attention at all, or they are willing to look the other way so long as Greenspan keeps propping up their 401K balance.

Mon, 07/02/2012 - 09:07 | 2580317 SheepDog-One
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'The investing public'? I'm not at all convinced there even is one. 

Mon, 07/02/2012 - 09:21 | 2580354 GMadScientist
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Note the lack of the word 'voluntary'.

Mon, 07/02/2012 - 09:23 | 2580361 Vince Clortho
Vince Clortho's picture

Investing Public = Working people trapped in their retirement pension plans and 401-Ks.

Mon, 07/02/2012 - 09:16 | 2580340 unununium
unununium's picture

At least Americans are used to trying to rationalize the disconnection of the Consumer Price Index from itself.

Mon, 07/02/2012 - 09:06 | 2580315 writingsonthewall
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This is true - and yet the BBA were "SHOCKED" at this news.

 

Those who continue to play in the markets are fools - this is the worst effort at deception yet - they're not even trying anymore - that's how little respect is left!

 

The banks are getting away with it and nobody is going to stop them because the world is full of loud mouthed pussies who won't do anything until it's far too late.

Mon, 07/02/2012 - 09:16 | 2580339 scatterbrains
scatterbrains's picture

Joe Stack would beg to differ with you.. but I get your point.

Mon, 07/02/2012 - 09:23 | 2580363 Bansters-in-my-...
Bansters-in-my- feces's picture

One up for Joe Stack....

He was the man........

a good man.

Mon, 07/02/2012 - 09:06 | 2580316 i-dog
i-dog's picture

 

"Had I realised what was going on, I would have blown the whistle."

Riiiiiiiight.....

Mon, 07/02/2012 - 09:08 | 2580322 SheepDog-One
SheepDog-One's picture

Lot of rear-view tough guys around. 

Mon, 07/02/2012 - 09:21 | 2580355 Vince Clortho
Vince Clortho's picture

Are they like internet thugs?

Mon, 07/02/2012 - 09:09 | 2580324 knukles
knukles's picture

(California Vallry Girl voice)

Oh my God, like what is with everyone?
I mean, like it is called London anyway.
Which is in Oregon, isn't it?.

Whatever.

Mon, 07/02/2012 - 09:22 | 2580358 GMadScientist
GMadScientist's picture

Gnar Gnar.

Mon, 07/02/2012 - 09:18 | 2580331 orangedrinkandchips
orangedrinkandchips's picture

KEY WORDS... 3-4 PER CENT!! NO BPS!!! % ABOVE WHAT WAS SUBMITTED. To the rest of the world...duh! You borrow at 60-80bps (.6%) when you should be borrowing at 3.6%!! It's one of those moments when you throw a ball up in the air AND IT NEVER COMES DOWN! things that make you go hmmmmm.....(that was 3 years ago, now it's business as usual and NOT A DAMN THING WILL CHANGE!)

 

BLANCHARD AD: wtf is up with this Blanchard ad? I dont understand. You have this middle-aged guy, then this chic in a shirt she bought at baby gap which is 3 sizes too small....IS THAT HIS DAUGHTER, WIFE? WHORE? NANNY? You have the kids, and the token grand parents....but is that is wife? older daughter?

If it were my daughter I wouldnt want her pushed those jacks in everyone's grill.

She looks all of 15. Normally in media they make it obvious the distinctions between the people in the ad's.....if you are a dad, you are not 4-5 years older than the dude playing your son!

WTF? SERIOUSLY....IF YOU ARE GONIG TO PUT HIS DAUGHTER IN THE AD, THEN DONT MESS WITH THAT AGE WHERE YOU CANT TELL WHAT ROLE SHE PLAYS....

 

I dont get it.

Ideas?

 

 

Mon, 07/02/2012 - 09:25 | 2580365 SheepDog-One
SheepDog-One's picture

I haven't seen that ad, but it sounds about right....some older guy discussing high finances with some little chick dressed like a whore 'who IS she, his 'trophy wife'? His daughter? An actual whore he just picked up? Just weird commercials.

Heres another choice one I caught while watching golf- Its 3 couples, somewhat older, and the guys are all saying they keep hearing things are bad and they should sell, get their money out. Then 'the wives' step in, looking up from their needlepoint of the Mona Lisa or something....certainly much more wise and level headed than their dopey male other-half's of course, and say 'RELAX! Look outside! The sky isnt falling you big silly goose!'

And....scene.

Mon, 07/02/2012 - 14:42 | 2581316 orangedrinkandchips
orangedrinkandchips's picture

yeah, the sky isnt falling...of course not! "ALL IN!"

 

right. Bottom line we are fighting a downturn which is cyclical and necessary.

 

I LOVE the smell of desperation in the morning!

 

 

Mon, 07/02/2012 - 09:27 | 2580377 SheepDog-One
SheepDog-One's picture

But back to that ad with the older guy and a 15 year old hooker lookin girl....HEY thats just the norm now! EVERYONES doin it!

Mon, 07/02/2012 - 10:07 | 2580472 i-dog
i-dog's picture

Had that conversation in the office just a few days ago....

21-year old ditz hears me talking and chips in: "You're a cradle snatcher!". So I asked her: "Would you go out with an older guy?". She replies, expectedly: "NO!". So I said: "Then why would you think I would want to date older women?"

Mon, 07/02/2012 - 14:43 | 2581320 orangedrinkandchips
orangedrinkandchips's picture

lol

Mon, 07/02/2012 - 09:13 | 2580333 lizzy36
lizzy36's picture

Looking forward to the defense that states:when the banks do it to save the banking system (preserve the status quo and their bonuses), that means it is NOT illegal.

Some day we may know learn, how all the fraud, corruption, and manipulation that broke the system, was then employed to save the system.

But the narrative is the ends always justify the means, when the ends have been decided on by the status quo.

Mon, 07/02/2012 - 09:13 | 2580334 Sojourner.
Sojourner.'s picture

The bankers have the best exterminators!!!

Mon, 07/02/2012 - 09:15 | 2580335 world_debt_slave
world_debt_slave's picture

those at the top knew what they were doing was criminal, but they know they are Too Big To Fail! Some small fish may fry but the big fish will just swim away.

Mon, 07/02/2012 - 09:16 | 2580341 Bansters-in-my-...
Bansters-in-my- feces's picture

"hide it right under thier noses"

Boy,lucky the banks hired the smartest of the smartest,otherwise this whole thing would be a big mess.

Mon, 07/02/2012 - 09:17 | 2580342 AndrewJackson
AndrewJackson's picture

Tyler,

Unfortunately I think that this scandal will lead to absolutely nothing. E$ futures havn't moved a blip and the front month contract is only trading at a 2 bp discount to Liebor.

Mon, 07/02/2012 - 09:21 | 2580356 falak pema
falak pema's picture

Was bunga bunga a libor inspired gimmick...big deal! everbody is doing it; why meeee? In the pillory box! 

Mon, 07/02/2012 - 09:26 | 2580371 GMadScientist
GMadScientist's picture

I'm tellin' ya....we need to set up a system where, instead of 7-figure wrist slaps on 9-figure scams, we sell tickets to shit directly onto whatever brown(formerly white) collar criminals make their way into the stockades this week. I doubt it would change their behavior, but it would be a source of revenue and could create some jobs in stockade manufacturing.

 

Mon, 07/02/2012 - 09:25 | 2580364 Monedas
Monedas's picture

Hoarding for 40 years, the stacking sindow was closed several years ago except for some token fun trinkets .... that's why I am the the perky little asshole you've come to love !          Monedas      1929         The Mother of Comedy Jihad 

Mon, 07/02/2012 - 09:27 | 2580375 GMadScientist
GMadScientist's picture

So....4 oz. ;)

Mon, 07/02/2012 - 09:25 | 2580367 Apocalicious
Apocalicious's picture

I fully anticipate this to require additional legislation as the answer. I mean, this sneaky, under-handed activity that existing regulators couldn't have possibly known about needs to stop! If only they had some inkling that Libor fixing was...price fixing. I mean, only an in-the-know super sleuth could have known this. Surely, more regulations and fewer, larger competitors for the regulators to monitor will prevent such a scenario from occurring again.

Mon, 07/02/2012 - 11:30 | 2580734 Winston Churchill
Winston Churchill's picture

If you think the NY Fed was not involved to its armpits in this, I've got

some beachfront property in Montana for you to buy.

Turbo Tax Timmy was its head then.

Strange how Barclays got first dibs at Lehman corpse.

Mon, 07/02/2012 - 09:26 | 2580372 bigwavedave
bigwavedave's picture

Must. Be. Bullish

Mon, 07/02/2012 - 09:29 | 2580381 aerial view
aerial view's picture

"remember children: stealing and cheating are not tolerated and have severe penalties whether it occurs at school, work, in sports or any other activity unless of course you're part of the big banking cartel; then anything goes!  Now let's all sing our new national anthem: oh, I wish I was an Oscar Meyer Banker so I could steal from everyone I met, that's all I really want to be......"

Mon, 07/02/2012 - 09:38 | 2580399 insidious
insidious's picture

You guys are way over reacting. Obummer, TOTUS in Chief, has said (decreed?) that while some of the things the banks have done (will do?), while perhaps morally questionable (at the margin), have never been (and will never be) technically illegal.

 

What he didn't say but which can be inferred (based on the US governments prosecutorial track record under Obummer) is that in any case, even if it "appeared" that the banks did do something illegal, we would not prosecute them. This type of action (inaction?) by Obummer and his “Justice” Department is consistent though and is exemplified by their recent decision to not prosecute AG Eric Holder after the House of Representatives approved a resolution charging the AG with criminal contempt of Congress.

Mon, 07/02/2012 - 09:42 | 2580411 tabasco71
tabasco71's picture

May take a few -1's for this, but I don't see the problem here. Presumably, Bank 2 hires a similar group of aggresive traders to Bank 1. Bank 3 does likewise and then its a market and traders try to out do each other cos that's what these jobs are there for.  Of course if you prefer, you can sack your neighbours nephew and turn all the dealing over to the skynet algos - because they would definitely operate more fairly.

Next point is that traders exist in many commodity markets (apples, copper, vehicle parts, etc), so do you reall want to start drilling down into the way that business gets done in all those markets too ffs!!  In that case, at which point do you want to stop.. ? 

Honestly, the world is f'ed enough already without turning it in upon itself.  These useless scandals do nothing to get economies back to confidence and certainty that they need to start being productive again.

Fact: UK banks needed to get borrowings off BoE and onto Libor as the latter reflected the cost at which they were obtaining money in the market and as the trader indicates even once on Libor, banks lacked a proper set of balls in order to charge borrowers what they actually needed to break even - they attempted to make profit off the ancillary products (insurance, treasury, bonds, etc). Even now, the cost of debt to borrowers is still not properly priced and borrowers are still getting away with using funds for lower costs than the banks can afford.  Its the equivalent of selling a can of Coca Cola for 10p, because you made the customer promise they would come back again and buy another one tomorrow.... only they don't

Mon, 07/02/2012 - 09:49 | 2580436 azzhatter
azzhatter's picture

Jamie, is that you?

Mon, 07/02/2012 - 10:03 | 2580466 tabasco71
tabasco71's picture

Haha, yes, sorry...

But seriously, there's as much corruption in your kid asking you for £10 pocket money and you whittling him down to £5...

You wanna Levenson me for that too?

Mon, 07/02/2012 - 10:20 | 2580528 TheLuckyGeneral
TheLuckyGeneral's picture

Thats my worry too...that we get into a Levenson style scenario with the banking industry ......London can kiss its financial security goodbye in that case

Mon, 07/02/2012 - 10:37 | 2580583 jimmyjames
jimmyjames's picture

May take a few -1's for this, but I don't see the problem here.

*************

I suppose if you discount all the mom and pop investors that lost billions-then sure- no problem-

Triple damages-that could be adverse to the yearly bankers bonus bonanza if it ever gets that far-

**********

In its case, Schwab alleges: "Surreptitiously bilking investors of their rightful rates of returns on their investments, defendants reaped hundreds of millions, if not billions, of dollars in ill-gotten gains."

The cases are being brought under the Sherman Act, America's anti-trust legislation, which allows for triple damages.

Lawyers for the banks are due on Friday to file an attempt to have the Baltimore case thrown out. But Mr Hausfeld said Barclays' settlement “should undermine any effort to dismiss the claim on the basis that it is implausible that the alleged events took place

http://bit.ly/KNiI8u

Mon, 07/02/2012 - 12:04 | 2580826 tabasco71
tabasco71's picture

Hmm, a lawyer is leading the charge here now.  Well, it wouldn't be in his interest to make the whole thing  "far bigger than many people thought originally" now would it?

Maybe the answer is to have bankers sit a bar exam and take an oath because thats about the only difference between them and lawyers, but people apparently love lawyers and consider them to be honest.

So, once we have successfully destroyed the banking industry we'll have the only means of capital distribution being the unregulated shadow banking system.  Now, that certainly won't yield any more scandals... will it?!

Mon, 07/02/2012 - 12:14 | 2580854 jimmyjames
jimmyjames's picture

So, once we have successfully destroyed the banking industry we'll have the only means of capital distribution being the unregulated shadow banking system.  Now, that certainly won't yield any more scandals... will it?!

***************

Are you actually serious?

I have no love for lawyers or bankers-but how did you come up with the shadow banking system being the only way to distribute capital?

Guess what? when bankers die--fuck all happens-

There is such a method for dealing with the aftermath-it's called nationalization/gutting and redistribution and restructuring and that's the avenue we need to take instead of your "ignore the crime and full speed ahead BS"

Mon, 07/02/2012 - 12:31 | 2580897 tabasco71
tabasco71's picture

Brother, I am tired of living in this stagnant excuse for an economy, so I do think that rather than trying to pull our guts out of own assholes to inspect what we ate for dinner, we are better off focusing on getting back to business.

I only have 25 working years left and I really don't want to spend them getting my ass kicked and my food stolen by the BRIC's

I guess when you say nationalisation, I kinda automatically think of the NHS... ??

http://www.dailymail.co.uk/news/article-1255858/Neglected-lazy-nurses-Kane-Gorny-22-dying-thirst-rang-police-beg-water.html

Mon, 07/02/2012 - 13:37 | 2581093 jimmyjames
jimmyjames's picture

I guess when you say nationalisation, I kinda automatically think of the NHS... ??

*************

No-that wouldn't be the way to think of it-because you forgot the "redistribution" part-which would entail selling off the good assets to responsible banks (there actually are some)

The nationalization would be-wiping out bond holders and printing the depositors whole-

That would be the path to moving forward-not being bogged down in this "bailout or allow corruption to take place in what passes for a banking system-

Stop the looting and start the prosecuting-

Mon, 07/02/2012 - 14:47 | 2581331 tabasco71
tabasco71's picture

Fair enough.

I'm not sure you can discard bond holders completely though - a fair few of them must be responsible parties too, like pension schemes...

Mon, 07/02/2012 - 15:53 | 2581543 jimmyjames
jimmyjames's picture

a fair few of them must be responsible parties too, like pension schemes...

********

Yes--people would be hurt-but they invested in the risk/yields and sometimes you lose-that is free market law-

Why should people who didn't take the risk-share in the losses?

Mon, 07/02/2012 - 09:55 | 2580448 Oldwood
Oldwood's picture

 The principles of a free economy require that both sides of a transaction win. The financial markets are not free as they require there to be a loser to facilitate the winner. Redistribution, not production. Wealth relocation not creation. When i build something and sell it to you, we both get something. When i place a bet and win, someone else loses and pays the bet. When the game is sufficiently rigged, i can win a lot more than I lose. Ever noticed how few want to bet on the flip of a coin? The odds are only 50/50. People only want to bet where they think the odds are in their favor, and we are shocked to find out that the most winning betters are in a rigged game. When you thought you could make a killing from the "muppets" like JPM or Goldman does, all was good, but now you discover you are a muppet too, it grates on you.

Mon, 07/02/2012 - 10:39 | 2580596 Downtoolong
Downtoolong's picture

A lot of people were in on it. But even a lot more affected by it weren’t. It’s still a case of too much money and too much power in the hands of too few people who are unbelievably,  incomprehensibly, unimaginably too fucking full of themselves to care about anyone else. The biggest crime of all is that these practices are economically inefficient. For every dollar they make, it costs the rest of us thousands.

If only the level of punishment could fit the crime. But that will never happen. No doubt Barclays and other banks involved will once again find a way to further profit from this debacle under the guise of stepping up and heroically fixing the problem they caused.

Mon, 07/02/2012 - 11:15 | 2580697 Zola
Zola's picture

Trader: "Oh yeah we were doing some bad stuff but you know everyone was doing it .. yeah i got a nice fat salary and nice bonus, bought some houses and f***some bi*** but yeah it's deserved, come on if only i had known if would have blown the wistle.. trust me !! No need for clawback come on, everyone knew the banks were corrupt, but i still chose to work for them !! got to pay the bills huh ... wink wink "

Mon, 07/02/2012 - 11:16 | 2580698 El
El's picture

Both government and the financial sector have reached that stage teenagers sometimes reach when they realize there isn't much that can be done to them. They are too old to spank and what parents can do (i.e. grounding) is irrelevant in the face of what the teen wants to do. Government and the financial sector have reached a point where they are too big to properly punish, so no one will bother to try. This is the stage of "girls gone wild."

Mon, 07/02/2012 - 11:17 | 2580703 Sandmann
Sandmann's picture

Simply direct the Courts to make all LIBOR contracts unenforceable

Mon, 07/02/2012 - 11:35 | 2580747 chinaboy
chinaboy's picture

What is conspicuous is the general numbness in the USA towards Libor manipulation. The main stream wanted to paint it as "already taken care of by the fine". The main street did not really know what was going on. The elite was happy because it helped keeping rates down. Only handful few came out to decry. For a country that relies heavily on virtual economy, this numbness really indicates deep sickness.

Mon, 07/02/2012 - 11:38 | 2580751 rosiescenario
rosiescenario's picture

As seen in today's news....the FSA is requiring banks in the UK to "make whole" borrowers who purchased interest rate SWAPS to protect them from interest rate increases. These SWAPS are LIBOR based. Little wonder the banks were eager to sell them as the bank knew they had the rate firmly under control. Many of those so damaged are family farmers in the UK.

 

 

Mon, 07/02/2012 - 12:00 | 2580806 Pee Wee
Pee Wee's picture

"...UK FSE's Director of enforcement..."

BWAAAHA HA HA HA HA HAAHAHAHA!!!!!

 

That is the best joke I've heard on a Monday in a while.

Fraud from record-bonus-tippy-top to absolute bottom.  From liebor to "appraisals,"  it's all a crying shame and the biggest joke on the regular-guy paying for this quad-decade crock of shit.

Mon, 07/02/2012 - 12:10 | 2580842 tony bonn
tony bonn's picture

"...In no sense was this a clandestine gathering..."

that's because laws and regulations are for the little people....

Mon, 07/02/2012 - 18:28 | 2580902 Widowmaker
Widowmaker's picture

Shoot "everyone" in finance caught and found guilty of lying, cheating or stealing in the head.

"It" endeth immediately.

Mon, 07/02/2012 - 12:47 | 2580926 Random_Robert
Random_Robert's picture

All of this (and I mean ALL of it, as in globally)   is neatly folded up intothe fact that when the denominator is not known, the fraction is invalid.

1/x  can only solved if X can be deduced in terms (or multiples) of 1. Otherwise there is the possibility that X might be equal to 0 (xero), and anybody who has ever used Microsft Excel knows that is a no-no.

 

Solving for X (Euros) in terms of Y (Dollars) also only works if X and Y are not concurrently zero as well. Otherwise: same error.

 

So, are we really at the global inflection point where economists and bankers need to solve for X in real terms for fear that if they don't, then X will trend to zero; thereby making the entire fucking global denomination (pricing) process null and void?

 

We have denominated the entire planet's financial transactions using terms like "Dollar", "Pound", "Yen" and "Euro"  and yet each of these is a simple abstraction that itself is not a fixed denominator.

 

There is only ONE written legal definition for a dollar- 371 grains of fine (90% purity or better) Silver.I have no clue what the legal definition of one Yen is...

 

The bankers had better get some laws re-written and passed PRONTO.

 

MS Excel provides the #DIV/0  error for a reason... Why haven't our brilliant central banking PH.D economists figured this out yet?

 

 

 

Mon, 07/02/2012 - 14:11 | 2581214 W10321303
W10321303's picture

Oh c'mon, we all know that this is all the fault of the GREEKS and the public employee unions.  (you're an IDIOT Babe, I'm amazed you still know how to breath....Bob Dylan)

In case it isn’t yet apparent to you, the unfolding scandal over manipulation of Libor and its Euro counterpart Euribor is a huge deal. Even though at this point, only Barclays, the UK bank that was first to settle, is in the hot lights, at least 16 other major financial players, which means pretty much everybody, is implicated.

First, Libor is the basis for pricing over $10 trillion of loans. As the CTFC noted:  (www.nakedcapitalism.com)

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