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The Li(e)bor Rigging Scandal Infographic For Dummies

Tyler Durden's picture





 

Via Healthcare Administration,

Since (at least) 2005, Barclays has been manipulating LIBOR, and their traders have been allegedly pocketing $40MM a day betting on interest rate derivatives. If the LIBOR, one of the most fundamental metrics of our banking system can be rigged, can you imagine what other elements of our financial system are a fraud? This morning's comments from European regulators appears to confirm that this story has a long way to go as ECB's Almunia states: "The evidence we have collected is quite telling so I am pretty sure this investigation will not be closed without results."

 


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Tue, 07/24/2012 - 18:04 | Link to Comment daveeemc2
daveeemc2's picture

no, thats too personal and doesnt have the mass effect carlyle group wants.... this is more like it

http://vimeo.com/24854061 You eat stuff grown in your neighbors shit. Bon appetit.

Tue, 07/24/2012 - 18:11 | Link to Comment SilverTree
SilverTree's picture

Graphic!

Tue, 07/24/2012 - 18:16 | Link to Comment Debtonation
Debtonation's picture

The uber large banks can just borrow from the Fed's discount window for ZIRP.

Tue, 07/24/2012 - 18:46 | Link to Comment Xibalba
Tue, 07/24/2012 - 19:14 | Link to Comment ITrustMyGut
ITrustMyGut's picture

new Clif High ( Webbots guy ) up from yesterday....  pretty damn dark...

 

http://www.payloadz.com/d1/freeproducts.asp?id=1643744

 

Tue, 07/24/2012 - 19:20 | Link to Comment Caviar Emptor
Caviar Emptor's picture

But but... if the big banks can bet on a change in interest rates AND also know ahead of time what they're going to chnage to...isn't that a little Dishonest? 

No! I can't accept it! They're too big to fail and too fat to impale! 

I want to get plugged back into the Matrix now....please!

Wed, 07/25/2012 - 00:02 | Link to Comment Yohimbo
Yohimbo's picture

Webbots are FAIL,  even High Clif Said that, and threw in the towel, saying "(sic) It Doesnt work" only to come back the next week, with more nonsense.

Wed, 07/25/2012 - 06:59 | Link to Comment shokdee
shokdee's picture

Cliff High has no dignity, every single "web bot" prediction has failed totally, yet he blubbers on. His last main predition about not seeing past May 2012, and that early May would be the end of the world as we know it. His post starts:

"Your last 26 days of life. On March 2, 2012, the zionists (isreali mossad and cia agents) who are the stooges of the central banksters, will attack an American naval ship (as they did with the USS Liberty). ...."

See for yourself here :http://halfpasthuman.com/lastdaysofyourlife.html

Web bot / Cliff High is a complete fraud.

Tue, 07/24/2012 - 18:56 | Link to Comment WillyGroper
WillyGroper's picture

gives new meaning to eat shit & die. Fracking fluids are disturbing as well.

Tue, 07/24/2012 - 18:10 | Link to Comment runlevel
runlevel's picture

ive never seen so many infographics for one event.

Tue, 07/24/2012 - 17:57 | Link to Comment RacerX
RacerX's picture

So where's the squid in all of this?

Tue, 07/24/2012 - 18:03 | Link to Comment SilverDoctors
SilverDoctors's picture

Good question- no doubt Blankfein and Co were as much involved as JPM and BOA.

Jim Willie predicted in early June the 10 year would make a run to 1%, prior to an epic collapse in treasuries and an explosion in gold.
With the 10 and 30 year making new record lows today...looks like Willie nailed that one.

http://www.silverdoctors.com/jim-willie-ustbonds-black-hole-dynamics/

Tue, 07/24/2012 - 18:30 | Link to Comment SilverTree
SilverTree's picture

Now all we need is the PM explosion.

Tue, 07/24/2012 - 19:26 | Link to Comment tekhneek
tekhneek's picture

No way they'd manipulate that like LIBOR.

/sarc

Tue, 07/24/2012 - 17:58 | Link to Comment falak pema
falak pema's picture

could one bet on manipulated backwardation trend of Libor in Barclay's via derivative swaps? That would be insider trading where the collusion would be evident. Did they?

Tue, 07/24/2012 - 17:59 | Link to Comment daveeemc2
daveeemc2's picture

Im just not suprised by any of this any more.

They got u by the balls, 24 hrs a day telling u wat to believe, what to buy. Its a big club, and YOU aint in it.

http://www.youtube.com/watch?v=iHsIjMPP2M8

Sh!t stinks, no matter how you spin it.....

Tue, 07/24/2012 - 18:22 | Link to Comment eclectic syncretist
eclectic syncretist's picture

recognition of the problem is the first step towards fixing it, and you've recognized the problem.

I can't in good concious hold my nose and vote for either of the bimbos the repubocrats are offering as solutions.  I'm writing in Ron Paul if they won't put him on the ballet.  He's the only one who seems to know what you know.

Tue, 07/24/2012 - 19:23 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Mitt might say that he'll become a banking Robin Hood, putting on tights and fighting the mighty cartel for the little guy! 

Tue, 07/24/2012 - 20:36 | Link to Comment pods
pods's picture

Hmmm, a prospective government employee wanting to help me, or not voting..................

I think I will go with the latter.

pods

Wed, 07/25/2012 - 01:48 | Link to Comment cbxer55
cbxer55's picture

Things that make you go hmmmm!

Somehow I just do not believe that Mittens in tights would be a help to anyone.

Wed, 07/25/2012 - 09:36 | Link to Comment StychoKiller
StychoKiller's picture

Duz majic underware float yer boat?  :>D

Tue, 07/24/2012 - 23:00 | Link to Comment dirtbagger
dirtbagger's picture

"All animals are equal, but some animals are more equal than others".  Orwell - Nothing new here move along.

Tue, 07/24/2012 - 17:59 | Link to Comment asteroids
asteroids's picture

"The wheels on the bus go round and round...." Until they fall off!

Tue, 07/24/2012 - 18:00 | Link to Comment maxw3st
maxw3st's picture

Stay tuned, more to come...

Tue, 07/24/2012 - 18:00 | Link to Comment SHEEPFUKKER
SHEEPFUKKER's picture

Market riggings= bankster hangings. 

Tue, 07/24/2012 - 18:00 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

Expose these banking thieves for the cocksuckers they are.  Arrests!  Trials!  The Gallows!

Tue, 07/24/2012 - 18:13 | Link to Comment yabyum
yabyum's picture

Al, Let me tell ya: Wu's pigs!

Tue, 07/24/2012 - 19:47 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

Wu's pigs would spit out bankster flesh.

Tue, 07/24/2012 - 20:38 | Link to Comment pods
pods's picture

These banking thieves should be hung because they create credit and lend it out at interest.

And they have been doing that for over a hundred years in the USSA.

pods

Tue, 07/24/2012 - 18:01 | Link to Comment Pretorian
Pretorian's picture

Excellent picture. Wait until instead of Title "Libor Manipulation" says "FX Manipulation" syndicate. 

Tue, 07/24/2012 - 18:14 | Link to Comment graneros
graneros's picture

""The evidence we have collected is quite telling so I am pretty sure this investigation will not be closed without results.""

 

We all know how this works.  Undoubtedly money will change hands a few inconsequential political enemy small fries will take the fall, lots of political posturing, a new law or two, then everyone will retire to the club for cocktails and entertainment with the more astute ones getting into the pretty blonde reporter's panties. Case closed. Story at 10.

Tue, 07/24/2012 - 19:25 | Link to Comment Caviar Emptor
Caviar Emptor's picture

I'm guessing there will be one fine and a few "firings". 

And yes, the politicians will compete to claim they saved the day. And then it's off to Berlusconi's house for the weekend

Tue, 07/24/2012 - 18:05 | Link to Comment youngman
youngman's picture

Yes but the Lawyers smell money....and the cities and states are short of cash...and this looks like an easy kill....so i expect them to go for the throat...settlements of course...no one will be found at fault...but I think it could be trillions...my loans were tied to libor....

Tue, 07/24/2012 - 18:27 | Link to Comment eclectic syncretist
eclectic syncretist's picture

Class action suits on behalf of every person who has had any form of debt over the last several years! 

Sounds like the occasional suits against the legality of fiat money that get quickly dismissed on dubious grounds before they can every access the public conciousness where everyone would realize how effectively they've been screwing us.  I love it!  Keep those suits coming!

Tue, 07/24/2012 - 19:27 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Did the Robosigning scandal get anywhere? That was supposed to be wirth trillions. 

 

Tue, 07/24/2012 - 22:36 | Link to Comment Spastica Rex
Spastica Rex's picture

Yes, I think Mariah Carey is going to be a new judge on American Idol.

Wait: what did you ask?

Tue, 07/24/2012 - 19:29 | Link to Comment BurningFuld
BurningFuld's picture

How about class action suits from anyone who had any SAVINGS and got no fucking interest on it because of the manipulated fucking libor.

Tue, 07/24/2012 - 20:37 | Link to Comment fasTTcar
fasTTcar's picture

That would not get anywhere.

Everyone knows American's don't have savings.

Tue, 07/24/2012 - 18:05 | Link to Comment Stoploss
Stoploss's picture

Anyone who had any kind of credit in the last 20 years has a case.

 

Hmm, ok, who hasn't had any kind of credit in the last 20 years..

Tue, 07/24/2012 - 18:12 | Link to Comment AL_SWEARENGEN
AL_SWEARENGEN's picture

Exactly.  These cocksuckers steal from everyone, all of us.  Time for the debt jubilee and let these crooks fall on their swords.

Tue, 07/24/2012 - 18:07 | Link to Comment Mr_Wonderful
Mr_Wonderful's picture
A Letter From An Angry Banker - 'They Couldn't Wait To Kick Us When We Were Down'

It's a conspiracy.

'I have been reading the stuff in the press about HSBC and its alleged compliance failings in the U.S., and I admit I am seething.

There's all this talk about drug barons, terror organisations and terrorist states allegedly using HSBC to launder and transfer money - for years - and yet the 'establishment', which was quick to round on my own firm, Barclays, for its LIBOR rate fixing, does nothing.

Why isn't the UK government, quick to come out and condemn Barclays and its culture over LIBOR, all over this ? Oh wait a minute. Is that because the UK Trade Minister, Lord Green, was until faily recently a senior executive over at HSBC ? In fact, most of the admitted wrongdoings took place on his watch.

And what about a Parliamentary hearing (remember Bob Diamond, our former CEO, was called up in quick order to explain himself) ?

And the regulators - you know, the guys at The Bank of England and The Financial Services Authority who pressured our outgoing Chairman to give Bob the boot ?

But let's be honest, the authorities (and by that I mean Parliament, the Bank, and the regulators) never did like us. We were always considered to be loose cannons, pushing the envelope in our quest for profits. We were never forgiven for refusing a taxpayer bailout during the early stages of the financial crisis, when we were able to attract private funds to beef up our balance sheet instead. We were never forgiven for having a global investment banking franchise, and paying decent bonuses to bankers (HSBC, on the otherhand, is a bit player in investment banking, and was always rather frugal when it came to year-end bonuses).

And we were never forgiven for having Bob Diamond as our CEO. A brash American, whatever next ?

So, the first opportunity the establishment gets to nail us, it does. They couldn't wait to kick us when we were down. And we were shafted. Bye, bye Bob; bye bye investment banking; and bye bye my share options.

And as for HSBC ? Not a mumur. Just a conspiracy of silence. The whole thing stinks'.

 http://hereisthecity.com/2012/07/24/letter-from-an-angry-banker-we-were-...

 

Tue, 07/24/2012 - 18:15 | Link to Comment fonzannoon
fonzannoon's picture

Ah an angry banker jealous and pissed off. I think I hear a wambulance coming...

WAAH WAAAH WAAAH

F him.

Tue, 07/24/2012 - 18:35 | Link to Comment cougar_w
cougar_w's picture

But let's be honest, the authorities never did like us.

Kinda gives it away, don't it?

Tue, 07/24/2012 - 18:09 | Link to Comment Occams Aftershave
Occams Aftershave's picture

No articles I've read previous to this infographic have actually explained what the bankers did.   It's a bit bizarre that the best exposé appears on the healthcareadministration.com website, but hey.... knowledge is where you find it.

Now I get it.   Most of the rigging and $40m/day profits took place years ago.  Nowadays, in the time of zirp, less so.   One would bet this rigged game was a mainstay in those quarters where banks never had a down trading day.

Tue, 07/24/2012 - 18:08 | Link to Comment Rainman
Rainman's picture

....so what happens if the boyz are forced to play a straight game ??

Deutsche Bank takes a 42% profit dump in Q2

 

http://www.bloomberg.com/news/2012-07-24/deutsche-bank-says-quarterly-profit-fell-42-as-expenses-gained.html

Tue, 07/24/2012 - 18:14 | Link to Comment sampo
sampo's picture

 

....so what happens if the boyz are forced to play a straight game ??

Libor @ 66,6%?

Tue, 07/24/2012 - 18:09 | Link to Comment silverserfer
silverserfer's picture

its a circle jerk and someone diddnt finish their job.

Tue, 07/24/2012 - 18:13 | Link to Comment SqueekyFromm
SqueekyFromm's picture

How could a consumer be directly injured by a falsely low LIBOR??? I can see how a falsely high LIBOR could harm consumers. I can see how some idiot betting on derivatives could be screwed either way, but do I really care at all about the idiots who use, and bet, on derivatives??? Isn't the real problem for most people if the LIBOR falsely manipulated UP as opposed to DOWN.

Plus, if LIBOR was manipulated downward, didn't banks as a whole stand to lose as their own interest rate would net them less??? Am I wrong??? 

Squeeky Fromm, Girl Reporter

Tue, 07/24/2012 - 18:24 | Link to Comment Rainman
Rainman's picture

Seeing the future in 100% HD is MONEY !!!!!!

Tue, 07/24/2012 - 18:26 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

so many Libor rates and so little time...

Tue, 07/24/2012 - 18:51 | Link to Comment fonzannoon
fonzannoon's picture

Squeeky google Jon Stewart's explanation of LIbor. ZH posted it too.

Tue, 07/24/2012 - 19:35 | Link to Comment SqueekyFromm
SqueekyFromm's picture

Fonz:

Thank you!!! I will. 

Squeeky Fromm, Girl Reporter

Tue, 07/24/2012 - 19:13 | Link to Comment rosiescenario
rosiescenario's picture

True, but the banks were also selling interest rate swaps that made them far more money and far more quickly when the rates did not go up. I know....the group I work with bought some of these from BofA....they made a killing on what we dumbly purchased....but we are going to sue. The FSA in the UK has already required the banks to make farmers whole who bought similar swaps there.

Tue, 07/24/2012 - 18:13 | Link to Comment buzzsaw99
buzzsaw99's picture

whoever was paying them $40M per day was sum dum fuks.

Tue, 07/24/2012 - 18:25 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

Nice...now let's talk about Prime Rate manipulation.

Tue, 07/24/2012 - 18:43 | Link to Comment Rainman
Rainman's picture

3.25 for what ??? 4 years.....??? what's to talk about ? That's rigged too.

http://www.fedprimerate.com/

Tue, 07/24/2012 - 19:08 | Link to Comment Dr. Acula
Dr. Acula's picture

Why does the Fed fix the price of loanable funds, but not that of other goods, for instance potatos?

Because they have no coherent theory of economics.

They are merely dilettantes in numerology.

 

Tue, 07/24/2012 - 18:29 | Link to Comment marz929
marz929's picture

WHERE IS JON CORZINE?

Tue, 07/24/2012 - 18:30 | Link to Comment Freewheelin Franklin
Freewheelin Franklin's picture

So, it's like a bookie that has a member of a pro sport team on the payroll that is shaving points off the game to cover the spread? 

Tue, 07/24/2012 - 18:31 | Link to Comment cougar_w
cougar_w's picture

I remember the days in 2008 when we were watching LIBOR go up like a scream as banks quit lending to each other due to assumed risks inter-bank. Essentially, everyone in the financial community aready knew everyone else was insolvent and felt they wouldn't get their money back even on over-night loans to big names. So the risk-weighted LIBOR had to go up.

Then it all sorta died down. Now I guess we know what was going on behind the scenes.

I can understand one bank not wanting to lend to another. Lehman was no doubt floating loans "overnight" and comfy LIBOR rates right up until the day they imploded. Who knows how much capital evaporated in that wee clusterfuck? The banks sure as hell knew. And any one of the others might have been next.

In a way, this is like a private club. The bankers play with each others' toys (I was going to say dicks) all the time and nobody needs know about it. During 2008 we had a rare glimpse. Now again, we get another. Should we care what they do? I'm not sure, and I don't know how these inter-bank rates hedge risk. But if one of the banks is sitting on a powder keg and will blow up any day, then we want healthy banks (I assume there are one or two left) to stay away from them or at least get a big risk premium, otherwise the demands on taxpayer bailouts is all the worse when the bomb does go off.

Tue, 07/24/2012 - 19:00 | Link to Comment Dr. Acula
Dr. Acula's picture

>Should we care what they do?

No, why would you care if other people are manipulating their own made-up numbers like LIBOR? Anyone who depends on such a number is an idiot.

>But if one of the banks is sitting on a powder keg and will blow up any day

That's what Ponzi schemes / fractional reserve / bailment fraud operations do.

>then we want healthy banks

That's an oxymoron. Like a healthy melanoma.

>the demands on taxpayer bailouts is all the worse when the bomb does go off.

Americans love it when their wealth is stolen. They love being impoverished. That's why they're voting for Obamney.

 

Tue, 07/24/2012 - 19:33 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Look, we are all polite gentlemen of means here. WE don't want to create a scandal. Let's just agree that Jerry Sandusky is a bit weird, and let it go at that

Tue, 07/24/2012 - 18:32 | Link to Comment q99x2
q99x2's picture

The NSA has years of everyone's emails. Which ones do you think might be released. Perhaps enemies of the Bush family? Central Bankers? 

We are going to have a another mentally challenged world leader soon.

Tue, 07/24/2012 - 18:37 | Link to Comment magpie
magpie's picture

...you still believe they even bother with 'real' emails ? How quaint.

Tue, 07/24/2012 - 18:33 | Link to Comment Aquarius
Aquarius's picture

The enemy http://tinyurl.com/d2t949v

and

 

Its analogical form http://tinyurl.com/cpqod8l

 

it's just natural physics

Tue, 07/24/2012 - 18:41 | Link to Comment The Fonz...befo...
The Fonz...before shark jump's picture

Throw them all in jail and let them manipulate the trading of cigarettes in the big house....

Tue, 07/24/2012 - 18:43 | Link to Comment GlomarHabu
GlomarHabu's picture

Most contributors at this site are well versed in the knowledge that most all, if not all, markets and the stats they produce are rigged.

It is now so blatant that the Ancien Régime is simply rubbing our noses in the smegma ....

I said it before in discussing the Melian Dialogue.

"the strong do what they can ( want to) and the weak suffer what they must"

Tue, 07/24/2012 - 18:58 | Link to Comment graneros
graneros's picture

"the strong do what they can ( want to) and the weak suffer what they must"

The rest of us mark time posting on ZH while trying to get stronger.

Tue, 07/24/2012 - 19:03 | Link to Comment Dr. Acula
Dr. Acula's picture

"the mentally retarded do what they can (vote for Obamney) and the rest suffer what they must"

Tue, 07/24/2012 - 18:58 | Link to Comment RobotTrader
RobotTrader's picture

More scandals = bigger bids into U.S. Treasuries.

 

10-yr. bond futures just hit another lifetime high.

Paper Bubble is getting even more crazy, everybody will be throwing in the towel on stocks and will start buying bonds at any price after that AAPL miss.

Tue, 07/24/2012 - 19:01 | Link to Comment Walt D.
Walt D.'s picture

" If the LIBOR, one of the most fundamental metrics of our banking system can be rigged, can you imagine what other elements of our financial system are a fraud?"

So the unemployment numbers, the CPI, GDP - these numbers are all rigged? Please tell me it ain't so.

Tue, 07/24/2012 - 19:22 | Link to Comment Chippewa Partners
Chippewa Partners's picture

Corzine takes investors off a fiscal cliff and is golfing every day.

This can't be anything to be seriously investigated can it?

 

Wed, 07/25/2012 - 06:17 | Link to Comment pherron2
pherron2's picture

As long as he can keep it on the fairway, should keep him in the open for a good headshot!

sorry, just couldn't resist :)

Tue, 07/24/2012 - 19:35 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Lesson # 1: Without overt conspiracy, the financial system is unsustainable

Tue, 07/24/2012 - 20:11 | Link to Comment DoolieDoink
DoolieDoink's picture

So which was worse, US rating agencies in cahoots with banks grading sub-prime loans as AAA investments or the Liebor scandal ?

It will be interesting to see if American lawers find the impetus to go for European liebor manipulating banks and yet the same lawyers had allowed US Banks "carte blanche" sub prime criminality.

Tue, 07/24/2012 - 20:29 | Link to Comment max2205
max2205's picture

Crime = 30 yr at 2.45 and 30 Yr mortgage rate at 3.5. Wtf kind of fcuking spread is that folks. There's NO effort to get people into houses at a fair rate.

Its a crime and fcuking Obbummer isn't doing shit about it Cept letting these banking motherfuckers make an unlawful and out fcuking obscene spread on the backs of the very people who bailed them out and are getting DP'd as thanks.

Tue, 07/24/2012 - 20:57 | Link to Comment JR
JR's picture

@Squeaky Fromm:Isn't the real problem for most people if the LIBOR falsely manipulated UP as opposed to DOWN.”

The Meaning of Libor-gate by PAUL CRAIG ROBERTS

Excerpts

T]he “safety” and “flight to quality” explanations (of the demand for Treasuries despite their negative yield) could not exist if interest rates were rising or were expected to rise. The Federal Reserve prevents the rise in interest rates and decline in bond prices, which normally result from continually issuing new debt in enormous quantities at negative interest rates, by announcing that it has a low interest rate policy and will purchase bonds to keep bond prices high. Without this Fed policy, there could be no flight to safety or quality.

It is the prospect of ever lower interest rates that causes investors to purchase bonds that do not pay a real rate of interest. Bond purchasers make up for the negative interest rate by the rise in price in the bonds caused by the next round of low interest rates. As the Federal Reserve and the banks drive down the interest rate, the issued bonds rise in value, and their purchasers enjoy capital gains.

As the Federal Reserve and the Bank of England are themselves fixing interest rates at historic lows in order to mask the insolvency of their respective banking systems, they naturally do not object that the banks themselves contribute to the success of this policy by fixing the LIbor rate and by selling massive amounts of interest rate swaps, a way of shorting interest rates and driving them down or preventing them from rising.

The lower is Libor, the higher is the price or evaluations of floating-rate debt instruments, such as CDOs, and thus the stronger the banks’ balance sheets appear.

Does this mean that the US and UK financial systems can only be kept afloat by fraud that harms purchasers of interest rate swaps, which include municipalities advised by sellers of interest rate swaps, and those with saving accounts?

The answer is yes, but the Libor scandal is only a small part of the interest rate rigging scandal. The Federal Reserve itself has been rigging interest rates. How else could debt issued in profusion be bearing negative interest rates?

As villainous as they might be, Barclays bank chief executive Bob Diamond, Jamie Dimon of JP Morgan, and Lloyd Blankfein of Goldman Sachs are not the main villains. The main villains are former Treasury Secretary and Goldman Sachs chairman Robert Rubin, who pushed Congress for the repeal of the Glass-Steagall Act, and the sponsors of the Gramm-Leach-Bliley bill, which repealed the Glass-Steagall Act. Glass-Steagall was put in place in 1933 in order to prevent the kind of financial excesses that produced the current ongoing financial crisis.

President Clinton’s Treasury Secretary, Robert Rubin, presented the removal of all constraints on financial chicanery as “financial modernization.” …

It was financial deregulation–the repeal of Glass-Steagall, the removal of limits on debt leverage, the absence of regulation of OTC derivatives, the removal of limits on speculative positions in future markets–that caused the ongoing financial crisis. …

The ongoing crisis cannot be addressed without restoring the laws and regulations that were repealed and discarded. But putting Humpty-Dumpty back together again is an enormous task full of its own perils. …

What follows is not an apology for fraud. It merely describes consequences of holding those responsible accountable.

Imagine the Federal Reserve called before Congress or the Department of Justice to answer why it did not report on the fraud perpetrated by private banks, fraud that was supporting the Federal Reserve’s own rigging of interest rates (and the same in the UK.)

The Federal Reserve will reply: “So, you want us to let interest rates go up? Are you prepared to come up with the money to bail out the FDIC-insured depositors of JPMorganChase, Bank of America, Citibank, Wells Fargo, etc.? Are you prepared for US Treasury prices to collapse, wiping out bond funds and the remaining wealth in the US and driving up interest rates, making the interest rate on new federal debt necessary to finance the huge budget deficits impossible to pay, and finishing off what is left of the real estate market? Are you prepared to take responsibility, you who deregulated the financial system, for this economic armageddon?

Obviously, the politicians will say NO, continue with the fraud.

But the question remains: How long can the regime of negative interest rates continue while debt explodes upward? … If the collapse of the system does not result from scandals, it will come from outside. …

To sum up, what has happened is that irresponsible and thoughtless–in fact, ideological–deregulation of the financial sector has caused a financial crisis that can only be managed by fraud. Civil damages might be paid, but to halt the fraud itself would mean the collapse of the financial system. Those in charge of the system would prefer the collapse to come from outside, such as from a collapse in the value of the dollar that could be blamed on foreigners, because an outside cause gives them something to blame other than themselves.

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal.  His latest book,  Wirtschaft am Abgrund (Economies In Collapse) has just been published.

http://www.counterpunch.org/2012/07/20/the-meaning-of-libor-gate/

Tue, 07/24/2012 - 21:39 | Link to Comment BetaRules
BetaRules's picture

What I don't get is why Barclays is singled out. I know fingers are bing pointed at other banks too. If the methodology throws out the top and bottom 4 contributions, then manipulation by only one bank becomes an art. They want to be number 5 (top or bottom) for maximum effect. The chances of being in the zone but at its edge would damp the magnitude of manipulation possible. If however more contributors were manipulating the rate in concert then................

Wed, 07/25/2012 - 09:34 | Link to Comment FRBNYrCROOKS
FRBNYrCROOKS's picture

Barclays and Bob Diamond ( nice name; probably used to be diamondujsky) had the misfortune of mass emailing the whole firm documenting their fraud. You would think they would have learned from Hank Paulson, who testifying to the House Subcommitee on Banking in 2009? claimed; after being grilled as to his knowledge and communications of the cds/cdo debacle and magnitude of risk,  "I don't use email". Seems Diamond and all the banks should hve used Hank's MO!

Tue, 07/24/2012 - 22:08 | Link to Comment BetaRules
BetaRules's picture

Something that seems to have escaped attention is the size of the positions Barclays (and I assume other banks) were running. If as alleged above, Barclays pocketed up to $40m in a day. What sort of exposure (DV01) would they have had (I suppose I could assume an average duration and overnight move to get a number). Was this ever monitored, reported or commented on. Were these positions "normal" in magnitude, How do they compare to other positoins over time, and at present. Is there a correlation in the positoins and the periods when LIBOR was skewed.

Tue, 07/24/2012 - 22:13 | Link to Comment BetaRules
BetaRules's picture

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Tue, 07/24/2012 - 22:46 | Link to Comment Ted Baker
Ted Baker's picture

The attack on barcap is political as the brits never liked diamon and has nothing to do with libor fixings since for most part of the period in question barcap rates were off the mark in taking part of the median or average libor across all maturities...the problem is there are few clever guys out there but many but many inept people

Wed, 07/25/2012 - 00:22 | Link to Comment Clowns on Acid
Clowns on Acid's picture

When even the centrally planned, State price of Libor is set "too  high" by the banks, and they are told to lower it further.....one has no need for further evidence that you are in..... the Twilight Zone.

Wed, 07/25/2012 - 02:29 | Link to Comment silverdragon
silverdragon's picture

Throw all the banksters and politicians in jail.

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