Posted on 07/08/2012 1:42:13 PM PDT by neverdem
THE unfolding story of how Barclays and, in all likelihood, other big banks rigged interest rates is full of telling tidbits about the way Wall Street works. It also represents yet another teachable moment.
By now the world knows that Barclays manipulated the most widely used benchmark rate, the London interbank offered rate. But Barclays is just one member of the cozy club that sets the Libor, which is supposed to be based on the average rate at which large banks can borrow money overnight. Its not based on actual transactions, however and that leaves room for mischief.
And mischief there was, according to e-mails and other documents that Barclays has turned over to regulators in the United States and Britain. The upshot: traders colluded by posting rates that either helped their bets in the markets or their banks perceived financial strength during the harrowing days of 2008.
Manipulating the Libor is a big deal because it affects the cost of money for almost everyone. The Libor is used to set rates on mortgages, credit cards and all manner of loans, personal and commercial. The amount of money affected by the phony rates is at least $500 trillion, British regulators have estimated.
Barclays is not the only bank under investigation for rigging the Libor. It was simply the first to own up to the behavior and settle with regulators, paying $450 million. Other banks will almost certainly follow, and the documents bound to bubble up in those cases will surely prove fascinating.
One of the most revealing exchanges in the Barclays documents came when a bank official tried to describe why Barclayss improper postings were not as problematic as those of other banks. Were clean but were dirty-clean, rather than clean-clean, an executive said in a phone...
(Excerpt) Read more at nytimes.com ...
Fanniegate: Gamechanger For The GOP?
This may send Wall Streeters to prison
Charles Gasparino wrote the story at the last link.
“Getting Tough”?
That headline belongs under ‘humor’.
Charlie and Gretchen:
Instead of headline grabbing, how about a discussion of The Fed’s role in manipulating LIBOR? See charts,
http://confoundedinterest.wordpress.com/2012/07/06/libor-fixing-and-the-fed-funds-target/
I see. Banks are fair game but government/Fed are sacred cows.
Hypocrites!
I can go to JAIL for selling unpasteurized milk and these bankers will never see the inside of jail. Two different rules. Jon Corzine walks free. He should also be in jail.
You are so right. Rick Santelli, of Tea Party fame, asked why the Fed was getting away with secretly manipulating markets with no transparentcy while the banks were doing the same thing. Hypocrites is right.
Gee, Banksters rigging rates for their own benefit? Whoulda thunk it!
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How much do you want to bet NO ONE goes to jail? Ive caught flak before and have been call a communist and worse for saying this, but it wont stop me from repeating it! The corner three card Monte dealer is more honest than most of the Too Big to Fail banks and investment houses. And face it the Monte dealer who scams a few hundred is a thousand times more likely to go to jail that the banksters that are stealing millions.
There is a war on the free markets and its not just Obama, OWS, Big Labor and so forth, but Big banks and brokerage house are just as much at war. They repeatedly get caught steal millions and billions and yet no one ever goes to jail. Tell me what is learned if you cheat, rob, defraud a billion dollars and you get fined a million? You learn that the cost of stealing a billion dollars is 1 million, when you should be learning that the cost of stealing is jail! A million on a billion? Hell you just write it off as the cost of doing business.
And no we dont need any more laws we just need the laws that are in place now enforced and start sending people to jail and I aint talking Club FED style prisons Im talking the same prison the liquor store robber and the car jackers go to.
Santelli comments on Fed vs Barclay Libor manipulations.
http://video.cnbc.com/gallery/?video=3000101011
“How much do you want to bet NO ONE goes to jail? Ive caught flak before and have been call a communist and worse for saying this, but it wont stop me from repeating it! The corner three card Monte dealer is more honest than most of the Too Big to Fail banks and investment houses. And face it the Monte dealer who scams a few hundred is a thousand times more likely to go to jail that the banksters that are stealing millions.
There is a war on the free markets and its not just Obama, OWS, Big Labor and so forth, but Big banks and brokerage house are just as much at war. They repeatedly get caught steal millions and billions and yet no one ever goes to jail. Tell me what is learned if you cheat, rob, defraud a billion dollars and you get fined a million? You learn that the cost of stealing a billion dollars is 1 million, when you should be learning that the cost of stealing is jail! A million on a billion? Hell you just write it off as the cost of doing business.
And no we dont need any more laws we just need the laws that are in place now enforced and start sending people to jail and I aint talking Club FED style prisons Im talking the same prison the liquor store robber and the car jackers go to.”
____
I am in complete agreement with you.
Last evening in German Vision Prevails as Leaders Agree on Fiscal Pact the New York Times portrayed the UK as the "big loser", stating Cameron made a "poor gamble".
Mr Cameron described Sarkozy's plans to impose a tax on financial transactions as "mad" -- and urged French banks to base themselves in London.
David Cameron has... vetoed a new treaty and kept Britain out of a dodgy deal to save the euro... despite infuriating pro-Europeans. Jubilant Tory MPs hailed his decision as a massive step towards Britain's EXIT from the European Union. His stand in Brussels was the first time a British Prime Minister has ever vetoed an EU treaty. Defiant Mr Cameron insisted he was RIGHT, as the deal threatened the City of London financial hub... The PM stuck to his guns during ten hours of bruising negotiations in which he faced intense pressure from French president Nicolas Sarkozy and German chancellor Angela Merkel... One French official blasted the PM for demanding concessions but offering nothing in return... Last night the EU's other 26 countries were set to press ahead with their own treaty... new rules on tax and spending by eurozone countries and tougher sanctions to back them up.
David Cameron is at the centre of a furious row with Nicolas Sarkozy after Paris tried to isolate the prime minister at the EU summit by suggesting that Britain is seeking to exempt the City of London from all European regulations. In a move dismissed by officials in Brussels as an attempt to set Britain up as the fall guy, senior French figures said Cameron wanted an opt out from EU financial services regulation. The French were said to have found themselves isolated in their attempt to limit an agreement on tough fiscal rules for the single currency just to the eurozone's 17 members. Britain said Sarkozy was distorting the British position, which is to ensure that changes to the eurozone do not harm the City of London.
Thanks for the ping!
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