One or two banks couldn't have colluded to fix the LIBOR rate. As Matt Taibbi and Eliot Spitzer point out, because of the way that LIBOR is calculated, either all or almost all of the banks had to have conspired to fix the rates.
And LIBOR is quite literally the center of the financial universe. If LIBOR rates are corrupted, then what in the financial world isn't?
Joe Nocera writes of the scandal today in his column:
Britain and America have reacted to the Libor scandal in completely different ways. Britain is in an utter frenzy over it, with wall-to-wall coverage, and the most respectable, pro-business publications expressing outrage. Yes, Barclays is a British bank, and the first word in Libor is “London.” But still: The Economist ran a headline about the scandal that read, in its entirety, “Banksters.”
Yet, on these shores, the reaction has been mainly a shrug. Perhaps we’re suffering from bank-scandal fatigue, having lived through Bank of America’s various travails, and the Goldman Sachs revelations, and, most recently, the big JPMorgan Chase trading loss. Or maybe Libor is just hard to gets one’s head around.
But the Brits have this one right. They may not understand the intricacies of Libor any better than we do, but they sense, powerfully, that banks have once again made a mockery of the role that society entrusts to them.
“Why has the scandal created outrage in Britain? Because it truly is outrageous,” said Karen Petrou, the managing partner of Federal Financial Analytics. “They weren’t supposed to be fixing that rate — no matter what the reason.”
She continued: “If I give you my money, I need to be able to trust you with it. If you can only be trusted via regulation, then you might as well be a utility. And if banks can’t be trusted to manage their trading desks, then we need to rethink our whole model of banking.” Petrou is not an advocate of returning to the days of Glass-Steagall, the Depression-era law that separated investment banking and commercial banking. But with the Libor scandal, she said, she could certainly understand the growing calls for it.
Barclays, of course, is hardly the only big bank that manipulated Libor for fun and profit. It is simply the first to admit its wrongdoing and settle with the government. The word is that just about every big bank is under investigation for playing games with Libor, including JPMorgan Chase, Citigroup and other American-based financial giants.
Which means there is going to be a lot more opportunities for Americans to become outraged over this scandal. And, maybe, to finally summon the will to change banking once and for all.
Until Katie and Tom are tied to the scandal, it doesn't look much like Americans care about this.
Just as Americans have been rather uninterested in the Murdoch hacking scandal in Britain and refuse to ask a question like "If Murdoch's minions felt safe enough to act in such corrupt and criminal ways over in Britain, is it reasonable to assume that they acted the same way here?", Americans seem uninterested in this LIBOR scandal that quite literally means, as Taibbi said a friend of his put it, "the world is built on quicksand."
So what if the loan and credit card interest rates they pay are tied to a fixed LIBOR rate.
What's going on with Katie and Tom?
The only reason Americans know anything about Katie or Tom is that the entertainment/media complex, another monopoly owned by only a few individuals, shovels this shit 24/7 on a mass scale. Americans DON'T give a damn about these stories...but it's forced on them.
ReplyDeleteThere's a lot of truth in what the first Anon. says: the media decides which stories it wants to cover and the monopolies that own the media aren't interested in talking about Wall Street and corporate corruption.
ReplyDeleteAnother item: for the man on the street,this stuff is also difficult to understand.This morning, I had to make an emergency trip to the dentist and luckily for me, my dentist has "Rolling Stone" magazine in his waiting room. This issue contained a Matt Taibbi article, "The Scam Wall Street Learned From the Mafia." In the article Taibbi discusses how the big US banks conspired to fix the interest rates on municipal bonds, cheating local governments out of tons of revenue. Taibbi talks about how hard it is for ordinary people to understand this type of convoluted, complicated manipulation--unless somebody breaks it down for them. Taibbi does, but even he says how boring the court testimony was. There are, of course, a lot of Americans who are too shallow to want to watch real news, but that's not the whole picture.
I don't buy that argument that because the media doesn't cover this stuff, people don't watch it, read about it or care about it. No one forces Americans to watch the shit that passes for TV news - the crap on the Today Show or the morning "news" programs, the "all news" cable networks or the Sunday political shows. No one forces Americans to watch reality TV, TV talk shows, and the rest of the crap that's on. And no one forces Americans to spend an awful lot of time, money and energy on celebrity gossip.
ReplyDeletePeople choose to do it.
I have a theory for why that is - it's easier to distract yourself with shit then have to think about the awful circumstances we find ourselves in. It's also easier to distract with somebody else's problems rather than think about your own stuff.
As for this being too complicated for people, that's bullshit. Taibbi explained it in a minute:
LIBOR is the rate they use to set almost all other rates - including mortgage rates, credit card interest rates and student loan rates.
They fuck with LIBOR, they're fucking mortgage rates, credit card interest rates and student loans rates.
Not that complicated.
Even an American can understand.
Or a child anywhere else in the world.
RICO act enforcement with jail time is the remedy for this type of bankster and manipulation. What is our government position on this corruption? What is our legal system doing about it? ...and what are our attorney generals doing about it? What has Eric Holder done during the last 4 years besides sit on his ass? .....play golf with Obama?
ReplyDelete....show contempt for Congress?
... Show contempt for the unenlightened public?.
NO SHIT SHERLOCK!