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  1. #1
    Thailand Expat raycarey's Avatar
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    The LIBOR Scandal and the Financial Cartel

    the financial cartel has been caught stealing from you again....and by "you", i mean everyone on the planet.

    the news:

    Over the past week damning evidence has emerged, in documents detailing a settlement between Barclays and regulators in America and Britain, that employees at the bank and at several other unnamed banks tried to rig the number time and again over a period of at least five years. And worse is likely to emerge.

    Investigations by regulators in several countries, including Canada, America, Japan, the EU, Switzerland and Britain, are looking into allegations that LIBOR and similar rates were rigged by large numbers of banks. Corporations and lawyers, too, are examining whether they can sue Barclays or other banks for harm they have suffered. That could cost the banking industry tens of billions of dollars. “This is the banking industry’s tobacco moment,” says the chief executive of a multinational bank, referring to the lawsuits and settlements that cost America’s tobacco industry more than $200 billion in 1998. “It’s that big,” he says.
    The LIBOR scandal: The rotten heart of finance | The Economist


    so, what is LIBOR?

    The London Interbank Offered Rate is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks.[1] It is usually abbreviated to Libor ( /ˈlbɔr/) or LIBOR, or more officially to BBA Libor (for British Bankers' Association Libor) or the trademark bbalibor. It is a benchmark, along with the Euribor, for interest rates all around the world.[2][3]


    Libor rates are calculated for different lending periods: overnight, one week, one month, two months, six months, etc., and published daily after 11 am (London time) by Thomson Reuters. Many financial institutions, mortgage lenders and credit card agencies set their own rates relative to (and typically higher than) Libor.
    Libor - Wikipedia, the free encyclopedia


    and in theory, how should LIBOR be calculated?

    The calculation of Libor is coordinated by just two people, who work in an unremarkable open-plan office in London’s Docklands. I watched the process, which seemed utterly routine, a couple of years ago. Just after 11 a.m. on every weekday that’s not a bank holiday, traders at leading banks send in their estimates of the interest rates at which their banks could borrow money. They do this electronically, but sometimes the co-ordinators make a phone call to a bank that hasn’t sent in its estimates, and if the latter seem implausible – typos, for example, are fairly common – they’re checked, also with a quick call: ‘Hi there, is the Kiwi chap [provider of the estimates for borrowing New Zealand dollars] about? … Bit of a spread on the two month. Everyone else is coming in a good bit under that.’
    A simple computer program discards the lowest quarter and highest quarter of the estimates, and calculates the average of the remainder. The result is that day’s Libor. The calculation is repeated for each of ten currencies and 15 loan durations (from overnight to 12 months), so 150 Libors are published daily: overnight sterling Libor, one-week euro Libor, one-month yen Libor, three-month US dollar Libor and so on.
    Explainer: Why the LIBOR scandal is a bigger deal than JPMorgan


    and here is a discussion about what the banksters have been up to:

    https://www.youtube.com/watch?v=0oV2mI0IYp8




    charge them, put them on trial, and if found guilty....put them up against the wall.

  2. #2
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    ^Highly recommend that article from the Spartacus League lefties at the Economist (seriously).

  3. #3
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    they are going to cover that one up, since it's quite massive and the implications go further than just "rate" manipulation.

    LIBOR is used in every derivatives and 99% of financial instruments out there, so in that regard it means that the pricing of those instruments were based on flawed or manipulated assumptions, meaning that some assets were incorrectly priced and someone got fucked over it. Can you imagine what it means in terms of compensation ? 200 billions settlement doesn't even come close.

    some banks like UBS are already calling for a new rate model and to dump LIBOR as soon as possible before the contamination become out of control.
    Last edited by Butterfly; 07-07-2012 at 08:04 PM.

  4. #4
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    from what I understand, with the complicity of the BoE, is that banks were encouraged to "price" their rates low, above all during the crisis (incidentally in late 2007, that is about 5 years ago as pointed by the article).

    If spreads were to increase along with the quoted LIBOR, interest rates for LIBOR would have gone out of control, like it was already in certain "interest rate" markets, and that meant a possible "full stop" of the money making machine.

    I think the real answer would be to investigate the BoE and see how far they were complicit.

  5. #5
    Thailand Expat Jesus Jones's Avatar
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    Max Keiser and Gerald Celente have warned us about banks and corruption. This isn't new, they've just been caught doing it.

  6. #6
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    Quote Originally Posted by Butterfly
    I think the real answer would be to investigate the BoE and see how far they were complicit.
    Agree, having seen Mervyn King doing a public interview a few days ago appearing startled that any such behaviour by those in the banking industry was possible. King, what do you think caused the start of the global recession in 2007/8?

    It's about time he was pensioned off or preferably forced to resign, with of course reduced pension rights in line with the working class taxpayer.

  7. #7
    I don't know barbaro's Avatar
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    Quote Originally Posted by Butterfly View Post
    they are going to cover that one up, since it's quite massive and the implications go further than just "rate" manipulation.

    LIBOR is used in every derivatives and 99% of financial instruments out there, so in that regard it means that the pricing of those instruments were based on flawed or manipulated assumptions, meaning that some assets were incorrectly priced and someone got fucked over it. Can you imagine what it means in terms of compensation ? 200 billions settlement doesn't even come close.

    some banks like UBS are already calling for a new rate model and to dump LIBOR as soon as possible before the contamination become out of control.
    Thanks for the OP, Ray and thanks for these comment Butterfly.

    Just shows once again, that the average stiff get f*cked over again, and again, and again....

  8. #8
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    But, but, but... they were just 'creating wealth'.

  9. #9
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    They, too, are human!

    It's sad when bankers start to cryin':
    Exclusive: Barclays insider lifts lid on bank's toxic culture - Business News - Business - The Independent
    Rich Ricci, the man with the most notorious name in banking, has feelings, too. The Barclays’ investment banking boss reportedly wept as he tried to reassure staff the bank would be able to pull through the outrage after the Libor rate-rigging scandal.
    “You can lead a horticulture but you can’t make her think.” Dorothy Parker

  10. #10
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    The whole central banking system is a total fraud. The Bank of England is nothing to do with the Government and is a private bank. The exact same way the federal Reserve is nothing to do with the US Government. They print the money and lend it to the Governments with interest which your taxes go to pay. They use this central banking system to keep the people in debt and perpetual basic slavery.
    In 2000 there were 7 countries without a Rothschild owned central banking system.
    Afghanistan
    Iraq
    Sudan
    Libya
    Cuba
    North Korea
    Iran
    Today there are 3
    Cuba
    North Korea and Iran.
    The countries that refuse to tow the debt line are invaded as in Iraq, Afghanistan and Libya.
    In Libya any Libyan could get an interest free loan or mortgage as the bank was run for the benefit of its people. Not today they can't.
    Banks and as such bankers own the politicians around the world. They have bought them all. They then get them to pass laws that allow them to operate as they do. In any other business the ways banks operate would be highly illegal.
    They get away with this as very few people understand just how they work.
    Google "Fractional reserve banking " It is nothing but one big scam.
    Will anything come of this so called scandal ?
    Very little as far from the system going wrong as it is being spun it was working perfectly till someone let the cat out of the bag in the same way as the expenses scandal was.
    There will be a few token scapegoats thrown to the baying crowds and then it will be quietly forgotten and it will be business as usual just like it was with the politicians.

  11. #11
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    This LIBOR scandal could be the beginning of the end for a lot of banks,

    regulators would be better off to put everything under the carpet and cover it up,

    it's a can of worms you do not want to open, unless we want a 2008 panic encore

  12. #12
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    Its probably a good job they did pressure down the rates, maybe saved many a mortgage.

  13. #13
    Thailand Expat OhOh's Avatar
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    Quote Originally Posted by Bower
    maybe saved many a mortgage.
    if you think any of them have been "saved" I question your sanity.

  14. #14
    Thailand Expat OhOh's Avatar
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    http://www.n-tv.de/ratgeber/Postbank...le6670486.html

    Above link is in german but GGle is your friend.

    German Postbank is having problems with their ATM's, Smells like the RBS "story" or the greek ATM "story."

  15. #15
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    Quote Originally Posted by Butterfly View Post
    This LIBOR scandal could be the beginning of the end for a lot of banks,

    regulators would be better off to put everything under the carpet and cover it up,

    it's a can of worms you do not want to open, unless we want a 2008 panic encore


    I'm not sure that sweeping a can of worms under the carpet would have the desired effect. But I agree that they'll probably try that until they end up tripping over it.

  16. #16
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    technically the "low" LIBOR means everyone has been overpaying one way or another for financial services, including FX rates

    you could personally take Barclays to court for indirectly manipulating exchange rates and therefore causing you personal financial damages for the overpriced rate

  17. #17
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    The BBC News just said the Serious Fraud Office is launching a criminal investigation.

  18. #18
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    that was yesterday news

    they will need to select a committee to make sure this is buried,

    they will catch a few traders who were simply following orders, and hang them high for the public to see, so they give the impression of doing something

  19. #19
    Thailand Expat OhOh's Avatar
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    The Barclay's chief will blame those "who were simply following orders" and if pressured blame the BOE minion who will infer his boss was "suggesting" it to him.

    The BOE chairman will blame various political "leaders". The Political "leaders" will blame the septics who in turn will blame the Chinese.

    Whom nobody will do a thing about.

    Buy gold whilst you still can.
    A tray full of GOLD is not worth a moment in time.

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    Thailand Expat OhOh's Avatar
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  21. #21
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    Quote Originally Posted by OhOh View Post
    Quote Originally Posted by Bower
    maybe saved many a mortgage.
    if you think any of them have been "saved" I question your sanity.
    Well as i see it, it kept down Libor tracker mortgage and loans.
    Its the savers that suffered as the banks didn't need their money, it would have been cheaper for the banks to borrow............but then perhaps i am insane

  22. #22
    Thailand Expat OhOh's Avatar
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    The constant "fixing" has led to large drops in house values, not want a householder desires I suspect.

  23. #23
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    Quote Originally Posted by OhOh View Post
    The constant "fixing" has led to large drops in house values, not want a householder desires I suspect.
    Better he can find the money to pay his mortgage than lose it because of an obsession with rising value. People are beginning to understand there is no benefit in high values of property if you cannot sell due to difficulty in getting mortgages.

  24. #24
    Thailand Expat OhOh's Avatar
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    Agreed

  25. #25
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    Quote Originally Posted by FlyFree
    But, but, but... they were just 'creating wealth'.
    for themselves and their buddies ,, yea.
    while 99% got fooked

    is it ok to say buddies on ere?

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