By Matt Taibbi Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything. You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets." That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps. Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget. It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. http://m.rollingstone.com/?redirurl...tter&utm_medium=email&utm_campaign=newsletter
See, interest rates control everything in capitalism. In American financial news, the main long-term rates are the 30-year mortgage, the 5-year adjustable rate mortgage, new-car loans, and the 10-year Treasury. The main short-term rates are the prime rate, the Federal funds rate, the Treasury bill rate...and the Libor rate, which is an average of interbank rates for dollar deposits in the London market. Economies can be controlled by faking an interest rate, instead of letting supply and demand set it. Economists would be shocked, and that's what happened with the Libor rate.
Even when all this stuff comes to light it doesn't really matter. No one is going to jail for it, they'll get fined some amount of money and get a nice little slap on the wrist.
Elizabeth Warren, the new Massachusetts senator, is hot to prosecute bankers. She's an expert on it and was a Harvard professor. She's getting nowhere convincing Republicans, so she won't get any legislation passed.
People won't want to hear this, but the market charges what the market will bear. Price signaling is done all the time by almost every industry which is simply a less formal version of what is being alleged here. It's sleazy, but if it were true, it would offer an opportunity to any institution who quickly wanted to build a rate swap business. Simply undercut the cartel price.
Price leadership, i.e. each company implicitly follow the ologopolist leader in price changes, is far from an individual making an overnight killing in the stock market.
The Central Bankers control interest rates in a variety of manners, and explicitly. There's no need to go witch hunting, private frauds are nothing compared to the dangers of fiduciary media.
Lol, "idiot"..."moral standing". That's the meat of your attack? Seems she has maxiep totally befuddled.
