The LIBOR rate-rigging scandal comes to America

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The LIBOR rate-rigging scandal, which has the potential to be the biggest financial scam perpetrated in the history of the world, is now reaching the shore of America.

So far, only British bank Barclays has been implicated – but now Bank of America – the nation’s second biggest bank – announced on Thursday it has received subpoenas from the Department of Justice, the Commodity Futures Trading Commission, and the United Kingdom Financial Services Authority looking into what role the bank may have played in the LIBOR scandal.

We now know that as much as $800 trillion in the global economy was manipulated by a handful of big banks rigging interest rates – screwing over individual consumers, small businesses, and even entire cities. Let’s see if our Justice Department finally holds some banksters accountable.

Thom Hartmann Administrator's picture
Thom Hartmann A...
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Dec. 29, 2009 9:59 am

Comments

How did they screw over "individual consumers, small businesses, and even entire cities"?

WorkerBee's picture
WorkerBee
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Apr. 28, 2012 11:22 am
Quote WorkerBee:

How did they screw over "individual consumers, small businesses, and even entire cities"?

The question whores are pleading that you answer them.

I suggest we simply say, Kiss My Ass.

anonymous green
Joined:
Jan. 5, 2012 10:47 am

It was a serious question. My understanding is that the manipulation's affect was to lower interest rates marginally. The way Thom's admin here is wording it implies that this had a major detrimental affect on the world economy so I ask the obvious question; how?

WorkerBee's picture
WorkerBee
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Apr. 28, 2012 11:22 am

Go to the world wide web, a quaint communication device from the future, and download The Matrix, the first one.

Imagine being used as a battery, or, as a reverse ATM, while you watch it. Think of how a free human being might feel, used in this way.

Call Mars. Tell them please don't invade us, it's only a probe.

anonymous green
Joined:
Jan. 5, 2012 10:47 am

If they manipulated rates lower, then the MBS securities in our mutual funds were getting shorted.
But maybe worker bee can explain what sort of fraud is ok?

Phaedrus76's picture
Phaedrus76
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Sep. 14, 2010 7:21 pm
Quote Phaedrus76:If they manipulated rates lower, then the MBS securities in our mutual funds were getting shorted. But maybe worker bee can explain what sort of fraud is ok?

Wouldn't we also benefit from lower mortgage rates though? How much did this affect interest rates? Certainly less then what the feds do.Wouldn't municipalities, and by extension taxpayers, benefit from the lower rate when issuing school and construction bonds? When you first heard about it did you, like me, assume they were manipulating the rate up? This was never stated in the stories I read about it, found out through the Jon Stewart of all people.

I am not trying to say fraud is OK, the folks involved should be prosecuted to the fullest extent of the law. I am only questioning the actual affect of the fraud.

WorkerBee's picture
WorkerBee
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Apr. 28, 2012 11:22 am

Eliot Spitzer's response:

Let’s be clear: Every person whose interest rate depended on Libor is a victim. The rate you paid was not the product of honest competition and reporting. Some people lost lots of money because of the manipulation, others may have saved some, but the game was rigged. The integrity of the market was destroyed so the banks could put money in their own pockets — our money.

Rob Kirby of Kirby Analytics tells Max Keiser:

You know what? And I should back off a little bit, because when I talk about J. P. Morgan, J. P. Morgan strapping on $8 trillion worth of less-than-one year swaps isn't J. P. Morgan to begin with, because the orders are coming from the US Treasury, specifically the Exchange Stabilization Fund, which is a secretive arm of the US Treasury, which doesn't answer to anyone, which is beyond any oversight, and these orders are being brokered through the New York Federal Reserve trading desk, and they're being — basically what I'm saying is, US monetary policy is being conducted through the trading desk of J. P. Morgan, Goldman Sachs, Citibank, and Bank of America and Morgan-Stanley.

I transcribed this whole interview (about 13 min.) which I commend to your attention at this link. The video is there too.

ProudPrimate's picture
ProudPrimate
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Jul. 31, 2007 3:01 pm

If you would like some detail as as to how things run, please see Kryder in Libor.

I have been writing about the unincorporated Rainier Brokerage Services, Inc., now BA Investments, for several years.

leighmf's picture
leighmf
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Jul. 31, 2007 3:01 pm

The basic issue of LIBOR is that they loaned to counties, cities and states at fixed rates with the promise of absorbing the variable rates themselves — but they fixed the rates high and fixed the variable rates low, so that they would generate trillions in profits from the chumps, who are all now bankrupt and people are dying from budget cuts all over the country. The chief LIBOR operator here, Geithner and his co-conspirators on Wall Street and in the White House, are guilty of murder, IMO.

Karolina's picture
Karolina
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Nov. 3, 2011 6:45 pm

You're absolutely right Linda, in three short years of total obstructionism from the right wing, Obama has kissed the world's ass goodbye and taken all the money off-shore.

Everybody! Linda is absolutely right!

anonymous green
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Jan. 5, 2012 10:47 am

Hmmmm.

Was Obama in the White House when Geitner was the head of the Fed?
I don't think so....

However if Obama fired Geitner now from his current position as head of the Treasury, he would inadvertently be making a strong statement.

There would certainly be hope for him then, Jackie!

Karolina's picture
Karolina
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Nov. 3, 2011 6:45 pm

Geithner was never the Fed chairman.

WorkerBee's picture
WorkerBee
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Apr. 28, 2012 11:22 am

Federal Reserve Bank of New York. President.

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Karolina
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