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Thomas Paine

To argue with a person who has renounced the use of reason is like administering medicine to the dead.

Wednesday, July 25, 2012

25 July - Libor

Inside JobInside Job (Photo credit: elycefeliz)LONDON, ENGLAND - JULY 04:  Demonstrators, in ...LONDON, ENGLAND - JULY 04: Demonstrators, in Robin Hood outfits, stand outside Portcullis House as they wait for former Barclays Chief Executive Bob Diamond to arrive at Parliament on July 4, 2012 in London, England. Mr Diamond, who resigned as Barclays Bank Chief Executive yesterday, is expected to be questioned by the Treasury Select Committee about inter-bank interest rate-fixing that caused the bank to be fined £290 million. (Image credit: Getty Images via @daylife)Housing: HAMP Disaster Shows U.S. Treasury is ...Housing: HAMP Disaster Shows U.S. Treasury is "Fully Captured by the Big Banks" (g1a2d0021c1) (Photo credit: watchingfrogsboil)Banking DistrictBanking District (Photo credit: bsterling)A multi segment panoramic image of the London ...A multi segment panoramic image of the London skyline from the Bermondsey banks of the Thames. Fran├žais : Image panoramique de Londres depuis les rives de la Tamise. (Photo credit: Wikipedia)TED Spread Chart - Data 2008 zh-hantTED Spread Chart - Data 2008 zh-hant (Photo credit: Wikipedia)The TED spread – an indicator of credit risk –...The TED spread – an indicator of credit risk – increased dramatically during September 2008. (Photo credit: Wikipedia)Dow Takes Giant Leap as Bailouts Snap GloomDow Takes Giant Leap as Bailouts Snap Gloom (Photo credit: YoTuT)WASHINGTON, DC - MARCH 17:  Special Inspector ...WASHINGTON, DC - MARCH 17: Special Inspector General of the Troubled Asset Relief Program Neil Barofsky, participates in a Senate Banking, Housing and Urban Affairs Committee hearing, on March 17, 2011 in Washington, DC. The committee is hearing testimony on oversight of the Troubled Asset Relief Program (TARP) and evaluating returns on taxpayer investments. (Image credit: Getty Images via @daylife)

Former rating agency worker: no fundamental changes have been made since the financial crisis hit

Negative interest rates: a sign that investors are more concerned about return "of" than return "on" their money

To avoid providing transparency, Wall Street prefers to establish 'New' Libor

New Yorker's James Surowiecki: Bankers gone wild

The LIBOR (London Inter-bank Offered Rate) index is the most important set of numbers in the global financial system. ...
Rigging LIBOR was shockingly easy. The estimates aren’t audited. They’re not compared with market prices. And LIBOR is put together by a trade group, without any real supervision from government regulators. 
In other words, manipulating LIBOR didn’t require any complicated financial hoodoo. The banks just had to tell some simple lies.

 

Neil Barofsky: "suspicions that the system is rigged...are true"

Nearly four years after Washington began its huge rescues of banks with taxpayer dollars, an important player in this, one of the great financial dramas of all time, is offering a damning account of how the Bush and Obama administrations handled the whole episode.

“There has to be wide-scale acknowledgment that regulatory capture exists, dominates our system and needs to be eradicated,” Mr. Barofsky said in the interview. “It was my job to bring as much transparency to taxpayers so they knew what was going on. Writing the book, I tried to bring the same level of transparency so people understand how captured their government has become to the financial interests.”...

Another crisis is likely because of the failed response to this one. “Incentives are baked into the system to take advantage of it for short-term profit,” he said. “The incentives are to cheat, and cheating is profitable because there are no consequences.”

 

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