The LIBOR, the London Interbank Offered
Rate has been in the news recently [
July 2012 ]. It follows on from the
Financial Crisis 2008 which is still rumbling on. It is a far from
incidental fact that the bankers have been abused but not been sacked. They walk
with their bonuses. Not one has been fined, flogged, imprisoned or hanged. Know
that we also have TIBOR. Where
would we be without that? More to the point what is it? Try Tokyo Interbank
Offered Rate. I leave the SIBOR
& Euribor to the interested
reader. Then there is the Ted
spread - obviously an indicator of liquidity changes.
Private Eye, which does understand the City,
finance, financiers and Fraud tells us that various large fines are the end of
the matter. LIBOR was not regulated by the government so it is only rules that
were broken, not laws. Paying the fines is a just a cost of doing business which
will taken from the suckers while bankers get even richer.
Banks are not the only beneficiaries of lower Libor rates. Debtors
(and investors) whose floating or variable rate loans are pegged in some way to
Libor also benefit....... But the banks did not fix the
Libor rate with their customers in mind. Instead, the fixed Libor rate enabled
them to improve their balance sheets, as well as help to perpetuate the regime
of low interest rates. The last thing the banks want is a rise in interest rates
that would drive down the values of their holdings and reveal large losses
masked by rigged interest rates........ Secondly, fixing Libor at lower rates has the same effect. Lower
UK interest rates on government bonds drive up their prices. In other words, we would argue that the bailed-out banks in the US
and UK are returning the favour that they received from the bailouts and from the
Fed and Bank of England’s low rate policy by rigging government bond prices,
thus propping up a government bond market that would otherwise, one would think,
be driven down by the abundance of new debt and monetization of this debt, or
some part of it......... The latest news completes the picture of banks and central banks
manipulating interest rates in order to prop up the prices of bonds and other
debt instruments. We have learned that the Fed has been aware of Libor
manipulation (and thus apparently supportive of it) since 2008. Thus, the circle
of complicity is closed. The motives of the Fed, Bank of England, US and UK
banks are aligned, their policies mutually reinforcing and beneficial. The Libor
fixing is another indication of this collusion. Unless bond prices can continue to rise as new debt is issued, the
era of rigged bond prices might be drawing to an end. It would seem to be only a
matter of time before the bond bubble bursts.
London
Interbank Offered Rate ex Wiki
Libor rates are calculated for ten different currencies and 15 borrowing
periods ranging from overnight to one year and are published daily at 11:30 am
(London time) by
Thomson Reuters.
Many financial institutions, mortgage lenders and credit card agencies set their
own rates relative to it. At least $350
trillion in
derivatives and other financial products are tied to the Libor. In June of 2012, multiple criminal settlements by
Barclays Bank revealed significant fraud and collusion by
member banks connected to the rate submissions, leading to the
Libor
scandal.
The Real
LIBOR Scandal [ 17 July 2012 ]
QUOTE
According to news reports, UK banks fixed the London interbank
borrowing rate (Libor) with the complicity of the Bank of England (UK central
bank) at a low rate in order to obtain a cheap borrowing cost. The way this
scandal is playing out is that the banks benefitted from borrowing at these low
rates. Whereas this is true, it also strikes us as simplistic and as a diversion
from the deeper, darker scandal.
UNQUOTE
Doctor
Roberts was in the business. He knows what he is talking about. We are being
robbed big time. It is going to be an action replay of
The Big Short. Insiders will be winners We will be screwed big time.
QUOTE
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.
It is usually abbreviated to Libor
or LIBOR, or more officially to BBA Libor (for
British Bankers' Association Libor) or the trademark bbalibor. It is
the primary benchmark, along with the
Euribor, for
short term interest rates around the world.
UNQUOTE
They must be doing something right - from their point of view. Staying out of
prison makes a good start. Getting that humungous bonus helps too. It is rather
the point.