A (somewhat) brief dissection of the LIBOR scandal

Trust.

In the end, that’s what the banking industry is founded upon: Trust. You give total strangers a lot of money — whatever “a lot of money” means to you — and you trust that they will be honest and competent stewards of whatever wealth you have accumulated.

But that trust is disappearing.

As banks have gotten deeper and deeper into high-risk ventures, as a banking culture of restraint and prudence has disappeared, replaced by a cowboy ethos, trust in the judgment and integrity of the banking industry as a whole has eroded badly, and for good cause. The LIBOR scandal now making its way onto the front pages of newspapers here in the United States and in Europe will only accelerate that process.

The story may seem complicated at first, but it isn’t. LIBOR stands for London InterBank Offered Rate, and is based upon the average rate that big banks charge each other for loans. The process of establishing the LIBOR rate is simple: Major banks submit the latest interest rates they have paid to a committee. The high and low rates are ignored, the remaining rates are averaged to produce the LIBOR rate. That rate is then used as the benchmark for literally millions of transactions around the globe, involving an estimated $350 trillion.

The LIBOR scandal is about how that rate was manipulated by banks to produce higher profits for those on the inside, at the expense of those on the outside. In blunt terms, it’s about how major banks rigged the game in their favor.

The allegations can be broken into two basic categories:

1.) Prior to the 2007-08 banking collapse, major banks were allegedly manipulating LIBOR to produce higher profits for themselves. If a bank’s traders needed a lower LIBOR to maximize profit on major deals, the bank would report a falsely low lending rate. If they needed a higher LIBOR to make their financial bets pay off, they would report a falsely high interest rate. Internal emails released from Barclays, the first major bank to settle in the scandal, reveal that bank officials knew that they were rigging the market for their own benefit, and that they were relatively blase about doing so.

As a result of a settlement with regulators, Barclay’s top executives have been forced out of their jobs, the bank has agreed to pay fines totaling $452 million to U.S. and British regulators, and criminal investigations are under way in the United Kingdom. And while Barclays’ involvement has been the first to be exposed, there is no expectation that it will be the worst offender. Most if not all of the major banks may be implicated in the end.

2.) During the 2007-08 global banking crisis, banks allegedly manipulated the LIBOR rate to make it seem that they were still lending to each other at relatively low interest rates. By reporting lower interest rates than they were actually paying, the banks hoped to make it appear to outsiders that the financial system was healthier than in fact it was, in hopes that the false confidence would help avert a panic.

In Britain, there is some indication that financial regulators ignored or even endorsed LIBOR manipulation through the crisis because they too were working feverishly to keep the system afloat. Here in the United States, there is some indication that the Federal Reserve Bank of New York at least had suspicions that LIBOR was being manipulated, although it is uncertain how aggressively it pursued those suspicions at a time when it too was trying to keep the system afloat.

In brief, that’s the scandal. Of the two main allegations, the charge that banks were manipulating LIBOR on a more or less daily basis — in effect rigging the market on their own behalf, at the expense of their own clients in some cases — is by far the more serious. The alleged manipulation of LIBOR through the banking crisis was at least understandable, although the potential involvement of financial regulators in that process is disturbing.

However, the most disturbing aspect of the scandal is how well it fits into the emerging picture of international banking as a system that shuns stability and chases risk, because with high risk comes high potential profits and personal bonuses. It reflects a modern banking culture that treats other people’s money as, well, other people’s money, with little regard to a sense of fiduciary duty.

It is not the type of corruption in which a few bad apples are caught cheating the system. It is the type of corruption that has become inherent in the system, and that’s far more troubling.

– Jay Bookman

703 comments Add your comment

Keep Up the Good Fight!

July 10th, 2012
8:32 am

With a number of mortgages impacted by LIBOR rates, I wonder what the ultimate fall out will be….

but of course, “self-regulation” is always better than “damn government regulation” :roll:

Brosephus™

July 10th, 2012
8:33 am

The LIBOR scandal is about how that rate was manipulated by banks to produce higher profits for those on the inside, at the expense of those on the outside. In blunt terms, it’s about how major banks rigged the game in their favor.

And in other breaking news, it has been discovered that the surface of the sun is too hot to support human life.

My Hard Earned Money

July 10th, 2012
8:34 am

Just damn!! The harder I work, the poorer I get! No relief in sight!!!

Recon 0311 2533

July 10th, 2012
8:37 am

“It reflects a modern banking culture that treats other people’s money as, well, other people’s money, with little regard to a sense of fiduciary duty.”

Not unlike Obama and the Democrats.

stands for decibels

July 10th, 2012
8:37 am

“I do say, Jay — it is Jay, yes? — couldn’t we speak of this AFTER your election? That’d be ever so much more civilized.”

–The Global Jerb-Creators

Granny Godzilla - Union Thugette

July 10th, 2012
8:38 am

Yep, the system isn’t broken – it’s FIXED!

Jm-pass TSPLOST silly people

July 10th, 2012
8:39 am

Things are never as simple as jay bookman makes them out to be

Granny Godzilla - Union Thugette

July 10th, 2012
8:39 am

RECON

Quite the silly crap and stand up if you can.

Do you support the manipulation of London InterBank Offered Rate?

Keep Up the Good Fight!

July 10th, 2012
8:39 am

…but…but….but… Obama in 4… the cons are slipping!

Granny Godzilla - Union Thugette

July 10th, 2012
8:40 am

Jm

Same question.

St Simons

July 10th, 2012
8:40 am

as long as you got the quote ‘the game is rigged’ in there,
you got my Stamp on this.

in civilized democracies, like Australia, this is heavily regulated, and
largely not permitted like in 3rd world banana republics.
Currently, planet Earth’s 4 ‘healthiest’ banks are all in one country
That country is _________ –anyone? anyone? Bueller?
ding ding

stands for decibels

July 10th, 2012
8:40 am

“We didn’t really need all those teachers and firefighters we had to lay off. We’re doing ok. Although it kinda sucks with the library closed most any time I want to visit. And my kid’s gym and band classes were eliminated… oh well.”

–Citizen of Municipality Fcrewn by returns on LIBOR manipulated-investments

St Simons

July 10th, 2012
8:42 am

-5 on the bu..bu..Obama. I win the office pool again.

Brosephus™

July 10th, 2012
8:42 am

The alleged manipulation of LIBOR through the banking crisis was at least understandable, although the potential involvement of financial regulators in that process is disturbing.

When you see a revolving door that allows government regulators to go work for the people they regulated, coupled with the government’s intent to weaken regulation to the point where it is no stronger than the spine of an octopus, why be disturbed and/or surprised by the reprecussion of the things we allow to happen?

Not a Neal Boortz Redneck

July 10th, 2012
8:47 am

The ninety day LIBOR rate jumped past 5% in 2008 during the Credit Crisis. Normally it is less than 1/10 of 1%.

The banks were trying to LOWER it to mitigate the panic – not to screw people over.

No excuse for them but 2008 will go down in history as another 1929.

stands for decibels

July 10th, 2012
8:47 am

Q: Ultimately, how many high-level banksters are likely to serve hard time for this?

A: This many.

Brosephus™

July 10th, 2012
8:51 am

Finn McCool (The System Isn't Broken; It's Fixed ~ from an Occupy sign)

July 10th, 2012
8:52 am

Will be bad enough for the Obama administration to demand inquiries with consequences?

When do we start reigning these banks in? How do we get banking back to being boring and dull – which is how banks are most effective in serving depositors.

Don't Tread

July 10th, 2012
8:52 am

“You give total strangers a lot of money — whatever “a lot of money” means to you — and you trust that they will be honest and competent stewards of whatever wealth you have accumulated.”

That’s like Social Security, isn’t it? (With the minor exceptions that you don’t accumulate wealth, and don’t have a choice in the matter, but who’s counting?) And look what happened to that.

I would say that trust in government is eroding at lightning speed when compared to the (obviously flawed) banking system. No one can be trusted anymore.

Adam

July 10th, 2012
8:53 am

It’s kind of obvious banks are not really interested in good will or public good, and they have basically become larger behemoths after the 2007-2009 crisis (and a little before that). These banks need to be broken up, frankly.

How Tom Cruise stole LIBOR scandal

July 10th, 2012
8:54 am

Finn McCool (The System Isn't Broken; It's Fixed ~ from an Occupy sign)

July 10th, 2012
8:54 am

planet Earth’s 4 ‘healthiest’ banks are all in one country

The bank we should be learning from is the Bank of North Dakota. Owned by the state, owned by the people to serve the people’s interests. Check it out.

http://www.motherjones.com/mojo/2009/03/how-nation%E2%80%99s-only-state-owned-bank-became-envy-wall-street

marty

July 10th, 2012
8:55 am

When the government simply refunded our Casino/Banking system rather than reenacting Glass-Steagall and breaking the banks up into small enough to fail entities, it was made clear that
Wall Street owns Washington. Best of luck to all!

Oscar

July 10th, 2012
8:56 am

Not unlike Obama and the Democrats.

______

Quite unlike. The opposite, I venture to say.

Simple Truths

July 10th, 2012
8:56 am

This LIBOR stuff sounds like judging for figure skating. I don’t like figure skating!

Ben Shockley

July 10th, 2012
8:57 am

Can we get a (somewhat) brief discussion of the Fast and Furious scandal?

Ben Shockley

July 10th, 2012
8:58 am

Anybody remember Hillary Clinton and cattle futures? Whitewater??

TaxPayer

July 10th, 2012
8:58 am

The Republican solution. More deregulation because then all their activities would be perfectly legal.

By the way, cons, I heard there’s a really good deal out there on some deregulated meat and I’m sure the free market will price it to your liking.

Jm-pass TSPLOST silly people

July 10th, 2012
8:59 am

“It is the type of corruption that has become inherent in the system, and that’s far more troubling.”

Meh hyperbole

Ben Shockley

July 10th, 2012
8:59 am

Anybody remember how much $$$ Barack got from the banks back in 2008?

Lord Help Us

July 10th, 2012
9:00 am

According to some, excessive regulation is the problem…

Remove these regulations, so that market forces go to work and the banks can regulate themselves…

Given the naivete/complicity of ‘regulators’, regulation is worse as if offers a figleaf of assurance…

St Simons

July 10th, 2012
9:00 am

If you think this is wrong,
There is one party that is for less regulation.
There is one party that is for more regulation.
Vote.

man behind the curtain

July 10th, 2012
9:01 am

Ask your doctor if Libor is right for you.

Aquagirl

July 10th, 2012
9:01 am

I would say that trust in government is eroding at lightning speed when compared to the (obviously flawed) banking system.

Open a bank without FDIC insurance and you’ll find out how many folks trust those fine bankers without a government guarantee in case of failure.

Not everybody is a shrieking paranoid sporting a tricorn hat.

Ben Shockley

July 10th, 2012
9:02 am

From wikipedia…

“Jamie S. Gorelick ( /ɡəˈrɛlɪk/; born May 6, 1950) is an American attorney, presently representing BP.[1] She was Deputy Attorney General of the United States during the Clinton administration. She was appointed by former Senate Democratic Leader Tom Daschle to serve as a commissioner on the bipartisan National Commission on Terrorist Attacks Upon the United States, which sought to investigate the circumstances leading up to the terrorist attacks of September 11, 2001 and also served as Vice Chairman of Fannie Mae. Her involvement in many of the major tragedies and high-profile American scandals of the past two decades has led some in the press to dub her the “Mistress of Disaster.”[2]”

Wow…first she wrecks our intelligence community, then our mortgage industry, and now she’s at BP? No wonder they got off so light on that oil spill…

What is Libor and why should we care?

July 10th, 2012
9:02 am

Not a Neal Boortz Redneck

July 10th, 2012
9:03 am

The Bush idiots had killed the Net Capital Rule in 2004 that required broker/dealers hold a capital cushion. With no margin of error the Bears and Lehmans crumbled in 2008.

http://en.wikipedia.org/wiki/Net_capital_rule

man behind the curtain

July 10th, 2012
9:03 am

Ben Shockley: “Hey, look over there!”

Thomas Heyward Jr.

July 10th, 2012
9:04 am

Manipulating the interest rate?
.
Isn’t that what the FED does on a daily basis?
.

We’re all just Obama’s tax donkey and we should be proud to work for less and less. Eventually, we will be working solely for the Glory of the State and for Obama and pals to rob every dime they can steal.
.
If we get alittle TOO agitated..they’ll send in “Putt it in the Mitt” Romney.
If that don’t work……………….some patriotic fireworks over Syria or Iran will do the trick.
.
USA.USA…….USA.
.
Braaaaaaaaaaaaaaay.

Ben Shockley

July 10th, 2012
9:05 am

With interest rates at historic lows, how does this impact “the common people” that the libs claim to be so concerned about? Guess i wasn’t aware that that trailer park dwellers were playing the markets…

Simple Truths

July 10th, 2012
9:05 am

Ben, don’t hold your breath waiting for Jay to answer your questions. Those questions don’t fit neatly into his Marxist claptrap here.

Adam

July 10th, 2012
9:05 am

Took all of four posts to turn this into “Obama and Democrats BAD! CONSERVA-SMASH!”

Paul

July 10th, 2012
9:06 am

I’m still waiting to see what the conservative talking heads come up with to justify their Party’s pledge to “repeal ALL regulations put in place since Obama took office.”

“with high risk comes high potential profits and personal bonuses.”

There’s very little risk to decreased reward for middling performance, but there is huge personal reward for some level of above-normal performance.

Therefore, decouple personal bonuses from institutional performance.

There’s no interest like self-interest.

Surprised ... Surprised?

July 10th, 2012
9:07 am

The bankers are just doing what they learned in business school.

I’m an engineer and some years ago (when I was promoted to a mgmt position),
the large company I worked for sent me off to one of the best business schools
in the country to learn about “finance”. At the start of class, we were asked
“How do you choose an accountant?”. The “correct” answer was “Ask each candidate
‘What is 1 + 1?’ Choose the person who answers ‘Whatever you want it to be’ ”

So, given the ethics that a generation of business people have been taught,
this should not be a surprise.

Smoke&Mirrors

July 10th, 2012
9:08 am

But isn’t the banking industry looking out for the public? Aren’t they just like a big, warm, fluffy bunny? Let’s embrace all their decisions, after all, they are totally for the good of the person on the street.

We need to continue to cut out all those pesky regulations that hinder their public serving interests, so the banking industry can continue to make more jobs, just like they are doing right now! After all, these are all good organizations, only looking out for the public interest, not their own. Oh, yes, and they need a big tax cut too!

…..not….

Not a Neal Boortz Redneck

July 10th, 2012
9:08 am

Actually, the most affluent and educated areas are solidly liberal. Greenwich, Palo Alto, Cambridge, Boulder, Austin, etc.

Trailer parks tend to vote GOP.

Paul

July 10th, 2012
9:08 am

Ben Shockley

“Can we get a (somewhat) brief discussion of the Fast and Furious scandal?”

If you’d show up more often, you’d have read it real time.

As it is, you can review the past threads.

TaxPayer

July 10th, 2012
9:08 am

According to Republican logic, no regulations are better because it would completely eliminate any chance of breaking a regulation. It’s a win-win. By the way, cons, I might be able to put you in touch with someone that still has a stash of deregulated peanut butter. I hear that the customer’s are 100% satisfied based on a follow up survey in which not a single customer came forth to complain.

Granny Godzilla - Union Thugette

July 10th, 2012
9:08 am

Ben Shockley

July 10th, 2012
9:05 am
With interest rates at historic lows, how does this impact “the common people” that the libs claim to be so concerned about? Guess i wasn’t aware that that trailer park dwellers were playing the markets…

oink, oink, oink

Yes, they play the markets.

“Can I afford a loaf of bread and milk?”

Adam

July 10th, 2012
9:10 am

The Republican solution. More deregulation because then all their activities would be perfectly legal.

This too, is placing blame where it doesn’t necessarily belong.

Hey, I don’t like most Republican policies myself, obviously. But I think only a few bad apples want to create this type of situation you describe, and this misses the point. All of their actions were not illegal to begin with because of the few bad apples who deregulated in the first place. Whether or not the amount of people who voted for deregulation had malicious intent is irrelevant. We now need to reverse those efforts and get some control back in there.

And we need to make our case with factual information, not with “this person here is blocking our regulation efforts because he WANTS to cheat you.” That might work on some people, but Washington does what Washington does without that BS. They could solve this behind closed doors and their spin machine could be used to let Republicans take all the credit, if they wanted to.

Common Sense

July 10th, 2012
9:10 am

Perform enough manipulation and you may get to be head of the Federal Reserve Bank, where you get to artificially keep interest rates low so that your government can spend with reckless and irresponsible behavior.

Gordon

July 10th, 2012
9:10 am

“If you think this is wrong,
There is one party that is for less regulation.
There is one party that is for more regulation.
Vote.”

Yes, because the people in government have been shown to be so much better stewards with large sums of money. Something must happen to people when they enter government that causes them to stop craving power and rigging the system in their favor.

carlosgvv

July 10th, 2012
9:10 am

Anyone not in denial knows by now that neither our politicians or Big Business can be trusted. Unfortunately, there aren’t many ways we can cope with this. Few of us would be willing to move to another Country and hope their politics and business are trustworthy. Fewer still would be willing to go into the woods and live in a cave.

We are therefore left with a nearly impossible task of somehow getting a trustworthy political and business system back into effect. At this late stage, I don’t have a clue how this can be done or if it’s even possible.

JamVet

July 10th, 2012
9:13 am

Oscar, between that childish hyperbole and Mr. Stream of Unconsciouness Blogging, the level of discourse, honesty and intellect goes WAY down here!

Most non-conservative conservative Republicans are not remotely interested in corporate/white collar crime. Even though it exists at record levels and they, their families and communities foot the bill for this bankster criminality.

Would someone explain that one to me…

Paul

July 10th, 2012
9:13 am

Surprised… surprised

I’m not at all surprised an engineer doesn’t understand self-deprecating humor designed to illustrate common misperceptions and hold that thought while the course teaches proper accounting standards.

Oscar

July 10th, 2012
9:13 am

Romney and the GOP want to completely deregulate the banks and let them self regulate. Wonder how that would work out.

Bringing back the Glass-Steagall Act would help. Less regulation and oversight would not.

TaxPayer

July 10th, 2012
9:14 am

Adam,

Which Republicans running for office have been promoting more regulation as opposed to more deregulation? Just curious.

Adam

July 10th, 2012
9:14 am

So Common Sense, do you think interest rates should go up?

JamVet

July 10th, 2012
9:14 am

…Marxist claptrap…

Joseph McCarthy still lives.

And he still rules the GOP…

Jack

July 10th, 2012
9:15 am

LIBOR did not cause the banking collapse or fiduciary mistrust; the collapse was aided and abetted by a fellow who just married his boyfriend.

JamVet

July 10th, 2012
9:16 am

Gordon, why do you love white collar crime so much?

Just curious…

Not a Neal Boortz Redneck

July 10th, 2012
9:16 am

The Fed sets no interest rates at all.

They set the Fed Funds rate which is the rate banks borrow from the Reserve overnight. The market sets all interest rates since not even Treasury, IBM or Microsoft can borrow from the Reserve.

Adam

July 10th, 2012
9:16 am

TaxPayer: Which Republicans running for office have been promoting more regulation as opposed to more deregulation? Just curious.

Depends on the subject. John McCain is for campaign finance reform, for instance. He was for similar banking controls as well, though no new bills have come up from either party to regulate the banking industry in a while that I am aware of. The focus of the legislators has been on… other things.

Jefferson

July 10th, 2012
9:17 am

These folks are Romney’s running/drinking pals, the bankers. The GOP is just dumb greedy.

Matti

July 10th, 2012
9:17 am

I used to work in banking, and I know what I saw. The execs are like car salesmen: they see every person who walks through that door as a sucker, and they spend all their time thinking of new ways to trick you and slick you out of your cash. And yes, they laugh at you behind your back. That their PACS have made it fully legal to LIE to your face is a big boost for their giggle time.

While dealing with a bank last year, in a long and deceptive process, I expressed my feeling and observations to the rep. She said, “Your comments are very offputting.” (Uh… yeah? AND?) Then I apologized. “I’M SO SORRY,” I told her. “In MY business, we want to know what your customers think of our products and services. We actively seek that information, so I just assumed you would care too. My bad.” Then she explained that “it’s the government’s fault” they were treating me like the contents of a litter box. Yeah-huh. (Cuz they never did anything like that before 2009…)

Hey bankers: Do us all a favor, climb to the roofs of your buildings, and fling yourselves to the sidewalks at noon. The world would be a better place.

TaxPayer

July 10th, 2012
9:17 am

Don’t worry. Greenspan assured us long ago that the Wall Street crowd would not let their greed destroy them, just everyone else. So Wall Street will live on to fight for bigger returns another day.

Aquagirl

July 10th, 2012
9:18 am

Romney and the GOP want to completely deregulate the banks and let them self regulate. Wonder how that would work out.

Seeing as how about 1/4 of Wall St. execs admit cheating is basic to success…probably not well.

http://finance.yahoo.com/news/many-wall-st-execs-says-050334637.html

curious

July 10th, 2012
9:18 am

Sadly, when money is involved, thievery has no political affliation.

Do like China, have a few public executions and people’s (who aren’t executed) morals/scruples will improve.

Paul

July 10th, 2012
9:18 am

We’re going on three pages and NOT ONE person has yet explained how Barney Frank caused the British financial crisis……

Brosephus™

July 10th, 2012
9:18 am

I would say that trust in government is eroding at lightning speed when compared to the (obviously flawed) banking system. No one can be trusted anymore.

There’s a big difference in the reasons though. Trust in government is eroding because of a deliberate effort to devalue and deface our government, i.e. “government is the problem” syndrome. The banking system is a case of greed driving people to do things they know they should not do.

—————————–

Who knew that Clint Eastwood deflected better than Linda Carter’s bracelets… :lol:

Granny Godzilla - Union Thugette

July 10th, 2012
9:19 am

Jack

July 10th, 2012
9:15 am
LIBOR did not cause the banking collapse or fiduciary mistrust; the collapse was aided and abetted by a fellow who just married his boyfriend

somebody fell head first off the bean stalk

Save the magic beans!

TaxPayer

July 10th, 2012
9:20 am

Adam,

John McCain! Of the Phil Gramm is my economics brain trust mentality. Come on dude. You didn’t tell me you were auditioning for a stand up comedy spot beside Thulsa.

JamVet

July 10th, 2012
9:20 am

LIBOR did not cause the banking collapse or fiduciary mistrust; the collapse was aided and abetted by a fellow who just married his boyfriend.

Ladies and gentlemen, THIS is the magnitude of self-imposed and fiercely proud ignorance that dominates the neocon movement.

A VERY minor player out of dozens and dozens who are MUCH more complicit and culpable and that is the only name that the rube can come up with????

Jm-pass TSPLOST silly people

July 10th, 2012
9:21 am

“By reporting lower interest rates than they were actually paying”

Those capitalist scoundrels stealing from borrowers with LOWER RATES?!!!! The outrage!!!

Wait a second….

Fly-On-The-Wall

July 10th, 2012
9:21 am

Ben,

Yes I remember Whitewater quite well. Millions of taxpayer dollars spent investigating NOTHING. It was a witch hunt and nothing more. All the stuff you bring up about the Clinton’s is old news and NO news. Next diversion please.

Brosephus™

July 10th, 2012
9:21 am

Paul

Jack @ 9:15 seems to be a prime candidate to be the person that can explain how Rep. Frank achieveved that.

Lord Help Us

July 10th, 2012
9:22 am

Well this is a fine howdy doody…

My second cousin’s neighbor said that his son-in-laws stepson saw Citigroup land its Gulfstream G-5 in the parking lot of Saks, park in a handicapped spot and spend millions in taxpayer bailouts on searsucker suits and bermuda shorts (with knee-high black socks) and lots of bling.

I was outraged, but did not report it…

Not a Neal Boortz Redneck

July 10th, 2012
9:22 am

Only an idiot thinks B. Frank or any House member in the minority party caused the mortgage crisis. Luckily, Fat Rush has a limited amount of idiots to lie to.

Normal Free...Pro Human Rights Thug...And liking it!

July 10th, 2012
9:22 am

Paul

July 10th, 2012
9:18 am

That’s easy. It’s because he married his boy friend. EVERYBODY on the Right knows that!

Brosephus™

July 10th, 2012
9:24 am

Only an idiot thinks B. Frank or any House member in the minority party caused the mortgage crisis.

Comparing those who believe that to idiots is very demeaning to idiots worldwide. :lol:

Paul

July 10th, 2012
9:25 am

Bropheus

Thanks! I missed that!

JACK!!!

“LIBOR did not cause the banking collapse or fiduciary mistrust; the collapse was aided and abetted by a fellow who just married his boyfriend.”

I’m really, really, really interested in how Rep Frank managed that. Can you please explain how he aided and abetted the LIBOR manipulation?

TaxPayer

July 10th, 2012
9:26 am

Perhaps the cons can also explain to us what role Washington Mutual played in the great recession. Or perhaps, AIG. And how they’re connected to Barney Frank. Spin a good one for us.

Jm-pass TSPLOST silly people

July 10th, 2012
9:26 am

Matti 9:17

Caveat emptor lady

stands for decibels

July 10th, 2012
9:27 am

If you’d show up more often, you’d have read it real time.

Trader Joe’s, motor scooters, and people who earn 30K per year aren’t gonna demonize themselves, Paul.

Rightwing Troll

July 10th, 2012
9:29 am

Yep… and sadly the wingnuts stand by screaming HARDER… FASTER…

We just need to unleash these poor downtrodden banks from the regulatory straitjacket thier encumbered with, and instead of raking in record profits in the billions, they’ll rake in record profits in the trillions, then they’ll trickle jobs down on us all… damn that Barney Frank…

JamVet

July 10th, 2012
9:30 am

Republicans think that they are entitled to their version of the facts. Even when they are not factual.

And Jack doesn’t know…………. Jack!

Which is exactly what Mendacious Mitt is counting on.

One of the great satisfactions that I got earlier this year was firing those criminals at the Bank of America. A superb idea that caught on like wildfire thanks to the OWS crowd.

Good job, you grass root patriots!

And Jm, why do you love white collar crime so much?

Jay

July 10th, 2012
9:30 am

Yes, Ben, we do remember Hillary and cattle futures and Whitewater. We remember them as yet another in a long line of absolutely groundless “scandals” ginned up by the right wing, along with “Who Killed Vince Foster,” “Clinton Was A Cocaine Smuggler,” “Obama Visiting India at $250 million a Day” and Michelle Obama’s “Whitey Tape.”

The most recent example of the genre is of course Darryl Issa and his “Fast and Spurious” investigation.

Jm-pass TSPLOST silly people

July 10th, 2012
9:30 am

Wamu was solvent

The government shut it down out of ignorance

East Cobb RINO, Inc (LLC)

July 10th, 2012
9:34 am

we don’t need no regulation
we don’t need no interal control
no dark sarcasm in the boardroom
regulators leaves those execs alone
hey! regulators! leave those execs alone
all in all you’re just another another brick in the wall
all in all you’re just another another brick in the wall

Lord Help Us

July 10th, 2012
9:35 am

Dan Burton was more entertaining than Issa…

Issa will have a hard time topping ol’ numbnuts shooting a watermelon in his backyard as part of his investigation trying to prove the Clintons killed Foster. That guy was priceless…

stands for decibels

July 10th, 2012
9:35 am

Not a Neal Boortz Redneck

July 10th, 2012
9:35 am

I guess Bush’s FDIC seized WaMu out of spiteful ignorance like any imperial leader would do.

Jm-pass TSPLOST silly people

July 10th, 2012
9:36 am

Jamvet silly question but I’ll give you a serious answer

I think that in financial transactions, people’s motivations are very hard to determine

What people do is after the fact, when they’re on the losing end of a transaction, the claim: “criminal!”

But on the front end both people agreed to the transaction for whatever reason

I think it is very difficult to discern the exact motivations of individuals. Though everyone is greedy, including the losers

I don’t give WC crims a pass. When it’s clear, they should go to jail (see McKinsey CEO insider trading)

But often these things are very very gray

ragnar danneskjold

July 10th, 2012
9:37 am

Agree with most of the analysis, disagree with the conclusion. 95% of the banks have no LIBOR loans, either as borrower or as lender. This is the top dogs of the biggest banks robbing their best customers. Most rational borrowers left the big guys long ago, and the big guys have to plunder the mid-size banks for a clientele.

Jm-pass TSPLOST silly people

July 10th, 2012
9:37 am

Bush did not control the FDIC

I'm a liberal and believe everything I read and nothing the other side comes up with...cause we're smart and they are not

July 10th, 2012
9:37 am

Off subject comment ( thanks Jay). Interesting that Katie Holmes say’s this morning that finding their daughter a suitable private school is job 1 right now…………..But the liberal mindset is NO SCHOOL VOUCHERS for school choice to give these poor kids a fighting chance at life other than a career in life long government entitlements…………………..But a educated child with a mind trained for independence does not make a good little future liberal voter……….Does it?

mm

July 10th, 2012
9:38 am

Romney is going to have a serious problem with his overseas holdings.

An October surprise? A debate debacle?

Brosephus™

July 10th, 2012
9:38 am

Wamu was solvent

Man, for somebody who’s a Bloomberg reader, I wonder about you some days….

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aG.D1cUCF5zU

Sept. 27 (Bloomberg) — Washington Mutual Inc., a holding company for the savings and loan that became the biggest U.S. bank to fail, filed for bankruptcy protection along with its unit WMI Investment Corp.

WaMu, the 119-year-old Seattle-based thrift, filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Delaware, according to a release from Business Wire. The Delaware bankruptcy Web site was closed for site maintenance. Ian Campbell, a spokesman for the bankrupt holding company with Abernathy MacGregor Group, said he couldn’t provide further details.

WaMu had its banking unit seized Sept. 25 by government regulators after customers withdrew $16.7 billion over 10 days. JPMorgan Chase & Co. became the biggest U.S. bank by deposits when it bought WaMu’s branches with a $1.9 billion payment to the Federal Deposit Insurance Corp.

WaMu had fallen 98 percent over the past year on losses tied to subprime lending before trading was halted on news of the FDIC seizure. The company was one of the financial firms the U.S. Securities and Exchange Commission protected from short selling this month as part of an effort to stabilize equity markets…

WaMu was expected to lose as much as $19 billion on bad mortgages during the next 2 1/2 years. Standard & Poor’s cut the bank’s credit rating twice in nine days, to eight levels below investment grade, as chances decreased that any deal wouldn’t be a buyout of the whole company, leaving creditors of the holding company to face substantial losses.

The failure of WaMu will have a “significant” effect on collateralized debt obligations that made bets on the lender’s creditworthiness, Standard & Poor’s said yesterday.

Yep, that reeks of solvency…

ragnar danneskjold

July 10th, 2012
9:38 am

Dear ay @ 9:30, does that mean your support the Holder coverup?

East Cobb RINO, Inc (LLC)

July 10th, 2012
9:39 am

poor little rich girl (Katie Holmes)