Raves, rants and reviews
Raves, Rants & Reviews

Home » Raves & Rants » It worked! The Libor rate is fixed, big boy!

It worked! The Libor rate is fixed, big boy!

It is not quite an Eureka moment like the 99.999% discovery of the Higgs boson-like particle. But when the bankers discovered that colluding on fixing the Libor rate can bring them huge profits, they emailed each other: “… please keep it to yourself otherwise it won’t work.”

They did keep it to themselves and robbed the public of billions of dollars. It worked! But only for a few years. They have been caught out and the heads are rolling, Bob Diamond of Barclays being the first (of many, most likely) to walk the plank. 

The Libor scandal – or “Liebor” – is yet more proof that the bank industry is rotten down to the core. Sapping money from the public faster than atoms fly through the CERN hadron collidor seem to have become the standard joke amongst bankers. It’s a circus. But the bankers are the audience and the public are the clowns.

How big is the joke on us? In his article “Barclays Libor Scandal: How Big Will This Get?” Larry Doyle shares an enlightening moment from the comedy:

The three- month rate from a senior Barclays trader in New York to the London banker who submitted the rates: “Hi Guys, We got a big position in 3m libor for the next 3 days. Can we please keep the lib or fixing at 5.39 for the next few days. It would really help. We do not want it to fix any higher than that. Tks a lot.”

Bankers submitting rates responded to such requests as if they were routine: “For you, anything,” and “done … for you big boy,” according to the e-mails. Not that the efforts went unappreciated: “Dude. I owe you big time!” one trader wrote to a Libor submitter. “Come over one day after work and I’m opening a bottle of Bollinger.”

Barclays traders also coordinated with counterparts from other banks. In an instant message, one Barclays trader wrote to a trader at another bank: “If you know how to keep a secret I’ll bring you in on it, we’re going to push the cash downwards. … I know my treasury’s firepower … please keep it to yourself otherwise it won’t work.”

Catching out cheating bankers is not the only good news. The discovery Higgs boson-like particle, the so-called “God particle” is also a major breakthrough. And if the scientists don’t have any more use for that big collider perhaps they could donate it to us, the public. We can think of a few pieces of matter that it should be fed with.

04/07/2012. Category: Raves & Rants. Topic: .

You may also like -