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Author: yodaorange Big red star, 1000 posts Feste Award Nominee! Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 463316  
Subject: The REAL LIBOR scandal . . . Date: 7/10/2012 7:59 PM
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. . . has NOTHING to do with what Barclay’s did IMO. With all due respect to TMFSinchiruna’s excellent article, I have an entirely different view of the situation.

Is anybody surprised that:

a) Barclay’s lied about their true interest cost (fact)
b) That Barclay’s management knew they were lying about it (fact)
c) That the Bank of England knew Barclay’s was lying about it and did NOT stop it at the time (fact)
d) Some of the other 15 banks that report their interest rates, also lied about them (alleged at this point)
e) The US Fed knew about the lying and did NOT report it (alleged at this point)

At least amongst METARites, I would expect that few would be surprised at any of these actions.

As a result of the LIBOR situation, Barclay’s Chairman, CEO and COO all “resigned.” It is not known if they were coerced to resign or if they did it on their own. The CEO, Bob Diamond, has also announced that he will forfeit his severance package.

What I do find scandalous is how the US handled similar situation(s). The most clear cut example IMO is Goldman Sachs and their Abacus mortgage backed CDO’s.

a) Goldman lied to its customers about who picked the mortgages for the CDO (John Paulson)
b) Goldman kinda forgot to tell its customers that it was shorting the Abacus CDO’s it was selling them
c) Goldman management knew about this at the time
d) Goldman got called before Congress to testify about Abacus
e) Goldman denied they had done anything wrong, contrasted with Barclay’s that did accept responsibility for its actions
f) Goldman LIED to Congress, at least in the opinion of Harvard Law School graduate Senator Carl Levin
g) The Justice department tried baseball player, Roger Clemens, two times for lying to Congress. The Justice department did NOT charge anyone from Goldman.
h) Goldman paid $550 million to settle the case, without admitting to any wrongdoing
i) NO executives resigned or were coerced to resign over this situation

YODA’s opinion is that this is SCANDALOUS. It appears that US regulators are missing testicles. It appears that British regulators have testicles.

AT A MINIMUM, Goldman’s Chairman, CEO and COO should have “resigned” IMO. If they would NOT volunteer to do this on their own, the Fed has plenty of regulatory authority to make this happen. Goldman’s lead regulator is the Federal Reserve Bank of New York. The president of the NY Fed is William Dudley,

It is simple. Bill calls up the Goldmanites and tells them they have two choices:

a) Resign effective today
b) Lose their primary dealer status and access to the discount window effective today

One small point. Bill Dudley’s previous position was Chief Economist of GOLDMAN SACHS. So if he is too shy to make the call, surely Chairman Bernanke can make the same call.

Maybe the phones were broken that day. For some reason, the call did not go through. Or maybe the carrier pigeon got lost. We are still waiting.

Brit’s should be encouraged that if their TBTF banks mess up, heads will roll at the TOP. It might not prevent another mess, but arguably it will have some deterrent effect. On the other hand, American’s can rest assured that the TBTF can abuse customers, lie to Congress yet keep their jobs and their bonuses. It encourages careers working for the US TBTF.


METARites, THIS is the TRUE SCANDAL IMO.

(I chose Goldman because it is the easiest target. Certainly, other TBTF firms performed similarly.)

Thanks,

Yodaorange
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Author: WatchingTheHerd Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397701 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/10/2012 8:28 PM
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METARites, THIS is the TRUE SCANDAL IMO.

====================================

The scandal isn't what's illegal, the scandal is what's legal. -- Molly Ivins

A quote that fits so many circumstances.


WTH

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Author: JoKingMe Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397705 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/10/2012 8:54 PM
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Not too late to spend a couple billion to convert the GS headquarters into a prison and lock up all GS executives for 20 years.

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Author: steve203 Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397712 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 12:13 AM
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CEOs actually being negatively impacted by their bad decisions is so 20th century.

Albert Russel Erskine

His downfall lay in his failure to cut production and costs quickly in response to the slump of 1929 and 1930, which led to an insurmountable cashflow crisis. In 1930, he had declared a dividend of $7,800,000 which was five times the actual net profits of that year. In 1931, he paid a dividend of $3,500,000—also out of capital—a ruinous procedure... Working capital had fallen from $26 million in 1926 to $3.5 million in 1932 and the banks were owed $6 million, for which they demanded payment. Studebaker defaulted and went into receivership.

Suffering from heart trouble and diabetes, ousted from his position at Studebaker, himself $350,000 in debt and his Studebaker stock now all but worthless, Erskine committed suicide on June 30 1933 by shooting himself in the heart in his home on the south side of South Bend.


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

CEOs today are royalty. You can't lay a glove on royalty.

Steve

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Author: ADrumlinDaisy Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397713 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 12:21 AM
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a) Goldman lied to its customers about who picked the mortgages for the CDO (John Paulson)
b) Goldman kinda forgot to tell its customers that it was shorting the Abacus CDO’s it was selling them
c) Goldman management knew about this at the time
d) Goldman got called before Congress to testify about Abacus
e) Goldman denied they had done anything wrong, contrasted with Barclay’s that did accept responsibility for its actions
f) Goldman LIED to Congress, at least in the opinion of Harvard Law School graduate Senator Carl Levin
g) The Justice department tried baseball player, Roger Clemens, two times for lying to Congress. The Justice department did NOT charge anyone from Goldman.
h) Goldman paid $550 million to settle the case, without admitting to any wrongdoing
i) NO executives resigned or were coerced to resign over this situation


Hi Mr. Orange,

(What an unusual name! I thought Yoda was green, but perhaps you are a Protestant Yoda? Sorry that is sort of a bad Irish joke . . . .)

Oh, geez – another bubble burst. If you can’t trust Goldman, who can you trust? At least we still have our elected officials watching out for us.

After reading your post I decided to pull all of my business away from Goldman, but then I realized they do not have any of my business and probably do not want any of it. But let’s just say that if they ever want to buy any used ceramic products, they will have to look elsewhere.

This kind of story just makes me very depressed. I am spending more and more time in my bomb shelter reading Archie comics and listening to my Buddy Holly collection on an old turntable (with a hand-crank option, in case the big one ever hits).

The bomb shelter was originally a root cellar, but I converted it by covering all the air vents with plastic. Unfortunately, I can only stay down there about an hour before it gets hard to breathe. But I have a pretty good collection of canned meat products, powdered milk and Pop Tarts; I still need to get some sort of water access though.

But I digress.

Anyway, thanks for the very informative (and depressing) post. I wish I could think of something constructive to say, but sometimes it seems the world just isn’t fair.

Your truly,

A Drumlin Daisy

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Author: voiceinthedin Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397715 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 12:32 AM
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Daisy,

where in Eire are you from????

Dave

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Author: ADrumlinDaisy Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397718 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 1:01 AM
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where in Eire are you from????

Hello Dave,

I was born, in a different millenium, in the town of Bunclody, on the River Slaney in the County of Wexford, but left that fair green land at an early age as my father sought to make his life in the hills of West Virginia. He found poverty and difficult times here, but raised a family and never regretted coming to these shores.

Despite my name, taken in honor of Robert Frost and, enigmatically, my middle daughter (whose name is not Daisy), I am male and well on the long decline (tip of the hat to Neil Young and his song, "Long May You Run"), and my ties to Ireland are distant and faded with time.

Do you hale from the land of Finn MacCool?

Rich

A Drumlin Daisy

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Author: voiceinthedin Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397722 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 1:30 AM
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Rich,

My parents came here in 1962 on the Mauritania.

http://en.wikipedia.org/wiki/RMS_Mauretania_%281906%29

where I was in the very least thought of......born ten months after....

My parents just celebrated their fiftieth.

Dad is from Dublin. Sandy Cove.

Mom from Kildare.

Dad's family is Jewish. His father's first country was Ireland at the age of 26 he got citizenship. Gramps as a young woman at Howard Johnson's christened him, Left Poland in 1907 for London.

We are Chelsea fans ever since Gramp's days in the sweat shops of London. Grandma worked in London, but her family was already in Dublin for a generation. They met in London and Gramps moved to Dublin. He set up shop as a women's tailor on Wicklow Street in Dublin center. Property today still worth over $10 million....unfortunately we sold it a long time ago....LOL.....

I am part of the first group of American/Irish to return and know my family in Ireland. I have been there ten times. Mom says I dont know half my family it is so large. Dad has family here in the states for employment reasons, and very few relatives in Ireland now. He lost family during his early childhood in the Holocaust.

slainte,

Dave...McYid.....

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Author: namkato Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397726 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 2:27 AM
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unfortunately, the LIBOR scandal resulted in universally lower mortgage payments over many, many years

were it not for the rigged rates, the housing bubble would have popped sooner, resulting in fewer foreclosures

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Author: namkato Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397728 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 2:54 AM
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As far as the actual details are concerned, I find myself to be ambivalent.

I'm just waiting for Matt Taibbi to give his complete rundown, and whatever he says, that's the last word.

His reporting will be hugely profitable to his personal income, but he clearly has no incentive to report in any way that would appeal to his adoring, expectantly drooling audience.

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Author: bjchip Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397729 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 10:39 AM
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Uh ... look. I hate to break it to you, but there isn't any way on earth that they were doing this as a charitable gesture to the rest of us. If you can't figure out HOW they were stealing money in the process, fine. I understand that, they are good at obfuscating the details. It's what they do.

Just don't expect anyone to believe that they were doing it for nothing.

Because there are plenty of bridges for sale out there.

Just as a first order guess here, you're sort-of right. The LIBOR scandal resulted in lower mortgage REQUIREMENTS as well as rates, over many, many years. The banks make money off the interest so the more they can lend the more money comes in. You KNOW that. So how much did this greater availability of cheaper money affect the market? How much did it distort the investment of money? There are indirect costs all over the place from this... and I KNOW you're a smart guy.

So don't tell us they did it for nothing. Those guys get PAID

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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397734 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 11:29 AM
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CEOs today are royalty. You can't lay a glove on royalty.

You can't hang them but you can behead them.

Denny Schlesinger

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Author: tgrmn Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397750 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/11/2012 2:25 PM
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Dang!

It's a good thing we got us a whole slew of elected and hired "Public Servants" dedicated to watching out for all of us!

With all of them and their focuzed Diligence,
What could possibly go wrong?

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Author: VitaBevis Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 397822 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/12/2012 8:31 AM
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Howdy Denny!

Last year, the word "democracy" came up in a conversation and my 8-yr-old looked up and said, "Is that where they cut the heads off all the kings and queens?" I said, "Yep, that's pretty much it, Baby."

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Author: outoffocus One star, 50 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 398236 of 463316
Subject: Re: The REAL LIBOR scandal . . . Date: 7/17/2012 5:51 AM
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not just Too big to fail, too big to be regulated. Instead they regulate small businesses to the point where they cant even compete. This is not a government for the people, its a government for the corporations.

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