Flow5.. Do your remember the differance of

[bimetalaupt]

Flow5,
Do you recall the long write up of the net difference and the expansion of the gap between Fed Funds and LIBOR in 2005-2007 we talked about.. Did we ever think that the LIBOR was rigged??

Now it is clear why the math models were not working... Perfectly clear.. Looks like the Real data was produced my the old MMV was true.. Differentiation equations did work after all..
How many billions of overpayment were made with the wrong data.. LIBOR was always higher then calculated ( AS I RECALL).. Making Europe more costly!! Banks were always more profitable... esp with 1:50 Capital rates of many like HYPOrealestate Bank in Germany!!
Just a thought,
BiMetalAuPt

[bimetalaupt]

There are a few metrics that are best-suited to financial obscurity - and when they emerge into common parlance, I get nervous.

In the bad old days of 2007 and 2008 at 11 am UK time each day we'd wait with mounting anticipation for the London Interbank Offered Rate (Libor).

Queues formed outside branches of Northern Rock, while HBOS, RBS and Lloyds teetered on the edge of unsustainability and we (foolishly) looked to Libor to tell us quite how bad things were.

That period of worrying about Libor ended with the collapse of Northern Rock, the bizarre takeover of HBOS by Lloyds and the subsequent part-nationalization of both Lloyds and RBS.

Now Libor is back in the spotlight and it's making me just as nervous as last time around.

The financial crisis already turned much of the UK population against bankers. Just look over June's financial pages for a rogues' gallery of deception, selfishness and general bad behavior.

Mis-selling of interest-rate swaps to small businesses; (on top of the recent multi-billion pound payment protection insurance scandal); JPMorgan's $5 billion "London Whale" loss; Kweku Adoboli of UBS granted bail over alleged unauthorized trade that lost $2.25 billion; Jerome Kerviel of SocGen takes to the appeal court in Paris over the 4.9 billion euros ($6.2 billion) loss related to his bets on the futures market in 2008; Bernie Madoff sentenced to 150 years for his Ponzi scheme; Texas banker Allen Stanford gets 110 years for a fraud worth $7 billion.

That was a selection of reports, from last month alone!

What worries me about the Libor manipulation debacle is that this could be the "Leveson moment" for the banking industry - the final straw that unites disparate political and interest groups against bankers once and for all.

Barclays almost won over the public. They didn't need a bailout and Bob Diamond almost drew a line under the self-flagellation years with his "the period of remorse and apology is over" speech. Except that now he has to start apologizing all over again.

The technical term for this is: major fail.

Meanwhile the coalition is struggling to keep a united front and this is a great opportunity to unite against a common bogeyman and curry favor with the electorate. Hence over the weekend David Cameron ordered an independent review into interbank lending rates. And as you'd expect, the opposition has to be seen to be even more outraged so Ed Miliband goes even further, with calls for a public inquiry into banking culture.

As more banks are implicated, demands to rein in the industry will only grow louder. Looks like the banks have finally succeeded in chopping off their collective noses to spite their faces. All over Libor. What a waste.

[bimetalaupt]

Flow5,
IT LOOKS "TARABLE".. OR "TARP-ABLE".. FINANCIAL SYSTEM IS TOTALLY ROTTEN..
FLOW5,YES YOU GOT IT RIGHT IN 2008..NOW THEY UNDERSTAND!! HOW ROTTEN IT GOT..!!
THANK-YOU SIR

BiMetalAuPt

During the 2008 financial crisis, the London Interbank Offered Rate (LIBOR) was a key barometer of the failing health of the banking sector. When LIBOR spiked in late summer 2008, it was a clear sign banks weren't willing to lend to other banks and the term "counter-party risk" became part of the vernacular.

LIBOR is the rate at which banks will lend to other banks and a critical component to the inner-workings of the global financial system. As with the 10-year Treasury note and fed funds rate, literally trillions of dollars of other financial instruments -- including corporate loans and mortgage rates -- are pegged to LIBOR, making it one of most important financial indicators in the world, if not the most important.

Fast-forward to today and the events of 2008 still resonate.

Last week, Barclays paid roughly $450 million to settle charges by U.S. and U.K. regulators that its traders had manipulated LIBOR. A day after he resigned as Barclays CEO, Robert Diamond appeared before U.K. Parliament last week and testified that regulators on both sides of the Atlantic were aware of irregularities in the LIBOR market as far back in 2007 and did nothing about it.

Barclays felt that some competitors were low-balling the rates being charged by other banks in order to make themselves look better to regulators and investors. In addition, Diamond testified that Paul Tucker, now a deputy governor at the Bank of England, expressed concern that Barclays was reporting higher LIBOR rates than some competitors; at least one Barclays executive took Tucker's concern as a signal Barclays too should report lower LIBOR rates.

Tucker is set to testify before Parliament Monday on these matters, which have gripped London's financial circles much in the same way all of Wall Street was watching Jamie Dimon's Congressional testimony last month.

But JPMorgan's estimated $3 to $5 billion loss on its 'London Whale' trades really is a tempest in a teapot -- as Dimon initially declared -- compared to allegations of LIBOR manipulation. Imagine finding out the Dow is rigged or the S&P 500 doesn't really measure the stocks of the 500 largest U.S. firms and you have a hint at how big a deal this really is.

In addition to allegations firms were under-reporting LIBOR rates during the crisis, there's a second scandal: that Barclays traders allegedly rigged the LIBOR rate to ensure certain derivatives bets paid off.

If recent history is any indication, it's very unlikely Barclays traders were operating in a vacuum; typically if one Wall Street firm is pushing the envelope (or breaking the law) to gain an advantage, its competitors won't be far behind. Most observers believe Barclays is just the first firm to settle related allegations.

'Expect More Ugly Revelations'

"We expect more ugly revelations" over what's been dubbed LIBOR-gate, writes David Kotok of Cumberland Advisors. "Other institutions may be implicated. Critics of emerging-market governance standards need to look in the mirror. The so-called developed markets now exude a rising stench."

Kotok notes that if LIBOR was manipulated that means the so-called TED-spread -- the difference between LIBOR and rates on Treasury bills -- is also suspect.