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Libor: Not a science fiction monster
Barclays bank was fined 290 million pounds last week for manipulating the Libor interbank lending rate.
July 9th, 2012
05:20 PM ET

Libor: Not a science fiction monster

By Jim Ribble, CNN

(CNN) – Maybe you've heard about the Libor scandal involving Barclays bank and thought, "Well, that's a British problem." But, it could influence all of us around the world. Libor is an interest rate that can affect everything from the interest you pay on your credit cards to the rate on your home mortgage. And if a bank falsifies the numbers it can make people nervous about the integrity of the entire banking system.

"We no longer trust Libor," says bank analyst Dick Bove of Rochdale Securities. "You just don't like what you're hearing, and you just keep hearing it over and over and over again. And after a while, you just cannot develop faith and confidence that the system is being run properly. [3:07]

"I think this is a catalyst, and it is one of those key signposts," says investment manager Justin Urquhart Stewart of Seven Investment Management. "We'll look back and actually say maybe it was that moment when banks realized that they had to look at their mission statement and start including two words, 'client' and 'service,' and make sure that's actually primary in what they're doing, and not 'profit'  and 'shareholder.' " [3:54]

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  1. MadMacs

    Untill WE MEN have a Million MAN March on D.C. with our M4'S and Round up all them White Collar Criminal Politicians, not one Damn thing is going to CHANGE (Belive IT) !!! we MUST be WILLING to SACRIFICE our own selfs to do just THAT! . it is CORRUPT beyond REPAIR now........i dont want my Grandchildren to be in BONDAGE to a Lot of Self Serving, Greedy, LEGISLATORS that dont give a Rats Behind about the FUTURE of America! While the Illuminati Seek Maximum World Power!! Through Wall Street ...of course ..... WAKE UP...

    July 12, 2012 at 10:08 am | Report abuse |
  2. Willie12345

    Turbo Timmy has been well aware of this for several years, but kept quiet about it. Why ? Another WH crook !!!

    July 10, 2012 at 2:58 pm | Report abuse |
  3. Andrew

    republicans have truly bastardized the word capitalism. i dont blame the less knowledgable for hating it, but true free market capitalism is actually what is best for the working class and worse for the elites.

    July 10, 2012 at 1:30 pm | Report abuse |
    • sdcanyon

      And Democrats dump middle income family's money into black holes of worthless causes

      July 10, 2012 at 1:55 pm | Report abuse |
    • Chris

      Capitalism is good. Unrestrained capitalism is not. Where capitalism is not reigned in by reasonable regulations, corruption becomes the norm and the working class becomes the working caste and eventually slaves.

      July 10, 2012 at 1:59 pm | Report abuse |
      • Andrew

        laissez faire is actually what is best for the working class. but we havent seen it at least since near the founding of our country. If Jacksonian Democracy had held out, that might have been it. It only takes a few reulgations, welfare, and certainly a central bank to throw a wrench in the market dynamic. Once this happens, yes, you must indeed regulate...but eventually it becomes a lost cause. We can only truly improve working class conditions by getting government out of the markets. That doesnt mean you cant have unions. Unions as a means of free association, a fundamental right, are just as capitalistic as anything. I can go on and on, but there's just so much. If you ask how this or that would work, I'd enjoy explaining.

        July 10, 2012 at 2:04 pm | Report abuse |
    • maccabeus

      Your Democratic President has a number of these banks' former CEOs in his cabinet. Don't be fooled in thinking its just the Republicans!

      July 10, 2012 at 2:04 pm | Report abuse |
      • Andrew

        You talking to me maccabeus? I'm done with the democratic party. Have been since they passed that law to figure out what was in it, and Im pretty livid about the Hit List Obama has where he just kills whoever he wants. But I'm libertarian now and until the republican party adopts the Ron Paul platform. Gary Johnson says, and it is true, the Democrats seem to be the best on civil liberties, and the republicans seem to be the best on dollars and cents. [I] believe [I] can beat them both on their strong suit.

        July 10, 2012 at 2:43 pm | Report abuse |
      • MadMacs

        you are Right it is NOT Partisan , Quote" The LOVE of MONEY is the ROOT of All Evil" unquote seriousley think about that .........

        July 12, 2012 at 10:12 am | Report abuse |
    • John

      Andrew, your lack of knowledge in the subject matter is surprising. It's easy to blame Republicans. But do I need to remind you we are in 3.5 years of a Democrat administration which has doubled the national debt for handouts to large corporations and banks, a full term of failed policies, rising unemployment (look at the real numbers – not 8%, but 15%), families suffering from foreclosures, and more. I'm not a big believer in polls, but 'Bama's support is falling through the floor, a good indication where the fault actually lies. Don't blame only the republicans, look at the current natioonal policies for the real culprit.

      July 10, 2012 at 2:13 pm | Report abuse |
      • Andrew

        Ive actually got great knowledge. I studied this in college.What we have is not a four year problem or an 8 year problem. Our problem is about to have its 100th birthday in december. The Federal Reserve is the biggest piece of our problems. And Im not wanting to essentially blame republicans, but honestly they are all for corporate welfare and the dems are all for middle and lower class welfare. I am against all kinds of welfare. I dont know what the proper rate of taxation ought to be, but I believe the only role of government is to protect liberty. Income taxes are the worst for the middle class. Sure each individual 1%er gets a lot more for tax cuts, but the entirety of the middle class pays way more than they do. I believe we should abolish the 16th (I believe thats the income tax one) amendment. Capital gains are what ought to be taxed.

        Yes Obama has been terrible, but I do like some democrats, and I believe if one has to be president it ought to be Elliot Spitzer. Terrible Terrible shame what happened to him.

        The Federal reserve threw gasoline on the tech bubble, then hit the choke to "get us out," and lo and behold they're doing it again. It has got to stop. We need free market money, and we need to stop letting them print up money that the government ought to be able to print itself. And we need to stop lending trilllions (16T in loans to banks in the crises) to the banks just to save their carcasses with no benefit to anyone else at all. In fact, once europe (if they do) gets their act together, all eyes will be on the sorry state in US treasuries and the dollar. That coming collapse will be a day of reckoning. 08 will look like a child's problem.

        But anyway, I say the republicans have bastardized the word capitalism because of their tendency to subsidize big corporations. When that leads to ever increasing income gaps, the populist movement hates it and they lose an understanding of what capitalism really means and why it is actually in their own best interests.

        July 10, 2012 at 2:28 pm | Report abuse |
      • The Woof

        And don't overlook the years of deregulation that has done nothing but feed the voracious greed that abounds in business!

        July 10, 2012 at 2:50 pm | Report abuse |
        • Andrew

          its not deregulation that has happened, its more like reregulation. or like regulation shuffling. regulations really only snuff out the good guys in the rhetorical 5%. The 1% has so many high powered lawyers they can afford to dodge regulations...they can afford to muscle through them.

          this is what happens when you have corporate welfare and more regulations that only the power corporations can muscle through. Using regulations is like using a predator drone to hit one terrorist in a populated village of otherwise peaceful people. The pitchfork mob is the best regulator. Sadly, the regulations simply serve to placate them into a false sense of security and imagined well being

          July 10, 2012 at 3:01 pm | Report abuse |
  4. libor

    my libor went into labor

    July 10, 2012 at 1:10 pm | Report abuse |
    • melvinslizard

      Check out "Collapse" with Michael Ruppert. Google it, or watch it on Netflix. This type of fraud is no anomoly- in fact, it's a sign post on the way to financial hell!

      July 10, 2012 at 1:20 pm | Report abuse |
  5. Socal Reggae

    Shoreline Rootz
    [youtube=http://www.youtube.com/watch?v=td8-LEoQZuw&w=640&h=390]

    July 10, 2012 at 1:07 pm | Report abuse |
  6. Socal Reggae

    [youtube=http://www.youtube.com/watch?v=td8-LEoQZuw&w=640&h=390]

    July 10, 2012 at 1:07 pm | Report abuse |
  7. Andrew

    the idea that we have to tax the rich is just like the idea of using predator drones to take out one terrorist in an otherwise peaceful village. ending corporate welfare is the way to go. a lot of these republican dummies say the poor are the leeches but never mention the bailouts, the printed money straight to the banks from the federal reserve, the lobbyists gunning for monopoly control etc etc...oil subsidies corn subsidies...big pharma patents on things they just have no right to own (not all but some)...big agriculture patents on GM seeds which cross polinate with the organics, where they can then sue the organic farmer for infringement....the list goes on and on.

    dont tax them, because that just kills the good guys. the good rich people arent the ones receiving corporate welfare. they get squashed by the ones that do

    July 10, 2012 at 1:02 pm | Report abuse |
  8. Bregs

    Hmm, maybe we should give all these rich 'job creators' some more tax breaks so we can keep paying for this nonsense. This 'trickle-down' is working great...for bankers!

    July 10, 2012 at 12:53 pm | Report abuse |
    • Andrew

      it's the fedeal reserve man...the federal reserve

      July 10, 2012 at 1:09 pm | Report abuse |
  9. Norm

    Ok...if we can't trust the interest rates to be fair and correct, let's all stop paying any interest until the system is reworked.
    And Jim...it's highly doubtful that anyone but a few in the banking business understood your snide explanation.

    July 10, 2012 at 12:21 pm | Report abuse |
  10. Louis J Celentano

    The very rich are cheating Americans, they must pay much higher taxes for that privelege.

    July 10, 2012 at 12:03 pm | Report abuse |
    • xfiler93

      they do. they pay over 78% of all taxes, while the no good govt moochers 48& dont pay ANY federal taxes.

      July 10, 2012 at 12:18 pm | Report abuse |
    • Andrew

      Higher taxes arent the answer. Ending corporate welfare is the answer. Central banks must go. Without the guarantees of lender of last resort, banks will be more careful what they do.

      July 10, 2012 at 12:40 pm | Report abuse |
    • The Truth

      I am strictly a middle class income person and I can objectively look at this whole class warfare. For every rich person cheating Americans I am willing to bet there are 100's of poor and middle class people cheating Americans too, and probably for a lot more money. The tax rate/percentage thing is nothing more than a rallying point to anger people against the rich. The beauty of math is you can find a statistic to support your arguement. The truth is Buffet's secretary may pay a higher percentage of her wages in taxes, but Buffet pays orders of magnitude higher in actual money. I am willing to bet Buffet pays more in taxes in one year then his secretary does in a lifetime.

      Also the more you make the less government services are available to you. The poor pay little in actual money to taxes, if any at all. So look at what they get education assistance, welfare, foodstamps, and a host of other tax breaks and entitlments. The rich pay tons of money in taxes and they get..... These are federal taxes so that means no sales, property etc. for the uneducated those are state and local. How would you like to go to a restaurant and pay based on your income? Also have your meal size dictated by your income too? The more you make the smaller the meal you get and the more you pay. The poorer you are the larger the meal you get and the less you pay. Sounds fair? Nope I don't think so.

      Now there will be the whinning of the rich buying politicians and getting benefits from that. Well first that is illegal and those who investigate these crimes earn middle class income. Second politicians are elected and there are more poor and middle class voters than rich voters. So in the end the poor and middle class are allowing this to happen. The rich are rich because they are smart and use their skills wisely (may not apply to those who inherit their money). The poor are poor either because they are not smart or they sit there and whine about the rich cheating them.

      July 10, 2012 at 12:50 pm | Report abuse |
      • bubba

        You are a moron

        July 10, 2012 at 2:22 pm | Report abuse |
      • DV

        You only get a middle class income for that 1% supporting drivel?

        July 10, 2012 at 2:25 pm | Report abuse |
    • tehHuskerOracle

      The 'Rich', as you call them, DO pay higher taxes you dumba$$. They also give a LARGE portion of their money to CHARITIES as well... Get a clue.

      July 10, 2012 at 12:54 pm | Report abuse |
      • WV Gleeman

        The rich definately give to charities tehHuskerOracle, but do you believe they would do it in the same amounts if there wasn't a tax benefit to it? Be honest now.

        July 10, 2012 at 1:53 pm | Report abuse |
    • Andrew

      the idea that we have to tax the rich is just like the idea of using predator drones to take out one terrorist in an otherwise peaceful village. ending corporate welfare is the way to go. a lot of these republican dummies say the poor are the leeches but never mention the bailouts, the printed money straight to the banks from the federal reserve, the lobbyists gunning for monopoly control etc etc...oil subsidies corn subsidies...big pharma patents on things they just have no right to own (not all but some)...big agriculture patents on GM seeds which cross polinate with the organics, where they can then sue the organic farmer for infringement....the list goes on and on.

      dont tax them, because that just kills the good guys. the good rich people arent the ones receiving corporate welfare. they get squashed by the ones that do

      July 10, 2012 at 1:01 pm | Report abuse |
      • bubba

        It's just like CNN to downplay and make a joke out of the libor scandal, when these bankers continue to screw us out of our hard earned money. This is not about taxes, this is about corupt bank practices, that continue to mount, one rip off after another. Wake up America, the banking industry is taking us for a ride.

        July 10, 2012 at 2:27 pm | Report abuse |
  11. Fred Evil

    I see no evidence in this article that LIBOR is NOT a sci-fi monster.

    July 10, 2012 at 11:58 am | Report abuse |
    • RYan

      LIBOR isn't a sci-fi monster because LIBOR actually exists.

      July 10, 2012 at 2:12 pm | Report abuse |
  12. Ben

    Why not explain what is Libor is or how it is calculated. How do you write a story about it without doing that???

    July 10, 2012 at 11:34 am | Report abuse |
  13. POD

    You are absolutely correct......And as we have learned it is a totally bogus, made up, number to enrich an international cartel of financial bankster criminals

    July 10, 2012 at 11:11 am | Report abuse |
  14. LouAZ

    Just great "reporting" (sic) ! ! ! No description about what "Libor" actually is. Just what it isn't, and a meaningless statement from someone that "You just don't like what you're hearing, and you just keep hearing it over and over and over again." Well, isn't that profound !

    July 10, 2012 at 11:02 am | Report abuse |
  15. conoclast

    We all learned what the Libor is during the 2008 meltdown, didn't we. It's the inter-bank overnight interest rate, in case you've forgotten 2008 already.

    July 10, 2012 at 10:52 am | Report abuse |
  16. Darlene Buckingham

    Everything is manipulated nowadays. It seems that is the only way we will see the deceptions that rule our lives say NO and create a better world.

    July 10, 2012 at 10:36 am | Report abuse |
  17. Jeff

    A week late and only a blog blurb about one of the biggest financial cartel scandals since 2008; way to go. Matt Taibbi has been covering this a lot, if you want some real information about how 16 banks are cooking their numbers to better themselves, and only themselves, you should check out his articles.

    July 10, 2012 at 10:32 am | Report abuse |
  18. jim

    "The $800 Trillion Scandal: How Banks' LIBOR Lies Affected You"- Daily Finance

    http://online.wsj.com/article/SB10001424052702304299704577500982100334286.html?mod=googlenews_wsj

    "More than $800 trillion in securities and loans are linked to the Libor, including $350 trillion in swaps and $10 trillion in loans."

    Snoop, another couple sources. Man you're stupidin the full sense of the word.

    July 10, 2012 at 10:03 am | Report abuse |
  19. bobby

    And the GOP says "a businessman knows how to best run the country" ya ok....how many times do these A@SS clowns need to get caught before the rest of us wake up.

    July 10, 2012 at 9:59 am | Report abuse |
    • jim

      We are awake, and powerless to stop them. The police, courts, representatives and officials are all untouchable by we peons.

      July 10, 2012 at 10:05 am | Report abuse |
      • mcrusa

        Jim: We can stop them at the ballot box by pledging to vote only for the candidates who spport the reinsatement of the Glass Steagall Act ; H.R. 1489 ; The Reurn to Prudent Banking Act.

        July 10, 2012 at 10:14 am | Report abuse |
        • jim

          mcrusa- Your votes are for candidates who are already bought and paid for on both sides. You really believe we get a choice in who runs for office? Our only options are people who have enough money from somewhere to run in the elections, and where did that money come from and why are they running. Rich people don't like to help poor people. They love to help each other stack the deck in their favor though. They buy media outlets to spin stories in favor of the criminal rep and away from the rep for the people. We all saw this clear as day with Ron Paul this election.

          July 10, 2012 at 11:20 am | Report abuse |
      • VEW2012

        Other than Paul was bought a long time ago by the American Nazi Party.

        July 10, 2012 at 11:39 am | Report abuse |
  20. jim

    The Financial Times headlined "Barclays boss discussed Libor with BoE," saying:

    "The bank admitted that it lowballed estimates of its borrowing costs from late 2007 to May 2009 because it wanted to reassure investors of its strength during the financial crisis and it believed other banks were doing the same."

    "It also admitted that its traders improperly influenced the rate submissions from 2005 to 2008 to make money on derivatives."

    July 10, 2012 at 9:57 am | Report abuse |
  21. Johnny 5

    "And after a while, you just cannot develop faith and confidence that the system is being run properly" Criminal activities are based on these actions. Digital numbers are easy to tweak when you are the one pushing the buttons.

    July 10, 2012 at 9:56 am | Report abuse |
  22. angryersmell

    Off to the woods forever as soon as I get the chance. If this is civilization, you people can have it.

    July 10, 2012 at 8:40 am | Report abuse |
    • jim

      There is a big line forming. They are going to get us in the woods eventually and sooner than later.

      July 10, 2012 at 9:04 am | Report abuse |
    • Snoop

      angryersmell
      Off to the woods forever as soon as I get the chance. If this is civilization, you people can have it.
      ----

      Please hurry.

      July 10, 2012 at 9:44 am | Report abuse |
      • jim

        You're such a schmuck.

        July 10, 2012 at 9:58 am | Report abuse |
  23. mike

    Libor? You mean LIGER and it's not only real, but it's totaly awesome!

    July 10, 2012 at 8:40 am | Report abuse |
  24. jj

    Banks are big business...and big business scams. It's a given...it's what they do, and what they always will do without tight controls and oversight. No exceptions to this behavior in the "stockholder" era. Privately held company's may have higher ethics overall.

    July 10, 2012 at 8:33 am | Report abuse |
    • Snoop

      jj
      Banks are big business...and big business scams. It's a given...it's what they do, and what they always will do without tight controls and oversight. No exceptions to this behavior in the "stockholder" era. Privately held company's may have higher ethics overall.

      -–

      Capitalism = scam. Check.

      July 10, 2012 at 9:47 am | Report abuse |
    • David

      JJ – do you really believe that "privately" held businesses have higher ethics? Time to take off the blindfolds dude.

      July 10, 2012 at 10:00 am | Report abuse |
  25. jim

    This was a fraud in the biggest market in the world. Worth $800Trillion these "small percentages" equal big numbers and it looks like every major bank was a part of the scandal, fraud, conspiracy. Governments, it turns out were fully aware and in cases such as Britain, told the banks to commit the fraud. This effects the interest rate of everything that is not fixed. This fraud is more proof that all the markets are being manipulated by the corporate elite and governments accomplices. We can pretty much assume with little doubt that all Western Governments are corrupt and accomplices in this gigantic swindle.

    July 10, 2012 at 8:29 am | Report abuse |
    • Derek

      Yes, and you musn't forget your tin foil hat or all the major governments in the world will intrude on your thoughts too. The moment you say "all major banks" and "all the markets" and "all western governments", your opinions shouldn't be counted without some additional facts.

      July 10, 2012 at 8:37 am | Report abuse |
      • irlkro

        Me thinks you might need to pull your head out of the sand, buddy. Look around, pay attention. It's all a scam and yes, by and large they are all corrupt.

        July 10, 2012 at 8:52 am | Report abuse |
      • jim

        These are not opinions, simpleton. Diamond, while resigning said all the major banks were involved in this scam. Hundred of execs from banks were resigning just this past fall to spring in preparation for this bombshell. Diamond also released an email that implicates the governments involvement in the fraud. Do some research and then speak.

        July 10, 2012 at 9:09 am | Report abuse |
      • jim

        And as for the tin foil hat you might not want to keep your on while sticking your head so far up yourass.You might get it stuck up there, and then what will you do.

        July 10, 2012 at 9:10 am | Report abuse |
    • Snoop

      "Worth $800Trillion"

      Hey.. I can make up big numbers, too. Try adding some facts into your insane ramblings.

      July 10, 2012 at 9:46 am | Report abuse |
      • jim

        No shortage of ignorance from you "Snoop". Here's the information you are incapable of typing into a browser before you speak like an idiot.

        The US Commodity Futures Trading Commission (CTFC) says:

        "US dollar Libor is the basis for the settlement of the three-month Eurodollar futures contracts traded on the Chicago Mercantile Exchange, which had a traded volume in 2011 with a notional value exceeding $564 trillion."

        The Wall Street Journal estimates $800 trillion. These type numbers are unfathomable.

        July 10, 2012 at 9:53 am | Report abuse |
        • Bammer 1107

          Very good Jim, I thought I've read that number in a couple of articles myself.

          July 10, 2012 at 11:58 am | Report abuse |
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