Liborgate
I was hesitant to voice my opinion on this until more of the facts came out. We still don’t know everything. The gist of it is that the big banks may have tweaked their LIBOR rates up by like 5 or 10 bps each day for years.
Um, so, the media has called this the financial industry’s “tobacco moment.” So I guess the whole manipulation of trillions of dollars of mortgages was just dandy as far as they’re concerned.
I would argue it has been exactly the opposite with LIBOR. LIBOR is the interest rate in which banks charge to lend to each other. Something like $800 trillion in loans and derivatives are based on it. Often times, when consumers get a floating loan, it will be based on some percentage plus “LIBOR.” Folks, why is it that LIBOR in Europe is like 0.25% when none of the banks trust each other? Why isn’t it like 15%? I don’t know, maybe I’m missing something here, but I’d say it looks more like the banks have been favorably manipulating the LIBOR rate rather than the other way around. Nonetheless, the media smells blood and a wound for Obama to pour salt into. They’re going to beat this thing to death, even if it’s the biggest tempest in the teapot we’ve had in a long while.
Keep in mind, central banks, like the US Federal Reserve, are manipulating interest rates every day. The banks did it with each other and by throwing out these big numbers like “$800 trillion” the media is going to make this sound HUGE. But, it’s really peanuts compared to how our central bank has robbed Americans, whether or not anyone wants to admit it, in the form of a severely devalued currency over the last ten years.
