Slashdot Mirror
The Biggest Financial Fraud of All Time
An anonymous reader sends this excerpt from an article at Bloomberg giving an inside look at how the Libor scandal happened:
"Every morning, from his desk by the bathroom at the far end of Royal Bank of Scotland Group Plc’s trading floor overlooking London’s Liverpool Street station, Paul White punched a series of numbers into his computer. White, who had joined RBS in 1984, was one of the employees responsible for the firm’s submissions for the London interbank offered rate, or Libor, the global benchmark for more than $300 trillion of contracts from mortgages and student loans to interest-rate swaps. Behind him sat Neil Danziger, a derivatives trader who had worked at the bank since 2002. On the morning of March 27, 2008, Tan Chi Min, Danziger’s boss in Tokyo, told him to make sure the next day’s submission in yen would increase, Bloomberg Markets magazine will report in its March issue. 'We need to bump it way up high, highest among all if possible,' [Tan wrote]. ... Events like those that took place on RBS’s trading floor ... are at the heart of what is emerging as the biggest and longest-running scandal in banking history. ... For years, traders at Deutsche Bank AG, UBS AG, Barclays, RBS and other banks colluded with colleagues responsible for setting the benchmark and their counterparts at other firms to rig the price of money, according to documents obtained by Bloomberg and interviews with two dozen current and former traders, lawyers and regulators. UBS traders went as far as offering bribes to brokers to persuade others to make favorable submissions on their behalf, regulatory filings show."
I just want to post in this thread before all the free marketeers try to talk up the joys of unregulated capitalism.
The USA has a 140 year history of regular banking panics and collapses, inspite of the institution of regulations.
And there are those who would still insist that the industry is over regulated, in the face of flagrant and widespread fraud during the last 6 years.
"Free" markets do not lead to competition.
They consistently and repeatedly lead to fraud and monopolies.
[Fuck Beta]
o0t!
The Fed buying up US bonds (for the past couple of years) has nothing to do with bailing out banks, and everything to do with printing money. And about half the nation thinks that printing money is a great idea - I don't, but hey, democracy, not dictatorship of lgw. For a while they were buying up securities, mortgage-backed stuff that it would be a real stretch to call bonds, but again that was not bailing out individual banks (other parts of the government did that, but not the Fed - the Fed shuts down individual banks, and was shutting down many each week during the downturn), but rather keeping financial infrastructure intact. Again, I don't think that was the right plan, but most experts disagree with me.
It's amazing how fast geeks will go off on a rant about imaginary banking scandals - c'mon slashdotters, don't be that crank with a firm opinion about a deeply technical subject that's he can't be bothered to actually study.
This libor scandal is the real deal. It's as dirty as it gets. The more you know, the more pissed off you will be about it. Instead of saying "oh yeah, well, this other imaginary stuff is worse" try a little research. This is the kind of cheating that makes even a libertarian like me say "maybe we should have some more government oversight of these fundamentally dishonest weasels."
Socialism: a lie told by totalitarians and believed by fools.
The most worrying thing is that now the banks make deals and pay fines so that the executives can walk away with their bonuses. Instead of going into jail as they should. This means this will happen again.
If you really think that, you need to take a break from your current lifestyle. It's... really only the case when money controls people's lives, and we can say safely these people are sick: humans aren't wired that way naturally; at the very least, primitive people care about their family and tribe. That's what evolution has taught us to do; not even bacteria are as selfish as you describe.
Bio questions? Ask me to start a Q&A journal. Computer analogies available for most topics!
It can be argued that no act is completely selfless. Yes people enjoy the feeling they get when they help others. It is equally fallacious however to argue that any act is completely selfish. Even some of the most despicable acts in history had partly altruistic motives, perhaps misguided ones, but nevertheless. In cases like this people often justify it to themselves by saying that they are stealing from a corrupt system to benefit their family, especially their children. Terrorists believe they are fighting for the freedom of everyone against corrupt and evil power, nazi's believed they were protecting the purity of a chosen race against evil outsiders, the US military believes that the poor villagers they blow up are evil doers intent on destroying their way of life.
All human action can be seen as either selfish or selfless, but in reality it is far more complex than that. To say that greed is the only motivation of human beings is a hugely jaded and pessimistic view of human nature, and no more justified than it's opposite. It is however wonderfully self fulfilling as you can find evidence to support either position everywhere you look as long as you filter out the evidence to the contrary.