You Can Bank on It 1
In the Guardian, Robert Reich explains what should be obvious. In the world of international banks and banking, the odds are that American banks are vault-deep in the LIBOR interest-rate-fixing scam.
Banks that have been willing to promote dodgy mortgages, sell (in)securitized debt, and foreclose on houses without cause (to mention a just a few practices of the responsible fiscals on Wall Street) certainly wouldn’t have any qualms about fixing an interest-rate roulette wheel.
But if that assumption is wrong – if the bankers are manipulating the interest rate so they can place bets with the money we lend or repay them, bets that will pay off big for them because they have inside information on what the market is really predicting which they’re not sharing with the rest of us – it’s a different story altogether.
It would* amount to a rip-off of almost cosmic proportions – trillions of dollars that average people would otherwise have received or saved on their lending and borrowing that have been going to the bankers instead.
It would make the other abuses of trust Americans have witnessed in recent years – predatory lending, fraud, excessively risky derivative trading with commercial deposits, and cozy relationships with credit-rating agencies – look like child’s play by comparison.
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*Conditional voice. Yeah. Right.
July 9, 2012 at 12:11 pm
Like you, I don’t believe there’s a tipping point. They may demand action in Europe and get it but the US government is so dysfunctional, that can’t happen here. If Enron existed today it would probably survive all the fraud its guys perpetrated. Americans choose their villains by their visibility on tv. So we have sports villains, reality tv trash villains, random petty perverts who kidnap and kill children villains, random shooter villains, and Barack Obama, who Fox made into a villain for around half the population.