Abigail Field | Libor – The Lying Bankers Scandal as Bailout

The Lying Bankers Scandal as Bailout

The Lying Bankers Scandal should be called the Bailout Theater scandal. I don’t mean the perhaps decades-long part where traders manipulated LIBOR by 0.01% or so, up and down, for personal profit. I mean the part that started in 2007 when the bankers lied by much more so they’d look healthier than they in fact were. That part is bailout theater because Friday’s data dump by the New York Fed proves the Fed and other “regulators” knew what was happening and effectively approved.

Why? Apparently the Fed decided that allowing criminal fraud was necessary to calm markets, even though the fraud did nothing to actually make the banks safer or sounder: Bailout Theater. And for that, the top guy at the NY Fed at the time, our current Treasury Secretary Timothy Geithner, needs to be fired by President Obama and indicted if possible by Eric Holder. Not that I’m holding my breath on either point.

The documents also show that the focus on the LIBOR 1 and 3 month is misplaced. The lying happened at those maturities, sure. But the lying was much worse at 1 year, for example. Why? Well think about it–banks were worried that the entity they were loaning to wouldn’t be around much longer. To take the risk of loaning money a long time in the future, the bankers wanted huge premiums. The victim class of arbitrary winners and losers can be much larger than people have been focused on.

Be sure to check out the rest here…

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4closureFraud.org

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