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The NYTimes finally puts LIBOR on the frontpage

It took long enough.  This article even starts poking around the edges at the Federal Reserve Bank of NY:

As big banks face the fallout from a global investigation into interest rate manipulation, American and British lawmakers are scrutinizing regulators who failed to take action that might have prevented years of illegal activity.

Politicians in both London and Washington are questioning whether regulators allowed banks to report false rates in the run-up to the 2008 financial crisis and afterward. On Monday, Congress stepped into the fray, requesting information about the role of the Federal Reserve Bank of New York, according to people close to the matter.

 […]

On Monday, the oversight panel of the House Financial Services Committee sent a letter to the New York Fed seeking transcripts from at least a dozen phone calls in 2007 and 2008 between central bank officials and executives at Barclays.

“Some news reports indicate that although Barclays raised concerns multiple times with American and British authorities about discrepancies over how Libor was set, the bank was not told to stop the practice,” Representative Randy Neugebauer, a Texas Republican and the head of the House oversight panel, said in the letter, which was reviewed by The New York Times.

Tim Geithner was the head of the Fed in NY during the time frame in question.  It is hard for me to imagine that he didn’t know that LIBOR was being manipulated.  We have already heard the panic defense, that if the true LIBOR rate was known, a financial apocalypse would have swiftly followed.  But it’s the aftermath of the manipulations when the panic had subsided that intrigue me.  Tim Geithner gave a lot of advice to Obama that was very friendly to bankers.  But he must have known that a couple of banks, like Citigroup, were insolvent.  Yet instead of nationalizing those failed banks, we merely stress tested them, bought their toxic assets and bailed them out.

Much of our current unemployment woes and struggling economy can be traced back to those early days of the Obama administration when we saved the bankers and ignored everyone else’s needs.  There were many smart people who were in favor of being more aggressive with the bankers and making a strong case for a bigger fiscal stimulus package.  They were ignored.  You can blame the Republicans, if you are so inclined.  But let’s remember that the Democrats were in charge in the first two years.  We can only speculate how they might have come together to push financial reforms and New Deal programs if we had only known how serious the situation was.

Hiding the true nature of the financial collapse from our elected officials amounts to a coverup, in my humble opinion.  It’s a coverup that cost many of us our houses, jobs and security.  Heads have got to roll for this one and THIS time, we have to demand that the parties responsible are held fully accountable.  There has to be real reform and perp walks or our present economic environment will never get better.

Yes, it sucks for the White House that it all comes to light in an election year.  What can I say? When you sell your soul to a bunch of people who have more money than God, they usually expect something significant in return. It looks like they got it.

Has someone found a smoking gun?  Reuters reports that Geithner had a “Fixing LIBOR” entry on his calendar in 2008.  Does that mean fix the rate or fix the problem with banks manipulating the rate?  Such ambiguity.

In early 2008, questions about whether Libor reflected banks’ true borrowing costs became more public. The Bank for International Settlements published a paper raising the issue in March of that year, and an April 16 story in the Wall Street Journal cast doubts on whether banks were reporting accurate rates. Barclays said it met with Fed officials twice in March-April 2008 to discuss Libor.

“FIXING LIBOR”

According to the calendar of then New York Fed President, Timothy Geithner, who is now U.S. Treasury Secretary, it even held a “Fixing LIBOR” meeting between 2:30-3:00 pm on April 28, 2008. At least eight senior Fed staffers were invited.

It is unclear precisely what was discussed at this meeting or who attended. Among those invited, along with Geithner, was William Dudley, who was then head of the Markets Group at the New York Fed and who succeeded Geithner as its president in January 2009. Also invited was James McAndrews, a Fed economist who published a report three months later that questioned whether Libor was manipulated.

It doesn’t look like LIBOR got fixed.  But clearly, Geithner knew what was going on.  And if he didn’t have a come to Jesus meeting with politicians right after he took office to explain how dire the situation was, then what can we conclude except that he was operating in the bankers’ interests at the expense of ours?

This s^*( is serious.  It affects mortgages, credit card rates, student loans and economic health and every decision that has been made in the past 4 years.  The timing is even crucial.  These meetings were taking place in the middle of the primary season when money was pouring into Obama’s campaign coffers from Wall Street and crazy Obots were screaming for Hillary Clinton to quit the race even as she was still winning big state primaries.  We know from other sources that the meltdown started in 2007.  So, even our primaries might have been affected by the shaky bank situation.

Darrell Duffie, a Stanford University finance professor who has followed the Libor issue for several years, said that he believed regulators were “on the case reasonably quickly” after questions were raised in 2008.

“It appears that some regulators, at least at the New York Fed, indeed knew there was a problem at that time. New York Fed staff have subsequently presented some very good research on the likely level of distortions in Libor reporting,” Duffie said. “I am surprised, however, that the various regulators in the U.S. and UK took this long to identify and act on the misbehavior.”

Surprise!

One last thing: If Geithner want to fix LIBOR in April of 2008, why did it take the CFTC to launch an investigation about it in March of 2011?  You’d think something as big and potentially litigious as a LIBOR scandal would have prompted swifter action. The fact that that didn’t happen suggests there is some bigger thing that is being covered up.  I can’t imagine what it is but it must be huge.

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Private Party

We keep getting Obama apologists here who insist that we “get over it”.  They are referring to the primaries of 2008.  We’re not going to get over it but in spite of all of our efforts, the Obama whiners and the DNC still do not seem to understand why the primaries of 2008 were the turning point for many of us newly created independent liberals and Democrats in Exile.  I think the reason for this is because they continue to see this as an internal accounting issue within a private party and it’s no big deal.  It’s just that one candidate who was a Democrat beat another candidate who was a Democrat.  Yeah, things got a little hairy and words were said that were misinterpreted as promises and some voters got screwed but, jeez, it’s two years already.  When are you people going to move on?

The answer is, never.  Or not until the Democrats understand the depth of anger we have in their violation of our trust.  So, let me explain it one more time to the dimwitted out there.

Let’s say that all of the crappy things the party pulled on us didn’t happen during a primary.  Let’s say it happened during the general election and the electoral college in the aftermath of that election.  In this scenario, the following might have happened:

– McCain’s supporters with clout meet with the federal elections authorities to make sure that there are caucuses in the south west and that these caucauses have disproportional representation at the electoral college later.

-McCain buses in his supporters to these caucuses and they use hooligan tactics to intimidate Obama’s voters and rig the caucus results.  Complaints by Obama’s campaign to the federal elections authorities fall on deaf ears.

-McCain takes advantage of some timing issues in Florida and Michigan to make sure that none of the votes count during election night.  BUT, knowing how bad that PR will be in the final analysis, works with the federal election authorities to make sure those votes count during the electoral college proceedings so that the voters in those states don’t cause a fuss and discredit the election results.

-McCain’s backers buy off a lot of electoral college superdelegates and delegates so that when it comes to count the electoral college votes, whole states that went overwhelmingly for Obama are given wholesale to McCain.  When the number of delegates needed for McCain to win is reached, none of the other states that voted overwhelmingly for Obama are allowed to cast their delegate votes.

McCain becomes our new president.

Now, if you think for one minute that anyone in this country would stand for such a thing, you’ve got another thing coming.  It’s one thing to have the supreme court decide an election in 2000 and many Democrats did not get over it.  It’s quite another to see violation after violation of fairness in elections happen right before our eyes by our own side.  No country in the world would respect such an election.  Our democracy would be thoroughly discredited and we would have massive demonstrations in the street.

The only reason Democrats were allowed to get away with it was because the whole mess wasn’t covered by the media to show what really happened.  AND because the Democratic party is a private party.  They can make or break the rules any way they want.  The only problem is that they used state taxpayer money to run their sham primary elections.  Millions of people went to those polls thinking that their votes counted.  In reality, it was a pointless exercise because the outcome was predetermined in some smoke filled room.

Now, I don’t care if the Democrats want to go back to smoke filled room politics.  But they should announce in advance that that’s their plan so I don’t waste my time campaigning and making phone calls and going door to door trying to convince people that my candidate is better.  And I don’t think any state, especially one the size of NJ, should be wasting precious tax dollars running fraudulent elections by people who don’t really give a damn what the voters think.  That money could be used to employ some teachers.

As for the results of the 2008 elections, well, nothing good every grows from a bad seed.  The results, as far as I and many others are concerned, are invalid.  The nomination was rigged for Obama and there is nothing anyone can say that would convince me otherwise.  If the Democrats don’t like it that we feel this way and are holding them responsible for the aftermath, tough.

Get over it.