
The Biggest Price-Fixing Scandal Ever - Jaigus
http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425?src=longreads
======
cynicalkane
Is this story of interest to hackers?

The claim that "everything is rigged" is supported by a small number of
specific examples coupled with a generous helping of polemics. Facts are not
placed in useful contexts. The reader, after reading this article, has likely
learned very little but only had whatever pre-bias he had confirmed. It takes
a lot more than that to support the fantastic superpowered-global-banking-
conspiracy thesis of the article.

Since, on articles like this, you tend to be downvoted for going against the
_zeitgeist_ , I'll provide a specific example.

The civil suit over LIBOR fixing, mentioned on page one, was thrown out
because antitrust laws only apply to competitive processes. (Source:
[http://www.upi.com/Top_News/US/2013/03/30/Judge-drops-
antitr...](http://www.upi.com/Top_News/US/2013/03/30/Judge-drops-antitrust-
claims-in-Libor-suit/UPI-99301364658941/))

Taibbi writes: "In that case, a federal judge accepted the banker-defendants'
incredible argument: If cities and towns and other investors lost money
because of Libor manipulation, that was their own fault for ever thinking the
banks were competing in the first place." This is a baffling
recontextualization: suits are thrown out when they are not lawful because we
live in a democratic rule of law, and there is no reason to believe the judge
wished to punish or blame consumers. The suit was thrown out because the suit
was illegal. This isn't an uncommon or partisan thing: the famous Walmart v.
Dukes discrimination lawsuit was thrown out 9-0 by the Supreme Court, because
it was unlawful. (The reason the case is famous is because of a 5-4 decision
on whether it could be refiled, but that's beyond the scope of this comment.)

A long history of reading Taibbi comment threads on HN and r/economics has
taught me that Taibbi routinely lies in this fashion; this is just one
example.

~~~
tptacek
Taibbi writes from a script. Particularly with his finance posts, the formula
is: comic invective, appeal to populism, name drop, comic invective, name
drop, attempt to explain technical concept he himself does not understand,
name drop, appeal to populism, comic invective.

People _want_ him to be right, because who the hell doesn't want to read a fun
piece on how corrupt Wall Street is? (I think Wall Street is pretty corrupt,
B.T.W.)

He was much better writing about politics, because most of the time you can
write a competent political story without needing to explain a technical
concept you yourself don't understand. Name dropping, appeals to populism, and
comic invective are entirely adequate to that task.

He's good at sports writing too, because he understands the technical concepts
he wants to explain.

But with finance writing, Taibbi has set a needlessly high bar for himself,
and he doesn't just routinely fail to clear it; he seems to be running _under_
the bar.

~~~
cia_plant
Taibbi's pieces are often brimming with excerpted interviews, specific names
and places and trials, details of hearings and indictments. It may be that he
is catastrophically misinterpreting these sources, but he obviously makes an
attempt to get into the details of what he's talking about. Your criticism of
him contains _zero_ examples, and is basically just "trust me, this guy
sucks".

~~~
tptacek
I could come up with specifics but that would basically be me trying to make
myself look smarter than I am, so instead: why not go track down what Matt
Yglesias said about the piece he wrote before this most recent one, or what
Felix Salmon wrote about the parking meter story, or what Kevin Drum wrote
about the vampire squid piece, or Tim Fernholz at TAP wrote about the Obama
piece, or Dan Primack's takedown of the Bain Capital piece? Most of these
writers, by the way, are political _allies_ of Matt Taibbi, who said in his
Reddit AMA that he checks in with Zero Hedge regularly.

------
incongruity
_"But when the attorney general says, 'I don't want to indict people,' it's
the Wild West. There's no law."_

How long has it been since we've actually had an AG that really went to bat
for the American people? I feel like more there than anywhere, we've been
failed by every administration for a good long while.

Yes, the blame goes much, much deeper, but so many of the problems (be it
banking or privacy and liberty related issues) all end up at the feet of the
attorney general and we've not had one that's been a champion for the people
for far too long.

~~~
rosser
_How long has it been since we've actually had an AG that really went to bat
for the American people?_

At this point, I don't think it's terribly inaccurate to say that AGs seem to
go to bat _against_ the American people more than they do for them.

~~~
jakerocheleau
This is why all of my friends that I talk to don't even want to try anymore.
We've watched this happen for so many years and it just feels hopeless... what
can we even do anymore? Banking cartels are just gonna keep doing whatever
they want because no DA or law enforcement official will stand up to them.

~~~
maxerickson
Unfair banking practices are probably a better deal than say, outright
feudalism. And unfair banking practices being in the news can sort of be
interpreted as someone doing something about it (not hearing about it could be
better, or it could be worse...).

And then 0.5% on a loan isn't going to smash all that many dreams.

------
jholman
Slightly OT nit-pick here...

    
    
        PRIMARY SUBMITTER: Whats it worth
        SWSISS FRANC TRADER: ive got some sushi rolls from yesterday?...
        PRIMARY SUBMITTER: ok low 6m, just for u
    

Uh, what. Assuming this is a real transcript, and without some very compelling
proof that PS actually fixed the price, I think that this is obviously,
literally, a joke. That is, SFT and PS are bullshitting around, a bit of
gallows humour about the possibility of price fixing.

~~~
fixxer
I agree. Sounds like two jagoffs joking around. I used to be one of those
jagoffs, and I joked around like that with friends at other firms.

That said, I believe the article. Some of the stuff you could get away with
LEGALLY on BrokerTec (ICAP's electronic platform) would amaze most.

~~~
webnrrd2k
Would you care to elaborate about (potential) shenanigans on BrokerTech?

[BTW, surprisingly apropos username.]

------
bjourne
Finance is a game of imperfect information. Most investors only has access to
published information such as companies quarterly reports, so obviously, if
you have an information advantage (by being an insider or knowing the next
LIBOR rate) you can translate that into guaranteed profit.

Contrast finance with sports betting. If you bet on a hockey team, you have
almost complete information about any variable you can imagine. The career of
each player, how the team has performed so far, how far the away team has to
travel (you use that to estimate the fatigue of the players), any player
injuries and so on.

Surprisingly, sports betting is both more transparent and much more fair than
finance because everyone has access to the same information. Sure, someone
might know that the ice cleaning machine in the arena is malfunctioning so
there may be debris left on the ice which may negatively effect one star
players skating abilities and be able to exploit that information advantage.
But it is marginal in comparison to the huge advantage traders and insiders
can acquire in finance.

My point is that looking at finance as betting makes it much clearer what is
going on. Some of the players have an information advantage and are exploiting
it. The rest are getting screwed.

------
apalmer
only thing shocking about this story, is that people are actually shocked by
it.

do we not know that money runs the world? i mean its almost infantile, its not
even a question of world view, its simple science, its like writing a news
story about the fact that the earth is round

------
Sven7
Now replace LIBOR with google page rank. OMG! people who can "fix" things
actually "fix" things! This isn't a conversation about banking. It's a
conversation about human nature.

------
bdb
Taibbi's pieces always make me feel so powerless.

~~~
anigbrowl
That's a deliberate choice on his part. He leaves out pertinent information so
as to increase the reader's feeling of helplessness. If you ever read a story
of his about a subject you happen to be familiar with the amount of
manipulation he engages in is nauseating.

I'm not saying this to blow off the story, I'm alarmed that there's more rate-
fixing going on and suspect that we'll hear about more again. But Taibbi
writes to incite, not to inform. I don't trust him any more than I trust Glenn
Beck or Alex Jones.

~~~
alan_cx
Isnt that just fighting fire with fire?

The government, banks, big business, whatever pull out all the stops to
manipulate "us" to force their view of the world. So, if the opposition are
bland and straight up factual, the opposing view will not have the same
impact.

I think of the political scare and hate ads that I (as a non US citizen)
associate with US right wing politics, and that the US left (still right from
a UK perspective) don't seem to do that, so lose out in the attention seeking
stakes. People react to fear. Scare them and they will react. Sort of like
with terrorists and how gov uses that fear to implement draconian policies.

But, when the non right, non business, non government, non banking people over
do the emotive stuff, they get criticised. But I think they, sadly, have to
play that game to compete in the information and ideas competition. You need
to scream, manipulate, and scare to get heard.

Its awful, horrible and not what I want at all, but I dont see any other way.
If this article makes people think, better still act, or at least wake up,
then its done its job, IMHO.

------
webnrrd2k
I'm curious -- does anyone know of other important financial numbers that are
easily manipulated?

I'm thinking, in particular, of numbers like LIBOR that are generated from
privately-reported or easily manipulated data. Although deregulation seems to
lead to major fraud sooner or later, so that would be worth keeping track of
too.

I'd like to get a feel for which numbers are "soft" and easily manipulated,
vs. "hard". Prior to this I thought that LIBOR and ISDAfix were fairly hard to
manipulate. Theoretically, it seems like they would be tough to manipulate,
but the reality of the financial system is very different from theory.

------
rasengan0
the frog has not boiled yet

------
knodi
Please sentence them to life in prison, send a message that people can stand
behind.

