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The Biggest Price-Fixing Scandal Ever (rollingstone.com)
204 points by Jaigus 1693 days ago | hide | past | web | favorite | 78 comments



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...)

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.


> Is this story of interest to hackers?

It's of interest to me because I've had some direct experience tangling with banks over other issues. I have come to believe that the extent to which the banks control the world is even greater than what Taibbi says.

> we live in a democratic rule of law

That is heartbreakingly naive. It is not possible to get elected to office in the U.S. without substantial funding, which means that all of the people in office are either themselves rich or have garnered the favor of wealthy donors. Either way it is impossible as a practical matter to pass any law that constrains the interests of the super wealthy in any meaningful way.


I'm sorry your worldview is so negative, but when I said we live in a democratic rule of law, I'm expressing the opinion that it is both good and usual that lawsuits must be lawful, and I'm talking about one specific lawsuit. So you might feel finance is unjust, but my point is Taibbi's example of injustice is nothing of the sort. He should choose a different example.

Anyway it's not like the banks weren't fined and sued for amounts totaling billions under other laws. Usually it's considered unjust to throw things out on technicalities if there's no other remedy available, but that wasn't the case here.

EDIT: I just noticed the judge allowed part of the case to go forward under different laws! So Taibbi's claim is even more nonsensical than I initially thought.


As Taibbi points out, 3 of the settlements occurred before the case was tossed out, should't that hint at a worth case?

As he also writes:

an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York...Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer.

The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, "Our goal here is not to destroy a major financial institution."

That sounds like govt insiders who were once responsible for being on the prosecution now acting as defense, which sounds more banana-republic than democratic imo.


And don't forget kids: This is all legal and within the law :D

More credit default swaps please :D


Do you know what a credit default swap is?


No, people and organizations routinely settle whenever they feel it's +EV. Just saying a lawsuit was settled tells you nothing about the merit of the suit. You need more contextual information.


You worked for CME right? Quite ironic given we're discussing LIBOR rigging which has its roots in a decision made by the CME, subsequently exploited by traders.

"In late 1996, Marcy Engel, then a lawyer for Wall Street heavyweight Salomon Brothers Inc, fired off a warning letter to U.S. regulators: If they approved a Chicago Mercantile Exchange plan to change how a popular futures contract was priced, they would put at risk the integrity of a key interest rate in the global financial system."

"The problem with the CME's plan, as Engel saw it: The banks that set the rates in London daily were also able to take positions in the CME's Eurodollar contract. In her letter to the U.S. Commodity Futures Trading Commission, she said tethering the futures contract to Libor "might provide an opportunity for manipulation" of the interest rate. A "bank might be tempted to adjust its bids and offers ... to benefit its own positions."

http://www.reuters.com/article/2012/11/20/us-libor-fixing-or...


Don't write this way here. Don't take disagreements with people and escalate them to innuendo about the character of the people who disagree with you. Don't try to track down where people work, and then fling a narrative at them about how they're somehow corrupted by their employer.

I'd like to think that if I did that myself --- it's possible I have, I'm a pretty undisciplined guy --- I'd apologize for it as soon as it was pointed out.


I think the Parent's comment could be taken either as a underhanded slander as you represent, or viewed that people can have naive perspectives while undermining their own interests.


It's always baffled me that people think I'm sinister because I once worked for the CME.

* Exchanges don't do "evil finance things". Exchanges are middlemen; not only are conflicts of interest legally prohibited, but also an easy way to lose business. LIBOR rigging was not good news for the CME.

* I have about as much loyalty to my former employer as any other hacker would have to a big corporation--that is, I think it's a valuable business, but I'm not going to go on the Internet and shill for them because of some sense of loyalty.

But finance discussion causes people to enter "good vs evil" mode. Go figure.


> the CME is almost completely irrelevant

To call CME irrelevant is strange - it's the world’s largest futures exchange! The CME decision many years ago to link futures contracts to LIBOR may have inadvertently kick-started the entire scandal, because banks responsible for fixing LIBOR would also have trading positions, and thus might be tempted to rig things (which is what happened).

> Exchanges don't do "evil finance things".

Ask farmers: "...rampant dairy price rigging that occurs at the CME and hurts farmers and consumers across the U.S. and around the world. In 2008 the Commodity Futures Trading Commission (CFTC) found Dairy Farmers of America (DFA) guilty of price rigging at the CME and levied an unprecedented $12 million fine. Yet, these illegal trading practices continue at the CME." http://familyfarmers.org/?p=731

Or bullion traders: "As the operator of U.S. commodity futures markets; the CME Group has a quasi-regulatory capacity to ensure the markets are operated in a legitimate manner. A primary facet of this responsibility is to set “margin requirements” for trading positions in a manner which enhances market stability. However, for the second time in 24 months we have this market operator engaging in precisely the opposite manner: maliciously rigging margin position requirements in order to increase the current “instability” in precious metals markets – i.e. the downward pressure in prices." http://wallstreetsectorselector.com/2013/04/cme-group-destab...

> finance discussion causes people to enter "good vs evil" mode. Go figure.

Maybe farmers and bullion traders are just bad losers. Maybe brokers don't front-run their customers. Maybe banks who settle lawsuits are innocent. Or maybe Matt Taibbi is right and people have simply had enough of rampant financial fraud that goes unpunished.


So because two blog posts suggest that the upper management of one of the most important market operators in the world --- one without which those farmers would probably be screwed, by the way --- anybody who in the past worked at CME must be suspicious? Because that's what you're asserting.

The weird thing about this comment is that you appear to have researched it. You researched an attempt to defame another commenter on HN.


What on earth are you talking about?!

Someone else[1] first mentioned that the original poster once worked for CME. Anyone who has been following the LIBOR rigging story can see the irony.

You've now accused several people of defaming the original poster. Did you somehow forget that the topic of discussion is fraud in the financial markets?

[1] https://news.ycombinator.com/item?id=5616839


Gosh gee.

You mean "finance discussions" from people who owed their income to the finance industry...and yet who want us to believe they are unbiased on the topic of the finance industry...this despite their well-thought out "discussion" in this thread of a criticism of the financial industry consisting not of any factual arguments, but only of completely unsupported horseshit like...wait for it... "Taibbi routinely lies..."?

I mean how could anyone even consider the idea "shill", is that what you're saying?

"Good vs evil"?

Go figure. Yeah, go fucking figure.


Again, a comment that says because 'cynicalkane said in his profile that he worked for the CME, he must be a shill.


In neither of those cases would the comment be welcome, as both would be targeted at a participant in the discussion and not the ideas in their comment.


Ok self-appointed HN comment cop, maybe you could make a ruling for us on top-voted HN comments which consists of nothing more than a mindless, unsupported assertion that the Rolling Stone article author "routinely lies", followed by a comment from someone else whose deep contribution is that the author "writes from a script?"

I mean, with the quality and depth of those kinds of comments, why would anyone ever even think to speculate about motivation and/or character here?


The funny thing about this comment and the rest of your comments on this thread is that they're in militant support of demonizing other commenters because of where they've worked in the past.

But maybe you, alone among all the other (I suppose) Taibbi advocates on this thread, would like to engage directly with my argument about his financial reporting?


That didn't seem to work. Have you tried throwing a temper tantrum?


> we live in a democratic rule of law

> lawsuits must be lawful

It's not the "rule of law" part that's naive, it's the "democratic" part. We still have some semblance of the rule of law (although even that is starting to fray) but there is no more democracy in the U.S. We are a plutocracy, a government of the wealthy, by the wealthy, and for the wealthy. So it is unsurprising that what the banks are doing to rip people off is legal: the banks (and other big businesses) write the laws.


For democracy to be restored for real in the United States, we'd have to see a few things happen. One, there would need to be strong legislation in place to fight insider deals in government. The anticorruption amendment Lessig has talked about is a good start. Two, there needs to be a complete redistricting of the United States under very specific guidelines to put an end to this gerrymandering bullcrap. We should seriously consider raising the number of Congressmen and increase representation all across the US. Gerrymandering is becoming a far larger problem for the long term than any campaign finance anything. Three, there has to be an end to all these corrupt subsidies like the the farm bill and let companies fail and succeed by the market and not by the corrupt government's fiat. That includes banks.


Amen.


The "rule of law" part sounds good, but in practice, a naive simplification.

A close friend has been a public defender (criminal defense attorney) for 20 years. In her experience observing 20 years of cases, there's a direct correlation between wealth of the defendant and likelihood of getting off.

"The unspoken reality is that in America today there exists two systems of criminal justice. One for the wealthy, which includes kid-glove investigations, lackluster prosecutions, drug treatment, light sentences and easy, if any, prison time. The other, for the poor, is one of paramilitary policing, aggressive prosecution, harsh mandatory sentences and hard time. Wealth, and the political connec tions inherent to wealth, not race, is the determining factor in deciding which system one gets. This is most obvious when wealthy hip-hop artists and athletes, many of them black, are charged with serious crimes. Class trumps race every time, even if the wealth is new found..."

"... corporations can and do commit high crimes and misdemeanors with impunity. Likewise for governments and their agents, such as the police or military."https://www.prisonlegalnews.org/(X(1)S(z3ez5uic5qiulf453pf34...

If this holds true for a black guy caught with a gun in NYC, why think it doesn't hold true for a finance guy conspiring against his clients?

Cheat your bookkeeping clients out of 10 grand and you're in the slammer, cheat cities or nations out of 10 billion and you might lose a couple tee times at the country club for depositions.


All this is true, but being wealthy is still not an absolute protection against the law. Even rich people cannot, for example, commit murder with impunity, at least not reliably. But the odds of getting elected to national office (or even state office nowadays) without the support of the wealthy is indistinguishable from zero. That is why I say that democracy is completely dead while the rule of law is only mostly dead.

But your point is well taken.


The article may be polemic but I don't see how LIBOR fixing was not a criminal act[1]. If something similiar happened with ISDAfix it is worth reading about it. And a failure to apply a certain law does not invalidate the crime alligations against the banks.

What is your take on the issue?

1: http://en.wikipedia.org/wiki/Libor_scandal


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.


You also seem to follow a script when you veer away from technical topics.

If the topic is political or economic and likely to provide a runway for some sort of frustration-at-establishment chatter, I regularly expect you to appear and engage in some sort of character-assassination, poisoning-of-the-well job as you've done here.

That second para is especially representative of the in-character mode of your responses: one of a reasonable, empathetic, "hey, I don't like it either!" stance followed in short order by some content-free opinion shaping.

You're clearly capable of more insightful commentary in technical matters (a minor understatement) but beyond that the risk of your comments going tabloid editorial increases quite a bit.

All quite odd behaviour when you combine it with your tendency to guide others in appropriate commenting approaches (as you've done further down this thread.)


Even more ironically, you're engaging in approximately the same behavior I wrote about downthread.

What's especially telling is that 5 (admittedly short) grafs, you've failed to address a single point I actually made, but rather tried to summon a gestalt of all my comments so you could tackle them in the abstract.

Want to take another stab at responding? I'm all ears.


Intentionally ironic, in that I held myself to the same standards as your comment: ad hominems mixed with personal insight and no content.


What you're saying here is that the right response to what you believe is a superficial criticism of a Rolling Stone article (or the collected works of its author) is a direct attack on the HN commenter who wrote it.

Why not make your argument more credible by taking down my supposedly superficial comment? Wouldn't that be a much more interesting and constructive argument?


He didn't "attack" you, he simply noted your usual character assassination attempt whenever someone speaks out against some establishment. Speaking of irony you didn't even bother to challenge any of the article's arguments. This reminds me of the time you attacked Dan Lyon for writing this article https://news.ycombinator.com/item?id=4866914

You didn't challenge any of his points or reasoning there either. Interestingly enough you did exactly what you seem to be condemning the above poster for: summon a gestalt of his points in the article and attack them in the abstract.


Matt Taibbi and Dan Lyons. An astute HN reader trying to suss out my petty little scheme might instead point to the gun next to the barrel where I'm getting you to stack the fish.

Would you like to stick up for Taibbi's financial reporting? I think I've set you up nicely for a takedown comment: as someone observed downthread, all I've done is make a bunch of assertions without supporting evidence.


>Matt Taibii and Dan Lyons.

Who they are and the difference caliber or prestige has nothing to do with the argument. I only mentioned that situation to further illustrate the trend justsee was pointing out, which you still have not bothered rebutting. You're still using worthless ad hominem attacks, just as you do whenever an article promotes a crowd vs. establishment discussion.

To be honest his comment is pretty accurate; you regularly come along for these types of articles as some sort of watchdog, and predictably attack the author's character in some way to discredit the article (especially if its generally criticizing the SV startup scene), instead of directly attacking the author's arguments and reasoning, which would be much more meaningful. I'm curious as to why?


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".


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.


He takes stuff, particularly hearings, trials, and indictments, wildly out of context. As in the example above, procedural and technical judgments (the law doesn't apply to this situation) become moral judgments (the people who lost money are undeserving of relief).


I think, in the case of fixed income, there is a public expectation of fair play (i.e. competitive market). That simply is not the case, nor is it mandate. Case in point, there is no such thing as "insider trading" when it comes to UST auctions.

As for "interest to hackers", this market seems to like finance. I suppose the grass is always greener...


Well, if it wasn't clear, my broad point is that the story isn't of interest to hackers because it yields no better understanding of how finance works. Hackers should be interested in understanding things, not eyeball-glazing polemics full of hopelessly re-contextualized non-information.

I used to work in finance, and think it's fascinating, the good and the bad. I'm sympathetic to the argument that banks are too large, too undisciplined, and have too much power, but agreeing with nonsense because you want to is an anti-pattern, both personally and in terms of the long-term ideological fight.


> ...eyeball-glazing polemics full of hopelessly re-contextualized non-information.

I had to chuckle at that. You, sir, have not worked in finance. (complement!)

>> EDIT: CME, eh? Which markets? >> EDIT2: I'm not counting CME software engineer as finance experience. Again, a complement!


I'm very interested in the index manipulation, but not at all in Rolling Stone's coverage, for the same reason as you - Matt Taibbi is not a reliable reporter, and if anything he poisons the well for other media coverage.


> Matt Taibbi is not a reliable reporter

That is 100% your opinion. I have read more than a couple of his articles and they are very, very well put together. He is an excellent journalist and one of the few who is willing to cover all the corruption going on within our financial system.


You mean like the time he wrote a huge expose on Obama's sellout to Wall Street that confused two different James Rubins, claiming that one of them (we're now not sure which one) helped "pick Obama's economic team", and claimed TARP could cost twenty three trillion dollars?


This is exactly the calibur of comment that makes hacker news superior to reddit in every way. You have expressed everything I think about Taibbi's yellow journalism more eloquently than I ever could.

But that this comment could go against the grain of Internet circle jerking and be the top voted one makes me e-swoon. Bravo everyone.

Anyways, I've worked for Apple and I've worked for a major investment bank. The two brand names are both major headline grabbers and I would say in both cases, about 60% of what you read is an outright fabrication designed to attract page views.


So banks didn't rig interest rates, or blatantly launder money for drug lords and terrorists, or foreclose on people who didn't even owe money on their homes? Are these things false? But you worked for Apple and an unnamed investment bank, so don't worry folks, it's all good, you can trust these guys. If only 40% of the things written about the banking industry are true, we should nuke the whole thing, throw every executive in prison, and start from scratch. So really you're just splitting hairs here.


"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning."

Henry Ford


The problem with shoddy journalism is that even when it's right, it can do a disservice by providing a vulnerable story for wrongdoers to poke holes in. Your comment is a non sequitur, assuming as it does that someone who thinks financial journalism is frequently inaccurate must believe whatever financial firms say instead.


My intent was to take issue with the OP's assertion that the majority of what is printed is an outright fabrication. Even when journalists get some details wrong, or quote a source who may be misinformed or lying, the broad strokes are often the most important aspect of a story.

Additionally, the tidbit about OP having worked for two high-profile companies is completely useless information. Just because you get a paycheck doesn't mean you are privy to inside details related to why or how things happen.

So yes, the article in question isn't necessarily perfect, but making wild, unsupported claims about fabricated stories is no better.


About as much as Apple employs children, forces them to inhale aluminum particulate, and then protest by means of suicide.

But given your clumsy reasoning, I doubt I'll see anything insightful from this conversation.


Oh wow, so now you're insulting people who disagree with you? Impressive, makes me think even less of the big banks if one of them employed you, frankly.

I don't see anything clumsy about my reasoning. The Libor scandal, for instance, is pretty clear-cut. The rate was set by, simplifying greatly, polling the banks and averaging. There is evidence that some of the banks misrepresented their actual cost of borrowing in order to further their own interests, and thus skewed the rate improperly.

Is any of this in doubt? Now, it might not be the Illuminati secretly picking the president and ordering him to clone Hitler, but it sure does demonstrate that our market economy isn't quite as "market-ish" as we had hoped.

That's a big problem in my book because the fundamental argument in favor of markets as a means of organizing economic activity is that they generate socially optimal outcomes. Otherwise, there's no reason for most of us to buy into the system, it's just feudalism (which economists and capitalists take great pride in having vanquished) all over again and most of us are still just serfs. If those markets are being manipulated, then are the outcomes socially optimal? Or, more specifically, are they more socially optimal than some other method of organizing things? If not, then the whole system is called into question, and that's a huge deal.


I may be missing your point. It sounds to me like this argument could invalidate any antitrust case. "No, it's not illegal for us to collude on the price of widgets, because we're cooperating to sell widgets instead of competing with each other."


To further support your argument, I'd think that when the business signed up to add data to the system, they had to sign a contract that said something to the effect that they'd add it in an honest and timely manner.

In other words, whether or not they were cooperating or competing, they were probably in breach of contract.


You are an ostridge with his head buried in the sand, except the cartoon you are in? IT'S NOT FUCKING FUNNY.


1) "Ostrich." They’re feeding, not hiding. And 2) "Road Runner."


I actually looked this up before I typed it… http://www.thefreedictionary.com/Ostridge fooled me :)


"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.


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.


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.


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.


IIRC there was a class-action(?) lawsuit against the banks which was with regards to the forged documents in the mortgage scandal (The one where people forged the signatures of people who had signing authorities when they lost the chain of ownership for properties under mortgage - this may have been 2008-9)

At that time, the bank(s) were batting for a settlement which I believe was opposed by the then DA of New York and 1 more. Most of the other DAs were on board.

I forget what happened to that particular lawsuit though.


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.


It is not speculation. They actually did fix prices in this casual manner.

The UK FSA Final Notice documents many transcripts just like this as evidence of the unethical, unprofessional, dysfunctional culture [1].

[1] http://www.fsa.gov.uk/static/pubs/final/rbs.pdf


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.


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

[BTW, surprisingly apropos username.]


while it's possible PS was going to submit `low 6m' regardless, all you'd have to do to verify this mostly likely was not a joke is check to see what PS submitted


Yeah, I'm sure he realized it was a joke. But it is funnier/sadder to use payment in day old sushi as a metaphor for "with impunity". That is, no payment necessary, because there is no fear of punishment. As it was obvious to us it was really a joke, perhaps Taibbi thought there was no need to spell it out for his readers.

However, it could also be seen as manufacturing outrage, as accepting as payment something of little to potentially negative value would cause more outrage for those who didn't get the farce. And perhaps that was/is Taibbi's goal, to try to elevate the level of outrage to what he feels are appropriate levels.

Whether this tactic is ethical and even pragmatically advantageous is not absolutely clear in my mind. I generally have an overriding value of intellectual truth, and abhor skewing that for the sake of an emotional response. However, if an unimportant intellectual truth is sacrificed to communicate a significant emotional truth, is that acceptable/virtuous? Of course, the danger is that this may be used to call into question the intellectual integrity of other claims which do involve important intellectual truths, as cynicalkane has done in this thread.

I think in the case of the day old sushi, the truth is outrageous enough without misrepresenting such an insignificant detail, even in jest, which could be used to undermine the author's credibility.


it is definitely bankers humor, that Taibbi took it seriously says everything you need to know about him - a tabloid financial journalist.

edit: it isn't even bankers humor, it is just general office humor. you wouldn't recognize it if you haven't worked anywhere.


Don't you see any similarities between your comment's sense of propriety and the traders?

It's not about whether people can have a joke, it's that people of that mindset should not be anywhere near global levers of capitalism.

Like they shouldn't be air traffic controllers, or have national security clearance, or judge legal cases.

However the point in this particular scandal is that the two groups should not have been talking to each other, let alone joking.


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.


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


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.


Taibbi's pieces always make me feel so powerless.


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.


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.


> But Taibbi writes to incite, not to inform.

Pretty much anything written from that point of view ought to be considered for flagging and being removed from this site, as it's flame bait.


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.


the frog has not boiled yet


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




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