Problem is I don't understand it. I'm speaking of the great LIBOR scandal involving Barclays Bank which has already cost them around a half a billion dollars, their chairman and who knows what else. Now for those of you just returning from Mars, LIBOR is the acronym for the London Inter-bank Offered Rate which was once defined as the rate at which first class banks borrow dollars for various maturities in the London market...and no, Theresa, Japanese Banks were not considered to be first class; they paid up. Once the plaything of Eurodollar lending, Libor has morphed into what is the base rate for practically every loan transaction denominated in dollars which means 0.001% here or 0.002% there and pretty soon you're talking real money. Clearly, it's something to which people should pay attention. But here's where I get into trouble.
Barclays is accused of mucking about with the rate in reporting the same. But Libor is a collective rate; it is the average of a number reported by different banks and therefore it would seem to me that it would be difficult for one bank--unless it is widely out of line--to affect the reported rate to any great degree. Now it has been said that Barclays' treasury requested lower rates from the actual borrowing costs to make them look better and that I can understand, but wouldn't that result in the bank's loan and origination books being marked down as to return? Now there is more to it I am sure but I'm missing something and if someone can help out I'd be greatful. It also seems to me that to achieve full effect as a scandal, other institutions would have to be involved but there is absolutely no one talking which is really unusual for this mob of today.
-----------------------------------------------------------------------
The Italians pulled two hamstrings on their back line and finito. 4-nil to what is being called the greatest side of all time. Who knows, but that is the wonderful thing about sport: it will never be known but the discussion will continue forever. Of more importance, Massimo has fallen off the face of the earth and one can only hope the sadness is not overwhelming because a touch of insight into what is being referred to as the "glorious victory"--Monti vs. Merkel--will only be known in full when he surfaces. And as for Angie, a friend called musing as to whether she has seen the light given her exposure to the national central banks, the exposure in the banking system, trade exposure etc. in the context of the entire bold experiment about to become a footnote in history and that maybe she better begin to stop that from happening. Sorry, nope. She's buying time Politically, she has no chance in acceeding to the demands of Frankie and Mario and Little Paulie Krugman and quite frankly, I think that she has made the determination that the absence of Greece from the argument would be a net benefit in more ways than one, not the least of which is in shutting up Frankie while he tries to save what would be left of his banking system. The one bank regulator idea has about a 15% chance of becoming an effective reality and not for a year at least and what with Perfidious Albion overlooking everything and the Colonies lending almost certainly little more than lip service, Plan A has to be kick the ball around a bit on your side of the pitch and wait to see what's on. It looks as though that's what will happen, with Greece getting their money and relief from that to which they have agreed (and being--hopefully--smart enough to go away), Ireland getting a better lease on life and Spain not imploding in the streets. And then there is Italy, which is the key to the whole thing...et Massimo non qui. Sure makes my life difficult.
No comments:
Post a Comment