Libor affair shows banking’s big conceit

This confirms two well known laws of the universe (Libor affair shows banking’s big conceit, June 29):
1. The last known free market was sighted in Tasmania in 1863. That is, it is a mythical animal that never existed even though many cults have sprung up in worship and quite a number of rituals are performed to honour its glory. These includes annual audits of "businesses" that exist as an infinite recursion of shelf companies in the Bahamas and elections which help determine which industries can get subsidies and tax concessions in order to remain as participants in the "free market".
2. Criminality only relates to sums of money smaller than the visible universe. When the numbers are larger than the number of atoms in existence at the time of the big bang (I'm pretty sure that number hasn't changed since) then things like fines and penalties are applied to infinite recursion companies registered in the Bahamas (see free market above). At worst, an individual's bonus could be suspended, sometimes returned but sackings are rarely applied when the level of fraud, deception and theft causes a stack overflow of a standard desk top calculator.
For amounts which can be stuffed down the front of one's trousers or shoved into the boot of a car, even if they are labelled as bonuses, in general, terms of incarceration apply.
I hope this is now clear.

When bankers start going to prison we will see a change in attitude (Libor affair shows banking’s big conceit, June 29).
Central banks are not descending on this because they are the root cause.
The Magic Pudding is alive and well. The printing of money without associated hard assets leads to unsustainable leverage.
Open up this rats sewer to the full view of the market. The Libor needs transparency. If rates are set too low and do not reflect risk, borrowers that should not borrow get access to funds they can never repay when asset prices fall. The system fails because of bad loans when assets can no longer be leveraged.
The worst loans are made at the top of a boom. The smart sell assets at the top, the stupid buy at the top. All ok if there is no borrowings involved or interest rates have increased to reflect the risk.
All this goes out the window when the printers hand out free money to create the boom.
Better to set a 5 per cent interest rate permanently. Unfortunately, its all too late for that now. The old empires slowly grind down, not by military defeats, but by internal cookery. The print their way to mediocrity.
Australia should set its bonds on the gold standard and charge interest on an Australian 10 year bond. Lend us your worthless paper so we can buy your property. If we cannot pay up we will back it with gold.

"...in line with usual banking practice, the more junior authors of the incriminating emails have already been fired"
They won't be leaving such trails in future - that does not mean that the rigging will stop - just that they will get away with it in future (Libor affair shows banking’s big conceit, June 29).

Some good points Geoff (June 29, 9.55am), although I would argue to set rates higher at around 6 per cent (Libor affair shows banking’s big conceit, June 29). Too late though, current policy is now just a blunt instrument.

A few questions. If Australian banks get 40 per cent of their funds for mortgages from overseas by borrowing from other banks has the manipulation of the LIBOR increased their costs? (Libor affair shows banking’s big conceit, June 29.)
And if so have AU mortgage rates been forced higher by these higher costs? And at what cost to the AU mortgage payers? Class action on the cards?

The public seem very keen jailing for fraud and collusion some of the big beans, to the extent that even the politicians are listening (Libor affair shows banking’s big conceit, June 29). This does of course effect all of us. The extra that went to the banks to when they pushed it up was effectively a tax on their customers, costing the real economy billions that they could binge on Bollinger. When they pushed it down, they cheated the stock market (and kept the value of their share allocations higher). While jailing a few CEOs with punitive clawbacks of bonuses to customers might raise the level of average honesty in banking industry, we really have to think very carefully about what this would do to the average level of corruption in prisons.

Funny stuff David Doyle (June 29, 9.45am). This goes to show that what is needed is true free market capitalism, not corporate/banking cronyism/corporatism (Libor affair shows banking’s big conceit, June 29).
A private banking market with no federal reserves/central banks with an ability to print your own money tied to gold/silver would fix it up.
(There was recently an excellent discussion on private central banks recently in the Daily Reckoning including debunking most protests against it).

Do Libor is rigged to suit the players? (Libor affair shows banking’s big conceit, June 29.)
What does that do to the Bank Bill Swap Rates that apply in Australia?
Is it all fine and beaut or is it time to buy shares in litigation funding outfits to benefit from the mass of (massive) class actions??

A recent example of a "free market" was yesterday's Roma Cattle Sale. There are plenty of other examples (Libor affair shows banking’s big conceit, June 29).
Re the Libor market manipulation, was it systematic? That is, did the supposed interventions make the rate higher than it otherwise would have been? If so, it benefited creditors. If it made the rate lower, then it benefited debtors. More likely, the interventions were non-systematic.