The above link from Zerohedge has Jon Stewart spoofing the Li(e)bor scandal. It is quite funny, maybe not Stewart’s best but this scandal is much more dangerous than many first thought. In fact, it’s tough to make this subject funny and is no laughing matter from whatever viewpoint because of the can of worms that’s been opened. Did 18 banks collude to “fix” interest rates? Of course they did. Did anyone think that rates weren’t fixed in some manner or fashion? Of course not which is why I am sure that the banks and traders themselves are (were) shocked that anyone would give a rat’s butt enough to even investigate. Like I wrote last week, everyone was doing it, everyone knew that everyone was doing it and everyone knew that everyone knew…
But, what they didn’t count on and still hasn’t been factored into the equation except by a very few, is that now the regulators have a free walk through the inner bowels of the banking system. This will include e-mails, internal memoranda, all movements of monies in and out and a look behind the curtain to see all portfolio holdings and how they are (mis) marked. Just ask HSBC, they are now embroiled in a (drug) money laundering/terrorist laundering/funding investigation.
We have become so accustomed to fraud that no matter what comes out, no one is surprised anymore. The “shock” factor being displayed by all the good Brits just doesn’t cross the pond and reach America, no, we seem to care less. Just off the top of my head without even looking back, the multitude of known frauds include: Li(e)bor, Madoff/ Sanford/MF Global/PFG, robosigning of foreclosures, Morgan Stanley charging storage fees for non existent metal, Goldman selling short it’s own customer recommendations, liar loans and low rate loans given as favors to Congressman/judges/regulators etc., $16 Trillion lent out all over the world in 2008-2009 by the Federal reserve in secret, dealerships being “stolen” by GM/Chrysler/government bailouts, the theft of Goldman’s “front running” software (in this case there was no honor amongst thieves), mark to market fraud, selling derivatives to sovereign states and municipalities that did the opposite of what they were supposed to be, blatantly wrong government statistics, blatantly inflated reported earnings etc. etc. You get the point.
But who cares? No one until they do. I know I just wrote about this a couple of weeks back but in a system of “confidence”, there surely seems to be a whole bunch of things happening that breaks “trust”. Each and every day now, something new comes out about a fraudulent activity, a fine paid with no admission of guilt, money gone missing or whatever. “Trust” is what the current system runs on and now the only thing you can trust is that if you are doing business, you are being cheated somewhere somehow. It’s truly a sad state of affairs but exactly what we should have expected because when the money is “fiat”, eventually everything else including morals follows. It (fiat) always starts out as “a little bit here a little bit there” and always ends up poisoning and infecting everything.
The danger now is “no one trusting anyone”, that ought to be good for business!