Libor Scandal Is A Huge Deal

It seems the more things change, the more they stay the same. If you are talking about the corporate greed that exists within the world's banking system however, then you just ask has anything changed at all?

The latest black eye for the banks is the London Interbank Offered Rate scandal, or in short Libor, and it makes America's subprime mortgage scandals of four years ago look like a routine candy swipe by a twelve year old at the local convienent store.

The situation is basically this, as early as 2008 there were signals that banks were underreporting borrowing costs to the Libor, which is the average interest rate estimated by leading banks in London that they would be charged if borrowing from other banks. This easily created the impression that banks were borrowing money from other banks more cheaply than they should have, It also made the system and particular banks look healthier than what they really were.

To put it in plain english, imagine going to Vegas, placing a huge bet on a heavyweight championship fight, and then finding out years later the guy you bet on had two broken hands at the time.

For those people out there who still feel the sting of the global economic recession, the thing that makes this so mind numbingly frustrating is not only does this scandal involve the same cast of characters like JPMorgan Chase and Citigroup, but once again very little is being done about it.

Barclays, the European banking giant where this all started basically shoved their CEO Robert E. Diamond Jr. and COO Jerry del Missier onto the sword. The two men resigned on Tuesday after basically offering up a “well everybody is doing it” and “we didn't know it was going on” defense.

Barclays will also be forced to pony up $450 million after being fined by the United States Justice Department for manipulating the system, but that is a drop in the bucket for a bank that makes billions.Diamond and del Missier may be out of a job, but they more than likely will not be spending time in jail and the hefty severance checks that they received in the past will be more than enough to dry their tears.

The fact is until England, the United States and any country in the free world decides to step up and punish these thieves for stealing, the merry-go-round will continue. Last month in the United States JPMorgan CEO Jaime Dimon testified twice in front of congress after his bank lost anywhere from two to nine billion dollars on controversial trades, and outside of a few Democrats who actually take their jobs seriously like Massachusettes Congressman Barney Frank, politicians of both parties treated him like a rock star.

The likelihood that Dimon has placed money into the coffers of 85% of the folks in the capital might be a safe bet, and of course Republicans in D.C are not hypocrites because they see nothing wrong with the way banks operate.

At the risk of infuriating my fellow progressives I am a huge fan of this President and his Administration. I am also a fan of the Attorney General Eric Holder, whose name and entire career has been dragged through the mud GOP scumbags like Darrell Issa.

The President and the AG have dropped the ball on this particular issue however. When Barack Obama was sworn in back in 2009, one of the first things he should have done was called a press conference to televise the arrests of everyone responsible for the worst economic crisis since the great depression.

As we know now, Wall Street was going to turn it's back on the President anyway because of his embrace of regulation policies, particularly Dodd-Frank. An all out assault on the real takers would have earned Obama a huge chunk of progressive support that he is missing while at the same time scared straight the entire business community.

Diamond, the now disgraced former CEO of Barclays is scheduled to testify in front of the British Parliament next week and try to explain what went wrong. I wonder if our worst and clueless like South Carolina Senator Jim DeMint has been in contact with British conservatives. Someone needs to show them how to kiss up to the crooks.