Do you think there could be a second Great Depression?

[Undertow]

So...sounds like the nation's banks are going to get a nice workover. I wonder if this, along with the other multiplying losses, will finally collapse the banks "too-big-to-fail"? Sounds like there are some pretty interested parties, too; i.e. the City of Baltimore.

Scandal Over Rate Fixing About To Hit The US

 

[LizzieMaine]

"I am shocked -- SHOCKED -- to discover that international banking is rife with corruption!"

 

[sheeplady]

So...sounds like the nation's banks are going to get a nice workover. I wonder if this, along with the other multiplying losses, will finally collapse the banks "too-big-to-fail"? Sounds like there are some pretty interested parties, too; i.e. the City of Baltimore.

Scandal Over Rate Fixing About To Hit The US

Considering that LIBOR is also the basis for inter-bank lending (something that all the large banks do at a rate which is LIBOR + a certain amount based upon the bank) it is incredibly stupid to price fix it. Yeah, you might be getting a good deal on what you're selling, but the money you need to borrow is going to be higher. At the end of every night the big banks turn over their books, and if they can't borrow money from each other, it's basically a big vote of no-confidence that will destroy the bank (see Bear Stearns and Lehman Brothers). Unless of course they price fixed LIBOR and then made sure their buddies got a better rate in the plus LIBOR inter-bank lending world than they should have. Which would make this much, much worse. Then you not only have price fixing to hurt consumers, but price fixing to help fellow lenders which further undermines the basic risk management you have to keep your bank afloat.

$453 million is pennies to an institution like Barclays. It is essentially a slap on the wrist if they did manipulate LIBOR to their advantage given the profits they would have reaped from loans, derivatives, and syndication due to inflated numbers. It's like making a school child who steals a car, holds somebody up with a gun, and steals pack of gum pay back half a chewed piece that they spit on the ground and letting them keep the car.

 

[Undertow]

$453 million is pennies to an institution like Barclays. It is essentially a slap on the wrist if they did manipulate LIBOR to their advantage given the profits they would have reaped from loans, derivatives, and syndication due to inflated numbers. It's like making a school child who steals a car, holds somebody up with a gun, and steals pack of gum pay back half a chewed piece that they spit on the ground and letting them keep the car.

This is no kidding. When a bank can lose $2bn in an afternoon and say, "Ah, don't sweat it, Jack - we got plenty where that came from", sounds like $400+million isn't really going to be a problem.

I can see it now - the Department of Justice looks at [enter bank CEO] sternly and says, "Pay up."

"Would you like that in US dollars, British pounds, Euro...Yen, uh, Pesos...? We cheat with all of those currencies, so it's all the same to us."

 

[Undertow]

"I am shocked -- SHOCKED -- to discover that international banking is rife with corruption!"

ound:

 

[sheeplady]

"We cheat with all of those currencies, so it's all the same to us."

lol Sadly, so true. There is not the political or social willpower to do anything about it either. The politicians distract us with shiny things and broadening political divisions while we are all getting pick pocketed and our houses robbed by the banks. And heaven forbid people feel anything but grateful for being able to get a loan or for having an economy that hasn't totally tanked, favors which these banks generously have provided to us but certainly don't have to give to anyone. Sickening.

Considering that the Chairman of the Federal Reserve and the SEC are former top executives with enough buddies back on Wall Street to fill a line of party buses from NYC to Washington DC, I won't hold my breath about appropriate punishments being sent down.

 

[William Stratford]

lol Sadly, so true. There is not the political or social willpower to do anything about it either. The politicians distract us with shiny things and broadening political divisions while we are all getting pick pocketed and our houses robbed by the banks. And heaven forbid people feel anything but grateful for being able to get a loan or for having an economy that hasn't totally tanked, favors which these banks generously have provided to us but certainly don't have to give to anyone. Sickening.

The difference between a burglar and a banker is that the buglar will only take the contents of your house....

 

[Undertow]

I think we, as a Western population including the Euro and UK, are beginning to see the ever-present disconnect between politics, economy and bankers. The disconnect has always been there by nature, but politics and economy necessarily work with the banking industry, and thus the mixing.

In other words, in the US, it's no longer a capitalist vs socialist argument, or Republican and Democrat argument, or even rich vs poor. There is a true thirst for justice against criminals, criminal behavior and criminal intent. I think this scandal has (maybe, finally) thrust the bloodthirsty psychopath class into the limelight.

When markets can't work, when politics are just noise and when your massive paycheck is stripped from you, I don't think you're worried about who's running for office anymore.

 

[Undertow]

The difference between a burglar and a banker is that the buglar will only take the contents of your house....

Right! And at least the burglar might just cook you dinner, organize your laundry and clean your floors!

 

[PrettySquareGal]

WASHINGTON (AP) — The ranks of America's poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

http://news.yahoo.com/us-poverty-track-rise-highest-since-1960s-112946547--finance.html?_esi=1

 

[PrettySquareGal]

Earnings Show Recession May Be 'Fast Approaching'

"There have been a lot of economists and analysts who have had their blinders on for quite some time," said Brian LaRose, an analyst at United-ICAP in Jersey City, N.J. "We're not bullish on the recovery here in the U.S. We think that there are far greater problems ahead that have yet to be addressed."

 

[PrettySquareGal]

Worldwide food prices are expected to soar as the U.S. experiences its worst drought in more than 50 years

“Currently, almost 61 percent of the country (not including Alaska and Hawaii) is in drought, compared to 29 percent a year ago,” Brian Fuchs, a climatologist at the National Drought Mitigation Center, explained to USA Today. Fuchs added that even with the variability of the climate, “this is a rare event.” He believes nearly 78 percent of the U.S. corn-growing regions are in drought.

The worst of it isn’t over yet. Bloomberg reported that due to the extremely low output of crops like corn and soybeans, the U.S. may be looking at higher food inflation into 2013.

 

[Baron Kurtz]

News just in. Official numbers from Office for National Statistics show British economy shrinks 0.7% in second quarter.

We're already well well well into a double dip. This starts to look like a long term depression to me. Especially when our current Chancellor's answer will be: Oh, that means we didn't cut enough. Let's cut some more.

bk

 

[jamespowers]

News just in. Official numbers from Office for National Statistics show British economy shrinks 0.7% in second quarter.

We're already well well well into a double dip. This starts to look like a long term depression to me. Especially when our current Chancellor's answer will be: Oh, that means we didn't cut enough. Let's cut some more.

bk

On the other end of that, spending like a drunken sailor isn't working over here either.

 

[Baron Kurtz]

Exactly. Though our chancellor does like spending his own money like a drunken sailor in certain bordellos of ill repute. or maybe she visits him at his home these days - less chance of publicity.

The rational, non-ideological Chancellor/Treasury secretary would seek some kind of middle ground with targeted public spending (major public works, say, with a component of employing currently unemployed) and cuts (trimming un-necessary benefits or entitlements, say, rather than punching pensioners and disabled people in the face (again)). It would also help if our chancellor would treat his job as full time. Too much chillaxing by half.

Too much ideology in politics, sadly: Can't see the wood for the policy papers that used to be trees.

 

[V.C. Brunswick]

Budget cuts can be a wonderful thing if the goal is to eliminate wasteful spending. But unfortunately that's not what happens. Instead many agencies deliberately cut vital services as their way of saying "Don't f*** with us." For example, when the sheriff's department out here is faced with budget cuts, instead of holding off on buying some new computers or squad cars for another year or two the sheriff threatens to release jail inmates and lay off deputies.

 

[LizzieMaine]

Around here it's the "we'll shut off your streetlights and see how you like it when the saltheads come around" routine. Always works, too.

 

[Flicka]

Budget cuts can be a wonderful thing if the goal is to eliminate wasteful spending. But unfortunately that's not what happens. Instead many agencies deliberately cut vital services as their way of saying "Don't f*** with us." For example, when the sheriff's department out here is faced with budget cuts, instead of holding off on buying some new computers or squad cars for another year or two the sheriff threatens to release jail inmates and lay off deputies.

Politicians love to make cuts and say they want to eliminate wasteful spending but they can never quite define what spending is wasteful or even verify that any wastefulness us going on. Then when the cuts have negative effects they act all shocked over the fact that they got less public services just because they paid less. I mean, seriously, do they think there's a Moore's Law for public services or what did they think would happen?

 

[sheeplady]

They use the "we can legally make your kids walk 3 miles to a bus stop" whenever someone wants to decrease the school budgets here.

They wanted to re-do the pool where my parents' live a few years ago, and parents were told if they didn't vote for the budget increase, they'd make their kids walk to school. Because we all know that a pool getting a non-necessary upgrade is more important than freezing a 5 year old to death from walking to school in -30 F degree weather.

 

[jamespowers]

Budget cuts can be a wonderful thing if the goal is to eliminate wasteful spending. But unfortunately that's not what happens. Instead many agencies deliberately cut vital services as their way of saying "Don't f*** with us." For example, when the sheriff's department out here is faced with budget cuts, instead of holding off on buying some new computers or squad cars for another year or two the sheriff threatens to release jail inmates and lay off deputies.

We called their bluffs several times out here and when nothing happened they backed off.