[olefoo]

It's big news in the very narrow segment of American society that pays attention to hard news. In the sense that we can see the mechanisms by which the general public is being robbed. It is not news in the sense that most anyone who has been paying attention the last 3 decades knows that the both the markets and the regulation of the markets is a rigged game.

[Tycho]

This angle seems a bit overplayed to me. The main victims of the fraud are just the counter parties on these large derivative trades that investment banks make between each other. One side was tilting the scales.

At least that's what I make of it.

[intended]

Considering that libor affects mortgage rates, I'd say that's a lot of people affected.

that's like saying the only people affected by oil speculation are the counter parties.

[Tycho]

I've not been able to find any analyses about mortgage borrowers being adversely affected. Regardless, they are not the targets of the fraud, so the idea about libor rate fixers robbing the public is disingenuous.

[intended]

What should probably get your goat though, is that this method completely destroys price discovery and was a clear case of the market not working because of collusion.

The other things that should strike you is the scale of the fiasco and the collateral damage -

Lets see... I would likely be using LIBOr for financial models, at the very least those focused on bond pricing and hence any shorts/longs made on that - all of those are off.

LIBOR does get used to set variable rate mortgages, Switzerland uses it for national projections for a few other things.

In essence those few terms I've mentioned are already fast approaching nearly a trillion dollars in affected securities and financial instruments.

> they are not the targets of the fraud...

Not being the target means little if you are still collateral damage. Heck the collateral damage was higher, since all the financiers were away the game was rigged by 2006. "LIBOR has become dislocated from itself".

Losers who weren't direct targets would be someone making a deposit - they were getting lower interest rates than they should have.

[olefoo]

Your savings account underperforming, or your adjustable rate mortgage being more expensive than it would be otherwise aren't obvious forms of theft...

And the second order effects as businesses smaller than major banks attempt to make up for their losses are even less obvious forms of theft.

And if the marks don't know they're being clipped, what's the harm, right?

[Dylan16807]

Savings account underperforming and adjustable rate mortgage being LESS expensive.