(Today’s piece in bloomberg.com by Andrea Tan, Gavin Finch, and Liam Vaughn provided so
much material in and underlying this blog we don’t know where their part ends
and ours begins.)
“Must be damn difficult to trade, man,”
the trader at the German bank replied. “Especially you not in the loop.”
Not in the loop. Nothing we at The MacDougal Post could ever
write would describe the rigged-market pricing mechanism, and your financial
chances because of it, clearer than that - understated as the observation may
be. Difficult, man. Not in the loop.
That’s you, subscribers, and all of us outside the Crime Families in every financial marketplace on Earth.
The German bank’s trader was responding
to a Scottish bank’s trader in cyberspace records the Scottish bank eventually
used to explain why their guy was getting fired over this Libor thing.
You’ll recall that Libor, the London
Interbank Offering Rate, is a benchmark used to set oodles of interest rates,
and consequently bond prices, all over the world.
“Libor”, as the Bloomberg.com piece explains, “is
calculated by a poll carried out daily on behalf of the British Bankers’ Association
(BBA) that asks firms to estimate how much it would cost to borrow from each
other for different periods and in different currencies. The BBA signaled yesterday it will give up
oversight of the rate. The top and
bottom quartiles of quotes are excluded, and those left are averaged and
published for individual currencies before noon in London.” The two banks referred to above are among those
that set Libor.
“What’s the call on Libor,” the Scottish
bank’s guy in Singapore asked one of the head office traders in another, and
equally revealing, conversation.
“Where would you like it, Libor that
is?”
“Mixed feelings, but mostly I’d like it
all lower so the world starts to make a little sense.”
"The whole HF ( hedge fund) world will be kissing you instead of
calling me if Libor move lower,” another Scottish Bank trader joined in.
“OK,
I will move the curve down 1 basis point, maybe more if I can,” the wise guy with clout replied.
