The Biggest Price-Fixing Scandal Ever

Is this story of interest to hackers?<p>The claim that "everything is rigged" is supported by a small number of specific examples coupled with a generous helping of polemics. Facts are not placed in useful contexts. The reader, after reading this article, has likely learned very little but only had whatever pre-bias he had confirmed. It takes a lot more than that to support the fantastic superpowered-global-banking-conspiracy thesis of the article.<p>Since, on articles like this, you tend to be downvoted for going against the <i>zeitgeist</i>, I'll provide a specific example.<p>The civil suit over LIBOR fixing, mentioned on page one, was thrown out because antitrust laws only apply to competitive processes. (Source: <a href="http://www.upi.com/Top_News/US/2013/03/30/Judge-drops-antitrust-claims-in-Libor-suit/UPI-99301364658941/" rel="nofollow">http://www.upi.com/Top_News/US/2013/03/30/Judge-drops-antitr...</a>)<p>Taibbi writes: "In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place." This is a baffling recontextualization: suits are thrown out when they are not lawful because we live in a democratic rule of law, and there is no reason to believe the judge wished to punish or blame consumers. The suit was thrown out because the suit was illegal. This isn't an uncommon or partisan thing: the famous Walmart v. Dukes discrimination lawsuit was thrown out 9-0 by the Supreme Court, because it was unlawful. (The reason the case is famous is because of a 5-4 decision on whether it could be refiled, but that's beyond the scope of this comment.)<p>A long history of reading Taibbi comment threads on HN and r/economics has taught me that Taibbi routinely lies in this fashion; this is just one example.

<i>"But when the attorney general says, 'I don't want to indict people,' it's the Wild West. There's no law."</i><p>How long has it been since we've actually had an AG that really went to bat for the American people? I feel like more there than anywhere, we've been failed by every administration for a good long while.<p>Yes, the blame goes much, much deeper, but so many of the problems (be it banking or privacy and liberty related issues) all end up at the feet of the attorney general and we've not had one that's been a champion for the people for far too long.

Slightly OT nit-pick here...<p><pre><code> PRIMARY SUBMITTER: Whats it worth SWSISS FRANC TRADER: ive got some sushi rolls from yesterday?... PRIMARY SUBMITTER: ok low 6m, just for u </code></pre> Uh, what. Assuming this is a real transcript, and without some very compelling proof that PS actually fixed the price, I think that this is obviously, literally, a joke. That is, SFT and PS are bullshitting around, a bit of gallows humour about the possibility of price fixing.

Finance is a game of imperfect information. Most investors only has access to published information such as companies quarterly reports, so obviously, if you have an information advantage (by being an insider or knowing the next LIBOR rate) you can translate that into guaranteed profit.<p>Contrast finance with sports betting. If you bet on a hockey team, you have almost complete information about any variable you can imagine. The career of each player, how the team has performed so far, how far the away team has to travel (you use that to estimate the fatigue of the players), any player injuries and so on.<p>Surprisingly, sports betting is both more transparent and much more fair than finance because everyone has access to the same information. Sure, someone might know that the ice cleaning machine in the arena is malfunctioning so there may be debris left on the ice which may negatively effect one star players skating abilities and be able to exploit that information advantage. But it is marginal in comparison to the huge advantage traders and insiders can acquire in finance.<p>My point is that looking at finance as betting makes it much clearer what is going on. Some of the players have an information advantage and are exploiting it. The rest are getting screwed.

only thing shocking about this story, is that people are actually shocked by it.<p>do we not know that money runs the world? i mean its almost infantile, its not even a question of world view, its simple science, its like writing a news story about the fact that the earth is round

Now replace LIBOR with google page rank. OMG! people who can "fix" things actually "fix" things! This isn't a conversation about banking. It's a conversation about human nature.

Taibbi's pieces always make me feel so powerless.

I'm curious -- does anyone know of other important financial numbers that are easily manipulated?<p>I'm thinking, in particular, of numbers like LIBOR that are generated from privately-reported or easily manipulated data. Although deregulation seems to lead to major fraud sooner or later, so that would be worth keeping track of too.<p>I'd like to get a feel for which numbers are "soft" and easily manipulated, vs. "hard". Prior to this I thought that LIBOR and ISDAfix were fairly hard to manipulate. Theoretically, it seems like they would be tough to manipulate, but the reality of the financial system is very different from theory.

the frog has not boiled yet

Please sentence them to life in prison, send a message that people can stand behind.