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View Diary: Libor --- OUTRAGE .... Please!!!! (210 comments)

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  •  Please help here (2+ / 0-)
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    cotterperson, BlueDragon

    Can somebody give a nice, easy explanation about how this affects ME or my neighbors?

    I can't explain to people that it's the rate that interbank lending is set at, etc. That's good to know, but we need a:

    "The banks artificially keeping the interest rate low hurt you because..."

    •  Suggestion ... (8+ / 0-)

      A worldwide groups of banks worked together to fix interest rates that affected $360 trillion in home loans, student loans, and more. The big banks profited greatly from that, while average people lost their homes, chances to go to college, and financing for local businesses.

      No doubt you'll find the words when the time is right ;)

      "Let each unique song be sung and the spell of differentiation be broken" - Winter Rabbit

      by cotterperson on Wed Jul 04, 2012 at 08:57:52 PM PDT

      [ Parent ]

      •  but that's not correct, I think (1+ / 0-)
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        lower rates HELP the average person, right?

        My variable student loan rates, my mortgage, etc are LOWER because of this, right? it just hurts investors?

        You are not telling me anything concrete about how this hurts the average person, but that's what we need to be able to explain.

        •  I'll see if I can help (2+ / 0-)

          The LIBOR rates were misreported by the banks. These are just examples, so don't take the numbers seriously.

          Essentially, they were telling the world that today, they would loan money to one another at 6.5%. Instead, they were loaning money to one another at 6% then pocketing the half-percent.

          This means that your investments that were supposed to earn 7.5% were only earning 7%. Those bonds you bought in the light company and the water company were only paying those companies 8% instead of 8.5%, and your variable rate mortgages and student loans were charging  9.5% when they should have been charging 9%.

          When you're dealing with billions of dollars a day, even a single basis point, which is 1/100th of one percent, can be a lot of money.

        •  If you want the whole world to be (2+ / 0-)
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          cotterperson, 3goldens

          rats in a wheel, and die running and panting...sure.  But it destroys pensions and it destroys most of the ability to invest and save for retirements.  My saved money isn't worth anything...even as commodities inflate due to the rich 1% (Barclays included) betting on the fact that I will have to eat.

        •  The average person (2+ / 0-)
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          emal, 3goldens

          uses the retail section of a bank, e.g., checking, savings, loans. This has to do with rigging estimates of what one bank would pay to borrow money from another. Most of it having to do with credit default swaps, from what I've read.

          Here is the brief diary from last year that got me interested and probably gives the best explanation. It's got graphs, video, and all ;)

          DOJ Probes Global Bankster CaTrtel for Fixing LIBOR (by The Anomaly)

          "Let each unique song be sung and the spell of differentiation be broken" - Winter Rabbit

          by cotterperson on Thu Jul 05, 2012 at 12:31:50 PM PDT

          [ Parent ]

          •  poor people like me (0+ / 0-)

            have a lot more in debt than in savings. in fact, I have $120k in debt and about $2000 in my checking account.

            thus, what the banks did (keeping interest rates on loans artificially low) HELPED me.

            •  If the only thing you care about is your personal (1+ / 0-)
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              Bank statement without regard to any other costs, then sure.

              But if your municipal taxes went up, your local schools were cut, your fire, police, or ambulance service was cut, or any of the myriad other things that depend on municipal bonds, then you're paying for it. And anyone you may know who had a pension from working for in a town/city office capacity is paying.

              So, yes, in a very short-sighted way, you benefited. But in the broader sense that includes the full effect on your taxes and your community, then no, you lost. A lot.

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