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The Libor scandal continues to grow, yet is making little in the way of waves in the US, in contrast to the full blown coverage in the UK. So far in the US this is all a Barclays story (see CNN Money, Bloomberg) when it really is a massive financial industry credibility/fraud story.

If you want to read a bit I am including a few recent links. Spend a few moments on these and I can guarantee that the outrage will surface. This is a major, massive event that is being swept under the carpet, because it fundamentally undercuts the credibility of the banks, the major contributors to both Presidential campaigns.

Remember too LIBOR is set by a private group, the British Bankers Association ... so the next time a right winger praises free markets, throw this in his/her face. The banks colluded and cheated under a free market system with lax regulation.... Amazing, no?

1. Matt Taibbi as usual is all over this and has a couple of pieces up: Amazing having to go to Rolling Stone to get good financial reporting.

Why is Nobody Freaking Out About the LIBOR Banking Scandal?

But to me what’s missing from all of this is the “Holy Fucking Shit!” factor. This story is so outrageous that it shocks even the most cynical Wall Street observers. I have a friend who works on Wall Street who for years has been trolling through the stream of financial corruption stories with bemusement, darkly enjoying the spectacle as though the whole post-crisis news arc has been like one long, beautifully-acted, intensely believable sequel to Goodfellas. But even he is just stunned to the point of near-speechlessness by the LIBOR thing. “It’s like finding out that the whole world is on quicksand,” he says.

So as far as the stateside press goes, I’ve got to assume the cavalry is coming soon. But when?

LIBOR Banking Scandal Deepens; Barclays Releases Damning Email, Implicates British Government
This Libor-manipulation story grows crazier with each passing minute. We have officially disappeared now down the rabbit-hole of the international financial oligarchy.
2. Al Jazeera has a very good 30 minute interview up quoting among others Bill Black and Max Keiser.
Inside Story - Rigged bank rates: Is there more to come?

3. Janet Tavokali calls out the media.

Last week, Gillian Tett of the Financial Times wrote how five years previously, she and her fellow journalists were intimidated into backing off of a huge story about banks manipulating LIBOR.
Malfeasance remains unchecked, unless something like the LIBOR scandal blows up. This isn’t the only problem with the British banks. Like their U.S. and European counterparties, the balance sheets need a thorough going-over to determine the true extent of the global financial debacle. The banks are not just lying about LIBOR.
4. And a final Hat tip to ZeroHedge which has been pushing this story for years. Here is a link to their 2009 piece. This makes no sense.  

Wrap: I know the word LIBOR throws people off, and eyes glaze over, but the manipulation of this rate by multiple banks (Barclays is the first to report because it is cooperating - All the other 15 banks are likely involved as well because you can't really manipulate a rate with 16 inputs by just changing one input) is unprecedented in its scope and impact.

We need REAL reform of the financial system. Among other things break up the big banks, prosecute fraud, and stop the speculating by FDIC insured institutions. Let's make banking boring (and less profitable) again!

Short Update:
LIBOR is a incredibly widely used set of short term interest rates (for various short durations - overnight, a week ...). LIBOR is set daily by asking 16 banks how much it would cost them to borrow from each other that day, for various periods, if they had to. That part is simple.

It gets more complex when you realize that LIBOR is used as a benchmark for so many products, rates, ... you name it. It is like a base ingredient to the financial system. A change in LIBOR causes ripple effects around the world every day. So if that rate is being rigged, then every other rate that derives from it is also being impacted. So in a simple example if your mortgage is LIBOR + 1%, if LIBOR goes up so does your mortgage rate. Or it can impact the rate your pension fund earns on its money ... or ... the list is endless.

Shorter Update: I guess it was the "please" that got folks' attention! Glad to see others share my outrage.

More: Taibbi and Spitzer.

A bit more from the economist:

“SINCE we have not more power of knowing the future than any other men, we have made many mistakes (who has not during the past five years?), but our mistakes have been errors of judgment and not of principle.” So reflected J.P. Morgan junior in 1933, in the middle of a financial crisis. Today’s bankers can draw no such comfort from their behaviour. The attempts to rig LIBOR (the London inter-bank offered rate), a benchmark interest rate, not only betray a culture of casual dishonesty; they set the stage for lawsuits and more regulation right the way round the globe. This could well be global finance’s “tobacco moment”.
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