Igor is a bit disappointed that the $25 billion “settlement” of the robo-signing fiasco didn’t make Guinness as The World’s Largest Ever Bribe, but now things are starting to get serious:
NYT (7/13 ’12): “Calculated Deal in a Rate-Rigging Inquiry”
Violations of the Commodities Exchange Act, which prohibits manipulation and fraud in the trading of commodities, as well as the Securities Act, which prohibits fraud in the purchase and sale of securities, may be crimes, as is mail and wire fraud, commodities fraud and conspiracy. Moreover, agreements by Barclays traders with others involved in the Libor process are, on their face, conspiracies “in restraint of trade,” which the Sherman Act says are “illegal,” and those who engage in such conspiracies “shall be deemed guilty of a felony.” // (The criminal division said its agreement with Barclays was reached in conjunction with the antitrust division.)
The sad fact of the matter is that we are in a regime of lies that must increasingly invoke just war theory against truth, simply because truth is so inexorable, dangerous and threatening.
So as a thought experiment consider what would happen if we started getting honest Libor today; how freer markets would come back with a vengeance. Can you start to see the size of the mess we’ve gotten ourselves into?