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GLOBAL NEWS THE BIGGEST FINANCIAL SCANDAL IN HISTORY? calculated by Thomson Reuters— the parent company of the Reuters news agency—for the British Banking Association (BBA), a trade association of banks and financial the Cleveland Fed looked at survey data in Ohio and found that by 2008, almost 60 percent of prime adjustable rate mortgages, and nearly 100 percent of subprime ones, were indexed to LIBOR." According to the Daily Mail [28 June 2012]: "Hundreds of bankers across three continents are embroiled in the interest-rate fixing scandal that has left Barclays chief executive Bob Diamond fighting to save his job. [He resigned on 2-3 July. Ed.] "As pressure intensified on Britain's highest paid banking boss to quit, MPs heard a string of other financial institutions across the world were under investigation. "At least 20 banks are believed to be under suspicion, with growing demands for a criminal e always knew that the financial markets were rigged, but this is getting ridiculous. It is now being alleged that 20 major banks have been systematically ixing global interest rates for years. Barclays has already been fined hundreds of millions of dollars for manipulating LIBOR, the London nterbank Offered Rate. But Barclays says that a whole bunch of other banks were doing this, too. This is shaping up to be the biggest financial scandal in history, and criminal investigations have been launched on both sides of the Atlantic. What those investigations are likely to uncover could shake he financial markets to their very core. In the end, this scandal could absolutely devastate confidence in he global financial system and it could potentially bring down a number of major global banks. We have never seen anything quite like his before. According to the Washington Post [5 uly 2012]: "In the simplest terms, LIBOR is the average interest rate which banks in London are charging each other for borrowing. It's services companies." If you have a mortgage, a car loan or a credit card, then there is a very good chance that LIBOR has affected your personal finances. LIBOR has been a factor in the pricing of hundreds of trillions of dollars of loans, securities and assets. The following is from an article by Maureen Farrell [The Buzz, 4 July 2012]: "These traders influenced the pricing of the London Interbank Offered Rate or LIBOR, a benchmark that dictates the pricing of up to $800 trillion of securities..." Most American consumers do not even know what LIBOR is, but it actually plays a key role in the US economy, as the Washington Post also explained: "In the United States, the two biggest indices for adjustable rate mortgages and other consumer debt are the prime rate (that is, the rate banks charge favored or ‘prime’ consumers) and LIBOR, with the latter particularly popular for subprime loans. A study from Mark Schweitzer and Guhan Venkatu at investigation." This scandal is making the global financial system look really, really bad. Confidence in global financial markets has already been declining, and these new revelations are not going to help at all. In addition, we are undoubtedly going to see a huge wave of lawsuits come out of this scandal. Those lawsuits alone will gum up the financial system for a decade or more. So, needless to say, this is a very big deal. Before this is all over, we are probably going to find out that mos of the major global banks were involved. At a time when the globa financial system is already on the verge of a major implosion, this is not welcome news. This financial scandal is jus another reason to be deeply concerned about the second half o 2012. The house of cards is starting to look really shaky, and nobody knows exactly when it will fall, bu anyone with half a brain can see tha things are progressively getting worse. (Source: Michael Snyder, The Economic Collapse blog, 6 July 2012, http://tinyurl.com/dgackm8) cas i" AUCTIONS ————————— a Seomervt//Ee “A rolled subscription copy of a printed newspaper, completely unread and still in its original clingwrap.” 2012, 12 * NEXUS AUGUST - SEPTEMBER 2012 www.nexusmagazine.com