It's of interest to me because I've had some direct experience tangling with banks over other issues. I have come to believe that the extent to which the banks control the world is even greater than what Taibbi says.
> we live in a democratic rule of law
That is heartbreakingly naive. It is not possible to get elected to office in the U.S. without substantial funding, which means that all of the people in office are either themselves rich or have garnered the favor of wealthy donors. Either way it is impossible as a practical matter to pass any law that constrains the interests of the super wealthy in any meaningful way.
I'm sorry your worldview is so negative, but when I said we live in a democratic rule of law, I'm expressing the opinion that it is both good and usual that lawsuits must be lawful, and I'm talking about one specific lawsuit. So you might feel finance is unjust, but my point is Taibbi's example of injustice is nothing of the sort. He should choose a different example.
Anyway it's not like the banks weren't fined and sued for amounts totaling billions under other laws. Usually it's considered unjust to throw things out on technicalities if there's no other remedy available, but that wasn't the case here.
EDIT: I just noticed the judge allowed part of the case to go forward under different laws! So Taibbi's claim is even more nonsensical than I initially thought.
As Taibbi points out, 3 of the settlements occurred before the case was tossed out, should't that hint at a worth case?
As he also writes:
an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York...Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer.
The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, "Our goal here is not to destroy a major financial institution."
That sounds like govt insiders who were once responsible for being on the prosecution now acting as defense, which sounds more banana-republic than democratic imo.
No, people and organizations routinely settle whenever they feel it's +EV. Just saying a lawsuit was settled tells you nothing about the merit of the suit. You need more contextual information.
You worked for CME right? Quite ironic given we're discussing LIBOR rigging which has its roots in a decision made by the CME, subsequently exploited by traders.
"In late 1996, Marcy Engel, then a lawyer for Wall Street heavyweight Salomon Brothers Inc, fired off a warning letter to U.S. regulators: If they approved a Chicago Mercantile Exchange plan to change how a popular futures contract was priced, they would put at risk the integrity of a key interest rate in the global financial system."
"The problem with the CME's plan, as Engel saw it: The banks that set the rates in London daily were also able to take positions in the CME's Eurodollar contract. In her letter to the U.S. Commodity Futures Trading Commission, she said tethering the futures contract to Libor "might provide an opportunity for manipulation" of the interest rate. A "bank might be tempted to adjust its bids and offers ... to benefit its own positions."
Don't write this way here. Don't take disagreements with people and escalate them to innuendo about the character of the people who disagree with you. Don't try to track down where people work, and then fling a narrative at them about how they're somehow corrupted by their employer.
I'd like to think that if I did that myself --- it's possible I have, I'm a pretty undisciplined guy --- I'd apologize for it as soon as it was pointed out.
I think the Parent's comment could be taken either as a underhanded slander as you represent, or viewed that people can have naive perspectives while undermining their own interests.
It's always baffled me that people think I'm sinister because I once worked for the CME.
* Exchanges don't do "evil finance things". Exchanges are middlemen; not only are conflicts of interest legally prohibited, but also an easy way to lose business. LIBOR rigging was not good news for the CME.
* I have about as much loyalty to my former employer as any other hacker would have to a big corporation--that is, I think it's a valuable business, but I'm not going to go on the Internet and shill for them because of some sense of loyalty.
But finance discussion causes people to enter "good vs evil" mode. Go figure.
To call CME irrelevant is strange - it's the world’s largest futures exchange! The CME decision many years ago to link futures contracts to LIBOR may have inadvertently kick-started the entire scandal, because banks responsible for fixing LIBOR would also have trading positions, and thus might be tempted to rig things (which is what happened).
> Exchanges don't do "evil finance things".
Ask farmers: "...rampant dairy price rigging that occurs at the CME and hurts farmers and consumers across the U.S. and around the world. In 2008 the Commodity Futures Trading Commission (CFTC) found Dairy Farmers of America (DFA) guilty of price rigging at the CME and levied an unprecedented $12 million fine. Yet, these illegal trading practices continue at the CME."http://familyfarmers.org/?p=731
Or bullion traders: "As the operator of U.S. commodity futures markets; the CME Group has a quasi-regulatory capacity to ensure the markets are operated in a legitimate manner. A primary facet of this responsibility is to set “margin requirements” for trading positions in a manner which enhances market stability. However, for the second time in 24 months we have this market operator engaging in precisely the opposite manner: maliciously rigging margin position requirements in order to increase the current “instability” in precious metals markets – i.e. the downward pressure in prices."http://wallstreetsectorselector.com/2013/04/cme-group-destab...
> finance discussion causes people to enter "good vs evil" mode. Go figure.
Maybe farmers and bullion traders are just bad losers. Maybe brokers don't front-run their customers. Maybe banks who settle lawsuits are innocent. Or maybe Matt Taibbi is right and people have simply had enough of rampant financial fraud that goes unpunished.
So because two blog posts suggest that the upper management of one of the most important market operators in the world --- one without which those farmers would probably be screwed, by the way --- anybody who in the past worked at CME must be suspicious? Because that's what you're asserting.
The weird thing about this comment is that you appear to have researched it. You researched an attempt to defame another commenter on HN.
Someone else[1] first mentioned that the original poster once worked for CME. Anyone who has been following the LIBOR rigging story can see the irony.
You've now accused several people of defaming the original poster. Did you somehow forget that the topic of discussion is fraud in the financial markets?
You mean "finance discussions" from people who owed their income to the finance industry...and yet who want us to believe they are unbiased on the topic of the finance industry...this despite their well-thought out "discussion" in this thread of a criticism of the financial industry consisting not of any factual arguments, but only of completely unsupported horseshit like...wait for it... "Taibbi routinely lies..."?
I mean how could anyone even consider the idea "shill", is that what you're saying?
In neither of those cases would the comment be welcome, as both would be targeted at a participant in the discussion and not the ideas in their comment.
Ok self-appointed HN comment cop, maybe you could make a ruling for us on top-voted HN comments which consists of nothing more than a mindless, unsupported assertion that the Rolling Stone article author "routinely lies", followed by a comment from someone else whose deep contribution is that the author "writes from a script?"
I mean, with the quality and depth of those kinds of comments, why would anyone ever even think to speculate about motivation and/or character here?
The funny thing about this comment and the rest of your comments on this thread is that they're in militant support of demonizing other commenters because of where they've worked in the past.
But maybe you, alone among all the other (I suppose) Taibbi advocates on this thread, would like to engage directly with my argument about his financial reporting?
It's not the "rule of law" part that's naive, it's the "democratic" part. We still have some semblance of the rule of law (although even that is starting to fray) but there is no more democracy in the U.S. We are a plutocracy, a government of the wealthy, by the wealthy, and for the wealthy. So it is unsurprising that what the banks are doing to rip people off is legal: the banks (and other big businesses) write the laws.
For democracy to be restored for real in the United States, we'd have to see a few things happen. One, there would need to be strong legislation in place to fight insider deals in government. The anticorruption amendment Lessig has talked about is a good start. Two, there needs to be a complete redistricting of the United States under very specific guidelines to put an end to this gerrymandering bullcrap. We should seriously consider raising the number of Congressmen and increase representation all across the US. Gerrymandering is becoming a far larger problem for the long term than any campaign finance anything. Three, there has to be an end to all these corrupt subsidies like the the farm bill and let companies fail and succeed by the market and not by the corrupt government's fiat. That includes banks.
The "rule of law" part sounds good, but in practice, a naive simplification.
A close friend has been a public defender (criminal defense attorney) for 20 years. In her experience observing 20 years of cases, there's a direct correlation between wealth of the defendant and likelihood of getting off.
"The unspoken reality is that in America today there exists two systems of criminal justice. One for the wealthy, which includes kid-glove investigations, lackluster prosecutions, drug treatment, light sentences and easy, if any, prison time. The other, for the poor, is one of paramilitary policing, aggressive prosecution, harsh mandatory sentences and hard time. Wealth, and the political connec tions inherent to wealth, not race, is the determining factor in deciding which system one gets. This is most obvious when wealthy hip-hop artists and athletes, many of them black, are charged with serious crimes. Class trumps race every time, even if the wealth is new found..."
If this holds true for a black guy caught with a gun in NYC, why think it doesn't hold true for a finance guy conspiring against his clients?
Cheat your bookkeeping clients out of 10 grand and you're in the slammer, cheat cities or nations out of 10 billion and you might lose a couple tee times at the country club for depositions.
All this is true, but being wealthy is still not an absolute protection against the law. Even rich people cannot, for example, commit murder with impunity, at least not reliably. But the odds of getting elected to national office (or even state office nowadays) without the support of the wealthy is indistinguishable from zero. That is why I say that democracy is completely dead while the rule of law is only mostly dead.
It's of interest to me because I've had some direct experience tangling with banks over other issues. I have come to believe that the extent to which the banks control the world is even greater than what Taibbi says.
> we live in a democratic rule of law
That is heartbreakingly naive. It is not possible to get elected to office in the U.S. without substantial funding, which means that all of the people in office are either themselves rich or have garnered the favor of wealthy donors. Either way it is impossible as a practical matter to pass any law that constrains the interests of the super wealthy in any meaningful way.