Some thoughts on ToD (Topics o’the Day) for those of you who’ve had your fill of Aurora, Colorado.
From the Brigadier came the following:
Before you look to do harm to Chief Justice Roberts or his family, it’s important that you think carefully about the meaning – the true nature — of his ruling on Obama-care. The Left will shout that they won, that Obama-care was upheld and all the rest. Let them.
It will be a short-lived celebration.
To which I replied:
I’ve seen a number of articles on the subject. Some judge Roberts positively, others negatively. My go-to guy for the law, Chicago & NYU law professor Richard Epstein, wasn’t very kind to Roberts on this decision when judging it from a legalistic viewpoint. Personally, if the decision negatively impacts Obama, I’m all for it. However, even if Romney gets elected, he will not have a filibuster-proof majority in the Senate, so Obamacare will not be repealed wholesale. All Romney would then be able to do is refuse to enforce some or all of it. But that would create chaos in the healthcare insurance biz because no one would know what they are or are not legally obligated to do.
The whole business is a frickin’ mess and I do believe that’s precisely what was intended when originally passed by the Democrats. They absolutely knew it would never be completely tossed out while moving the chess pieces in a socialist direction. Anyone believing the Republicans will be starting over from scratch is kidding himself.
And then, there’s the states. What will they do? Collectively or individually?
Frankly, politically motivated legislative and jurisprudential brinkmanship is no way to run a country.
From B-school buddy Harry came the following, though included with the email was his strong disclaimer regarding any concurrence with Ms. Warren’s political philosophy:
Libor fraud exposes Wall Street’s rotten core
By Elizabeth Warren, Published: July 19
Elizabeth Warren chaired the TARP Congressional Oversight Panel from 2008 to 2010. She is the Democratic nominee for a U.S. Senate seat in Massachusetts.
The Libor scandal is more than just the latest financial deception to come to light. It exposes a fraud that runs to the heart of our financial system.
The London interbank offered rate is a benchmark for a range of interest rates, and the misdeeds making headlines have to do with how those rates are set. If insiders can manipulate the basic measurement of a loan — the interest rate — there is rot at the core of the financial system.
The British financial giant Barclays has admitted to manipulating the rate from 2005 to at least 2009. When the bank made a bet on the direction in which interest rates would turn, the Barclays employees who submit data for calculating interest rates would fake their numbers to help Barclays traders win the bet. Day after day, year after year, bet after bet, Barclays made money by fixing bets for its own traders.
With a rotten financial system once again laid bare to the world, the only question remaining is whether Wall Street has so many friends in Washington that meaningful reform is impossible.
Wow! Behold Elizabeth Warren, reform Crusader on the warpath and Democratic candidate for U.S. Senator from Massachusetts, no less. Is the Wall Street Journal impressed by such scintillating rhetoric? Well, maybe not. They point out that the Bank of England and the Fed can’t even agree as to who was the first to be really, really worried about the “Libor”:
REVIEW & OUTLOOK
Updated July 20, 2012, 6:46 p.m. ET
Tim Geithner and Libor
The Bank of England says the New York Fed raised little alarm
Well, did U.S. regulators sound the alarm on the Libor rate-setting scandal, or not? You sure can’t tell from the conflicting stories this week by Bank of England Governor Mervyn King and U.S. Treasury Secretary Timothy Geithner.
Mr. King, who said he first learned of “fraudulent behavior” when the Barclays settlement was announced last month, told a British Parliamentary committee Tuesday: “At no stage did he [Mr. Geithner] or anyone else at the New York Fed raise any concerns with the Bank that they had seen any wrongdoing.”
Mr. Geithner, who led the New York Federal Reserve before becoming Treasury Secretary in 2009, then told CNBC Wednesday, “We brought it to the attention of the British and took the exceptional step in putting in writing to them a detailed set of recommendations that revealed the extent of the concerns in that context.”
So who’s really on first? …
On the evidence currently available, Mr. Geithner and his fellow regulators were inclined at the time of the crisis in 2008 to treat understated Libor rates as a minor issue—a financial foot fault. But now that the issue has stirred a political uproar and become a proxy for all banking sins, the regulators are joining the denunciations and descending from their parapets to shoot the wounded as if they had been on the front lines all along.
So which is it? The regulators can’t have it both ways.
After a couple of additional email exchanges, I concluded with the following:
That’s why I still feel this whole biz may be little more than misdirection. I looked at the Elizabeth Warren WaPo piece and it read more like a political diatribe on Wall Street than a serious analysis. I don’t care how much she may or may not know. She’s running for office and this op/ed piece is designed to promote her chances.
Also, keep in mind that there’s “LIBOR”, and then there’s “Libor”. They are not the same thing. I didn’t know this until after I started boning up upon receiving your email response.
LIBOR = “London Interbank Overnight Rate”
Libor = “London Interbank Offered Rate” (Different rates for different periods)
I’m not sure just how precisely these terms are being used in the various articles and whether or not they are being confused at times. And I’m not sure if it’s LIBORgate or Liborgate — or both!
Still working on it. :)
Libors and LIBORS and Bears, oh my! If I ever get reasonably comfortable with the subject, I’ll pass along my new-found enlightenment.