VIDEO: ‘Where Is the Press With the Outrage?’ about Major Financial Scandal
Rick Santelli on Monday tore into the mainstream media for ignoring the London Inter-Bank Offer Rate (LIBOR) scandal in favor of petty and useless headlines such as “jet skiing is un-American.”
But what’s LIBOR and what’s the scandal?
“LIBOR … is the average interest rate the world’s largest banks pay when they borrow money. And this figure … is used to price hundreds of trillions of dollars worth of financial instruments, from high-yield corporate debt to student loans,” Christopher Matthews writes for TIME Business.
Simply put, rather than being contained to the financial services sector, LIBOR affects the everyday interest rates associated with loans, credit cards, etc.
This is where things start to go downhill.
Barclays, one of the world’s largest banks, admitted two weeks ago that it had submitted false data in order to keep its borrowing rates low. And while that alone is enough to cause concern, the real problem lies in the fact that Barclay’s wasn’t the only bank pulling this kind of stunt.
“We’ve only seen the tip of the iceberg, yet the LIBOR rate rigging scandal has rocked the financial world,” writes Sam Dwyer for BostInno, adding that other banks are involved in the growing scandal.
It gets worse: the New York Fed, headed by none other than Secretary of the Treasury Timothy Geithner, knew as far back as 2007 about the rate rigging. 2007? You know that this means, right? It means that at least a few key players involved in TARP [Troubled Asset Relief Program] knew big banks were understating their borrowing costs!
And this is why Santelli is angry.