Paul C. Roberts on "the REAL LIBOR scandal" and "Bond Market Armageddon!"

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Welcome to Capital Account. Today we survey the Wall Street hijinks. From potential big bank criminal wrongdoing in the Libor scandal reported by the Justice Department, to regulators answering for the money laundering probe at HSBC, to a former Citigroup banker accused of misleading clients in a CDO deal. Does this continue because of the lack of senior executive level convictions for financial crimes? We hear from Charles Ferguson, director of Inside Job and author of Predator Nation who wrote about that on the Huffington Post today. After all of the work he's done, he tells us the price he's paid personally for shining the light Wall Street's underbelly.
And returning to the issue of LIBOR, and the scandal there, the current picture painted is one that shows banks benefiting from borrowing at low rates through interest rate manipulation. But our guest, former assistant Treasury secretary, Paul Craig Roberts, argues that this is too simplistic and that it functions as a diversion from the deeper, darker scandal.
The dirty little secret (well, not so secret if you can do basic math) is that banks have been living off borrowed time since the onset of the 2008 financial crisis. They have assets on their books that they refuse to mark to market, and are dependent on cheap financing and easy liquidity to keep their insolvency from officially bankrupting their institutions. This is what characterizes a zombie bank, and zombie banks no longer speak only Japanese. This is a western phenomenon now, with the zombie virus having crossed the pacific, and then again the Atlantic.
Paul Craig Roberts, Economist and Former Assistant Secretary of the US Treasury under Reagan, will discuss what he calls "the real Libor scandal," and tell us what we may all be missing from this latest hullaballoo.

• Category

  News & Politics

[ggh1209]

Australia is also considering direct trade payments with China, bypassing the US$

ausbullion.blogspot.com.au/201­2/07/australia-and-china-strik­e-another-nail.html

[Active Reasoner]

Aren't banks always "insolvent"? I thought because of the fractional reserve system banks are required to have only 10% of their assets in cash. Doesn't that mean any bank can be made instantly "insolvent" if customers demand their cash? Hasn't it always just been peoples faith that their money was really in the bank that floated the system? It looks like people are willing to let the fraud continue indefinitely because now people know if they make a run on the banks they may lose their money.

[sha370z]

you said it

[LUVallova]

I hope RT isn't making the same mistake as CNBC. Hiring smoking hot women with financial knowledge a mile wide and an inch deep.

[tech4156]

HSBC did money laundering but have the nerve to refuse us individuals because you wont pass their security checks.

[pretorious700]

Apparently none of the TV talking heads (like this bimbo) are aware that the LIBOR rate is not market derived, it's a totally arbitrary, rigged number agreed upon by banks. Is now, has always been.

[TheBenballs99]

of course if we went that course the long term plan would be to reopen the banks but with maybe 40 -50 major banks all being smaller than the 7 or 8 now that are so big they cannot fail.. then they would be forced to compete more heavily and if they fail its no big deal. then we as citizens can tell the banks what we want without fearing them going under and destroying the market. Americans would never allow this though they would be too suspicious of govt...

[TheBenballs99]

there seem to be only two options with the economy this bad.. We need SOMEONE to lend large amounts of money easily and freely to keep business and the economy moving. either- 1.stay the course, too big to fail banks. 2. the govt takes over so they can keep lending and break up what are monopoly banks. if the gov takes over its socialism if we stay the course its unregulated capitalism. i think that socialism is preferrable, at least then elected people make the decisions not bankers

[centurion180ad]

This plundering with its mass murder going on world wide, will continue FOREVER, until we arrest all the God damn bankers.

[centurion180ad]

This is all hocus-pocus gobblygook nonsense talk.

The fucking bankers are producing trillions of WORTHLESS paper, and then FORCING people to trade theIr REAL labor and their REAL property for this WORTHLESS paper.

ARREST ALL BANKERS

BANKERS ARE THE ENEMY