Courtesy of Matt Taibi at Rolling Stone:
I’ve been away for weeks now on a non-financial assignment (we have something unusual coming out in Rolling Stone in a few weeks) so I’ve fallen behind on some crazy developments on Wall Street. There are multiple scandals blowing up right now, including a whole set of ominous legal cases that could result in punishments so extreme that they might significantly alter the long-term future of the financial services sector.
As one friend of mine put it, “Whatever those morons put aside for settlements, they’d better double it.”
Firstly, there’s a huge mess involving possible manipulation of the world currency markets. This scandal is already drawing comparisons to the last biggest-financial-scandal-in-history (the Financial Times wondered about a “repeat Libor scandal”), the manipulation of interest rates via the gaming of the London Interbank Offered Rate, or Libor. The foreign exchange or FX market is the largest financial market in the world, with a daily trading volume of nearly $5 trillion. Continue reading