Comments on: Hard Libor

By: Sharon

Sharon — Tue, 03 Jul 2012 18:59:24 +0000

“which led us at OTE to wonder what the Frivolous Fraud Office is up to.”

Oh, that’s easy, they make sure no one is sold a dead parrot.

By: readerOfTeaLeaves

readerOfTeaLeaves — Tue, 03 Jul 2012 17:33:04 +0000

A link both for the LIBOR topic, as well as Dr Bernstein’s longer think-piece about how to reach the public regarding policy matters.

The Guardian has an interesting interactive that enables users to click on different banks, alter the timescales, and get a better sense of the differences between the LIBOR rates, and the manipulations the banks were offering.
http://www.guardian.co.uk/news/datablog/interactive/2012/jul/03/libor-rate-fixing-bank-submissions

In a sense, this is not ‘opinion’, although I think the integrity of the data is a critical element in public trust. Here’s hoping a few DC investigators, take a few minutes to go play around with this interactive and see the patterns that are right in front of their eyes.

This kind of ‘data-based’ policy content has a future, I’m convinced.
I think that the NYT, the Guardian, and the FT are all in the forefront of trying to make this kind of thing accessible. It is critical to clearly identify the sources for the data, but this seems like a good example of how to develop new content for the public.

(The interactive works nicely on desktop and iPad; can’t find it on the iPhone, but that is something for designers to consider as I frequently read Guardian updates on my iPhone.)

By: Jared Bernstein

Jared Bernstein — Tue, 03 Jul 2012 12:30:59 +0000

Yes–it would be great to send him over to the UK to oversee the FFU for awhile.

By: Jared Bernstein

Jared Bernstein — Tue, 03 Jul 2012 12:29:19 +0000

I actually commented on this paper at an LSE seminar right after they wrote it–I’ll dig up my notes if I can. But in the mean time, see Larry Mishel’s paper on this and the video we did here at OTE–which shows increasing decoupling of the median compensation and productivity. They actually find the same thing Larry does, they just label it different–they call it “gross decoupling.” Too technical to go into here, but Larry explains it all here:
http://www.epi.org/publication/ib330-productivity-vs-compensation/

The main result is that the gap is large in both Larry’s and their paper if you’re looking at median compensation deflated by the CPI and productivity. Any difference then are a function of using averages instead of medians and gdp deflator instead of cpi. BTW, note that Van R et al say one of the main factors that explains the gap is wage inequality…same as Larry.

By: davesnyd

davesnyd — Tue, 03 Jul 2012 12:28:04 +0000

Thumbs up. Taibi has done great work investigating this and other issues of fraud and malfeasance by financial institutions.

Oh, and Jared, over here in the US, frivolous investigations are alive and well in Issa’s work.

By: mitakeet

mitakeet — Tue, 03 Jul 2012 10:21:57 +0000

Not LIBOR specific, but Matt Taibbi has a great article on Rolling Stone that details the issues that are behind some of this rate fixing:

http://www.rollingstone.com/politics/news/the-scam-wall-street-learned-from-the-mafia-20120620

For the detail oriented (many of the readers here, I am sure) he provides some additional information here:

http://www.rollingstone.com/politics/blogs/taibblog/notes-on-wall-streets-bid-rigging-scandal-20120622

I understand this is a rather complex subject, but these people are stealing _billions_ of dollars out of our pockets! Where is the rage?

By: Sergey Vorobiev

Sergey Vorobiev — Tue, 03 Jul 2012 10:02:42 +0000

Jared, within the framework of the discussion on how corporations make their profits at least sometimes, let me bring you attention to this new paper “Decoupling of Wage Growth and Productivity Growth? Myth and Reality” by João Paulo and Pessoa, John Van Reenen (Resolution Foundation). The authors of this study repudiate the myth that in the US wage growth has fallen significantly behind productivity growth. It seems that implications of this finding is far-reaching. Could you offer your comment on this paper?