economics | April 28, 2013

Big Banks: Are We In The Midst Of A Price-Fix Scandal? Matt Taibbi Weighs In

In a searing new article in Rolling Stone Magazine, economics speaker and Griftopia author Matt Taibbi presents a startling revelation: "The world is a rigged game." He explains that "we found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything." Who's involved in this scandal? How deep does the corruption go? The megabanks, he tells us—including Barclays, UBS, Bank of America, JPMorgan Chase, and the Royal Bank of Scotland—are all in on the game. We've entered into a situation where a small group of people are manipulating the prices in a multi-trillion dollar market. Not only are they fixing market prices—often at our expense—but they're profiting from doing so. And, scarier still, Taibbi says that neither the criminal justice system nor the civil courts have much power to stop it.

Here's Taibbi's explanation of the events in question:

Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps. Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It's about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget. If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it's no secret.

In his Rolling Stone articles and in his speeches, Taibbi pulls no punches and gets to the heart of the backroom dealings that affect the global economic framework. His scorching exposés of America's biggest power players has earned him the National Magazine Award, and his book, Griftopia, has been critically hailed as well. In his talks, he expands on the eye-opening topics covered in his writing. Provocative and informative, Taibbi uncovers the wheeling and dealing of the country's business powerhouses—and lays the groundwork for how we can get ourselves out of this economic mess.