It took me a while to understand the trickle down implications their effect on my own situation. Based on the "6 ways" in the article, I can see many of them in my own life.
The part that was hard to understand, was the argument that, in the end, the actual average LIBOR looked to be a zero sum gain, and until I understood that the daily fluctuations were used to set rates for things like municipal bonds, it didn't seem to matter. Any manipulation would be difficult to track... probably the reason for the two year study.
Now I can see some of the direct results as our local municipal bond funds and public pension funds are suffering, and services are being curtailed. Not directly from the manipulation of LIBOR? Maybe... I do know that our village boards are not too sophisticated, and that the fund losses have been escalating... both here in IL and in Fl... We haven't had a direct loss yet, but reserves have been depleted, and our bond ratings have dropped. One bond renewal saw a 2% rate increase.
Along with everyone else, we've had to adjust our worth, by the real estate value drop.
Indirectly, 4 of the 6 "ways" would seem to affect us, but the real worrisome part, is the "Grandma" part... quite a bit different than being age 35. No truly safe way to recover losses, even if the economy recovers (last hope Walmart Greeter jobs are no more).
The revelations have triggered a political furor in the U.K.— but nothing comparable, so far, in the U.S. But this might soon change if a two-year investigation concludes that any U.S. reference bank — including Bank of America, Citibank and J.P. Morgan Chase, or even all three – was in on the fix.
We'll have to wait to see if this turns out to be a blip on the radar, or if the author is correct.
