The Big Picture

Open Secret of Libor Manipulation
10 Tuesday PM Reads
Railway Shipping Reshape Crude Market
King Dollar vs Euro, Yen Renminbi
Shiller: Housing Shows Signs of Weakness
10 Tuesday AM Reads
What younger renters want & their financial constraints

Posted: 30 Sep 2014 04:00 PM PDT

Open Secret: The Global Banking Conspiracy That Swindled Investors Out of Billions is the new book written by Erin Arvedlund.

The book goes behind the scenes of the elite firms that trafficked in LiBOR based products, including Barclays Capital, UBS, Rabobank, and Citigroup to show the negative impact they had on both ordinary investors and borrowers.

Erin’s claim to fame was a column she wrote in Barron’s in the early 2000s outing Bernie Madoff as a fraud. It was a national bestseller titled Too Good to Be True.

Here is Yahoo:

“LIBOR, the London Interbank Offered Rate, is a global benchmark for interest rates. It's tied to everything from mortgage rates and student loan rates to complex financial derivatives. And guess what? For a very long time it was rigged.

Now, multiple lawsuits are pending, and that could mean some money back for some investors, traders and consumers.

LIBOR is set each day by a group of bankers, based on estimates of rates at which banks would expect to borrow money from each other. It’s a system built on trust, not math. Regulators were tipped off back in 2007 that banks were fixing rates, and by the summer of 2012, an ugly scandal was revealed. An estimated $300 trillion in financial securities worldwide are based on LIBOR.

Video after the jump . . .

10 Tuesday PM Reads

Posted: 30 Sep 2014 01:30 PM PDT

My afternoon train reads:

• Bill Gross: Not the King of Bond Markets, After All? (CIO) but see Pimco Is in a Race to Keep Investors After Bill Gross Exits (WSJ)
• Emotions make awful investment managers (Certifiable Planner)
• ERP: The single, best way to tell whether stocks are worth it (Fortune)
• Why investors are ignoring war, terror and turmoil: Global political change has done more to create opportunities than to destroy them (Financial Times)
• A Dozen Things I’ve Learned from Henry Ellenbogen (25iq)
• Revisiting the Lehman Brothers Bailout That Never Was (NY Times)
• Why Rumors Outrace the Truth Online (NY Times)
• Eric Holder’s Mixed Legacy on White-Collar Crime (DealBook)
• Investing to Make a Difference Is Gaining Ground (NY Times) see also Yale Fund Takes Aim at Climate Change (NY Times)
• Robert Plant and Jimmy Fallon are your new favorite doo-wop supergroup (Daily Dot)

What are you reading?

America is getting richer, but most voters can’t feel it

Source: The Economist

Railway Shipping Reshape Crude Market

Posted: 30 Sep 2014 11:30 AM PDT

Source: WSJ

King Dollar vs Euro, Yen Renminbi

Posted: 30 Sep 2014 10:30 AM PDT

click for giant graphic

Source: FT

The U.S. dollar is still king of global currencies. The dollar made up 60.9 percent of foreign exchange reserves and was used in 42.1 percent of global payments. Some countries, though, contest how much influence the U.S. dollar really has.

The term "exorbitant privilege," coined by former French Finance Minister and later President Valery Giscard d’Estaing, refers to the benefits the U.S. receives as a result of its currency being the chosen reserve currency of the world. The term also reflects the discomfort some nations feel toward this financial favor.

What other options does the world have? Luckily, we have a chart.

Continues here

Shiller: Housing Shows Signs of Weakness

Posted: 30 Sep 2014 09:30 AM PDT

10 Tuesday AM Reads

Posted: 30 Sep 2014 05:15 AM PDT

Is it just me, or does it seem like there is more news going on today than usual? No worries, we have you covered with our morning meritage of reads:

• You can't even spell "capitulation" (TRB) see also Is Rampant Hedging a Bullish Sign? (Barron’s)
• Google study heightens fund industry fears (FT)
• Who likes European bonds? (Alphaville)
• Argentina v. the Hedge Funds (Consortium News) see also Are hedge funds doomed? Everything you need to know, in four paragraphs (The Week)
• 31 Fantastic Pieces Of Advice For Surviving Your First Year On Wall Street (Business Insider)