the entire financial world is built on this rate The Epicurean Dealmaker (@epicureandeal) posted the standard response to your comment a few days ago ("Ready,

the entire financial world is built on this rate The Epicurean Dealmaker (@epicureandeal) posted the standard response to your comment a few days ago ("Ready, Fire, Aim"). Prices are calculated as LIBOR + spread. You and I argue over the spread meaning that if I want 185 bp then I'll either ask LIBOR+165 or LIBOR+65 if the base rate went up by a whole 1%. Check the people who responded to his twitter comments (e.g., @dsquareddigest) for more of the standard back-and-forth here. For example Eurodollar futures hedge the LIBOR so people short LIBOR during the period in question directly lost money. Tangent: this is something I love about twitter. I imagine the meatspace equivalent would be eavesdropping on some Wall Street people in a bar, or hoping that a variety of voices get heard in the WSJ. But today, on twitter, I can read financial market participants' back & forth to each other about the scandal of the day, using their own terminology and reasoning. Very cool. How on earth is such a conflict of interest allowed to parade around out in the open? It's in no-one's interest to admit that systemically important banks have lost the confidence of their counterparties.