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Is this story of interest to hackers? The claim that "everything is rigged" is supported by a small number of specific examples coupled with a generous helping

Is this story of interest to hackers? The claim that "everything is rigged" is supported by a small number of specific examples coupled with a generous helping of polemics. Facts are not placed in useful contexts. The reader, after reading this article, has likely learned very little but only had whatever pre-bias he had confirmed. It takes a lot more than that to support the fantastic superpowered-global-banking-conspiracy thesis of the article. Since, on articles like this, you tend to be downvoted for going against the zeitgeist, I'll provide a specific example. The civil suit over LIBOR fixing, mentioned on page one, was thrown out because antitrust laws only apply to competitive processes. (Source: http://www.upi.com/Top_News/US/2013/03/30/Judge-drops-antitrust-claims-in-Libor-suit/UPI-99301364658941/ http://www.upi.com/Top_News/US/2013/03/30/Judge-drops-antitr...) Taibbi writes: "In that case, a federal judge accepted the banker-defendants' incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place." This is a baffling recontextualization: suits are thrown out when they are not lawful because we live in a democratic rule of law, and there is no reason to believe the judge wished to punish or blame consumers. The suit was thrown out because the suit was illegal. This isn't an uncommon or partisan thing: the famous Walmart v. Dukes discrimination lawsuit was thrown out 9-0 by the Supreme Court, because it was unlawful. (The reason the case is famous is because of a 5-4 decision on whether it could be refiled, but that's beyond the scope of this comment.) A long history of reading Taibbi comment threads on HN and r/economics has taught me that Taibbi routinely lies in this fashion; this is just one example.

fixxer 14y ago
I think, in the case of fixed income, there is a public expectation of fair play (i.e. competitive market). That simply is not the case, nor is it mandate. Case in point, there is no such thing as "insider trading" when it comes to UST auctions. As for "interest to hackers", this market seems to like finance. I suppose the grass is always greener...
- cynicalkane 14y ago
  Well, if it wasn't clear, my broad point is that the story isn't of interest to hackers because it yields no better understanding of how finance works. Hackers should be interested in understanding things, not eyeball-glazing polemics full of hopelessly re-contextualized non-information. I used to work in finance, and think it's fascinating, the good and the bad. I'm sympathetic to the argument that banks are too large, too undisciplined, and have too much power, but agreeing with nonsense because you want to is an anti-pattern, both personally and in terms of the long-term ideological fight.
  - fixxer 14y ago
    > ...eyeball-glazing polemics full of hopelessly re-contextualized non-information. I had to chuckle at that. You, sir, have not worked in finance. (complement!) >> EDIT: CME, eh? Which markets? >> EDIT2: I'm not counting CME software engineer as finance experience. Again, a complement!
lisper 14y ago
> Is this story of interest to hackers? It's of interest to me because I've had some direct experience tangling with banks over other issues. I have come to believe that the extent to which the banks control the world is even greater than what Taibbi says. > we live in a democratic rule of law That is heartbreakingly naive. It is not possible to get elected to office in the U.S. without substantial funding, which means that all of the people in office are either themselves rich or have garnered the favor of wealthy donors. Either way it is impossible as a practical matter to pass any law that constrains the interests of the super wealthy in any meaningful way.
- cynicalkane 14y ago
  I'm sorry your worldview is so negative, but when I said we live in a democratic rule of law, I'm expressing the opinion that it is both good and usual that lawsuits must be lawful, and I'm talking about one specific lawsuit. So you might feel finance is unjust, but my point is Taibbi's example of injustice is nothing of the sort. He should choose a different example. Anyway it's not like the banks weren't fined and sued for amounts totaling billions under other laws. Usually it's considered unjust to throw things out on technicalities if there's no other remedy available, but that wasn't the case here. EDIT: I just noticed the judge allowed part of the case to go forward under different laws! So Taibbi's claim is even more nonsensical than I initially thought.
  - snomad 14y ago
    As Taibbi points out, 3 of the settlements occurred before the case was tossed out, should't that hint at a worth case? As he also writes: an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York...Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer. The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, "Our goal here is not to destroy a major financial institution." That sounds like govt insiders who were once responsible for being on the prosecution now acting as defense, which sounds more banana-republic than democratic imo.
nisa 14y ago
The article may be polemic but I don't see how LIBOR fixing was not a criminal act[1]. If something similiar happened with ISDAfix it is worth reading about it. And a failure to apply a certain law does not invalidate the crime alligations against the banks. What is your take on the issue? 1: http://en.wikipedia.org/wiki/Libor_scandal http://en.wikipedia.org/wiki/Libor_scandal
- deleted 14y ago
  [deleted]
CoolGuySteve 14y ago
This is exactly the calibur of comment that makes hacker news superior to reddit in every way. You have expressed everything I think about Taibbi's yellow journalism more eloquently than I ever could. But that this comment could go against the grain of Internet circle jerking and be the top voted one makes me e-swoon. Bravo everyone. Anyways, I've worked for Apple and I've worked for a major investment bank. The two brand names are both major headline grabbers and I would say in both cases, about 60% of what you read is an outright fabrication designed to attract page views.
- glesica 14y ago
  So banks didn't rig interest rates, or blatantly launder money for drug lords and terrorists, or foreclose on people who didn't even owe money on their homes? Are these things false? But you worked for Apple and an unnamed investment bank, so don't worry folks, it's all good, you can trust these guys. If only 40% of the things written about the banking industry are true, we should nuke the whole thing, throw every executive in prison, and start from scratch. So really you're just splitting hairs here.
  - CoolGuySteve 14y ago
    About as much as Apple employs children, forces them to inhale aluminum particulate, and then protest by means of suicide. But given your clumsy reasoning, I doubt I'll see anything insightful from this conversation.
    - glesica 14y ago
      Oh wow, so now you're insulting people who disagree with you? Impressive, makes me think even less of the big banks if one of them employed you, frankly. I don't see anything clumsy about my reasoning. The Libor scandal, for instance, is pretty clear-cut. The rate was set by, simplifying greatly, polling the banks and averaging. There is evidence that some of the banks misrepresented their actual cost of borrowing in order to further their own interests, and thus skewed the rate improperly. Is any of this in doubt? Now, it might not be the Illuminati secretly picking the president and ordering him to clone Hitler, but it sure does demonstrate that our market economy isn't quite as "market-ish" as we had hoped. That's a big problem in my book because the fundamental argument in favor of markets as a means of organizing economic activity is that they generate socially optimal outcomes. Otherwise, there's no reason for most of us to buy into the system, it's just feudalism (which economists and capitalists take great pride in having vanquished) all over again and most of us are still just serfs. If those markets are being manipulated, then are the outcomes socially optimal? Or, more specifically, are they more socially optimal than some other method of organizing things? If not, then the whole system is called into question, and that's a huge deal.
od2m 14y ago
You are an ostridge with his head buried in the sand, except the cartoon you are in? IT'S NOT FUCKING FUNNY.
- El_Mariachi 14y ago
  1) "Ostrich." They’re feeding, not hiding. And 2) "Road Runner."
  - od2m 14y ago
    I actually looked this up before I typed it… http://www.thefreedictionary.com/Ostridge http://www.thefreedictionary.com/Ostridge fooled me :)
anigbrowl 14y ago
I'm very interested in the index manipulation, but not at all in Rolling Stone's coverage, for the same reason as you - Matt Taibbi is not a reliable reporter, and if anything he poisons the well for other media coverage.
- jakerocheleau 14y ago
  > Matt Taibbi is not a reliable reporter That is 100% your opinion. I have read more than a couple of his articles and they are very, very well put together. He is an excellent journalist and one of the few who is willing to cover all the corruption going on within our financial system.
  - tptacek 14y ago
    You mean like the time he wrote a huge expose on Obama's sellout to Wall Street that confused two different James Rubins, claiming that one of them (we're now not sure which one) helped "pick Obama's economic team", and claimed TARP could cost twenty three trillion dollars?
DennisP 14y ago
I may be missing your point. It sounds to me like this argument could invalidate any antitrust case. "No, it's not illegal for us to collude on the price of widgets, because we're cooperating to sell widgets instead of competing with each other."
- webnrrd2k 14y ago
  To further support your argument, I'd think that when the business signed up to add data to the system, they had to sign a contract that said something to the effect that they'd add it in an honest and timely manner. In other words, whether or not they were cooperating or competing, they were probably in breach of contract.
tptacek 14y ago
Taibbi writes from a script. Particularly with his finance posts, the formula is: comic invective, appeal to populism, name drop, comic invective, name drop, attempt to explain technical concept he himself does not understand, name drop, appeal to populism, comic invective. People want him to be right, because who the hell doesn't want to read a fun piece on how corrupt Wall Street is? (I think Wall Street is pretty corrupt, B.T.W.) He was much better writing about politics, because most of the time you can write a competent political story without needing to explain a technical concept you yourself don't understand. Name dropping, appeals to populism, and comic invective are entirely adequate to that task. He's good at sports writing too, because he understands the technical concepts he wants to explain. But with finance writing, Taibbi has set a needlessly high bar for himself, and he doesn't just routinely fail to clear it; he seems to be running under the bar.
- cia_plant 14y ago
  Taibbi's pieces are often brimming with excerpted interviews, specific names and places and trials, details of hearings and indictments. It may be that he is catastrophically misinterpreting these sources, but he obviously makes an attempt to get into the details of what he's talking about. Your criticism of him contains zero examples, and is basically just "trust me, this guy sucks".
  - rayiner 14y ago
    He takes stuff, particularly hearings, trials, and indictments, wildly out of context. As in the example above, procedural and technical judgments (the law doesn't apply to this situation) become moral judgments (the people who lost money are undeserving of relief).
  - tptacek 14y ago
    I could come up with specifics but that would basically be me trying to make myself look smarter than I am, so instead: why not go track down what Matt Yglesias said about the piece he wrote before this most recent one, or what Felix Salmon wrote about the parking meter story, or what Kevin Drum wrote about the vampire squid piece, or Tim Fernholz at TAP wrote about the Obama piece, or Dan Primack's takedown of the Bain Capital piece? Most of these writers, by the way, are political allies of Matt Taibbi, who said in his Reddit AMA that he checks in with Zero Hedge regularly.

fixxer 14y ago

I think, in the case of fixed income, there is a public expectation of fair play (i.e. competitive market). That simply is not the case, nor is it mandate. Case in point, there is no such thing as "insider trading" when it comes to UST auctions. As for "interest to hackers", this market seems to like finance. I suppose the grass is always greener...

cynicalkane 14y ago
Well, if it wasn't clear, my broad point is that the story isn't of interest to hackers because it yields no better understanding of how finance works. Hackers should be interested in understanding things, not eyeball-glazing polemics full of hopelessly re-contextualized non-information. I used to work in finance, and think it's fascinating, the good and the bad. I'm sympathetic to the argument that banks are too large, too undisciplined, and have too much power, but agreeing with nonsense because you want to is an anti-pattern, both personally and in terms of the long-term ideological fight.
- fixxer 14y ago
  > ...eyeball-glazing polemics full of hopelessly re-contextualized non-information. I had to chuckle at that. You, sir, have not worked in finance. (complement!) >> EDIT: CME, eh? Which markets? >> EDIT2: I'm not counting CME software engineer as finance experience. Again, a complement!

lisper 14y ago

> Is this story of interest to hackers? It's of interest to me because I've had some direct experience tangling with banks over other issues. I have come to believe that the extent to which the banks control the world is even greater than what Taibbi says. > we live in a democratic rule of law That is heartbreakingly naive. It is not possible to get elected to office in the U.S. without substantial funding, which means that all of the people in office are either themselves rich or have garnered the favor of wealthy donors. Either way it is impossible as a practical matter to pass any law that constrains the interests of the super wealthy in any meaningful way.

cynicalkane 14y ago
I'm sorry your worldview is so negative, but when I said we live in a democratic rule of law, I'm expressing the opinion that it is both good and usual that lawsuits must be lawful, and I'm talking about one specific lawsuit. So you might feel finance is unjust, but my point is Taibbi's example of injustice is nothing of the sort. He should choose a different example. Anyway it's not like the banks weren't fined and sued for amounts totaling billions under other laws. Usually it's considered unjust to throw things out on technicalities if there's no other remedy available, but that wasn't the case here. EDIT: I just noticed the judge allowed part of the case to go forward under different laws! So Taibbi's claim is even more nonsensical than I initially thought.
- snomad 14y ago
  As Taibbi points out, 3 of the settlements occurred before the case was tossed out, should't that hint at a worth case? As he also writes: an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York...Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer. The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, "Our goal here is not to destroy a major financial institution." That sounds like govt insiders who were once responsible for being on the prosecution now acting as defense, which sounds more banana-republic than democratic imo.

nisa 14y ago

The article may be polemic but I don't see how LIBOR fixing was not a criminal act[1]. If something similiar happened with ISDAfix it is worth reading about it. And a failure to apply a certain law does not invalidate the crime alligations against the banks. What is your take on the issue? 1: http://en.wikipedia.org/wiki/Libor_scandal http://en.wikipedia.org/wiki/Libor_scandal

deleted 14y ago
[deleted]

CoolGuySteve 14y ago

This is exactly the calibur of comment that makes hacker news superior to reddit in every way. You have expressed everything I think about Taibbi's yellow journalism more eloquently than I ever could. But that this comment could go against the grain of Internet circle jerking and be the top voted one makes me e-swoon. Bravo everyone. Anyways, I've worked for Apple and I've worked for a major investment bank. The two brand names are both major headline grabbers and I would say in both cases, about 60% of what you read is an outright fabrication designed to attract page views.

glesica 14y ago
So banks didn't rig interest rates, or blatantly launder money for drug lords and terrorists, or foreclose on people who didn't even owe money on their homes? Are these things false? But you worked for Apple and an unnamed investment bank, so don't worry folks, it's all good, you can trust these guys. If only 40% of the things written about the banking industry are true, we should nuke the whole thing, throw every executive in prison, and start from scratch. So really you're just splitting hairs here.
- CoolGuySteve 14y ago
  About as much as Apple employs children, forces them to inhale aluminum particulate, and then protest by means of suicide. But given your clumsy reasoning, I doubt I'll see anything insightful from this conversation.
  - glesica 14y ago
    Oh wow, so now you're insulting people who disagree with you? Impressive, makes me think even less of the big banks if one of them employed you, frankly. I don't see anything clumsy about my reasoning. The Libor scandal, for instance, is pretty clear-cut. The rate was set by, simplifying greatly, polling the banks and averaging. There is evidence that some of the banks misrepresented their actual cost of borrowing in order to further their own interests, and thus skewed the rate improperly. Is any of this in doubt? Now, it might not be the Illuminati secretly picking the president and ordering him to clone Hitler, but it sure does demonstrate that our market economy isn't quite as "market-ish" as we had hoped. That's a big problem in my book because the fundamental argument in favor of markets as a means of organizing economic activity is that they generate socially optimal outcomes. Otherwise, there's no reason for most of us to buy into the system, it's just feudalism (which economists and capitalists take great pride in having vanquished) all over again and most of us are still just serfs. If those markets are being manipulated, then are the outcomes socially optimal? Or, more specifically, are they more socially optimal than some other method of organizing things? If not, then the whole system is called into question, and that's a huge deal.

od2m 14y ago

You are an ostridge with his head buried in the sand, except the cartoon you are in? IT'S NOT FUCKING FUNNY.

El_Mariachi 14y ago
1) "Ostrich." They’re feeding, not hiding. And 2) "Road Runner."
- od2m 14y ago
  I actually looked this up before I typed it… http://www.thefreedictionary.com/Ostridge http://www.thefreedictionary.com/Ostridge fooled me :)

anigbrowl 14y ago

I'm very interested in the index manipulation, but not at all in Rolling Stone's coverage, for the same reason as you - Matt Taibbi is not a reliable reporter, and if anything he poisons the well for other media coverage.

jakerocheleau 14y ago
> Matt Taibbi is not a reliable reporter That is 100% your opinion. I have read more than a couple of his articles and they are very, very well put together. He is an excellent journalist and one of the few who is willing to cover all the corruption going on within our financial system.
- tptacek 14y ago
  You mean like the time he wrote a huge expose on Obama's sellout to Wall Street that confused two different James Rubins, claiming that one of them (we're now not sure which one) helped "pick Obama's economic team", and claimed TARP could cost twenty three trillion dollars?

DennisP 14y ago

I may be missing your point. It sounds to me like this argument could invalidate any antitrust case. "No, it's not illegal for us to collude on the price of widgets, because we're cooperating to sell widgets instead of competing with each other."

webnrrd2k 14y ago
To further support your argument, I'd think that when the business signed up to add data to the system, they had to sign a contract that said something to the effect that they'd add it in an honest and timely manner. In other words, whether or not they were cooperating or competing, they were probably in breach of contract.

tptacek 14y ago

Taibbi writes from a script. Particularly with his finance posts, the formula is: comic invective, appeal to populism, name drop, comic invective, name drop, attempt to explain technical concept he himself does not understand, name drop, appeal to populism, comic invective. People want him to be right, because who the hell doesn't want to read a fun piece on how corrupt Wall Street is? (I think Wall Street is pretty corrupt, B.T.W.) He was much better writing about politics, because most of the time you can write a competent political story without needing to explain a technical concept you yourself don't understand. Name dropping, appeals to populism, and comic invective are entirely adequate to that task. He's good at sports writing too, because he understands the technical concepts he wants to explain. But with finance writing, Taibbi has set a needlessly high bar for himself, and he doesn't just routinely fail to clear it; he seems to be running under the bar.

cia_plant 14y ago
Taibbi's pieces are often brimming with excerpted interviews, specific names and places and trials, details of hearings and indictments. It may be that he is catastrophically misinterpreting these sources, but he obviously makes an attempt to get into the details of what he's talking about. Your criticism of him contains zero examples, and is basically just "trust me, this guy sucks".
- rayiner 14y ago
  He takes stuff, particularly hearings, trials, and indictments, wildly out of context. As in the example above, procedural and technical judgments (the law doesn't apply to this situation) become moral judgments (the people who lost money are undeserving of relief).
- tptacek 14y ago
  I could come up with specifics but that would basically be me trying to make myself look smarter than I am, so instead: why not go track down what Matt Yglesias said about the piece he wrote before this most recent one, or what Felix Salmon wrote about the parking meter story, or what Kevin Drum wrote about the vampire squid piece, or Tim Fernholz at TAP wrote about the Obama piece, or Dan Primack's takedown of the Bain Capital piece? Most of these writers, by the way, are political allies of Matt Taibbi, who said in his Reddit AMA that he checks in with Zero Hedge regularly.