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Sanford & Bernstein Analyst Brad Hintz on the broadening scope of the Libor rate manipulation scandal in the financial sector.
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-- so didn't pardon me.
He was an investor argue anxious right -- -- -- kind of excited and ready to take some risk with some of these names.
Wait wait till you hear my next guest he's -- -- -- -- Banking analyst -- -- of the business of billion -- spirit of Fox Business exclusive and you say it's really important not to our -- -- a buffet meaning.
Be greedy when others are fearful -- lot of fear out there but that this Libor rate manipulation scandal.
Could take others down Barclays is just the beginning senate.
Take people down as a Little League this is gonna have a huge civil -- litigation tail.
So yes any if you think of how live -- work see -- there are sixteen banks who put their bids in every day.
The bottom for get thrown out the top four get thrown out and then they take an average of the middle to set the rate well.
If Barkley says that we've been -- we've been attempting to negotiate it to manipulate this since 2005 they will not admit that they minute today that we was manipulated.
But it to you logically.
If you were doing manipulation to successfully manipulate net system you'll need more than just one bank that means this is going to be a much larger.
Problem than just a Barkley.
You'd need a lot of -- to Ben -- -- paid 451 million as a fine how big could this get it and sixteen banks out there including by the way we remind people JPMorgan Citi.
Bank of America -- that the American banks that.
Could potentially be just pull down.
We have the entire -- fixed income derivatives market is tied to Libor.
We have.
Thirty trillion dollars worth of bank loans tied to Libor.
We have mortgages -- -- or excuse -- to the extent that they moved Libor up just a little bit.
It's a incredibly large number times a very small number of times four and a half years cassettes the period that they're looking at.
And then a negotiated settlement.
Just prior to going to -- civilians we actually are quick read on this and then remember you're you're making some pretty.
Rough estimates at this point is that this this is the twice twice the size of an Enron when it's all over Poland promised seven billion.
This is a big number OK so so it'll be split among the bank says -- that's the issue the problem with this is.
We have these shoes that are going to be phone thing this is going to be good for for -- people right we.
A -- -- of blood in the water here I'm kidding but the fact is that people are looking right now to you to give us some names if they are absolutely determined to get into at least the broader sector here.
Give us we promised to names can you cough up to that would be at least safer bets than the -- banks might be involved.
Absolutely Goldman -- Morgan Stanley.
The the gold the Morgan Stanley analyst just wrote a piece on action be amortized -- and the competition but I think Goldman that it Morgan Stanley analyst.
Wrote a piece where she did an estimate of the of Libor.
No legal department will allow you to write the piece and on it if you were involved in the investigation.
So and I got an email from a Morgan Stanley eight executive.
Retired.
Who pointed out that we made a lot of money when when Solomon Brothers attempted to to.
To manipulate the markets back in the early ninety's -- so you're gonna have Wall Street suing -- We -- the matter helpless and we've got thirty seconds what about the exchanges is that a better way to getting -- -- yes of the group the evening the two exchanges the futures exchanges.
Are the ones who are better position they're not exposed to Europe.
They pardon me they are going to be winners in the world of regulatory change.
And it to the extent that there's volatility in the market it's good for their revenues CME and ice are the picks that they are further there are first -- You but you know the -- more recently are not involved in the live or one that's going to be the key thing -- come -- of -- earnings press -- of Sanford Bernstein our -- here in -- thank you so much thank you for MS fourteen billion that could be the number when -- was -- --
