ML-Implode News - Taibbi: Is LIBOR, Crucial Financial Benchmark, a Complete Fabrication?

It... makes sense in theory to use LIBOR as a benchmark for borrowing rates on car loans or mortgages or even credit cards. But that's only true if LIBOR is actually measuring something... Theoretically, a fine system. Measuring how scared banks are to lend to each other should be a good way to gauge market stability. Except for one thing: banks haven't been lending to each other for decades.
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For decades now, the world's biggest banks have been dutifully reporting a whole range of numbers every morning at 11 a.m. London time -- the six-month Swiss franc rate, the three-month yen, the one-month dollar, etc. And none of it seems to have been real.

These numbers, even when sociopathic lunatics weren't fixing them, were arbitrary calculations based on previous, similarly arbitrary calculations -- a rolling fantasy that has been gathering speed for decades.
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Since we now know those rates are not based on reality -- there isn't a funding market -- that means hundreds of trillions of dollars of transactions have been based upon a fraud. Some canny law firm somewhere is going to figure this out, sooner rather than later, and devise the world's largest and most lucrative class-action lawsuit: Earth v. Banks.

Relevant:

Taibbi: Is LIBOR, Crucial Financial Benchmark, a Complete Fabrication?