Ad Hoc Commentary – don’t dream on a Liborgate

Ever since the libor fixing debacle brought down Bob Diamond of Barclays, regulators everywhere are on a crusade to investigate rate fixing.

This flurry of me-too investigation got some of us to believe that this is the time for good people to be made whole – especially those who were caught on the wrong side of manipulations of yesteryear.

After seeing what happened in Korea today, yours truly thinks that  Bob Diamond will go down in history as the only bank CEO that lost his job in the rate fixing debacle.

Korea, like every good regulator were on a witch-hunt on Korea CD fixing today. Some pundits believed if the regulators indeed found collusion, CD could fix 20bps lower on the day. After all is said and done, CD was virtually unchanged, fixing a mere 1bps lower on the day.

The Korean interest swap markets understandably had one of the most volatile day today since Lehman. Rates went lower as much as 15bps lower before closing virtually unchanged at 1 to 2bps lower vis a vis yesterday’s close.

The lesson? Nobody wants to rock the boat except perhaps the press in UK. We can continue to watch the talking heads on television jump up and down on collusion. But if you are looking for Liborgate, you likely will be disappointed.

To the bulls, enjoy the risk on till the start of Olympics. To the bears, every dog will have its day.

Good luck in the markets.