Daily Archives: February 18, 2013


Apparently, Wells Fargo doesn’t bother to check the ID photos you send them

Apparently, Wells Fargo doesn’t bother to check the ID photos you send them

Austinite Todd [Redacted] wanted to see if Wells Fargo could tell the difference between a photo of his ginger self and a photo of a ginger housecat.

Long story short, they could not.

A photo of Todd’s new Platinum Debit Card posted on Reddit appears to show the humorous result of his Internet-ready experiment, with the photo ID spot plainly occupied by a satisfied-seeming red-headed feline.

A photo of a similarly pleased-looking Todd has been juxtaposed for comparison’s sake.

A rep for Wells Fargo told Consumerist that the bank was aware of the photo, and a statement concerning the “interspecies mixup” was forthcoming.

UPDATE: Wells Fargo responds:

While we’re relieved to know that our customer is a real person and not a cat, his use of his cat’s photo falls well within our image standards and guidelines on our website. The image on the card is not intended to serve as a form of ID, and customers can add any picture they want as long as it fits our standards and guidelines. As long as this customer doesn’t use the card in a dog store, there shouldn’t be any issues. 😉

[photo via Imgur]

Post Libor scam: Indian financial markets to move away from ‘polled’ to ‘traded’ rates, may fix Mibor

MUMBAI: Learning from the Libor scandal, Indianfinancial markets will change the way they set key benchmark rates, which are the basis for deals worth thousands of crores every day.

The Reserve Bank of India (RBI) and commercial banks have arrived at some consensus to gradually move away from ‘polled’ rates that may be prone to manipulation, to ‘traded’ rates in calculating the daily benchmarks in the currency and money markets.

“At a meeting with the Reserve Bank a week ago, banks were told to give their views. The general preference was that the two most liquid benchmarks,Mibor and RBI reference rates, should be based on dealt rates,” said the treasurer of a large bank. “The regulator is favourably inclined towards the change… it will happen over time.”

For less liquid benchmarks, polled rates will continue but a new governance structure would be put in place. “There will be rules on giving inputs and storing of information for those participating in the poll,” said another banker present in the meeting.

Mibor (or the Mumbai Interbank Offered Rate), tailored after Libor (the London Inter-bank Offered Rate), is the key money market rate that corporates and banks use to hedge their risks and bet on interest ratemovements. It’s a tool to switch from fixed to floating rates or vice versa to either earn more from loans or pay less on debt, depending on the view on interest rates.

Read on.

LIBOR Scandal More Than Fraud – Whole Game Is Rigged



JAY: So what have you been working on this week?

LAPAVITSAS: I think one of the most interesting things to hit the news this week is the Libor manipulation case and the fine that has been imposed on the large British bank RBS for manipulating the Libor.

I think we need to talk a little bit about this so that people understand the significance of it, because it hasn’t really been widely appreciated by the public.

Now, the Libor is not a real interest rate. It’s a benchmark. It’s a benchmark that is set privately by the banks and in secret. There’s a committee of banks that does that. On the basis of the Libor, a whole host of other interest rates that are charged to people for their mortgages, to businesses, and so on are determined.

Now, the case and the fine imposed on RBS has discovered, has found that actually RBS has been colluding with brokers and others to manipulate the Libor. This is a criminal dimension. And they’ve been charged. The British government—.

JAY: Hang on one sec. Just for people that haven’t followed this story at all, just a little more on why this matters so much.

LAPAVITSAS: This matters enormously for a number of reasons. As I said to you, as I said, this is not a real interest rate; this is a benchmark. If the banks determine the benchmark in an untruthful way, then they can influence a whole host of other prices, and they can influence the receipts they make from people to whom they’ve lent money and from the various transactions they make in the derivatives markets. For the banks, the ability to manipulate the Libor is a key mechanism to make extra profits, basically. And they’ve got this ability to do it because they set the Libor privately and in a special committee, which they run themselves.

Now, the British government is making out that this is a criminal act, which it is, of course, because collusion with the aim of making extra profits is criminal. The point is, however—and this is something that the British government wishes to keep quiet—it isn’t simply criminality here. It looks as if the entire game is rigged from beginning to end. In other words, it isn’t simply collusion and illegality. The game is rotten.

And it is rotten for two reasons, I would argue. First, the banks have got an incentive to present falsely low rates, because they in this way appear to be stronger than their competitors. And the banks have got an incentive to manipulate the rate sometimes up, sometimes down, because they make different payments in this way on their derivatives portfolio. The banks, then, have got clear incentives to manipulate it, and they signal their incentives to each other.

So this committee doesn’t work. It doesn’t work systematically in the public interest; it works in the interest of banks. This is becoming increasingly clear, and this is going to be big news, I think, in the months to come, because, of course, there are more banks that would be hit—that will be charged fines in the months ahead.

JAY: How did we get to a situation that a group of banks, most of them private, or maybe all of them privately owned, get to determine what is essentially the most influential rate in the globe? I mean, in theory, central banks are supposed to establish rates, I would have thought.

LAPAVITSAS: Central banks establish the rates at which they themselves lend to the banking system. However, there is also a private market for funds. There’s the money market. And in the money market, banks interact with each other and work out the rate at which they lend to each other.

This is the most important price in the financial system. It’s more important than the rate at which central banks lend to banks. It’s the most important financial price. And presumably, in a neoliberal free-market system such as the one we’ve got today, it ought to be set through the free competition among the financial institutions. It isn’t.

And that’s the significance of this. This rate is actually manipulated. These banks have got a secretive committee. They work out the rate, which is the Libor. They don’t transact at this rate—this is a benchmark. And they announce it on a daily basis. They manipulate it. They handle it. And by manipulate it, they affect all other actual interest rates at which people undertake [unintel.] transactions.

‘I didn’t even know it was in foreclosure’

The particulars

• The house: An 1,800-square-foot home (four bedrooms, two bathrooms) in a new south Stockton housing development

• The price tag: $340,000 when it was first purchased in 2005, $110,000 when it was sold as a foreclosure in 2011

• Lender: Bank of America, then Countrywide

STOCKTON – The moment is seared, like a scene from a horror movie, in Luz Sauceda’s memory.

She came home after picking up her teenage daughter from school in the autumn of 2011 to find a sign on the front door:


She had spent a year working with Bank of America and mortgage lender Countrywide, trying to renegotiate or modify her loan – and save her house. She believed the blizzard of paperwork, most of it too confusing for her to understand, was going to pay off, that she would keep her dream of home ownership alive.

“The bank said everything was good. It was going to be OK,” said Sauceda, a parenting educator with Stockton-based El Concilio (the Council for the Spanish Speaking). “I didn’t even know it was in foreclosure. I thought we would have 30 days, but the house already had new owners.”

Read on.