Friday, July 13, 2012

It all averages out

From the New York Fed's summer Friday afternoon document dump on the LIBOR scandal, a 24 October 2008 conversation between a Barclays money market trader and the NY Fed markets desk --

I [Barclays trader] think people are afraid to be seen as being having, I mean if they have a high libor the market automatically assumes they're paying too much, but in a perverse kind of way if you put a low libor, it's almost as if the market knows that you're scared to put where you really think it is. I mean, I know that I'm consistently high, but I think I'm consistently correct.