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Libor, long the most important number in finance, dies at 52

nytimes.com

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Re: Libor, long the most important number in finance, dies at 52

#121

Post by carnitine »

svnpenn wrote: post #62
mhh__ wrote: post #55

Earlier quoted context omitted.

How is it clickbait? LIBOR is omnipresent in finance and it is being killed. Sterling LIBOR is already dead for example.

Well: 1. Its LIBOR, not Libor 2. LIBOR is not a number, its a rate. Thats literally what the "R" stands for 3. LIBOR cant die, as its not a person Its just an awful title because it calls LIBOR a number, which its not, then goes on to treat it as a human, which its also not.

LIBOR is not a rate, it’s a series of rates across different currencies. Rates are numbers though so I’m not sure what distinction you are trying to draw.

Re: Libor, long the most important number in finance, dies at 52

#123

Post by sneak »

> It turned out that bankers had been coordinating with one another to manipulate the rate, pronounced “LIE-bore,” by skewing the number higher or lower for their banks’ gain.

It's rare to see shade thrown so overtly in the Times, because it's so rare it can be done this deniably, and always makes me chuckle when it does.

Re: Libor, long the most important number in finance, dies at 52

#124

Post by jcuenod »

If you're a neophyte like me, take a look at the Odd Lots podcast: https://www.listennotes.com/search/?ocid=c1a7b213882c4e32964...

There's a ton of good info in there on what Libor is, why it needed to live, why it needed to die, and some attempts to replace it.

Re: Libor, long the most important number in finance, dies at 52

#125

Post by tula »

JackFr wrote: post #35
HarryHirsch wrote: post #13

Earlier quoted context omitted.

So - considering that LIBOR was not an observed number, but a made-up number that was nonetheless useful, what did the LIBOR actually measure?

It measures the answer to the hypothetical question "If a another bank with good credit came to you right now to borrow (overnight/1W/1M/3M) in (USD/EUR/GBP/CHF/JPY) what rate would you offer them?" Which is a proxy for the banks' willingless to lend. (It had a less quoted counterpart, LIBID the London Interbank Bid Rate, where would you borrow at.)

No, LIBOR is your borrowing cost, the rate at which you'd be able to borrow (ie the rate that others would offer to you to lend you money).

LIBID is the rate at which you'd be willing to borrow. So the difference between the two is like bid vs ask.

Re: Libor, long the most important number in finance, dies at 52

#126

Post by mathattack »

r00fus wrote: post #113

The salient info buried at the end: "Libor is survived by several successors, each making a claim to its crown. The Secured Overnight Financing Rate, or SOFR — a rate produced by the Federal Reserve Bank of New York that is based on transaction data, not estimates — has already been embraced by many banks in the United States and has the endorsement of the Fed. Others, like the American Interbank Offered Rate, or Ame…

The article references that existing contracts will stay on LIBOR. It’s only dead for new deals.

Re: Libor, long the most important number in finance, dies at 52

#128

Post by willcipriano »

grahamm wrote: post #109
decafninja wrote: post #94

Earlier quoted context omitted.

It's not just one level though. You can ask the same about whether your boss's boss will understand, and so on and so forth up the food chain. The problem with many tech-as-a-cost-center companies is that you will quickly run into a person on that hierarchy who doesn't (often at or near the intersection between tech departments and the profit center business departments).

And if your company wants to "flatten the structure" running into that person is more likely and you will run in to them. I also have a problem with ex-developers who work their way up the structure with time. Generally they drift away from the tech and what tech takes and end up serving their higher masters. So you end up with someone who thinks they know what it takes but hasn't actually done it for many years. Lit…

I like the rule whoever estimates lowest gets to do it. If you aren't in the running to do it, your estimate doesn't count. It's easy to armchair quarterback if someone else is on the line.

Re: Libor, long the most important number in finance, dies at 52

#129

Post by DwnVoteHoneyPot »

santoshalper wrote: post #101
throwmeaway666 wrote: post #58

Earlier quoted context omitted.

>we were part of the cost cutting measures. >the event that lead to my eyes being opened to the world of Silicon Valley tech companies I found that being aware of whether you will be part of the cost center or profit center in a company is very useful when deciding where you should work.

This one really hit me personally. When I was young, my father advised me that in my career I should stay "close to the money". It made a lot of sense, and I tried, but I ended up moving increasingly into financial services technology. Now, 25+ years later, I am the head of technology (C-Level) for a large financial services firm (Fortune 200). I report to the CEO, I lead thousands, I am handsomely compensated, but I…

> my father advised me that in my career I should stay "close to the money"

I got the same advice from my father, but it meant something different. I was told if I went into computer science or any engineering, I'd always be a servant to management and my job would be outsourced to India. I would be easily replaceable. Best to be "close to the money" instead... that was management. Also, to make "real money", I'd have to move up from engineering to management and wouldn't be programming anyway.

So I went to business school. Might as well optimize and skip the engineering step and go straight into managment. And to be even closer to the money: finance degree.

15+ years later, while finance has been fine, I just really like programming. I have a real aptitude for it. Had to teach myself to code, started side hustle online business (finance is still day job). I might get the same salary as a FAANG software engineer (without the skyrocketing stock), but I always wonder what if I did comp sci instead.

Then, on HN I see comments like yours. Many here hate management, or in your case, moved up to the top of IT management and still seem unsatisfied.

Now, I figure grass is greener on there side... Management says they are treated like a cost center and engineering is "closer to the money" as in profit center. Engineers, even in the profit center, gripe at those MBAs who are "closer to the money" as in directing the business plan, budget and timelines.

In my next life, I'll just do what I enjoy and am good at.

Re: Libor, long the most important number in finance, dies at 52

#130

Post by toss1 »

santoshalper wrote: post #101
throwmeaway666 wrote: post #58

Earlier quoted context omitted.

>we were part of the cost cutting measures. >the event that lead to my eyes being opened to the world of Silicon Valley tech companies I found that being aware of whether you will be part of the cost center or profit center in a company is very useful when deciding where you should work.

This one really hit me personally. When I was young, my father advised me that in my career I should stay "close to the money". It made a lot of sense, and I tried, but I ended up moving increasingly into financial services technology. Now, 25+ years later, I am the head of technology (C-Level) for a large financial services firm (Fortune 200). I report to the CEO, I lead thousands, I am handsomely compensated, but I…

THIS^^ So much this.

If the executives from the CEO on down fail to understand technology as the source of a serious competitive advantage, then you will be seen merely as a glorified janitor, or maybe plumber. They do absolutely essential work, but nobody respects them.

And one guarantee, if your company (or one you are considering) looks at technology as a cost center, then I can guarantee that they do NOT and WILL NOT see technology as the source of any competitive advantage. You'll be nothing more than a plumber on a team of plumbers who will be ignored, until a pipe breaks, then you'll be blamed for it happening even if they congratulate you for fixing it to your face. Good luck with that.

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