The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History Hardcover – Box set, March 21, 2017

I read this book and many of the reviews herein both positive and negative. I also read Liam Vaughan’s book The Fix on the same subject. Libor (London interbank offered rate) was created either consciously or unconsciously so that the submitting banks would be motivated to submit their lowest borrowing costs. This would reflect on the credit worthiness of the submitting banks. The higher the submitted rate relative to the other submissions could lead to questions about the banks solvencyThe high and low submissions would be discarded and the rest would be averaged to reflect the daily Libor rate. The Libor rate was the benchmark by which the interest rate of many classes of debt would be set like home mortgages, car loans, commercial loans et. cet., world wide.However derivatives based on the Libor came along (bets where the Libor rate would be in the future, 3,6,9 months out et. cet.) and are not loan transactions. Derivatives based on agricultural commodities have been around for a long time. Libor was formally adopted as a bench mark in 1986. Financial derivatives mushroomed into huge gambles in the late 2000s. By 2013 $300 trillion in derivatives, mortgages and other contracts including U.S student loans were tied to the Libor rate. Derivatives are also highly leveraged bets usually between large banks some of which are submitters to the Libor rates. Participation in the derivatives market is not limited to banks and hedge funds: individuals, pension funds, endowments and others can participate. During the Clinton Presidency commercial banks and investment banking merged. Which meant that the two types of banking which had been separated during the Great Depression now were joined under the same roof and a bank could use depositors money to gamble on all types of derivatives including Libor derivatives. Banks can now gamble with your money. Libor rate derivatives are regulated by the Commodities Futures Trading Commission located in Chicago.The submitting banks generally have billions of dollars riding on their derivative bets on the Libor rate. Therefore they would have a bias to try to move the Libor to favor their derivative bets either up or down depending on their positions. A movement of a few basis points ( A basis point is one hundredth of a percentage point.) meant profits of hundreds of thousands of dollars. Thousands of these derivative bets are made daily during the business week.This book is the story of Tom Hayes a math whiz and a probably somewhat autistic trader who along with others, both inside his employer banks and at other banks and brokerages, conspired to move the rate to favor their banks trading positions.After the crash of 2008 which was attributed to the financial sector, regulators were looking to hold some one accountable since none the Wall Street titans and others in Europe were never criminally held responsible for nearly destroying the world’s financial system by their abusive practices involving property related derivatives.The Libor manipulations while not related to the 2008 financial crash was the closest thing the regulators could find to criminally punish one bank trader out of hundreds if not thousands of participants as a poster boy.Tom Hays a super star trader whose trading volume only involved approximately 5% of Libor related trades was singled out for criminal punishment. His other co-conspirators, both senior management, supervisors, co-employees and people at other banks were not sent to jail. Hayes the low hanging fruit received 14 years.The author made this account highly readable by narrating the lives, hopes and desires of the participants and their interrelationships. It was an enjoyable read although I am not involved in finance as a professional

This book is too long, too detailed. Apparently, because the author had to sift through an enormous amount of information, we have to read it. However, I am glad I read it. Honestly.The financial story is simpler than one might think. LIBOR is a bank interest rate benchmark, created from a sort of average from about a double-handful of banks. LIBOR is a solid number. Or is it? Each day, each bank's LIBOR number is reported to a central authority. People, not machines, report the number. Let's say Bob is the LIBOR reporter at each bank. Suppose I make trades based on the future value of LIBOR. Suppose I know Bob, or I have a close colleague who knows Bob. Suppose I ask Bob or I ask one of my friends-of-Bob to fudge the upcoming LIBOR number in a direction that will help my trades. Suppose I can influence a few Bobs. Remember, there are only around ten banks in the LIBOR circle. Also know, hundreds of thousands of dollars (euros, pounds, what-have-you) can be made on very large trades that move up or down only a small amount.Suppose my name is Tom Hayes, the villain of this book. Then, of course, I get sentenced to 14 years in jail for bending the market for profit (later reduced to 12 years). Now let's look at the Bobs and my colleagues who helped convince the Bobs to alter the day's LIBOR reported value. None (none) of them went to jail. Yet, you can see that my LIBOR manipulation could not have happened without these people.Now let's look at my career. I am very smart and I work very hard to understand the market. I make tens of millions of dollars (euros, pounds, what-have-you) for my employers, noting that only about 5% of my trades are around LIBOR. I am known in the industry as a star trader, so I regularly am asked to change companies. Sometimes I do. People in the industry know a lot about why I am a star trader, even the unspoken (?!) part about orchestrating LIBOR manipulation. That is, people just above me, and sometimes just above them, know that part of my power as a money-maker is to manipulate LIBOR. None of my bosses, none of their bosses accompanied me to jail for LIBOR manipulation.But wait! How does the author know that I and my friends convinced the Bobs? How does the author know that my boss and bosses of bosses knew about my history of convincing Bobs to change their LIBOR reports? It seems there is a tremendous amount of record keeping in the finance sector. Records include chats, telephone calls, e-mails, texts, and who-knows-what.Part of the power of this book is to open accountability to justice. If justice is ever to be served, this book shows that Tom Hayes should not be in jail alone, should not be serving a hugely unusual jail term. It also shows how the circle of LIBOR is made of a very large number of people colluding to manipulate a number that is a benchmark in name only. It's base should be solid but isn't and never was from day one.Last observation: The simplest case of LIBOR manipulation would be a bank telling its very own Bob to jiggle the day's LIBOR report for the sake of its own in-house traders. Could that happen? Well, silly us! Not only did it happen, it is word-of-mouth of this that inspired Tom Hayes to make LIBOR manipulation one of his trading tools. It's in the book!

ペーパーバックとして可も無く不可もありません。敢えて言えば、高齢で視力が弱っているのでもっと大きめのFontが望ましいのですが。

The Spider Network does an excellent job of humanising the man convicted of manipulating LIBOR and commendably explains the workings of LIBOR to non-technicians. That is not to say that the author paints Hayes as justified in his actions, but merely paints him as a full, three-dimensional human being, rather than a stereotypical "evil" banker. In fact, it is quite clear that Hayes was a person it was difficult to be around, most definitely manipulated LIBOR and justified it to himself on the basis that "everyone was doing it".It provides an interesting exploration of the culmination of factors that lead to and allowed the fraud to occur:- The culture of investment banking- The individual characteristics of Hayes that lead both to his views on the appropriateness of moving LIBOR and the ability for others to cast him as a lone actor- The failings of LIBOR itselfOther reviewers have noted that the author has sympathies for Hayes. I think this assessment is somewhat misplaced; the author clearly has empathy for Hayes but does not, at any stage, appear to condone or even excuse Hayes' behaviour. There is no argument presented that the treatment of Hayes was not reasonable: the author does compare Hayes treatment to others involved in the scandal, but it is left to the reader's own judgement whether the implication is that Hayes was treated harshly or the others were not treated harshly enough.The final chapter of the book does raise interesting questions about the effectiveness of the doctrine of "example" in white collar crime. It is clear that enforcement agencies and the trial judge sought to "make an example" of Hayes. This resulted in a political victory, but seems to have made it more difficult to convict others associated with the scandal. In fact, some of those whose role it was to be the check to balance behaviour such as Hayes' received no punishment at all. Given that more people were not punished than the number that were, one has to wonder whether this had any real deterrent effect at all. These themes are only loosely explored - the author seems to favour his casting of the story in a spider/fly analogy.

The book is an interesting read, the beginning & end are the best sections. The middle is very repetitive. It provides the same message across a timeline that could have done with some truncation.The story itself is fascinating. The fact that it mentions some people in the financial sector not taking pause during the tragic 9/11 events, instead looking for ways to best leverage for profit... It doesn't get much more pathetic than that.

読みどころは、・お約束のウォールストリートの強欲最優先のカルチャー・ブローカーは絶対信用してはいけない・バッドタイム＆バッドプレースにいた自閉症気味のトムちゃんと家族の残念なヒューマンストーリー・イギリスとアメリカの金融絡みの犯罪へのスタンスの違い・情報ソースの正確性へのジャーナリスティックなこだわり・金融業界の結果オーライな無責任体質

Great book. The author navigated a fine line between generating empathy for the main character and the crashing reality of legal system. Eventually the law caught up with him.