Category Archives: Current Events
Thing One: The Fed’s True Libors: It’s a good thing no one on earth cares about this Libor scandal, because otherwise the Fed would be in so much trouble right now.
The United States central bank straight-up confesses to Reuters that, oh yeah, sure, it knew all about Libor shenanigans waaaay back in 2007, even before the Wall Street Journal wrote about it. It seems the New York Fed got a tip from some bank called, let us check here, Bar-Clays? Does that sound right? Bar-Clays? It seems this bank told the Fed about problems with the setting of Libor, an interest rate that is so pervasive in our daily lives that you were probably drinking a little Libor in your coffee just now. Not only that, but the Fed talked to Barclays about Libor approximately eleventy gazillion times after the initial tip. Not only that, but it also drew up a list of suggestions for Barclays and UK banking authorities about how to fix the Libor market. Which list of suggestions were promptly crumpled up into a ball and tossed in the coal oven for warmth because it’s dismal in the UK in the winter, guvnah.
So, fast forward to today, and the Libor market never got fixed, despite everybody knowing about its problems. That bank, Barclays, is paying about $450 million in fines over Libor, its chairman and CEO have resigned (chairman Marcus Agius testified this morning before a parliamentary committee), and a whole mess of other banks are under investigation, too. And attention is finally turning, as it should, to why the regulators had their heads firmly implanted in their own behinds for so long, The New York Times writes (I’m paraphrasing). Bank of England deputy guvnah Paul Tucker yesterday denied giving a nudge-wink to Barclays to cheat on Libor, but that’s certainly some faint self-praise, isn’t it? And it certainly won’t end the scrutiny of the regulators.
Thing Two: Euro Crisis Solved Yet Again: Remember that time, when the umpteenthousandth solution to the euro zone debt crisis seemed insufficient, and markets were punishing European sovereign debt? Yesterday, I mean? Well, pop some champagne, my friends, because that day is over. Because this is today. And today, euro-zone officials are giving Spain a whole extra year to get its budgetary act together and promising to pump more cash into its banks. And then very soon, maybe, they’ll get around to adding some details to that umpteenthousandth solution they hammered out a couple of weeks ago. That’s just barely good enough for European stocks, which are higher this morning.
Thing Three: Another Brokerage Firm Enters Bermuda Triangle: Mere months after the collapse of brokerage firm MF Global magically made more than $1 billion of client money disappear into thin air, another brokerage firm — with the eerily similar name of PFGBest — has also collapsed, making $200 million of client money vanish. Neat trick. Regulators, which had promised after MFGlobal to tighten up their brokerage-firm-watching skills, are once again perplexed, The New York Times writes.
Thing Four: Laying Down The Mortgage Law: The Consumer Financial Protection Bureau, which hates your freedom to lose tons of money in the housing market, has proposed new rules designed to give borrowers more information about the mortgages they’re taking out, because of socialism. The New York Times writes: “The proposed rules have two central elements — the loan estimate and the closing disclosure — that would provide would-be homebuyers with a simple accounting of likely payments and fees to prevent costly surprises.”
Thing Five: No Jobs Anywhere Forever: Quick, take a mental snapshot of how awful the job market is. Now imagine that lasting for at least another two years. Voila, you’ve got the gist of a new OECD report on the global economy: “Unemployment in advanced economies will remain high until at least the end of 2013, with young people and the low-skilled bearing the brunt of what is by far the weakest economic recovery in the past four decades, the OECD said on Tuesday.”
Thing Six: Enjoy Those Corn Flakes: Because it hasn’t rained in America since February, and because it has been 112 degrees since March, growing corn has been just a little on the difficult side. And that has pushed corn prices to the moon, writes the Wall Street Journal: “Corn futures for July delivery jumped 4% to $7.7525 a bushel on the Chicago Board of Trade, extending gains to 29% in the past three weeks, as intense heat and a dearth of rainfall punish parts of big corn-growing states like Illinois, Indiana, Iowa and Ohio.”
Thing Seven: Google’s Private Eyes, They’re Watching You: Google is about to pay $22.5 million to settle Federal Trade Commission charges that it skirted Apple users’ privacy settings, the Wall Street Journal reports: “The fine is expected to be the largest penalty ever levied on a single company by the U.S. Federal Trade Commission. It offers the latest sign of the FTC’s stepped-up approach to policing online privacy violations, coming just six months after the WSJ reported on Google’s practices.” Ah, yes, but how much do you want to bet that Google made much, much more than $22.5 million skirting your privacy settings?
Thing Seven And One Half: Cape Fear: Batman needs to go back to the Bat-Lab and design a better Bat-Cape, apparently. Wired reports that physicists at the University of Leicester, who obviously have nothing better to do now that the Higgs boson has been discovered, have calculated that a leap from a 500-foot-tall building using Batman’s cape would result in a 50-mph collision with the ground, which would likely result in a Bat-Death.
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Heard On The Tweets:
@ezraklein: Today we’re talking about tax cuts for the rich rather than the Friday jobs #s. Mission accomplished for the White House.
@conorsen: How is “Romney fundraisers” not a reality TV show yet?
@mattyglesias: If you make $250,000 a year and think you’re not “really” rich, ask yourself how the 97% of population that makes less than that feel.