Update (0445am UK time) — Well, well, well… eurozone leaders did indeed promise not to subordinate Spanish bondholders at the summit, as we assumed they would below. Seniority was “renounced” in the case of Spain.
That phrase suggests a reversion to the original status of official eurozone bilateral and EFSF loans – of being at least pari passu with bondholders. (Though at times the loans have even been subordinated on some points, such as restructuring interest rates. The status is a political football subject to constant change, you could say.) Read more
We noted in an earlier post that an optimistic near-term scenario for US employment would likely mean productivity growth remaining at its depressed rate for a little while.
The alternative — productivity growth returning back up to pre-crisis trend — would have to coincide with sluggish employment growth unless economic growth were to pick up significantly. Read more
Staring a political storm in the face, Barclays chief executive Bob Diamond writes to Andrew Tyrie MP, chairman of the Treasury Select Committee.
(Excuse the lengthy quoting) Read more
US stocks staged a late comeback on EU summit hope. The S&P 500 pared losses to close down 0.21 per cent at 1,329.04 (Reuters). The S&P 500 health sector fell 1 per cent after the Supreme Court’s ruling, brought down by insurers. Read more
With a new government in place and market focus shifted to Spain and Italy’s debt issues, Greece has been enjoying a bit of welcome breathing space.
The country’s banks have been seeing steady inflows since the election two weeks ago, according to Reuters (emphasis ours): Read more
Right, this one may stick in the throat somewhat but it’s an interesting idea, a variant of which we have heard before.
From JCD Rathbone, of JC Rathbone Associates, (with our emphasis): Read more
The Supreme Court has upheld the constitutionality of Obama’s best-known legislative achievement, including that of the individual mandate requiring nearly all American to obtain health insurance. Click here for the opinion.
The key reasoning is that the mandate can be considered a tax that Congress is empowered to impose. Read more
Another quote from the Barclays Libor files — from the CFTC itself:
In addition to the $200 million penalty, the CFTC Order requires Barclays to implement measures to ensure that its submissions are transaction-focused…
It’s all very well bashing Bob and calling for bankers’ heads.
But we shouldn’t overlook another exceedingly important point about the Libor affair, as picked up by Claire Jones over on the FT’s Money Supply blog. Read more
Barclays, down 16 per cent at pixel…
First of all, a big congratulations to Goldman Sachs for jumping on board the safe assets debate approximately 12 months late.
And, in so doing, challenging (but not really challenging) what we still think is the biggest trend of the post-crisis era. Read more
Live markets commentary from FT.com
A scroll through the comments on any post or article relating to the LIBOR-fixing scandal makes the verdict of the Court of Public Opinion pretty clear: ‘Hang the lot of them.’
But there’s a less emotional requirement here to at least take a stab at the likely financial damage to Barclays et al as regulatory fines are followed by action in the courts. Sandy Chen at Cenkos has done some early maths: Read more
The Shanghai composite index has now fallen for the past 7 days in a row and is down some 10 per cent since a high on May 4th (click to enlarge):
Elsewhere on Thursday,
– A former Barcap executive writes… Read more
Barclays was fined more than $450m by US and UK regulators for having tried to manipulate Libor, reports the Financial Times. You can find hilarious examples of the emails between Barclays traders and Libor submitters at FT Alphaville.
The board of News Corp voted to split the company into two after a meeting Wednesday night, reports the Wall Street Journal. There will be a formal announcement on Thursday, according to the WSJ. Read more