Thing One: Another Day At The Office For The ECB: If it's Wednesday, it must be time to ignore the flailing Spanish banking sector.
The European Central Bank meets this morning to discuss monetary policy, and it would seem a perfect time for the ECB to cut interest rates and otherwise take steps to instill confidence in financial markets, what with the European economy in recession and financial markets in turmoil and all. The meeting comes a day after Spanish officials said they were being cut off from funding in the bond market and that their banks might need to be rescued.
But the ECB will likely do nothing today, Bloomberg writes, which is just sort of how things get done in Europe -- everybody waits until the very last minute, when the locomotive is on fire and halfway off the cliff, before deciding to take any action. The ECB really doesn't have the authority to just straight-up bail out Spain's banks, the Wall Street Journal notes. A bailout will require massive changes in European treaties, which will require political will, which is not currently present, particularly with Germany still having its prolonged existential crisis about its role in Europe, the WSJ notes -- a role that is putting its own banking sector at some risk. Also, Greece is going broke, The New York Times reminds us again.
Thing Two: OK, Sure, Have More Stimulus: The Federal Reserve has shown it is not nearly so reticent about acting to bolster the economy and financial markets, although it has pretty much cleared out its toolbox and is starting to build stimulus out of chewing gum and chicken wire. In light of the clown show in Europe and signs of a slowdown in the U.S., the Fed is considering building yet another round of stimulus, Jon Hilsenrath of the Wall Street Journal writes -- although any new action will bring political risks, the Washington Post notes.
Thing Three: This Is Going To Be Awkward: Fannie Mae general counsel Timothy Mayopoulos will become the mortgage giant's new CEO after agreeing to a dramatic pay cut starting in 2013. If that name sounds familiar, it's because he was the guy who was summarily fired by Bank of America after expressing surprise about the size of losses at Merrill Lynch in the fourth quarter of 2008, during BofA's shotgun purchase of Merrill. Fannie Mae and BofA are likely going to cross paths often. Should be interesting.
Thing Four: More MF Global Madness: In the second of two dueling bankruptcy trustees' reports on Tuesday, Louis Freeh, the trustee overseeing the MF Global holding company bankruptcy, wrote that MF Global avoided higher capital requirements by shifting some of the assets on its balance sheet to an unregulated entity overseas. Et voila, no more need for rainy-day money. Until it collapsed. Hmm, shifting risks to unregulated entities, where have we heard that one before? Except everywhere from Enron to the financial crisis. Why is this still a thing that is allowed to be done?
Thing Five: Nasdaq To Traders: Our Bad: Nasdaq OMX is expected to announce a plan today to throw a little cash to traders who lost money during the bungled Facebook IPO, which was hampered by technical glitches at the exchange. Very little cash -- $13.7 million, to be exact, compared with estimated losses of more than $100 million, Reuters writes.
Thing Six: All Your Data Are Belong To Hackers: Fidelity National Information Services, a firm that processes transactions for major U.S. banks, is under scrutiny by regulators for its safeguarding of customer data, the Wall Street Journal reports. "Fidelity National Information Services Inc. is the latest entrant in the fast-growing financial-processing sector to face questions about how thoroughly it protects data, after major breaches in the past two years at Citigroup Inc., credit-card processor Global Payments Inc. and email marketer Epsilon Data Management LLC. Fidelity also suffered a breach last year involving prepaid cards."
Thing Seven: Congratulations, Now You're Unemployed: It's early June, which means millions of happy students will soon be marching across stages all over the country to receive diplomas -- and unemployment checks. The Huffington Post's Bonnie Kavoussi writes: "Three out of four recent high school graduates not attending college full-time do not have a full-time job, according to a study released on Wednesday by Carl Van Horn, Cliff Zukin and Mark Szeltner at Rutgers University's John J. Heldrich Center for Workforce Development."
Thing Seven And One Half: D-Day: On this day in 1944, 160,000 Allied troops landed on the beaches of Normandy, France, to begin the invasion of Europe to drive Nazi Germany from power. About 9,000 Allied troops were killed or injured on that day, but the Allies got a foothold to begin the push to Berlin.
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Calendar Du Jour:
2:00 p.m. ET: Fed's Beige Book for May
After Market Close:
Heard On The Tweets:
@hblodget: Look, at $25, Facebook is still worth $70 billion. That's 70X last year's EPS and 40X this year's. That's a VERY healthy valuation.
@ritholtz: ALLOW ME TO RESOLVE FACEBOOK ISSUE: IT WAS OVERVALUED AT $38 STAYED OVERVALUED AT $30 STAYED OVERVALUED AT $30 STILL OVERVALUED AT $25. WONT CHANGE TIL $15 $FB $$
@LaMonicaBuzz: 80 years from now, a great grandchild of Warren Buffett will buy stake in $FB. And media will laugh at what a Luddite he/she is. Good night.
@BCAppelbaum: And furthermore, it strikes me that we like talking about Europe and China because they're pleasant distractions from our real issues.
-- Calendar and tweets rounded up by Khadeeja Safdar.
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