Thing One: Help! Spain Needs Somebody: Seven And A Half Things is all about self-help, but this is ridiculous.
Spain, which has warned that it is very nearly unable to borrow money in the bond market, somehow managed to sell 2.1 billion euros' worth of bonds on Thursday without a hitch, mainly by force-feeding the debt to its own banks, which are themselves near death because of the bad debts they already carry. What could possibly go wrong? "If it sounds like the most vicious of circles, it is," writes Landon Thomas Jr. of The New York Times.
And it's not sustainable, not even for a short time. Even as it was selling its banks its unappetizing debt -- although at more than 6 percent, Spanish debt is some high-yielding stuff -- Spain's government was starting talks with the European Union about bailing out those banks, Bloomberg writes. It is expected to formally ask for help tomorrow, writes Reuters. And all those bonds it just forced the banks to buy? Their credit rating is a little lower, after Fitch cut Spain's rating Thursday afternoon to "BBB," just two notches above "junk." European stocks, which rallied after yesterday's charade of a bond sale, are falling again this morning on weak German export data. It may be yet another long weekend for the euro zone.
Thing Two: Bernanke Not To The Rescue: U.S. stocks also faded yesterday, after Ben Bernanke doggedly refused to give financial markets what they wanted: A promise of another round of stimulus. Instead, Bernanke suggested maybe Congress could do a little of the heavy lifting for a change, by helping stimulate the economy or at least preventing it from going over the "fiscal cliff" of tax increases and spending cuts scheduled for the end of the year. Ah, but such talk is anathema to a Congress in the grip of austerity fever, which Paul Krugman points out even Ronald Reagan recognized was insanity.
Thing Three: Basel Faulty: The Federal Reserve yesterday proposed that U.S. banks adopt new international capital requirements, known as the "Basel III accords," which would leave the 19 biggest U.S. banks more than $50 billion under-capitalized, write Shahien Nasiripour and Tom Braithwaite of the Financial Times. Small banks are deeply unhappy that they will be forced to raise their own capital standards along with the megabank set, the Wall Street Journal writes, although they will avoid a penalty that the Fed will eventually impose on the biggest banks.
Thing Four: Bear Stearns Payday: It only took four years, but the last bow has finally been tied on the package of doom that was the Bear Stearns meltdown, the Wall Street Journal's Liz Moyer writes, as former executives, including former CEOs James Cayne and Alan "Ace" Greenberg, agreed to pay $275 million to settle a shareholder lawsuit over the debacle. "The deal with investors led by the State of Michigan Retirement Systems puts to an end the last major dispute surrounding the demise of Bear Stearns, whose near-collapse in March 2008 marked the beginning of the worst period of the financial crisis," Moyer writes. Naturally, Cayne and Greenberg won't have to pay a penny: Their part of the settlement will be paid from a fund set up by JPMorgan Chase. And of course they all denied any wrongdoing.
Thing Five: McMansions Return: Maybe the housing market really is on the rebound: People are buying gigantic houses again, the Wall Street Journal writes: "As the economy slowly improves and some consumers' anxieties ease, buyers are upsizing again—though there is far less demand than before for huge houses loaded with upgrades."
Thing Six: Low And Inside: Hmm, Reuters reports that "a retired, well-known baseball player and several other former athletes whose names have not yet been disclosed" are the focus of a federal insider-trading investigation: "The former athletes under scrutiny - mainly a group of professional baseball players - are allegedly part of what one U.S. investigatory government official described as 'a loose federation of people' sharing important market-moving information about various companies before it becomes public." Time to start wildly speculating about who this famous ex-ballplayer might be!
Thing Seven: Have A Coke And A Regret: As the rest of the nation fights for its right to buy giant buckets of soda, a former Coca-Cola marketing executive recently expressed regret about taking part in his company's plans for a gastric takeover of the world, the Washington Post reports: "He wanted to give an inside account of what he contends has been a drive by Coca-Cola to replace not just its direct competitors but all beverages in the American diet — a campaign for what the company called 'share of stomach.'" Gross!
Thing Seven And One Half: Djingle Django: We hate to advertise stuff without being compensated for it, but as a service to you, because everybody in the world is probably going to be talking about this soon enough, here is the trailer for the new Quentin Tarantino flick, "Django Unchained." I don't know. I'm sure I'm probably going to see this movie, but it feels sort of like "Inglourious Basterds" in the antebellum South instead of Nazi Germany. And maybe on the exploitative side? But also a little enjoyable against your better judgment? You know, a Tarantino film.
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Calendar Du Jour:
8:30 a.m. ET: International Trade Balance for April
Heard On The Tweets:
@pdacosta: Bernie Sanders tells Bernanke having Jamie Dimon on NY Fed's board is a classic case of the fox guarding the hen house.
@sosonis: A lost generation -- Youth unemployment: Greece 53%, Spain 52%, Portugal 37%, Italy 36%, Ireland 27%, France 22%, UK 22%
@zerohedge: Bernanke: "No risk that JPMorgan is in danger" following CIO losses. Rewind to Bernanke on Subprime
@mattyglesias: I hate the "do more vs do less" frame for monetary policy. No matter what Bernanke does, it's an equal quantity of "doing".
@lizzieohreally: Shorter Bernanke to Congress: Guys, do your job. Thanks.
-- Calendar and tweets rounded up by Khadeeja Safdar.
More:European Debt Crisis Seven And A Half Things Seven And A Half Things You Need To Know Spanish Bank Rescue Spanish Banks
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