Mark Gongloff, HuffPostBiz's trusty financial news curator, is off today, so 7.5 things will be brought to you by Jillian Berman.
Thing One: Jobs Report Drops, Obama Pays Close Attention: Guys, the jobs report comes out this morning and it’s not just going to be a measure of how many struggling Americans can’t find it. It’s also going to determine whether Obama is president next year. Maybe. Political scientists believe that today’s report may be more important than any of the past three years, according to The New York Times, becuase it comes at a time when voters are deciding who they want to be president.
“Studies also show that voters make their decisions based less on their personal experiences than a general sentiment — meaning news articles about the national economy this summer might be more influential than each voter’s experience, or a neighbor’s business, or a cousin’s or child’s trouble getting a job,” according to the NYT.
Those news articles may be gloomy. The U.S. economy is expected to add 90,000 jobs in June, according to a Reuters survey. That’s more than May’s paltry 69,000, but definitely not enough to keep up with population growth. The numbers may also show the weakest jobs gains since June 2010, according to Bloomberg.
"While tomorrow's employment numbers may not be great, it is beginning to look like the labor market is not nearly as weak as feared," Joel Naroff, chief economist at Naroff Economic Advisors told Reuters.
Since the Great Depression, no president has won reelection with an unemployment rate above 7.2 percent on election day, according to the Wall Street Journal. Today’s report is likely to show the rate stayed unchanged at 8.2 percent, but the situation may be worse than it looks; the participation rate -- or the share of working-age Americans with a job or looking for one -- has dropped to a three-decade low over the past three years.
Thing Two: Libor Fallout, Continued: The fallout from the Libor scandal is now hitting people outside of Barclays and the embatled Bob Diamond. Critics are raising questions about the Financial Services Authority -- Britian’s banking watchdog -- and whether it did enough to stop the rate-fixing before it happened. As early as 2007, bank executives warned the FSA about Libor issues, but the regulator didn’t start investigating the problems until 2010, after being prodded by U.S. officials, the Wall Street Journal reports.
The allegations are just the latest in a slew of criticisms of the agency, which is being dismantled following claims it didn’t do enough in the lead up to the financial crisis. In addition, the FSA’s reputation also took a hit after JPMorgan’s infamous trading loss, which originated in the bank’s London desk.
The BBA, the group of bankers that decides the Libor rate, is also facing criticism as people finally begin to realize that “that bankers have a hard time regulating bankers,” according to The New York Times.
Still, the BBA may be forced to make changes as a result of the scandal. The settlement between Barclays and U.S. regulators puts pressure on the group to put teeth into any revisions it makes to its process, according to the Financial Times. In addition, Barclays will be forced to increasingly advocate for oversight in the industry.
Thing Three: JPMorgan's Secret Emails: JPMorgan Chase CEO Jamie Dimon can’t catch a break. Excuse us for not feeling too sorry for him. A judge ordered the bank to explain why it won’t release some internal emails to the Federal Energy Regulatory Commission as part of an investigation into whether JPMorgan manipulated the California energy market, the Wall Street Journal reports.
Though the allegations likely won’t hit the bank’s reputation as hard as the bank’s huge trading loss did, it’s a decent dent in what was an otherwise pristine record, according to Reuters. If the agency keeps pressing for the emails, it will likely make things worse for the bank by evoking memories of the California power trading scandal that took place 10 years ago.
The FERC alleges that JPMorgan used bidding tecniques in the midwest and California that resulted in more than $73 million in improper payments, according to Bloomberg. In addition, the agency claims JPMorgan is using attorney-client privilege to withhold more than 50 emails subpoenaed in April.
Thing Four: Spain Debt Crisis Hits Everywhere: The debt crisis in Spain has gotten so bad that some hospitals don’t have the means to give their patients medicine, Bloomberg reports. The austerity measures Spain has implemented in an aim to both get bailout money and fix its debt problem have only made things worse, critics claim, forcing some cancer patients to wait 24 hours before getting a drug they need because it has to be borrowed from another clinic.
The crisis isn’t only affecting hospitals though. Spanish officials are planning to set a deadline of the end of 2013 for companies owned by local governments to either right their accounting or face liquidation, the Wall Street Journal reports. The move, which may be met with controversy, aims to give more power to provincial level governments by taking away public services currently provided by cash-strapped towns.
Thing Five: Drug Company Woes: Five retailers are suing Pfizer, accusing the company of trying to keep generic versions of Lipitor off the market until the end of November of last year -- a full 20 months after the patent on the drug expired, according to Reuters. The chains, which include Walgreens, Kroger and Safeway, say Pfizer and India's Ranbaxy Laboratories conspired in a price-fixing deal to delay cheaper drugs, obtained a fraudulent patent and by using other tactics.
Pfizer’s fourth quarter profits fell by half last year, in large part because of declining sales of Lipitor -- the best-selling drug in history and the most popular drug ever to go off patent.
Meanwhile, the future of another popular drug is at stake. Asthma medication Advair, GlaxoSmithKline’s biggest moneymaker, faces uncertainties after the company was forced to pay a $3 billion settlement for promoting the drug and others for other purposes other than those approved by the Food and Drug Administration, according the Wall Street Journal.
Thing Six: AIG Makes Things Difficult: In an ironic twist, a unit of mostly government-owned AIG is making it more difficult for homeowners to refinance their government-backed loans than its rivals, the Financial Times reports. Homeowners with an AIG loan are the least likely to benefit from the Home Affordable Refinance Program -- a government initiative aimed to boost refinancings of government-backed mortgages for borrowers with little or no equity -- a FT review of the five biggest mortgage insurers found. According to the FT, that’s because:
AIG’s mortgage insurer is refusing to automatically waive its right to pursue lenders for misrepresenting the quality of loans that may default. That in turn has put the brakes on some refinancings of AIG insured loans, according to industry officials.
Thing Seven: CFPB Makeover: The nation’s consumer watchdog is trying to makeover the mortgage market in hopes of making over its reputation at the same time. The Consumer Financial Protection Bureau, one of the centerpieces of the Dodd-Frank financial reform law, is trying to make it easier for borrowers to understand the terms of their mortgage loan and the costs associated with it, The New York Times reports. If the agency succeeds, it would be a big boon for its reputation, which has suffered under intense criticism from the right.
Thing Seven And A Half: Tina Fey Spits Game: If you haven't seen this already, you’re welcome for bringing it to your attention. Saturday Night Live and 30 Rock star Tina Fey appears on Donald Glover’s new mixtape rapping. The satirical tape features mostly “insecurity rap,” whatever that means. Watch Fey spit some game here.
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Calendar Du Jour:
Economic Data:
8:30 a.m. ET: Nonfarm Payrolls for June
Corporate Earnings:
Nada
Heard On The Tweets:
@zerohedge: Is there also a "best supporting LIBOR manipulator" category at the Euromoney awards?
@hblodget: .@ArticaDown It's "partisan" to look at Romney's tax return? I thought that's what the press was supposed to do.
@umairh: Hey, UK. Here's a really good strategy for national prosperity. Shut down immigration. And make sure the bankers never leave.
@BCAppelbaum: Today we celebrate our dependence on monetary policy. #5thofJuly
@JustinWolfers: When economists cite the ADP jobs estimate as our economic ray of hope, they reveal how weak recent data have been.
-- Calendar and tweets rounded up by Khadeeja Safdar.
And you can follow us on Twitter, too: @markgongloff and @byKhadeeja