Huffpost Business

Seven And A Half Things To Know: Diamond Grill

Posted: Updated:

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: Diamond Grill: The Barclays interest rate fixing scandal may have forced the bank's CEO to resign Tuesday, but Bob Diamond isn't going down quietly. During testimony in front of British lawmakers Wednesday, Diamond's efforts to evade responsibility for the incident may have not been in quite the same league as Rubert Murdoch, but they came pretty darn close.

Diamond told lawmakers: “I don’t feel personal culpability. What I do feel is a strong sense of responsibility,” according to The New York Times. He also complained that his bank was being scapegoated because it was the first to settle over the allegations, even though scores of others participated in the practice of fixing the Libor rate.

“This isn’t just Barclays,” Diamond, said during the hearing, according to Bloomberg.

Diamond may be right; the Wall Street Journal reports that the banking industry as a whole may have to pay billions of dollars to settle rate fixing claims.

Lawmakers won't let Diamond off the hook though, and one even accused him of being "complicit, grossly negligent or incompetent," according to the WSJ.

Thing Two: ECB Rate Cut: The European Central bank has slashed its interest rate to a record low in an aim to boost the region's economy, according to the Wall Street Journal.

Policymakers and the markets may welcome the cut, but, with interest rates already near zero, it would mean that the ECB has a limited number of options for dealing with the crisis, according to The New York Times. It would also increase speculation that the bank's next move would be to buy government bonds in a program similar to the Federal Reserve's quantitative easing.

Though it's not official yet, the Eurozone economy likely shrunk between March and June, according to business surveys from thousands of companies, a bad sigh for a region that narrowly avoided recession last quarter, according to Reuters.

On the upside, everyone is on their best behavior in an aim to avert economic disaster. German Chancellor Angela Merkel said Wednesday that Italy and Germany are "willing to work together" to solve the eurozone debt crisis, the NYT reports. That comes a week after Italy and Spain pushed a deal through -- over Merkel's objection -- that would allow eurozone bailout funds to go directly to banks instead of through governments.

Thing Three: Your Town Could Own Your Mortgage: The housing crisis has gotten so bad that some California cities may use a controversial power to acquire home loans in an aim to help struggling borrowers. California's San Bernardino County and two of its biggest cities are looking into using the power of eminent domain to take underwater mortgages away from investors, reduce the loan principal so that it more closely matched the homes' property value and then resell the loan to a different investor, the Wall Street Journal reports.

The move would help underwater borrowers -- or homeowners who owe more on their home than that home is worth -- stay in their homes. More than 30 percent of mortgage borrowers in the U.S. are underwater, according to May data from Zillow cited by CNNMoney.

The tactic would additionally help cities still struggling with a housing bust that has weighed on property values, according to the WSJ.

Thing Four: Heads Roll In Spain: Things just work a little differently in Spain. Over there, banks that are accused of mismanagement, but still get huge bailouts are taken to court. Rodrigo Roto, a former head of the International Monetary Fund, is facing criminal fraud charges -- along with 32 others -- over their stewardship of government-owned Bankia, which is slated to receive a bailout of at least 19 billion euros, The New York Times reports.

If convicted, the defendants could face anywhere from six months to six years in jail, according to Reuters. Criminal convictions are rare in financial corruption cases.

The decision to open the case may be a response to anger being voiced by the Spanish populace. Ordinary Spaniards are upset with political and business elites for imposing austerity measures while seeking aid to keep the country's banking sector from falling apart, according to Reuters.

Thing Five: Lobbying Leader: Wells Fargo is spending the most of any big bank to influence government officials, the Financial Times reports. The bank spent $7.8 million on lobbying last year, largely in an aim to influence mortgage rules as the company continues to be the leader in the home loan market.

By some measures, JPMorgan Chase has the lead in lobbying spending, but Wells Fargo's surge in the amount it spends to influence politicians is particularly notable -- the bank's lobbying spending increased 40 percent between 2010 and 2011. The company cited its acquisition of Wachovia in 2008 as an explanation for the boost, according to the FT.

Thing Six: Here Come The Socialists: Cue the socialist panic. France, which recently elected a socialist Prime Minsiter Francois Hollande, is hoping it can make enough money off the super-rich to keep from implementing austerity measures like many of its eurozone counterparts. The country announced a tax boost worth 7.2 billion euros Wednesday that includes a big hit to wealthy households and major corporations, Reuters reports.

With France facing a big budget gap, "the wealthiest households and the big companies will be asked to contribute," finance minister Pierre Moscovici said of the tax, according to the Financial Times. Households worth more than 1.3 million euros will be forced to pay the tax.

Thing Seven: Baby iPad: Apple is likely to launch a cheaper baby iPad in an aim to assure that it maintains total domination over the tablet market, according to Bloomberg. Google and Microsoft are making competing handheld devices, which may have Apple worried about losing some of its tablet market share.

The device, which Apple hasn't announced publicly, would have a screen that's 7 to 8 inches, smaller than the current 9.7 inches, according to Bloomberg.

The company's suppliers in Asia are getting ready to mass produce the smaller tablet in September, the Wall Street Journal reports.

Thing Seven And A Half: Secret To The Universe Revealed: We're a little bit closer to knowing the secret to the universe. Physicists announced Wednesday that they had discovered a particle that looks like it might be the Higgs boson, the key to understanding why there's diversity in the universe, according to The New York Times. But don't get too excited yet. The particle may be an impostor, scientists warn, one of many that have yet to be discovered.

Now Arriving By Email: If you'd like this newsletter delivered daily to your email inbox, then please just feed your email address to the thin box over on the right side of this page, wedged narrowly between the ad and all the social-media buttons. Nothing bad will happen to you if you do, unless you consider getting this newsletter delivered daily to your email inbox a bad thing.

Calendar Du Jour:

Economic Data:

8:15 a.m. ET: ADP Employment Change for June

8:30 a.m. ET: Initial Jobless Claims for 06/30

Corporate Earnings:

Nada

Heard On The Tweets:

@politic_animal: Boris claiming Barclays' brand isn't tarnished. Will probably follow up by saying that the News of the World is a well-respected newspaper.

@Queen_Europe: It's tiny, impossible to find and we're all hoping it will solve the mysteries of the universe. Yes, Cyprus has the EU presidency.

@FGoria: Libor in the sky with Diamond #liborsongs

@zerohedge: Diamond is kicking himself now for not bribing, pardon, "lobbying" politicians as much as Jamie Dimon did

-- Calendar and tweets rounded up by Khadeeja Safdar.

And you can follow us on Twitter, too: @markgongloff and @byKhadeeja

Around the Web

The Aftermath of the Bob Diamond Testimony - Businessweek

Libor scandal live: Bob Diamond 'was physically sick' when by ...

HEARD ON THE STREET: Diamond Testimony Leaves Big ...

Barclays' shares reverse early falls as Bob Diamond testimony ...

Diamond Testimony Leaves Big Questions Unanswered

Barclays' Ex-Chief Spreads the Blame in Rate-Rigging Scandal

Diamond Quizzed on 2008 Bloomberg Story on Libor