Thing One: King Of Pain: If there were a buck-passing event in the London Olympics, Bank of England chief Mervyn King would be the favorite to win the gold.
King, appearing this morning before a parliamentary panel investigating charges that some of the world's biggest banks manipulated Libor, one of the world's most important interest rates, deftly tossed responsibility for the debacle to the Four Winds. Neither he nor England's Financial Services Authority had any responsibility for policing Libor, King shrugged, according to the Wall Street Journal's live blog of his testimony. Nothing could be done, oh well. Incredibly, King even claimed he had no evidence that banks were manipulating Libor until just a couple of weeks ago, when he read about the Barclays $450 million settlement in the newspaper just like every other chump.
Are we really supposed to believe that? This is the same Mervyn King, recall, that got a six-point memo from Tim Geithner way back in 2008 suggesting changes to the Libor process that might gently discourage banks from manipulating Libor. It was the absolute least Geithner could do, literally, but did King think Geithner did it for his own health? Did rampant Libor-rigging, which people on both sides of the Atlantic had suspected for years, happen under King's nose without his knowledge? If so, then he is the Mr. Magoo of global finance.
Parliamentary testimony in the case has been fraught with contradiction already. Yesterday, the former Barclays chief operating officer said former CEO Bob Diamond flat-out told him that the Bank of England had instructed the bank to manipulate Libor, directly contradicting Diamond's earlier testimony that he gave no such instruction. Meanwhile, the under-fire FSA says it is investigating seven UK banks for Libor manipulation. One of those is almost certainly the Royal Bank of Scotland, which is bucking a request from Canadian regulators to release data in the case. This fun ride has only gotten started.
Thing Two: Meet The New Boss: Marissa Mayer, come on down: You're the next contestant in "Who Wants To Be A Yahoo CEO?" Mayer, 37, will be the sixth Yahoo CEO in the past five years, including interim chiefs, and will be tasked with trying to make the company relevant again and "brighten the user experience," whatever the hell that means. Mayer comes from Google, where she was employee No. 20 and played a key role in designing the search page and other user interfaces, but she appeared to have climbed as high as she could in that company. There are questions about her lack of experience running a company, particularly a company as troubled as Yahoo, which has been a mass graveyard for CEOs. Oh, and for extra degree of difficulty, she's pregnant. Anyway, she's also now the 20th woman running a Fortune 500 company, a record. Wish her luck.
Thing Three: HSBC's Friends In Low Places: HSBC accounts have been used for laundering the money of Mexican drug lords, Saudi banks with terrorist ties and Iranians trying to dodge international sanctions, according to a 335-page Senate report released yesterday. And, naturally, bank executives and regulators looked the other way, according to the report. In HSBC's defense, everybody is doing it, sort of like Libor manipulation.
Thing Four: Global Warning: The International Monetary Fund yesterday cut its forecast for global growth this year and warned the global economy could end up in far worse shape if policy makers don't take action soon. The report came on a day when the U.S. reported a shocking drop in retail sales, pointing to sluggish GDP growth in the second quarter. Fed Chairman Ben Bernanke is due to appear before Congress today and tomorrow to talk about the economy. If he is not thinking seriously about taking more action to help the economy, and if he does not push the braying jackasses in Congress to lend a hand, then he is doing it wrong.
Thing Five: Plugging The Leaks: The U.S. Labor Department has taken steps to plug the leaks of its important economic data. That gives Bloomberg and high-frequency traders a giant sad, but maybe makes the playing field just a smidgen fairer for the rest of us.
Thing Six Investors Still Not In Love With Banks: For some reason, investors think big banks are risky investments, according to a new Moody's Analytics report. Go figure! "For big U.S. and European banks, the cost of credit default insurance, a measure of investor fear, is still nearly 20 times as high as it was in early July 2007 before the failure of two Bear Stearns hedge funds."
Thing Seven: The New Dust Bowl: America has not been this dry since 1956, according to a new National Oceanic and Atmospheric Administration report, with drought affecting 55 percent of the land mass of the 48 U.S. states in North America. The parched conditions are ruining corn, soybean and other crops, threatening to drive global food prices higher.
Thing Seven And One Half: Linsanity's End: Remember Linsanity? Seems like it was not even six months ago that Jeremy Lin's sudden stardom had brought new life to the habitually hapless New York Knicks. But the power of the Knicks to shoot themselves in the foot cannot possibly be overstated, so now Jeremy Lin is probably headed to Houston, and shelfloads of Lin merchandise are rapidly becoming worthless. Well played, Knicks.
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:
8:30 a.m. ET: CPI for June
9:15 a.m. ET: Industrial Production for June
10:00 a.m. ET: NAHB Housing Market Index for July
Corporate Earnings:
Before Market Open:
Comerica
Goldman Sachs
Johnson & Johnson
Coca-Cola
Mattel
After Market Close:
CSX
Intel
Yahoo
Heard On The Tweets:
@CaseySoftware: Marissa Mayer joining Yahoo? Bravo. It's great seeing accomplished people take leadership positions with non-profits.
@zerohedge: Meet Marissa Mayer http://t.co/OqHhjgGq
@moorehn: Unfortunately, this means Marissa Mayer will not be Mitt Romney's VP pick.
@Williamw1: Fascinating context for Libor: in 13th century financier Richard Lyons was imprisoned and then beheaded for rate rigging... @BBCRadio4
@BCAppelbaum: Estimates of Q2 GDP are dangerously close to dropping below the rate of population growth. Which is bad.
-- Calendar and tweets rounded up by Khadeeja Safdar.
And you can follow us on Twitter, too: @markgongloff and @byKhadeeja
Related
Before You Go
