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Libor Fraud Co-Op: Seven And A Half Things To Know

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Barclays has paid $450 million in fines in the Libor scandal, but that is only the beginning of the costs to the banks involved.
Barclays has paid $450 million in fines in the Libor scandal, but that is only the beginning of the costs to the banks involved.

Thing One: All Together Now: Stringer Bell would be so proud.

Just as The Wire's business-savvy drug dealer organized a cooperative of Baltimore drug dealers to let everybody make money in peace, regulators suspect that some enterprising traders at European banks whipped up a little cartel of traders to make money manipulating the European version of Libor, the Financial Times writes. At least four banks -- Credit Agricole, Deutsche Bank, HSBC and Societe Generale -- are suspected of having worked with a ringleader at Barclays to screw around with a rate called Euribor, which is the euro-based version of Libor, that other world-changing interest rate you just learned about, the FT writes. Barclays recently settled charges that it manipulated Libor and Euribor, often just because its derivatives traders wanted to make an extra buck or two. It turns out that sometimes those traders were also helping rival banks make a buck or two, too. Aw.

Before you get too teary-eyed about this heart-warming tale of kumbaya, be warned: Some other banks are not too thrilled about this. These would be the banks that don't get the privilege of setting Libor or Euribor wherever the hell they want them to be, for fun and profit. Sometimes they might have been on the other side of derivatives trades with the Libor-fixing banks. You can see why they're jealous and/or outraged. These unlucky few, including Goldman Sachs and Morgan Stanley, are probably going to try to sue the pants off the Libor-fixing banks, Bloomberg writes. Meanwhile, the same whip-smart regulators who blissfully ignored signs of Libor fixing in 2008, according to Bloomberg's John Detrixhe, are going to hold a very important meeting, in September, to talk about what on earth they should do about the problem of Libor. Careful, you rotten banks, they might write a strongly worded memo at you!

Thing Two: Incredible Shrinking Banks: But do not be too angry with the banks. They have problems, too, you know. Like everybody hating them, and their profits shrinking all the time. Bank of America yesterday reported shrinking revenue and a growing bad-mortgage problem and said it had cut more than 12,000 jobs in the past year. In fact, the six biggest U.S. banks have cut more than 18,000 jobs in the past year, with more bloodshed to come, the Wall Street Journal writes.

Thing Three: Slapital One: They say you never forget your first enforcement action. The spanking-new Consumer Financial Protection Bureau lost its enforcement virginity yesterday, getting Capital One to pay $210 million in fines and customer reimbursements for pushing useless and expensive products on muppets, er, consumers. Sadly, the CFPB is already getting to be just like any other regulatory agency: It doesn't call you afterward, and lets you get by with neither admitting nor denying wrongdoing.

Thing Four: Economy Lousy, In Different Way: Well, looky here, here's a funny thing. Not so much ha-ha funny, as Great-Depression funny: The U.S. economy is slowing down again, even as the housing market seems to finally be picking up, the Wall Street Journal points out. New-home construction in June was the strongest it's been in nearly four years. But everything else is moving in the wrong direction. It's starting to take its toll on President Obama's poll numbers, maybe, says The New York Times.

Thing Five: China Now Owns Everything: But not to worry, China is here to save us. China is going to be buying a bunch of U.S. private-equity investments from the General Motors pension plan, reports the Financial Times. GM is dumping the investments because, ick, private equity. China is buying them because, yay, private equity. Meanwhile, some of the money burning a hole in China's pocket is finding its way to Africa, where China has offered to loan $20 billion to various nations that obviously just want to be more like America. USA! USA!

Thing Six: Nokia, No Phone: So here's how sad Finnish phone maker Nokia is: It spent billions on an R&D team that essentially dreamed up the iPhone and the iPad several years before Apple did, but never brought those products to market, the Wall Street Journal writes. Now the company's stock price is tumbling, and it's slashing jobs.

Thing Seven: Apple Ordered To Announce Funny Thing: In the latest ignominious development in its never-ending slapfight with Samsung, Apple has been ordered by a British judge to take out advertisements in several major British newspapers to announce that Samsung did not steal its design for the iPad. This order came from the same judge that said Samsung's product was obviously not stolen from Apple because it's "not as cool."

Thing Seven And One Half: It's All In The Game: Speaking of The Wire, why not watch a version based entirely on Legos?

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Calendar Du Jour:

Economic Data:

8:30 a.m. ET: Initial Jobless Claims for 07/14

10:00 a.m. ET: Existing Home Sales for June

10:00 a.m. ET: Philadelphia Fed Index for July

10:00 a.m. ET: Leading Economic Indicators for June

Corporate Earnings:

Before Market Open:

Morgan Stanley

UnitedHealth

Verizon

After Market Close:

Advanced Micro Devices

Google

Microsoft

Heard On The Tweets:

@JoshZumbrun: How do we know Fed's Beige Book is really not that important? Because they share it with us. They don't share the important stuff. ‪#TealBook‬

@ReformedBroker: Swedish model is save the banking system, let the banks die. Japanrese model is save the banks themselves and let the bankers save face.

@neilbarofsky: Geithner neglects his implicit endorsement of reliability of LIBOR by including it in bailouts (TALF, AIG) while he knew of manipulation

@maxkeiser: HSBC 'inadvertently' funded 9/11 terrorists. And I suppose Charles Manson inadvertently murdered Sharon Tate

@mattyglesias: Campaign season sure does make everyone touchy and humorless.

-- Calendar and tweets rounded up by Khadeeja Safdar.

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

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Ben Bernanke and Mervyn King describe Libor fixing as 'fraud'

Barclays Libor Scandal: The Complicit Regulators