Thing One: Germany Tastes Own Medicine: Let's all of us in the poor countries -- Greece, Spain, the United States -- have a laugh at Germany, shall we?
Germany, which has all the money and so thinks it can always just tell the rest of us how to get our financial houses in order, found itself near the business end of a Moody's downgrade stick last night. Germany didn't get an actual credit-rating downgrade, but Moody's warned that the country's rock-solid finances could be hurt by the ongoing slow-motion disaster in Europe. Said disaster is at least a small bit Germany's fault, because of the austerity it has forced on all the struggling countries in the euro zone, which, shocker, has made the economy there worse.
Germany has responded to the downgrade warning with a resounding "Nein nein nein!" and a downgrade seems unlikely. But the Wall Street Journal points out that the Moody's warning puts a spotlight on just how crushingly expensive it will be for Germany and the rest of Europe to bail out Spain and/or Italy. Worries about Spain, whose borrowing costs have soared to record highs, and about Greece , which is once again struggling with its austerity plan, crushed global markets yesterday. Markets are a little quieter this morning, but these problems have not yet begun to be solved.
Thing Two: The Libor Liars' Club: The Wall Street Journal has its own take on reports by Reuters that prosecutors are about to drop criminal charges on a bunch of traders in the Libor scandal. According to the WSJ, the Libor-cheating ring was widespread, involving at least nine banks and "several groups of traders," which could make it harder for banks to call these isolated incidents, as Reuters suggested yesterday. The WSJ even names a name, Thomas Hayes, a former trader at Citigroup, which may have been the worst Libor manipulator when banks were trying to make themselves look better in the financial crisis. Proof of widespread Libor-rigging will also raise fresh questions about the knowledge and actions of regulators, including the New York Federal Reserve, which yesterday got a fresh request from Congress for still more info about its role in the scandal. The Fed protests that it did everything it was required to do, but its oversight looks shoddier by the day.
Thing Three: Murdoch Seen Learning To Bake Files Into Cakes: Two of Rupert Murdoch's best buddies, Rebekah Brooks and Andy Coulson, will soon be charged criminally in the phone-hacking scandal that is slowly destroying News Corp.'s newspaper empire. Both Brooks and Coulson also circulated uncomfortably near the top of political power in Britain, with Coulson serving as David Cameron's press chief for four years.
Thing Four: Home Prices Mildly Less Terrible: A new Zillow survey will show that U.S. home prices inched up 0.2 percent in the second quarter from a year ago, the first such gain since 2007, the Wall Street Journal's Nick Timiraos writes. Happy days are here again! Of course, Zillow also says that this newsletter author's home price is down 14 percent since this author stupidly bought it in early 2009, so the celebration will be a bit muted in the 7.5 Things homestead. We'll spend it watching "House Hunters" and quietly weeping.
Thing Five: Insourcing? Onshoring? While we're on a good-news binge, Reuters reports that U.S. manufacturers are bringing factory jobs back to the U.S. of A. as Chinese labor and logistical costs get more expensive: "To be sure, labor-intensive industries like clothing and electronics, which are heavily dependent on hand assembly, are seen as unlikely to come back to the United States in a major way. And the trickle of returning jobs is far from a flood. But higher transportation costs and wage inflation in China could drive more production back to the United States."
Thing Six: All Your Oil Belongs To Us: China, meanwhile, will console itself by BUYING ALL THE OIL IN THE WORLD. Chinese oil giant Cnooc bid $15 billion yesterday to buy Canadian oil giant Nexen, the New York Times writes: "A takeover of Nexen by China National Offshore Oil Corporation, the Chinese state-run oil giant known as Cnooc (pronounced SEE-nook), would give China a number of footholds in the Gulf of Mexico, the Canadian oil sands in Alberta, the North Sea and the waters off Nigeria."
Thing Seven: Chump Change For Penn State: So the NCAA did not give Penn State the death penalty after all. Though it did hamstring the football program in a number of ways, the $60 million penalty amounts to just one year's football revenue, the New York Times writes, and will shrink in relevance quickly: "The money involved in big-time college sports is staggering, and it grows almost exponentially every couple of years."
Thing Seven And One Half: RIP Sally Ride: Sally Ride, the first American woman in space, has died at 61 of pancreatic cancer. The New York Times writes: "Dr. Ride told interviewers that what drove her was not the desire to become famous or to make history as the first woman in space. All she wanted to do was fly, she said, to soar into space, float around weightless inside the shuttle, look out at the heavens and gaze back at Earth."
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Calendar Du Jour:
Economic Data:
10:00 a.m.: FHFA Housing Price Index for May
Corporate Earnings:
Before Market Open:
Lockheed Martin
Altria
AT&T
UPS
Whirlpool
Time Unknown:
DuPont
After Market Close:
Apple
Norfolk Southern
Heard On The Tweets:
@ObsoleteDogma: Oh good. A short selling ban. Why didn't they think of this before? EURO CRISIS OVER.
@RBReich: LIBOR scandal will grow. I wish O would say he'll try to resurrect Glass-Steagall and break up Wall St's biggest banks in his second term.
@Nouriel: Troika pressure on Greece:ECB not accepting collateral;Germany talking exit; IMF signaling prog stop. Posturing in game of chix or for real?
@zerohedge: Market is like an eBay auction, only instead of buying in the last second, everyone sells
@ReformedBroker: Finally saw Rise of the Planet of the Apes this weekend, was like a documentary about my days in the brokerage biz.
-- Calendar and tweets rounded up by Khadeeja Safdar.
And you can follow us on Twitter, too: @markgongloff and @byKhadeeja