You may be wondering why 7.5 things felt a little different this week. HuffPostBiz's financial news guru Mark Gongloff is off enjoying some rest and recuperation, so this week's newsletters have been brought to you by Jillian Berman. Gongloff will be back Monday.
Thing One: Facebook Stock Plunge: Facebook’s shares fell to record lows yesterday as the company’s stock was defriended, unliked, etc. The plunge came after the number of available shares surged by 60 percent, according to Bloomberg.
Rules expired Thursday that had prevented some early investors from selling their shares, according to the Wall Street Journal. The company’s stock price is poised to continue to fall as 1.32 billion more shares are freed from lockup agreements, according to the WSJ. Still, this could be good news for those who are smart enough to realize that anything related to Facebook’s disastrous IPO is probably tainted. Investors that bet earlier in the week that the stock price would tank took home as much as double what they paid initially.
Though Facebook’s IPO has been particularly fraught with problems, it’s not unusual for a company’s stock price to fall when a lock up agreement expires, according to The New York Times. The situation is especially bad for Facebook though, which has seen its stock price hammered since its debut.
Thing Two: Bad News For Europe As Usual: It probably comes as no surprise that things in the eurozone look pretty dire. As the region heads back towards recession, eurozone citizens are facing the possibility of a lost decade of stagnation and wasted potential, according to The New York Times.
Meanwhile, Angela Merkel in her typical Angela Merkel fashion is insisting that needy countries stick to certain conditions before they can get any help, according to Bloomberg. Merkel backed European Central Bank president Mario Draghi’s decision not to step in with bond buying unless political leaders addressed concerns about debt holdings and figured out how they were going to use their bailout money.
And while Angela Merkel and the ECB were busy not helping, the country’s deepening recession put the banking industry at risk. Spanish banks’ bad loans shot up to their highest level ever in June, according to the WSJ.
Thing Three: Romney Pays His Taxes Just Like You And I. Sort Of. Mitt Romney would like us voters to know that he’s such a patriot that he paid taxes at a rate of at least 13 percent every year for the past 10 years. The assertion came in response to claims by Harry Reid that Romney paid essentially nothing in taxes during that same period. Never mind that if Romney did indeed pay his taxes at a rate of 13 percent that would be less than the 16 percent middle class families paid in taxes on average in 2010. As his wife’s Olympic-caliber horse may indicate, Romney is slightly richer than your average middle class family.
Despite the accusations, the Romney campaign held steadfast in its position not to release any more tax returns than the two years he’s already made available, according to The New York Times.
Thing Four: Ugh, More Bribery Scandals: Another day, another Wall Street bribery scandal. Garth Peterson, a former Morgan Stanley executive, was sentenced to nine months in prison Thursday for violating internal controls by giving a Chinese government official a discount on valuable land in exchange for the official’s help in finding investment opportunities for Morgan Stanley, according to Bloomberg. To set up the deal Peterson skirted the bank’s internal controls, which are required for it to be in compliance with the Foreign Corrupt Practices Act.
If that law sounds familiar, that’s because it’s the one that Walmart is accused of breaking in its infamous Mexican bribery scandal. Though prosecutors have stepped up their enforcement of the FCPA, this case is one of the first involving the financial industry, according to Reuters.
Thing Five: Your Money Might Get A Little Protection: Good news! You may be able to soon invest your money in a futures firm without the risk that it will just kind of disappear. The CME Group, a futures exchange operator, met with officials and consumer advocates to discuss a proposal that would create a fund to protect futures customers in the case of huge losses, according to the WSJ. Why is the futures industry suddenly interested in offering the protection that’s always been available to stock investors? Maybe it’s because of the glut of bad headlines from the collapse of MF Global and Peregrine Financial Group, and the loss of hundreds of millions of dollars that accompanied them.
Thing Six: Walmart Sued For Hiding Things: One of Walmart’s shareholders is suing the big box store in an aim to get access to internal documents related to claims that the company bribed Mexican officials, Reuters reports. An Indiana union pension fund is claiming that Walmart made a “woefully deficient” disclosure of documents as part of an earlier out of court demand and the documents were so intensely redacted that they were barely readable. Maybe that’s because they didn’t really want them read?
Thing Seven: The Latest Trick Play: Apparently creating trick plays isn’t the only trick Jim Donnan is good at. The SEC accused the hall of fame coach of using his high-profile position to convince former players and college coaches to invest their money with him and then promptly used it in an $80 million Ponzi scheme he was running.
Thing Seven And One Half: Paul Ryan As Sex Symbol: Well, this is awkward. Apparently the voters are clamoring for shirtless pictures of Paul Ryan, you know, to help them make the right decision about who should be second in line to run our country, according to New York magazine. The Ayn Rand-loving budget wonk is such a hunk that TMZ asked one of Ryan’s fraternity brothers if he had any topless photos of Ryan he'd lik to share with voters.
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:
Nada.
Economic Data:
9:55 a.m. ET: University of Michigan Consumer Sentiment Index for August
Corporate Earnings:
Nothing
Heard On The Tweets:
@zerohedge: Donald Trump, whose companies have filed for bankruptcy 4 times, advises everyone to buy houses
@ritholtz: Facebook @ $19.88 -- A Teenager for teenagers! $FB $$
@BorowitzReport: People are trashing Facebook because its stock has dropped to $19, but that's still pretty good for something that's worthless.
@ReformedBroker: Guns Don't Kill People, Social Media IPOs Do.
@moorehn: Has anyone noticed we're in a new layoff cycle? From H-P to media.
-- Calendar and tweets rounded up by Khadeeja Safdar.
And you can follow us on Twitter, too: @markgongloff and @byKhadeeja