12/05/2012 07:59 am ET

European Banks Make Miraculous Recovery: Seven And A Half Things To Know

Science has determined that people need to know 7.5 things per day, on average, about the world of business. You can't argue with science. Lucky for you, the Huffington Post has an email newsletter, delivered first thing every weekday morning, boiling down the day's biggest business news into the 7.5 things you absolutely need to know. And we're giving it away free, because we love you, and also science. Here you go:

Thing One: Miracle Banks: Great news, everybody: The European banking sector is about to enjoy a miraculous recovery.

No, the European debt crisis hasn't been solved. What, are you kidding? That's just a permanent thing now, like the Wars on Drugs, Terror and Christmas. No, Europe is still deep in recession, as new manufacturing and service-sector data showed this morning. And the whole continent is fumbling around in the dark like a nervous virgin on his wedding night, trying to figure out how this whole "political union" thing works. The depression in Greece, the epicenter of the crisis, is eroding its political institutions: Greece has fallen to 94th in the world, below Colombia and Liberia and the worst in the euro zone, in Transparency International's latest global corruption rankings, Bloomberg writes.

But here's the good news: John Paulson has lost a ton of money betting against Europe, he told clients yesterday at the annual meeting of his $20 billion hedge fund empire, Bloomberg reports. Actually, no, that's not the good news. It's just maybe a little schadenfreude-y: Paulson is the guy, after all, who made billions betting against American mortgages ahead of the crisis. It's just kind of comforting to know that the same guy can't get lucky twice in a row betting on crippling global economic disasters. At least not yet.

No, that's not the good news I meant. The good news is that European banks seem to think they are totally healthy now, despite getting a massive bailout from the European Central Bank just a year ago. That bailout kept Europe from utter financial ruin, which is why Paulson has lost money. Now some of those banks are in a big hurry to pay some of that bailout money back, writes David Enrich of the Wall Street Journal. Banking is a confidence game after all, and it doesn't look good to carry government money on your balance sheet for too long. A few northern European banks might actually be in decent enough shape to give that money back.

The trouble is, once a few banks give their bailout money back, then others are going to look bad if they don't give their money back, too. Pretty soon you've got some unhealthy banks taking themselves off life support, and the whole system may get wobbly again.

Thing Two: Cliff Watch! Meanwhile, America's own, less crisis-y crisis, the Fiscal Escarpment, continues apace. Here's the latest: Conservatives blasted Speaker of the House John Boehner for showing the slightest bit of wiggle room in debt negotiations, the Wall Street Journal writes, a sign of how politically difficult it's going to be for Boehner to cut a deal -- though cut a painful deal they must, a fact that has other Republican congresspeople in a panic, the New York Times writes. Adding to the pressure, yet another poll finds that the public will hold Republicans responsible if taxes go up and spending is cut next year as a result of failure to strike a deal.

For the time being, Republicans are holding whatever lines they can, wagging their fingers at short-term economic stimulus measures in President Obama's debt-deal offer and refusing to even consider raising taxes on capital gains and dividends. For now, they're sticking by the Mitt Romney plan, to raise tax revenue by closing mystery loopholes and deductions. The NYT points out that such a plan might work, but would be all but politically impossible.

Fortunately, Wall Street, at least, has decided not to care much about the Fiscal Escarpment, writes the Washington Post, leaving the stock market eerily calm.

Thing Three: Sobotka Might Soon Return To Work: At least somebody knows how to make a deal around this place: Striking workers and port management have reached a tentative agreement to end a week-long strike that has shut down the busiest ports in the United States, the ports of Los Angeles and Long Beach. The strike was the longest in a decade and cost the cash-strapped state at least $8 billion, Reuters writes. The 2002 strike disrupted the nation's supply chain for months.

Thing Four: Big Banks Hate This Guy: In a speech yesterday, Federal Reserve Governor Daniel Tarullo once again expressed his unease with the too-big-to-fail banking set and discussed some ways to solve the problem. This isn't just one of those wackadoodle regional Fed presidents, who are always spouting off about their pet obsessions, but somebody in the Fed's inner sanctum. That suggests the TBTF issue could be a big one in the year ahead, the Washington Post writes.

Thing Five: Big Lots Of Trouble: The Securities and Exchange Commission is investigating Big Lots CEO Steven Fishman, the Wall Street Journal reports. As the WSJ reported last week, Fishman sold $10 million of stock just before the company announced news that knocked its stock price around. Coincidence, I'm sure, and the company says the sale was proper. But Fishman has suddenly decided he wants to spend more time with his family and told the board yesterday that he was retiring. Again, you people just read too much into coincidences.

Thing Six: Adelson To Keep Redistributing Wealth: For a casino owner, Sheldon Adelson also happens to be a terrible, terrible gambler. Having blown $100 million betting on losing Republican candidates in the latest election cycle, Adelson vows he'll get 'em next time, and is doubling down on his political contributions, the Wall Street Journal writes.

Thing Seven: Spies Like Us: Got a pesky population you want to spy on? China can help, apparently. Reuters reports that the Iranian government somehow magically got its hands on a piece of Chinese technology called a "Lawful Interception Solution," designed for "supporting the special requirements from security agencies to monitor in real time the communication traffic between subscribers." A partner of Chinese telecom-equipment maker Huawei sold the system to Iran, according to Reuters, though the company denies it was the one that did the selling.

Thing Seven And One Half: For Your Dining Pleasure: Hardee's introduces "shame curtains" that allow you to eat Hardee's food in privacy, via The Onion.

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Calendar Du Jour:

Economic Data:

8:15 a.m. ET: ADP Employment for November

8:30 a.m. ET: Productivity for Third Quarter

10:00 a.m. ET: Factory Orders for October

10:00 a.m. ET: ISM Services for November

Corporate Earnings:

Not much.

Heard On The Tweets:

Calendar and tweets rounded up by Alexis Kleinman.

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


Euro Area Countries With High Unemployment
Euro Area Countries With High Unemployment