Mark Gongloff is off the newsletter this morning, so today's 7.5 Things are brought to you by Jillian Berman.
Thing One: Cyprus Bailout Disaster: If there’s one thing you can count on, it’s that a European crisis will rear its ugly head at least once every few months. Welcome to European crisis: tiny island nation edition! We’ll catch you up real quick in case you were busy enjoying your weekend. The IMF and eurozone nations agreed to bail out Cyprus, which is on the verge of bankruptcy, to the tune of $13 billion, on the condition that the country raise some of the money from its bank depositors. Talk of the proposal sparked a panic and Cyprus account holders ran to their banks to pull out all of their money.
Now, Cyprus officials are preparing a new proposal that would soften the blow for regular deposit holders, according to the Wall Street Journal. The plan would tax savers with accounts worth less than 100,000 Euros only 3 percent, while those with more than 100,000 Euros would face a 10 percent tax and those with more than 500,000 Euros would pay 15 percent.
That last-ditch effort to re-work the bailout comes after President Nicos Anastasiades convinced Cyprus’ parliament to delay the vote on the bailout until today for fear it wouldn’t pass, according to The New York Times. Minutes ago, that vote was delayed yet again, to Tuesday. Cyprus authorities are preparing for another run on the banks, whenever they open, no matter which way the vote goes.
And that feeling of panic isn’t staying confined to Cyprus. The Cyprus bailout is the first time European leaders have required bank depositors to shoulder the burden of a rescue. As a result, people in other crisis-plagued countries like Spain and Italy are growing concerned they could face a bailout with similar terms.
Thing Two: SEC Maybe Throwing In The Towel: Looks like the SEC may be packing it in on the whole punishing-people-for-the-financial-crisis thing. The number of civil fraud cases filed by the agency is expected to drop significantly this year, the Wall Street Journal reports. Mary Jo White, the nominee to head the SEC, may have to explain later this year why the enforcement actions are dropping from the record levels of previous years. White promised “unrelenting” enforcement of Wall Street during her confirmation hearings earlier this month. The drop in filings could also add to criticism that the SEC is throwing in the towel holding any senior-level bankers responsible for their actions during the financial crisis.
Thing Three: Breaking News! Jamie Dimon Is Arrogant: Shareholders at JPMorgan Chase and some members of the company’s board are finally discovering that the bank’s CEO Jamie Dimon is arrogant, The New York Times reports. The fact -- released in a damning Senate report last week -- that Dimon called the $6 billion London Whale loss a “tempest in a teapot” months after he knew the trades had violated JPMorgan’s internal checks hundreds of times is apparently of some concern to at least two board members. Still, Dimon is unlikely to face any threat to his power over the report's findings.
Meanwhile investors are growing concerned that JPMorgan isn’t the only bank that put itself at risk of huge losses like the London Whale, according to Reuters. Other big banks are likely making changes to their risk models as a way to appear to be complying with tougher global regulations, which could allow for giant losses like the London Whale.
Thing Four: Wall Street Journal Probed: The Justice Department opened a probe into allegations Wall Street Journal workers were bribing Chinese officials for information for news articles, the Wall Street Journal reports. The probe was part of a larger government investigation into News Corp., the parent company of the WSJ, relating to the 2011 phone-hacking scandal, according to the New York Times. The WSJ investigated the China allegations and found no evidence of wrongdoing, according to Reuters. Still, it’s unclear of the Justice Department will be satisfied with the internal investigation.
Thing Five: It's All A Wash: Surprise, surprise, another issue with super-fast robot trading has popped up. Regulators are investigating whether high-frequency traders are illegally acting as buyer and seller in the same deal, the Wall Street Journal reports. Those so-called “Wash Trades” are prohibited because they can feed wrong information into the market by giving a false impression of higher trade volumes. In addition, wash trades, which limit the risk for the firms making them, can be used to manipulate prices.
Thing Six: Pay Clampdown Spreading: EU’s banker bonus clampdown is spreading outside the banking sector. The European parliament’s main parties support a proposal to extend the ban on large bonuses to include fund managers, the Financial Times reports. The proposal, which faces a vote Thursday, indicates that the EU could apply the strict pay curbs to other jobs within the financial industry when the opportunity arises.
Thing Seven: Dreamliner Fix: If for whatever reason, you decide to fly on a Boeing 787, the plane should hopefully be a bit safer than last time. Or at least you can be comforted in the knowledge that it went through more tests. In order to get its Dreamliner fleet flying again, Boeing is putting the planes’ batteries through rigorous tests that the company helped develop, but initially ignored when originally testing the batteries in 2007, according to Reuters. The batteries ultimately caught fire on multiple passenger flights.
Thing Seven And A Half: Let The Madness Begin: With March Madness starting this week, we all know your productivity is about to come to an end, and that could cost your bosses big time. Employees watching the tournament at work are expected to cost their bosses $134 million in just the first two days, according to a recent survey.
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Calendar Du Jour:
10:00 a.m. ET: NAHB Housing Market Index for March
Heard On The Tweets:
More life on Mars than the bond market this morning.
— Ed Bradford (@Fullcarry) March 15, 2013
NO ONE should work.
— Richard Lawson (@rilaws) March 18, 2013
Don't presidents have a two-term limit? How many times has Morgan Freeman been president? More than Harrison Ford, right?
— Paul Vigna (@paulvigna) March 18, 2013
have any rappers ever bragged about slingin more cane than Santa because I think that would make a fun holiday song
— Horton Atonto (@crushingbort) March 18, 2013
"Hey, it's five o'clock somewhere..." - old person eating dinner at three pm
— Megan Amram (@meganamram) March 15, 2013
-- Calendar and tweets rounded up by Mark Gongloff.