It’s Friday the 13th, widely considered a bad-luck day, and if the Financial Times (FT) lead—which states that banks face a $22 billion bill for LIBOR-related misdeeds—is correct, it certainly is bad luck for them. U.S. regulators are trying to get their side of the LIBOR story out, with reports in the business section of the New York Times (NYT) and on page C3 of the Wall Street Journal (WSJ) that Tim Geithner, then-president of the New York Fed, is said to have noted problems with the LIBOR rate-setting process and attempted to correct them. Apparently, the problems were not corrected, as we are finding out, but the Fed wants us to know that at least Geithner tried. The story just keeps getting more interesting by the day.
Other than that, economic reporting is actually rather upbeat for a change. Page 1 of the NYT reports that economists see signs of a pick-up. Not a fast pick-up, as the article notes, but renewed growth in the second half of the year. On page 4 of the FT, an optimistic take on China’s growth is reported, and on page 3, Ireland seems to be on track with its bailout requirements. Finally, the first page of the NYT business section reports that California municipal bankruptcies are not seen as a trend, despite three in the past couple of weeks. Good to know.
Not all the news is good, of course. And it’s no surprise that Europe is providing most of the bad. Finland is taking a tough line on bailout terms, per the FT, and Italy’s Berlusconi is plotting a political comeback due to popular demand, per the NYT. Moody’s has also downgraded Italy to two notches above junk status. Coincidence? Both the NYT and the WSJ report on China’s sharply slower second-quarter growth rate, compared with one year ago.
Thank God for the private sector. Ah, no. Internal failures at HSBC may lead to fines as high as $1 billion (that’s a B) for anti-money laundering violations, as reported on the front page of the NYT business section. Between Barclays and LIBOR, JP Morgan and the whale, and now this, you have to wonder.
Not sure how this fits in with the rest of it, but Pluto has acquired a fifth moon, according to astronomers. Personally, I think it was an injustice that it was demoted from planetary status, and I support its quest to form its own orbital system. Go, Pluto!
Happy Friday the 13th!