One of my favorite movies is Star Wars, for a number of reasons. The scene I am reminded of right now is the one where the Imperial stormtroopers stop Luke and Obi-Wan, and Obi-Wan uses a Jedi mind trick to make the troopers let them go.
The reason I am thinking of this scene is the major meta-story in today’s papers, which hits the front page above the fold. The New York Times (NYT) has “Laundering Case Settled by Bank for $340 million,” the Financial Times (FT) has “StanChart Settles NY Claims for $340m,” and the Wall Street Journal (WSJ) has “Bank Settles Iran Money Case.” Do you remember when this hit about a week ago and the bank angrily denied the accusations? Now, we have a quickie settlement in the nine-figure range that has been hurriedly announced before the parties have even fully agreed upon the final settlement terms.
Clearly, the bank feels pressure to put this scandal behind it, thus trying the Jedi mind trick of the quick settlement. And equally clearly, it isn’t going to work; look at the multiple front-page headlines. Moreover, this is just one settlement with one regulator in one state—an important state admittedly, but only one. The articles make the point that there are still multiple other investigations ongoing. This story is not going away, and it can reasonably be expected to continue to play into the financial regulation versus market-freedom debate. One more point for the regulators.
Is it September already? No, it’s still August, but the dog days may be ending sooner than we expected. The second meta-story today is the contraction of the eurozone economy, with “Europe Contracts, Concerns Widen” on page A1 of the WSJ, “No Longer Stagnating, Euro Zone Contracts” on page B1 of the NYT, and “Eurozone close to second slump” on page 4 of the FT. Germany seems to be the only major economy that continues to grow, but on page 4 of the FT, “German business sees gloomy road ahead” suggests that even Germany may be at risk as well. Greece continues to struggle, as discussed in “Greece seeks extension of austerity program as it struggles with cuts” on page 1 of the FT, and the situation in France is getting worse, with riots in Amiens and other cities, according to “French Leader Promises Order After Youths Riot in a Northern City” on page A8 of the NYT. Hurricane season continues, as I mentioned in an earlier post, and Hurricane France may be closer behind Hurricane Spain than we’d thought.
U.S. coverage is on the presidential race, and the evolving politics of Medicare is leading the coverage in “Republicans fret over Ryan’s appeal in tight races” on page 2 of the FT and “Medicare Fight Recasts Races for Congress” on page A1 of the NYT; the other side of the Ryan story is presented on page A4 of the WSJ in “Ryan Holds Crossover Appeal.” The unexpectedly strong retail sales report I mentioned yesterday also made it into the domestic papers, on page A2 of the WSJ with “Rising Retail Sales Ease Fears for the Economy” and on page B2 of the NYT with “July Retail Sales Rose 0.8%, Well Beyond Expectations.” If it bleeds, it leads; and if it doesn’t, well maybe page 2 isn’t that bad.
Finally, the tension in the South China Sea continues to bubble along, with a front-page set of graphics in the WSJ followed by a pair of articles on page A8, “Japan’s Nationalist Movement Strengthens” and “Tokyo Faces Fresh Tensions Over Disputed Territory.” I also just got a special piece on this from Stratfor, a geopolitical intelligence company to which I subscribe. As I have said multiple times, keep an eye on this.
Have a great day!