Markets on the continent are melting down, particularly due to the increased Spanish borrowing costs. As I explained yesterday, the votes in Germany to approve the bailout of Spanish banks, which was reiterated by the Eurozone, effectively reversed the results of the EU Summit by making it explicit that the Spanish government would be on the hook for the bailout funds, rather than direct injections into the banks themselves.
|By: David Dayen Tuesday July 17, 2012 10:15 am|
The British Parliament continued their investigation into Barclays Bank and the Libor scandal this week, and it’s just getting worse and worse for everyone involved. Yesterday, Jerry del Missier, the former COO of Barclays, testified that he was instructed by CEO Bob Diamond to manipulate the Libor down in 2008, to mask the ill financial health of the bank.
|By: David Dayen Monday July 16, 2012 8:30 am|
If there is a genuine effort to bring criminal charges in the Libor scandal, the Justice Department will have plenty of banks to choose from – Deutsche Bank, cooperating with EU and Swiss regulators, is just an example – and can round up a couple low-level bankers for the perp walk photo-op. But this would be a classic deflection strategy. Because the more you learn about Libor, the more you must reserve some of your fury for the regulators.
|By: David Dayen Sunday July 8, 2012 5:00 pm|
A whistleblower from Barclays Bank makes the obvious point that former CEO Bob Diamond had to know about the various fixings of the Libor benchmark inter-bank lending rate before he claims to have found out: Speaking on condition of anonymity, the banker says that senior Barclays bosses would have been told about Libor concerns because [...]
|By: David Dayen Friday July 6, 2012 9:48 am|
In Britain, the investigations into Barclays Bank manipulating the benchmark Libor rate have begun in earnest. Parliament approved an official inquiry into the Libor scandal, though only at the Parliamentary level rather than an independent investigation.
|By: David Dayen Thursday July 5, 2012 9:06 am|
The Bank of England, People’s Bank of China and the European Central Bank all cut lending rates or added quantitative easing today, a near-global spurt of monetary stimulus designed to increase economic growth. Because the Federal Reserve hasn’t joined in, the dollar is growing stronger, which is bad news for US exports.
|By: David Dayen Wednesday July 4, 2012 11:42 am|
There’s a closely watched Parliamentary hearing with Bob Diamond, the former CEO of Barclays Bank who resigned after the scandal of bank employees rigging the benchmark Libor inter-bank lending rate. It’s been fairly explosive, as Diamond accused Paul Tucker, deputy governor of the Bank of England, of essentially encouraging Barclays to manipulate the Libor rates, to make their financial situation look less dire.
|By: David Dayen Monday July 2, 2012 1:30 pm|
Along with Barclay’s Bank, sixteen other major financial institutions are implicated in the scandal. In the simplest terms, Barclays admitted to manipulating the inter-bank lending interest rates to cash in on derivatives and also mask weaknesses in its balance sheet. But the LIBOR (which stands for London Inter Bank Offered Rate) is used as a benchmark lending rate all over the world. Adjustable-rate mortgages were calculated using the LIBOR. The exposure on this could be enormous.
|By: David Dayen Tuesday May 22, 2012 3:33 pm|
Today the official Twitter account of the Democratic Party proudly retweeted, and Democratic operatives proudly passed around a Marketwatch story that finds that federal spending in the Obama era has experienced the smallest growth in real dollars in 60 years. The Dems still don’t seem to get that this means they’ve doomed the economy to slower growth and left millions unemployed.
|By: Knut Saturday May 19, 2012 1:59 pm|
It is an honor and a pleasure to have Paul Krugman at the Lake this afternoon for a conversation on End This Depression Now! Dedicated “To the unemployed, who deserve better,” the book is a condemnation of the policies and mind-set that have produced the worst economic depression since the 1930s. And unlike the Great Depression, which contemporaries did not understand, we know what to do; the current depression is entirely self-inflicted. The broken homes and ruined lives are not attributable to acts of God or the inscrutable logic of the market, but are the direct consequence of public decisions that have amplified the inherent risk of private credit by deregulating financial operations and the attempt to balance the budget when aggregate private demand is collapsing. The central message is that none of this suffering is necessary, and none of it is justified.