Payrolls In U.S. Rose 80,000 In June; Jobless Rate At 8.2% (Bloomberg)
Payrolls rose 80,000 last month after a 77,000 increase in May, Labor Department figures showed today in Washington. Economists projected a 100,000 gain, according to the median estimate in a Bloomberg News survey. The unemployment rate held at 8.2 percent. Private employment, which excludes government agencies, increased 84,000 in June, the weakest in 10 months. Hiring has shifted into a lower gear, restricting consumers’ ability to boost spending as concern mounts about a global slowdown. Elevated joblessness underscores concern by some Federal Reserve policy makers that the economy isn’t expanding enough.
Lagarde Says IMF To Cut Growth Outlook As Global Economy Weakens (Bloomberg)
The International Monetary Fund will reduce its estimate for global growth this year on weakness in investment, jobs and manufacturing in Europe, the U.S., Brazil, India and China, Managing Director Christine Lagarde said. “The global growth outlook will be somewhat less than we anticipated just three months ago,” Lagarde said in a speech in Tokyo today. “And even that lower projection will depend on the right policy actions being taken.” The new outlook will be announced in 10 days, after an April estimate of 3.5 percent, she said.
Embattled FSA Is Under Fire for Libor Policing (WSJ)
Bank executives warned the FSA about problems with Libor as early as 2007, but it wasn't until 2010 that the FSA, prodded by U.S. officials launching their own probe, began examining Libor irregularities, according to regulatory documents and industry officials. FSA officials defend their handling of the matter. As part of that probe, the FSA learned a top Barclays executive, Jerry del Missier, had instructed deputies to submit inaccurate Libor data, but the FSA in 2010 cleared him of wrongdoing, according to bank and regulatory officials. Just a few weeks ago, the agency blessed Mr. del Missier's promotion to become the bank's chief operating officer.
Barclays’ US deal rewrites Libor process (FT)
Under the terms of the pact with the US’ Commodity Futures Trading Commission, Barclays agreed to a six-pronged plan to “encourage” benchmark publishers, such as the British Bankers' Association, to improve the rate-setting process by increasing transparency and creating rigorous methodologies to determine submissions. The pact is unusual because it requires Barclays to not only beef up its internal compliance systems but to take on a role as an advocate for increased oversight for the industry.
Spain Re-Enters Danger Zone, Germany Borrows for Free (Reuters)
German two-year government bond yields fell to zero and briefly turned negative on Friday after the European Central Bank cut interest rates the previous day. Two-year yields fell as low as minus 0.001 percent, two basis points lower on the day. Spanish 10-year government bond yields extended their rise to go past 7 percent on Friday, with investors dumping risky assets as they fret about the efficiency of the anti-crisis tools available at the moment. Ten-year Spanish yields were last 22 basis points higher on the day at 7.006 percent.
SI man sues parents over ice-cream company OT payments (NYP)
A Staten Island man has filed suit against his father and stepmother, claiming they never paid him overtime for working at the family ice-cream company. Nicholas Piazza, 29, of Tottenville, says that because the ice-cream business is seasonal, he often was required to work as many as 80 hours at Piazza’s Ice Cream & Ice House. But he claims he earned only $10 an hour at the ice-cream distribution firm. His dad, Salvatore Piazza, and stepmom, Patricia — co-owners of the Staten Island-based business — say Nicholas’ Brooklyn federal suit is an icy dagger to their hearts and counter that his allegations of being underpaid are laughable given Nicholas was their firm’s vice president. They say the suit is a smoke screen for a grab at control of the family business. “I love Nicky, but he went behind our backs and bought an ice-cream truck, and then he lied to all our customers. He told our customers we were dead or we were retired,” Patricia Piazza told The Post.
China rate cut a gamble that banks will boost economy (Reuters)
"Bringing up the loan-to-deposit ratio is probably a better move to spur lending, but it's a long-term systemic risk," said Sheng Nan, an analyst at CCB International, the HK investment banking arm of China Construction Bank. "They ultimately want banks to be domestic deposit funded, and an easing of LDR may shift funding towards wholesale lending." Therefore, policymakers have adopted a more complex path of bringing down borrowing costs while trying to persuade banks to more actively manage their loan books. They are trying to overcome the tendency of state-backed banks to extend extra credit to big, cash-hoarding state-owned enterprises and over-extended property developers.
JPMorgan Told To Explain Withholding Energy-Probe E-Mails
JPMorgan Chase & Co. (JPM) was ordered by a federal judge to explain why it shouldn’t be compelled to turn over e-mails sought by U.S. regulators in a probe of potential energy-market manipulation. U.S. District Judge Colleen Kollar-Kotelly in Washington today gave JPMorgan until the end of the day on July 13 to respond. The U.S. Federal Energy Regulatory Commission sued JPMorgan on July 2 to release 25 e-mails in an investigation of possible manipulation of power markets in California and the Midwest by J.P. Morgan Ventures Energy Corp.
Citigroup's Provocateur in Residence (WSJ)
Willem Buiter has built a career out of being a thorn in the side of politicians and central bankers. In one of his most recent dust-ups, Citigroup Inc.'s chief economist in February upset senior staff members of the European Central Bank when he warned that new rules would force the ECB to accept "rubbish" collateral in exchange for loans to the Continent's governments, according to people familiar with the situation. ... Back in 1999, while a little-known academic, he grabbed the attention of the financial world with a paper pointedly titled "Alice in Euroland" that took aim at the newborn European single currency. "I like saying things that drive people around the bend," said Mr. Buiter over lunch recently at Citigroup's downtown New York offices.
How David Einhorn Was Out-Bluffed at the Poker Table (BW)
Einhorn has said his approach to poker resembles his approach to investing: He doesn’t play a lot of hands. When “the situation feels right, I put in a big, aggressive raise with a marginal holding,” he said in a 2006 speech. “It is very hard to describe how I know the ‘feel,’ and sometimes I get it completely wrong. But to do well in a poker tournament, you have to recognize a few non-traditional opportunities and you need to get people to sometimes fold the better hand. I think we invest similarly. By this, I mean that most of our investing lines up nicely in the disciplined, traditional value camp—very low multiples of book value, revenues, earnings, etc., but occasionally we are opportunistic and invest in situations that are difficult to justify under traditional criteria.”
Crammed Into Cheap Bunks, Dreaming of Future Digital Glory (NYT)
The tenants, mostly men in their 20s, sleep next to heaps of dirty laundry. There is no television set; the men watch online video, on laptops with headphones. On a recent afternoon, 23-year-old Steve El-Hage, who came here from Toronto in May, ate slices of ham straight out of the package: “As you can see, I was going to make a sandwich, but I didn’t get there.” ... Justin Carden, a 29-year-old software engineer who is staying in another hostel, in Menlo Park, while working on a biotech start-up, talks about the place as if it were Stanford. “The intellectual stimulation you get from being here is unparalleled,” Mr. Carden said. “If you’re wanting to do something to change the world and make it a fundamentally better place, you need to be around the right people.”
It's Rough to Make a Living as a Pro Golfer on the Bar Circuit (WSJ)
Graig Kinzler ... goes to a bar to play golf every day. That's his job. He is one of about two dozen men around the country, mostly in their 30s and 40s, who make their living playing Golden Tee, the most popular cash videogame in the U.S. In a typical month, he plays about 600 games, competing against 49 other players at a time for a top prize of $10. He says he earned more than $50,000 last year.