Of the ways to become rich, on Wall Street stealing easily beats creating value.
Everybody Knew: The LIBOR rate-rigging scandal that has all of London in an uproar (but which can't compete with a heat wave and wind storm in the US) is just beginning. There are literally dozens of the worlds major banks involved and more than one CEO's head will end up on a pike for undermining the integrity (ha) of the $504 trillion market. Cue Lenoard Cohen.
River City: US manufacturing – as measured by the June ISM index – fell to 49.7. Anything below 50 indicates contraction in the economy. This is the lowest number since 2009's doldrums. Production fell to a three year low as new orders fell to their lowest in more than 10 years – following 9/11. The Prices Paid Index plummeted from 47.5 to 37.0. The global PMI reading was decisively sub-50 at 48.9, also the first below 50 reading since 2009. The markets? They went up because they think the bad news means the Fed will give them more free money.
Natural History: The best reason to have hope that Europe will abandon its German-dictated 'suffering is good' nonsense and take some steps that might help a bit is simply that the breakup of the euro would be a disaster for all of the eurozone countries, including Germany because it would lose its customers. Perhaps the threat of being hanged separately will motivate them to hang together. Remember, depression, war, revolution, starvation and “the passions of patriotism” are not extinct.
History Lessened: "The real words to describe American power are: plunder, fraud, criminality, deceit, murder and repression.
The Enablers: Emails show that the President of Penn State and two senior officials knew, as early as 2001, that they 'had a problem' with Sandusky, and had immediately began to 'protect the institution' as though they were bishops hiding pedophilic priests. It is apparent that Paterno knew Sandusky was raping children and was probably "the person most responsible" for the coverup. But hey, he won a lot of football games.
War Is, In Fact, Hell: Former chairman of the JCS, Admiral Mike Mullen, says that “18 vets a day are killing themselves in the US” because of the stress from America's wars of choice.
Illustration: Lest ye forget the true nature of capitalism, let us ask giganormous drugmaker GlaxoSmithKline to step to the front of the room and recite: “"GSK expressly and unequivocally admits that it committed the crimes charged in the Information, and is in fact guilty of those offenses." It pled guilty and was fined $3 billion for unlawfully marketing its products and bribing doctors to prescribe its products. But the fine comes from shareholders' profits and won't deter the criminals. Three to five in a federal prison might.
Being There:In the last four quarters, $14 billion of taxpayers' money flowed to JPMorgan - that's about 77% of JPMorgan's net income for the period. Let's hear it for
socialism free market capitalism.
Gift That Keeps On Giving:Chesapeake Energy, whose CEO has had quite a few problems accounting for his accounting, has paid $53 million in taxes. No, not last year – since its founding over 20 years ago. $53 million, total, on $5.5 billion in profits. The tax break is – in theory – in recognition of the tremendous risks involved in drilling new wells. After all, 0.4% of Chesapeake's 2011 efforts were dry holes. CEO Aubrey McClendon's 2008 compensation was over $100 million buckeroos. Drill, Baby, drill.
Lessons: Bribery is good, blackmail better, according to Barclays' CEO Bob Diamond, who is threatening regulators with “embarrassing revelations” - which will probably work better than Jamie Dimon's cufflinks.
Porn O'Graph: Ronnie was worse...
The Parting Shot.