Syria: Russia and China Veto Resolution at the U.N.S.C.
Today at the United Nations Security Council, Russia and China vetoed a new resolution that would have extended Kofi Annan’s monitoring mission in Syria by 45 days and added new sanctions against Bashar al-Assad’s regime. The vote effectively gives the Syrian government free rein to continue to pound rebels and escalate the 16-month conflict. Assad didn’t wait for the vote to retaliate for the killing of his closest aides yesterday. U.S. Ambassador to the U.N. Susan Rice raised concerns that the Syrian president may resort to chemical weapons against his people.
From Libor to Euribor: the Investigation Grows
After Libor, its Brussels equivalent is now under scrutiny. Four more banks who submit to Euribor are now being suspected of collusion. Traders at Crédit Agricole, Société Générale, HSBC, and Deutsche Bank are thought to have collaborated with their counterparts at Barclays, pushing the rate up or down to boost trading gains. A panel of 43 banks from Europe, the U.S., and Japan submit their rates every day to the European Banking Federation, Europe’s banking lobby. Much like Libor, Euribor is a median of all the rates compiled, calculated by removing the top and bottom 15 percent. Yesterday and Tuesday, Federal Reserve Chairman Ben Bernanke faced questions from senators and representatives about the reasons why the Fed didn’t do more to end Libor-rigging when it was informed of the practice in 2008. Central bankers will meet in September to decide whether to reform Libor or scrap it altogether.
Economic Gloom Hinders Obama in Bid for Second Term
The more Americans worry about the economy, the less they trust their president. A new Times/CBS poll shows that this spring’s job slowdown is benefiting Republican Mitt Romney in the presidential election race. The attacks of the Obama campaign against Romney seem to have taken hold in some states, however, and there is understanding that the White House’s policies will eventually bear fruits. Still, it’s grim. Reports showed today that factory activity shrank in July for the third consecutive month and jobless claims rose last week. Politico reported yesterday that Obama’s Jobs Council hasn’t met publicly in six months, partly because some of its members haven’t openly endorsed the president, but also because the president has failed to endorse some of their recommendations. Liberal megadonors aren’t helping the Democratic effort, either. But Republicans in Congress, who blocked today the Democrats’ jobs bill, may give Obama a chance to spin the unemployment issue differently.
Spain Bond Auction Shows Investors Are Still Fearful
Spain sold bonds maturing in five years for a euro-era record-high yield at almost 6.5 percent, a sign that investor fear hasn’t abated despite the harsh austerity measures imposed on the country. The situation is rather dire: right now, almost a third of the Eurozone’s unemployed live in Spain. In comparison, France sold today bonds of the same maturity for a yield of less than 1 percent and Germany borrowed yesterday at a negative yield, showing that the market is looking for safety. Separately, the German Parliament voted to approve a €100 billion ($123 billion) package to bail out Spanish banks.
The IMF Strikes Again: U.K. Must Boost Spending
The International Monetary Fund said the U.K. government must boost spending to avoid a recession, and act quickly to revive confidence and stave off the effects of the euro crisis. Economists forecast that the country’s economy contracted again in the second quarter, a slowdown that can be partly attributed to the bank’s reluctance to lend money to businesses. Much criticism has been leveled at Prime Minister David Cameron and Chancellor of the Exchequer (read: finance minister) George Osborne for their inability to get the country back on its feet.