Death Star Economics



Scandal-week just doesn’t end…

The US is closed for a collective barbecue party today, so there will be no news from across the Atlantic.

In the Barclays‘ case, the bank is now actually threatening the Bank of England and other government officials, accusing them of having been involved in the rate manipulation scandal, known by the unfortunate name of LIEborgate. Barclays’ ace up the sleeve is a note written in 2008 by BoE markets director Paul Tucker alluding to the possibility of a rate cut. But according to Alphaville …

You just don’t threaten then Bank. The City of London is not some sort of financial democracy. It is a hierarchy. It is not Capitol Hill; political brawling is prohibited.

Diamond will be facing parliament today.The whole affair is also warming up the question of ring-fencing investment banks, because of the size of the fine Barclays had to pay for the manipulation last week (£290m). read article

More on the note of scandals, GlaxoSmithKline was fined $3bn for healthcare fraud this morning, after pleading guilty in the case of mis-marketing drugs. These included antidepressants Paxil, approved for adults that were marketed to teenagers, and Wellbutrin, mis-marketed to treat weight loss and sexual dysfunction, says the US Department of Justice. read article

In Mexico, where Enrique Pena Nieto won the presidential election on Sunday, Andres Manuel Lopez Obrador demands a recount of votes. Pena Nieto’s victory has a peculiar after-taste for Mexicans, because his party, the Institutional Revolutionary Party, which had led the country for 71 years, including the times of the revolution, the ‘Mexican Miracle’ and an economic crisis. But hopes for Pena Nieto’s administration are high, as the country needs labor and tax reforms and increased international participation in the monopolistic national market. It is also expected that the new government will open up the country’s oil market, including allowing foreign investments in the state-owned oil company Pemex.

Meanwhile, the Romanian opposition is moving to suspend the country’s president, Traian Basescu, for unknown reasons. read article

In other news, Apple is apparently planning to bring a smaller and cheaper iPad to the market later this year. Oh, you mean like the iPhone? But however ridiculous it may sound right now, it will make Apple’s Christmas business. Also, Manchester United completed certain filings with the SEC in New York last night as part of the club’s ambitions of an IPO within the year. Initially, the owning Glazer family, had been planning a $1bn IPO on the Singapore stock exchange, but abandoned the plan due to volatile Asian markets. The New York IPO could be worth as little as one tenth of last year’s valuation.

So long.


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One Response

  1. […] The proposal would force Slim to sell assets and open the market for foreign competitors. Upon Enrique Pena Nieto‘s election in July 2012 hopes for economic reform, particularly in Mexico’s oil market, rose. read […]

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