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90 seconds at 9 am: Barclays CEO Diamond admits was 'physically ill' when reading emails revealing LIBOR scandal; Easing seen imminent as Euro-zone contracts in June qtr; NZ$ hits record 64 euro cents

Posted in News Updated
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Here's my summary of the key news overnight in 90 seconds at 9 am, including news outgoing Barclays CEO Bob Diamond testified at a British parliamentary inquiry overnight that he felt 'physically ill' upon reading the emails detailing how Barclays rigged the rates it submitted in the LIBOR (London Interbank Offer Rate) setting process.

Diamond, who resigned on Tuesday night over the scandal, said the LIBOR rigging by Barclays' bankers was 'reprehensible and he was 'sorry, disappointed and angry'.

However, he also repeated comments that he thought a Bank of England official had indicated 'Whitehall' wanted Barclays' rates submitted to the LIBOR committe to be lower to make Barclays look 'safer' during the worst of the post-Lehman collapse crisis. Diamond said he did not order his traders to lower Barclays' rates, but that his Chief Operating Officer Jerry del Missier had mistakenly assumed that he had wanted the rates lowered and had ordered traders to lower the rates. Del Missier has also resigned. See more here at BBC.

Bank of England official Paul Tucker has requested an appearance before the committee to put his side of the story, which is now convulsing the City of London and British politics.

Meanwhile, Euro-zone economic output appears to have contracted in the second quarter. Factory activity surveys show significant falls in activity across the Euro-zone. Even German services activity figures out overnight were weaker than expected. See more at Reuters.

All this weakness in the Euro-zone and British economies is increasing expectations of easings of monetary policy when the European Central Bank (ECB) and the Bank of England (BoE) announce their latest monetary policy decisions later tonight.

The ECB is expected to cut its key rate to 0.75% from 1% and potentially announce other measures, including more cheap long term loans for struggling banks. The BoE is widely expected to increase its money printing and bond buying programme known as Quantitative Easing by a further 50 billion pounds to 375 billion pounds.

All this Northern Hemisphere money printing and develuations of currencies make our currency look relatively attractive, given our interest rates are higher and New Zealand is not printing money.

The New Zealand dollar was solid around 80.4 US cents in morning trade and up at fresh record highs of 64 euro cents as talk of further easings in the Northern Hemisphere widened the interest rate advantage for investors in New Zealand bonds.

All eyes will be on the US economy on Friday night when jobs figures are released. They could prove the trigger for a third round of money printing in the United States.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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8 Comments

Yes, I assume thats the

Yes, I assume thats the feeling you get when you are caught out big time.
Funny how none of these people are prosecuted for theft or fraud. help me understand!!.

Keep this foremost in your

Keep this foremost in your mind when called upon to make decisions about where and how to invest the family fortune:
 
“The fund develops relative value strategies in the capital structure of synthetic static CDOs through 2 different approaches both quantitatively driven. Bespoke static Synthetic CDO Tranches are used to build exposure to investment grade credit idiosyncratic risk [and we] trade Standard index tranches of iTraxxIG and DJ CDX IG. The strategy takes advantage of structural dislocations in the correlation market, and increased liquidity of the Index Tranche market, to generate alpha through momentum and mean reverting relative value trades in the capital structure.”
 
Read more about Diamond and his cohorts.

Maybe he was physically ill

Maybe he was physically ill when he realised that he could be sharing a cell with people from outside his class
unlikely to happen however

First

All this Northern Hemisphere

All this Northern Hemisphere money printing and develuations of currencies make our currency look relatively attractive, given our interest rates are higher and New Zealand is not printing money.
Well, we should print money because we are a very small boat on an increasingly rough pond and the only way to keep afloat in the end is to go with them.
"QE ahoy,me hearties"

"The BoE is widely expected

"The BoE is widely expected to increase its money printing"
Merv goes to the doctor, says "there's something not quite right with my arse, Doc".
Well get your gear off and give us a look. .
Definately something amiss there Merv as he spys the corner of a 10 pound note sticking out.
The doc gives it a pull and out it comes - a full ten quid note, but there's another, then a twenty, then a fiver and so on till there's quite a pile. Finally the money stops. "Well count it up Doc"
The doc counts up the money. Nineteen hundred and ninety pounds there Merv.
Ah, that'd be right says Merv. I knew I wasn't feeling too grand.
 
 

Hows yer derivatives

Hows yer derivatives going....Mr Diamond.
http://uk.news.yahoo.com/bob-diamond-rough-ride-mps-014524253.html

Interesting comment from a

Interesting comment from a Zerohedge comment stream:
 
 
Wait till the EM's see the cost of US wheat, corn and soybeans now that the heat wave is destroying everything. Didn't the Arab Spring uprisings really start over the cost of wheat for their bread?
Imagine the entire spring/summer US crop eliminated from the market. Hedge accordingly.
PS. The heat wave is due to all the Fukushima radiation in the atmosphere spread over the US. This isn't going away soon. Not to mention all the rain we've had since 3/11 that did fall on the US farmlands was all radioactive, but we won't get into that.