Libor-ated: Former Barclays CEO Bob Diamond didn’t like being called a liar by British lawmakers. Baltimore didn’t like losing money on interest-rate swaps, so it sued banks for manipulating interbank lending rates. Other U.S. municipalities are weighing whether to follow suit, and the cost to banks could be in the tens of billions. Jerry del Missier, the Diamond-lieutenant who resigned from Barclays last week, will testify before Parliament on Monday along with a number of top regulators. A lull in the action seemed like a good time to unveil Libor explainers to more than one outlet.
Pain in…Spain will be forced to cede control of its banks to European rescuers and impose losses on local investors, according to a draft agreement that will provide the nation with 100 billion euros in bailout funds. Prime Minister Mariano Rajoy announced tax hikes and spending cuts aimed at taking 65 billion euros out of the nation’s budget. According to Reuters, the plan shifts taxes from income and employment to consumption, which we suppose makes sense for a country facing a 24.4 percent unemployment rate.
Talking about the Whale: Jamie Dimon will meet with analysts for two hours after JPMorgan announces second quarter conference call, replacing the typical conference call with a face-to-face meet. Analysts will want to know the size of trading losses incurred by the firm’s chief investment office, how much larger the losses may grow and how far the firm has gotten in unwinding the losing positions, according to Bloomberg. The Wall Street Journal says that the firm may announce it is clawing back bonuses from CIO executives as soon as Friday.
Chapter 7: PFGBest, the Iowa-based futures broker that froze customer accounts this week amid allegations that the firm was missing more than $200 million in segregated clients funds, filed for Chapter 7 liquidation yesterday. PFG’s owner, Russell R. Wasendorf Sr., attempted suicide on July 9; on July 3, he ceded power of attorney to his son.
Flip-flop: Duke Energy CEO Jim Rogers appeared before North Carolina regulators to discuss the ouster of Duke CEO-for-a-day Bill Johnson. Mr. Rogers ticked off Mr. Johnson’s autocratic leadership style, according to The New York Times, as well as problems at Progress Energy, the utility which Mr. Johnson headed before company closed its merger with Duke at the beginning of the month.
Big loser: Add Paolo Pellegrini to the list of investors who have withdrawn assets from John Paulson. Mr. Pellegrini, the former Paulson aide credited with getting the hedge fund manager excited about betting against subprime mortgages, The Wall Street Journal reports that Mr. Pellegrini lost $10 to $20 million, or a “significant portion” of his money by investing with Mr. Paulson. Mr. Pellegrini earned a $175 million bonus in 2007.
Fatigued: Bank of America can’t even give money away, apparently.
So sorry: HSBC will apologize at a Senate hearing on July 17 for faulty anti-money laundering controls.