Good morning
The headlines:
- The Libor Folk resist change.
Link: old school.
So there’s the Libor collusion scandal. And (obviously) this has been followed by calls to change the way it’s calculated*.
The BBA is happy to issue codes of conduct and increased vigilance: but they won’t change the calculation method.
Which makes sense. A number of Libor-based contracts are denominated for long periods of time (ie. 10 years plus). Changing the calculation method sounds like a material contract change, not so? Especially when the general consensus is that any change will be “incremental” (a synonym for “higher”).
The opposition want Libor quotes to be trade-driven, not opinion-driven. This sounds reasonable – but I think that there is a solid argument against it. The rate is interbank: the people being asked should be banks. They have negotiating power and such between themselves. You leave it market-driven, and suddenly, it’s being driven by speculators.
And the banks will still just lend between themselves.
*The quick summary of the current calc: the British Bankers Association does a quick call around the banks every morning, gets an idea of what everyone expects to pay to borrow money for a specific period of time, ignores the top 25% and the bottom 25% of quotes, averages the middle 50%, and publishes the rate just before noon.
- News Corp. to be split in two.
Link: the publishing breakaway.
It’s the same old story: someone reads someone else’s cellphone messages, people get angry, and then there’s a break-up.
The theory is to separate the UK newspapers from the entertainment group’s investments: as the American investors want the Fox side to stay, but why be exposed to UK editorial shenanigans?
So much scandal.
- Glencore-Xstrata deal threatened.
Link: Qatar cuts deep.
Qatar Holdings LLC, Xtrata’s second-largest shareholder, is demanding an effective 16% increase in the bid, by asking for 3.25 Glencore shares for every Xstrata share (up from 2.8 shares).
13.3% of shareholders now formally oppose the merger at the current acquisition price, which is coming very close to the 16.48% needed to stop the merger from happening**.
The vote is on July 12.
**Something something UK takeover rules something Glencore can’t vote with its 34% share something equals: a 16.48% threshold.
- Google to unveil tablet.
Link: more iPad competition.
It’s expected to be shown at the Google conference today. An asus tablet running on Android.
I feel like Microsoft beat them off the mark with the Surface.
On the other hand, Apple beat everyone.
- Stockton to file for bankruptcy.
Link: and so the end begins.
Stockton, California, is to file for bankruptcy protection. Talks with bondholders and labour unions failed.
Dominos?
That’s all for now.
Have a good day.
