FURTHER FURTHER READING
- Another reaction to Cardiff's taxonomy post -- hand payroll tax rates to the Fed?
- A bankruptcy moment of truth for the Supreme Court.
- The wrongness of some US ratings.
- Caustic chart du jour, via Mark Thoma.
- What is the value of an unborn pig? Matt Levine considers.
- Oh, to be a Chinese VIE.
ROUND-UP
The usual pre-Fed volatility. The S&P 500 closed up 0.79 per cent at 1,639, having lost earlier highs after taking fright at an FT analysis of the Fed's communications policy (below).
"The Fed chairman has a double communications problem. Markets seem reluctant to acknowledge the improvement that is leading the Fed towards a taper of QE3. But they also appear to be assuming, incorrectly, that any taper means the Fed has become less willing to support the economy's recovery." (Financial Times)
UK prosecutors could file their first criminal charges over Libor as early as Tuesday. Tom Hayes, a former UBS and Citi trader, was charged with conspiracy to commit fraud by the US Justice department last year. But the planned charges against Hayes by the Serious Fraud Office could lead to US charges being dropped if they lead to a successful prosecution, under double-jeopardy rules (Wall Street Journal).
China's top state-owned banks are pressing their central bank to do more to resolve an interbank cash crunch. The People's Bank of China has so far seen fit to maintain a 'prudent' stance over levels of cash in the system, in order to cool down credit growth. But it has faced calls to lower the reserve-requirement ratio for banks after funding costs began to soar this month (Wall Street Journal).
The EU is set to approve ICE's $10bn takeover of NYSE Euronext, paving the way for the world's largest derivatives exchange to be created. A probe by European regulators found that ICE and NYSE were likely to complement each other's business rather than pose competition issues (Financial Times).
The US launched free-trade talks with the EU. The first round of negotiations will begin in Washington on July 8. "This is a once in a generation prize and we are determined to seize it," said UK Prime Minister David Cameron at the G8 summit (Reuters).
Homebuilder sentiment recovered to a seven-year high in June. The National Association of Home Builders/Wells Fargo index rose to a level of 52, from 44 in May. Low mortgage rates and dwindling inventories of homes for sale helped push the index to its first reading above 50 since April 2006 (Financial Times).
