D-DAY FOR THE EURO?
-BIG PICTURE: THE LOOMING “PLANE CRASH”…Nothing we could write here can top this from The Independent’s John Lichfield – as Eurozone leaders make what’s billed as a last-ditch effort to ease the crisis and save the Euro itself: “If this ‘last chance’ fails, it really will be time to brace for the final crash. Your plane is about to crash. What do you do? a) rebuild the plane in mid-air; b) take avoiding action; c) bail out. There a few things to bear in mind. The plane has 17 pilots. Some people on the ground are praying you do not fall on their heads. Others are firing missiles at you. The European summit, which starts in Brussels today, is the 18th ‘last chance’ to rescue the euro. In the last two years, the 17 pilots – and 10 co-pilots – have tried several unconvincing variations of a) and b). If they fail this week, they may be forced into a combination of c) abandon ship; and d) crash-and-burn. One thing by now should be clear even to the most diehard euro-fanatics: The euro, in its present form, is a failure – a successful failure in some ways, but nonetheless a failure…”
-ALL EYES ON MERKEL…The German Chancellor arrives at the Brussels summit – seen as both the great hope and chief stumbling block to a shock-and-awe response to the region’s debt crisis. As the Washington Post writes, “Jealously guarding the purse strings of Germany — an anchor of economic might and stability in a region adrift in financial trouble — the leader nicknamed ‘Frau Nein’ by the European press is resisting calls to roll out a bevy of measures seen as possible quick fixes to the crisis. But in recent weeks, Merkel and her top ministers have been spelling out a far grander, German alternative to convince markets the euro is here to stay. What they envision would mark a radical step forward in European integration through a “political union” in which countries in the region would act more like American states, sharing an elected president and even a pan-European army.
“LIBOR” OUTRAGE: WHAT IT IS, WHY IT MATTERS
-BIG PICTURE…As Bruno ROEBER writes from London, about the Barclays $450 million settlement for manipulating the Libor rate: “This could be the biggest financial scandal yet; several other banks are being investigated…and the fallout both here and across the pond is going to be huge. Bear in mind that at the time this was being done governments were pumping billions of dollars into the banking sector and one of the ways of judging the health of banking was via the Libor rate itself…”
-WHAT’S THE “LIBOR”?…The Libor is “a benchmark rate used around the world to set interest rates for everything from credit cards to corporate loans” (FTimes). It affects how much banks charge on loans and mortgages – an increase in the Libor can add hundreds of dollars annual mortgage payments. Libor is often seen as a barometer of how healthy a bank is; just as customers with bad credit have to pay higher interest rates, banks deemed in poor financial health are charged more to borrow. The rate is set every morning by a panel of banks and overseen by the British Bankers’ Association. Each bank sets the rates at which it believes it can borrow, from overnight to 12 months. There are 150 separate Libor rates, spanning ten currencies and 15 time periods.
-WHAT DID BANKERS DO?…Barclays’ traders were manipulating Libor in an effort to make huge profits. E-mails and instant messages disclosed in the bank’s settlement show how Barclays’s traders were trying to manipulate rates to benefit their own trading positions – in the process fixing the rates that affect millions of homeowners and small firms. In one e-mail, a trader at a different bank wrote to “Trader G” at Barclays: “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger.” Other e-mails revealed how traders would “shout” across the desk at each other to “beg” for the interest rate to be fixed at a certain level in the hope of making millions for themselves. “Coffees will be coming your way either way, just to say thank you for your help in the past few weeks.” His colleague replied: “Done…for you big boy.” Traders were conspiring with “submitters” at the bank – the people who lodge Libor rates every morning. Depending on the way they were betting, traders would urge these submitters to increase the Libor rate or lower it.
-NOW WHAT?…Last night – after Barclays was hit with the big fine -British MPs said the police should be called in to investigate the ‘appalling’ conduct. And other banks are under investigation as well. Barclay’s Chief Executive Bob Diamond apologized – and said he’ll forgo his bonus this year.
-DAMASCUS BLAST…Syrian state media reported “terrorist explosions” Thursday in the parking lot outside a judicial complex in central Damascus, the capital. The blasts injured three and damaged 20 parked cars, SANA said. Television images from the scene showed smoke billowing from the blast and firefighters with hoses dousing flames that appeared to have engulfed several parked cars. Syria has suffered a number of car-bomb attacks in recent months, mostly targeting government or security installations. Rebels have vowed to take the battle to the capital, and fierce clashes have been reported in recent days in Damascus’ restive suburbs.
-TURKEY MOVES ANTI-AIRCRAFT WEAPONS TO BORDER…In the wake of the downing of a Turkish jet last week, Turkish Prime Minister Erdogan is putting his money where his mouth is. Video out this morning shows Turkish military convoys arriving at the Syrian border. As Alex MARQUARDT notes, there have been cross-border shootings but this is a significant escalation and comes after Prime Minister Erdogan warned that any Syrian military element near the border would be treated as a target.
-EMERGENCY MEETING SATURDAY…Russia and other big powers have told mediator Kofi Annan that they support his idea of a Syrian national unity cabinet that could include government and opposition members but would exclude those whose participation would undermine it. Annan’s proposal for a political transition aimed at ending the 16-month conflict in Syria is one of the main topics that Russia, the other four permanent Security Council members and key players in the Middle East will discuss at a meeting in Geneva on Saturday.
HILLARY CLINTON BECOMES MOST TRAVELED SECRETARY OF STATE
When Secretary of State Hillary Clinton visits Latvia today, it will be the 100th nation she’s visited as Secretary. She is the most traveled Secretary of State in U.S. history, breaking the record of 96 trips made by Madeleine Albright.
NEWS CORP. TO MAKE IT OFFICIAL
News Corp. is expected to make it official today, announcing the restructuring that has been rumored all week. The Wall Street Journal reports the company is expected to split in two, separating its entertainment businesses from its publishing arm. http://www.bbc.co.uk/news/business-18621354
HIGH RADIATION LEVELS AT FUKUSHIMA
From Akiko FUJITA in Tokyo: TEPCO says they’ve detected the highest levels of radiation to date inside the No. 1 reactor at Fukushima. While the news is alarming, it’s important to note that this is the first time TEPCO has been able to measure for radiation inside that reactor, using endoscopes and dosimeters. At its highest level, radiation was more than 10 sieverts, enough to kill somebody in an hour – and 10 times higher than levels in the other 2 reactors. TEPCO says they’ll have to rely on robots going forward to assess the damage.
From Kirit RADIA in Moscow: Check out the new Kalashnikov rifle – Coming soon to a conflict near you. Here’s some video of experts testing the new prototype for the AK-12, which is said to have better aim and control than the AK-74 and its famous predecessor the AK-47.
THE QUEEN TODAY
Joe SIMONETTI asks: Does this 86-year old monarch ever take break. Fresh off her two-day visit to Northern Ireland, the Queen travelled a short distance from the Palace to nearby Green Park for the dedication of a statue commemorating UK World War II bomber crews. Controversy still swirls around the Allied carpet-bombing campaign during the war that may have killed as many as 600,000 German civilians and this memorial has been a long time coming.
BEES MORE DANGEROUS THAN TERRORISTS?
Bruno ROEBER flags a new report by a British government watchdog who claims that bee stings kill as many people in Britain as terrorist attacks do. As the Telegraph notes, the risk from extremists in Britain has fallen “markedly” in recent years.
CANADIAN CEREMONIAL GUARD FALLS – STABS HIMSELF WITH BAYONET
It happened in Ottawa yesterday – during the ceremonial guards parade on Parliament Hill. The guard tripped and fell on his bayonet – piercing his arm – and it all happened in front of hundreds of tourists.
A SCOTTISH ISLAND TO CALL YOUR HOME
An amazing-looking 260-acre property off the west coast of Scotland features a helipad, an observatory and a boathouse as well as a four bedroom home. “King’s Island” is yours for a cool $4.5 million
ODD FOOD DEPARTMENT
-HUMMUS ICE CREAM…At an ice cream shop in Jaffa, Israel, hummus-flavored ice cream is available. Hummus grains are blended then frozen. One customer said it was a little hard to swallow.
-SQUARE-SHAPED WATERMELON…Akiko FUJITA points out Japan is known for its high-priced fruits but this may be the oddest creation yet. Farmers in Kagawa (southeast Japan) have begun selling square-shaped watermelons. The odd-shaped fruit has been around in the region for about 35 years ago, but aren’t meant for consumption. NHK reports that they are popular decorations – and expensive ones, at $120 a piece. How do farmers grow them? Once they’re about 4 inches tall, farmers place a square shaped plastic cover on the fruit so it morphs into the intended shape. That restriction also apparently makes the watermelon lose its flavor.
BILL CLINTON, WEDDING CRASHER
Former President Bill Clinton gave an Irish-American couple an extra special moment on their wedding day last week. Clinton was attending a dinner in Ireland and playing golf when he took time out to pose with a couple on their wedding day. The couple says they were astonished when he came over, introduced himself and took pictures with them.
OZ DAD OFFERS YEAR’S SUPPLY OF BEER TO ANY EMPLOYER WHO HIRES HIS SON