Barclays' Brave New CEO
Barclays PLC (NYSE: BCS) did not take long to appoint a new chief executive. The CEO is Antony Jenkins. He ran the retail part of the financial firm, so he was far from the operations involved in Libor rate rigging. His predecessor, Robert E. Diamond Jr., was not only thrown out, but his testimony before a Parliament committee has been questioned as to its truthfulness. That only caused the British government to aggressively expand its investigation about Libor. The U.K. Serious Fraud Office has become involved, which means that the Barclays inquiries have taken on a criminal aspect. This may not be the worst of it. U.S. agencies likely will press similar cases. Analysts estimate that fines and settlements with governments and shareholders may cost billions of dollars. Jenkins faces years running a bank that is in one kind of trouble or another. Looked at that way, his decision is a very brave one.
China Puts on a Brave Face
At least one leader of a major nation is confident the financial and economic problems of Europe will be solved. China's Premier Wen Jiabao said he thinks the region will pull through. He admitted at the same time that troubles in Europe have become a large drag on the global economy. According to Reuters, Wen said he is confident the crisis-stricken eurozone can survive its nagging debt crisis. Wen almost has to make optimistic statements, unless he wants to admit that China will be sucked more rapidly in the direction of recession. Chinese leaders have been accused of embellishing the good prospects of their national economy. Some analysts who follow the People's Republic claim that its GDP growth is much slower than reported. Part of the proof of this is the accumulation of inventory that is supposed to have been shipping overseas. The New York Times recently carried a report that some of this inventory has accumulated in Chinese warehouses and on ships.
Hollande Not Popular with Voters
French President Francois Hollande may have run out of leverage with his peers in the European Union, his political opposition and his own voters. Bloomberg reports:
Hollande's approval rating fell by five points to 50 percent from July, beating the 54 percent level for Jacques Chirac at the same point in his presidency in August 2002, the poll for Figaro Magazine weekly by TNS-Sofres showed yesterday. Nicolas Sarkozy, who lost to Hollande, had a 64 percent rating after 100 days, while Francois Mitterrand was the most popular with a 66 percent approval rating in August 1981.
The problem could hardly come at a worse time. Hollande and Italian Prime Minister Mario Monti have been the leaders of a fight with Germany over whether austerity measures set for economically weak nations like Greece and Spain are so great that they will strangle any possibility for growth. The two men have even lobbied for stimulus packages to renew growth in these countries. If Hollande is seen as wounded at home, the strength of his hand overseas likely will be weakened.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Market Open Tagged: BCS, featured