UBS to Pay $1.5 Billion to Settle Libor Charges [WSJ]
UBS AG became the second bank to settle accusations that it tried to rig benchmark interest rates, agreeing to pay roughly $1.5 billion in a deal with authorities in multiple countries that points to a broader manipulation scandal than previously known. As part of the deal, UBS acknowledged that dozens of its employees were involved in widespread efforts to manipulate the London interbank offered rate, or Libor, as well as other benchmark rates, which together serve as the basis for interest rates on hundreds of trillions of dollars of financial contracts around the world. UBS's unit in Japan, where much of the attempted manipulation took place, pleaded guilty to one U.S. count of fraud.
Boehner ‘Plan B’ Aims to Show Republican Tax Aversion [Bloomberg]
U.S. House Speaker John Boehner plans to use a vote on his alternate budget proposal to highlight Republican opposition to tax increases sought by President Barack Obama, as the two sides negotiate a larger fiscal deal. The House may vote tomorrow on Boehner’s “Plan B,” which would raise tax rates on income over $1 million, rather than the $400,000 threshold the president proposed in his latest offer. The Obama administration and Democrats rejected the Boehner plan, released yesterday, as inadequate. With his push for a vote on his proposal, Boehner is looking to pressure Obama to accept deeper spending cuts and a higher threshold for rate increases by showing how hard it will be to win Republican support for any tax increase. Unless Congress acts, more than $600 billion in tax increases and spending cuts will begin next month.
A Bad Budget Deal [WSJ]
It's clear by now that the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later. This is a bad deal for everyone except the politicians who want more money to spend. Consider the tax increase now being touted as a sign of "compromise." Speaker John Boehner has moved from opposing higher tax rates to offering higher rates for incomes above $1 million a year. While that's better than the scheduled increase on incomes above $200,000 a year (for singles), it would still put the GOP on record as endorsing a tax increase, in particular on small businesses that file individual returns. President Obama has countered with a ceiling of $400,000. If they compromise at $500,000, we are all supposed to thank the two sides for their reasonableness. Yet both parties will have declared that raising tax rates is no big economic deal. This will hurt the economy, and it further advances Mr. Obama's political goal of separating the middle class from the affluent on tax policy.
But they're not giving up! "HealthSouth, together with the stockholder derivative plaintiffs, has filed a Notice of Appeal of the arbitration panel's decision dismissing what the Company believes are meritorious claims against Ernst & Young. HealthSouth noted the arbitration panel granted Ernst & Young's motion to dismiss based on their conclusion that the Company was not permitted to pursue its claims since certain of its former officers and employees committed fraudulent acts. The Company maintains that this determination is contrary to Alabama law and the duties of a public accounting firm to its corporate clients."
For SALT nerds: "Nike demanded that the single sales factor apportionment formula used by Oregon never be changed. Actually, the company said it did not want it to change for 30 years. If the Oregon legislature and governor did not agree, the company said it would pick up and move. Of course, the Oregon politicians, not exactly the profile in courage types, agreed. For the uninitiated, the single sales factor apportionment formula is greatly beneficial to companies that manufacture or are headquartered in a state but make most of their sales in other states. It basically allows corporations to reduce their tax liability to zero."
I can't believe it took this long.