TOP NEWS: Economy: July 12, 2012
- US Jobless Claims Fall to 350,000
- Clock Is Ticking on Crisis Charges
- Move America’s Economic Debate Out of Its Time Warp
- Regulators Review How JPMorgan Marketed Funds
- Fed Forced Into Election Spotlight
Excerpts and more top stories
Shannon Bond, Financial Times – US jobless claims fell to 350,000 last week, the lowest level in more than four years, but unusual seasonal factors may have fuelled the unexpected sign of improvement in the labour market.
JOBS: The Road to More Jobs
New York Times, EDITORIAL – Republicans’ relentless opposition to constructive proposed Obama stimulus policies has kept unemployment high. Federal aid to states was a mainstay of both of those efforts, and if federal aid to states had been bolstered, some two million unemployed workers would have jobs, and economic growth would be comfortably above 2 percent, instead of below that pace.
Jean Eaglesham, Jeannette Neumann, & Reed Albergotti, WSJ - Time is running out for U.S. securities regulators to file civil charges for alleged wrongdoing during the financial crisis. Federal laws under which the SEC usually goes after alleged fraud and other misdeeds have a five-year statute of limitations. The five-year limit is causing SEC officials to race to file lawsuits in some cases and ask lawyers representing the targets of certain investigations to give the agency more time.
SEC/MARKETS: SEC Arms Itself to Better Track Trades
Jessica Holzer, WSJ – A divided Securities and Exchange Commission approved a plan to track all U.S. stock trading with a powerful computer system, the regulator’s biggest step since the 2010 “flash crash” to get a better handle on the rapid-fire trading that has come to dominate U.S. markets.
ECONOMIC FUTURE: Move America’s Economic Debate Out of Its Time Warp
Jefffrey Sachs, Financial Times, Opinion – America’s economic debate is stuck in a time warp. On the one side, Mitt Romney’s conservative advisors defend tax cuts for the rich and spending cuts for the poor as if we hadn’t just lived through 30 years of failed Reaganomics. On the other side, Paul Krugman defends crude Keynesianism as if we’ve learned nothing in recent years about the severe limitations of short-term fiscal stimulus.
Susanne Craig & Jessica Silver-Greenberg, NY Times Dealbook – Authorities are responding to current and former JPMorgan financial advisers who said they had felt pressure to sell the bank’s products even when cheaper or better performing options were available.
David Wessel, WSJ - Federal Reserve officials usually try to keep their heads down in the summer and fall of an election year. This year, the economy is not cooperating.
FED/LIBOR: Fed to Document Libor Action
Damian Paletta, WSJ – A Federal Reserve official said Wednesday the central bank will release documents showing the Federal Reserve Bank of New York acted swiftly during the financial crisis to identify problems with a key interest rate and suggest changes. The Fed plans to release the documents in response to lawmakers’ questions about the central bank’s potential knowledge of the alleged manipulation of Libor by banks in 2007 and 2008.
CLAWBACKS: Dewey Seeks ‘Clawbacks’
Jennifer Smith, WSJ – Once one of New York’s largest firms, Dewey & LeBoeuf filed for bankruptcy-court protection six weeks ago and owes more than $315 million to banks and other creditors. Its failure was the biggest ever by a U.S. law firm. Ex-partners were offered a stark choice: give back up to $103.6 million in pay and benefits or face years of litigation.
MUNICIPAL BANKRUPTCY: Labor Costs Push San Bernardino Near Bankruptcy
Tamara Audi & Erica E Phillips, WSJ – Like other aging California communities, San Bernardino, has struggled with plummeting tax revenue, slumping housing values and rising public-employee costs. On Tuesday night, the municipality succumbed to its financial troubles and authorized a bankruptcy filing. Home to 210,000 residents, the city will run out of cash to pay its 800 employees within 90 days, and expects its deficit to rise to $45 million in this fiscal year.
STUDENT DEBT: ’Looking for Rats in (For-Profit School) Ratholes’
NY Times, EDITORIAL – The Department of Education should use its authority, which was affirmed by a federal judge, and rein in for-profit schools that bury students in debt.
FUEL/ETHANOL: In Kansas, Stronger Mix of Ethanol
Matthew L Wald, NY Times – Unfortunately for ethanol makers, Americans are driving fewer miles and upgrading to more efficient cars, so ethanol makers want to offer a blend of fuel that is 15 percent ethanol rather than 10 percent. At a Phillips 66 station in Lawrence, Kan., E15 is catching on.