TOP NEWS: Economy: July 17, 2012
- London Self-Regulation Proves Illusory In Libor Scandal
- Bernanke Predicts Slow Progress on Unemployment
- Bernanke Unlikely to Add Liquidity
- The Cure for Our Economy’s Stationary State
- Automatic Federal Spending Cuts Could Eliminate 2M Jobs
Excerpts and more top stories
Simon Kennedy & Jennifer Ryan, Bloomberg – As long ago as 2008, New York Federal Reserve President Timothy F. Geithner was warning the Bank of England that letting bankers set the benchmark interest rate for global finance was open to abuse. Governor Mervyn King’s failure then to take greater responsibility for Libor now poses a new threat to London’s drive to rival New York in the battle for a larger share of a shrinking international financial industry.
Shahien Nasiripour, Financial Times – The Federal Reserve’s top attorney told US Senate aides that the Fed lacked jurisdiction to police banks that may have attempted to manipulate Libor. The New York Fed said last week that it became aware of “problems” with Libor in late 2007.
David Enrich & Dana Camilluca, WSJ - A recently departed Barclays PLC executive said he was following orders from his boss and regulators when he instructed deputies to understate the British bank’s borrowing costs in 2008. This could intensify the political storm over top British officials’ role in the interest-rate-rigging scandal.
Joshua Zumbrun, Bloomberg – Federal Reserve Chairman Ben S. Bernanke said progress in reducing unemployment is likely to be “frustratingly slow” and repeated the Fed is ready to take further action to boost the recovery, while refraining from discussing specific steps.
Michael Mackenzie, Financial Times – Central banks are in an easing state of mind with the global economy slowing and the eurozone crisis with all its uncertainty damping confidence among investors and markets. In the US, Ben Bernanke steps into the spotlight on Tuesday with his semi-annual testimony on the economy and policy to Congress.
ECONOMIC GROWTH: The Cure for Our Economy’s Stationary State
Niall Ferguson, Newsweek, Opinion -The world economy may not be in a depression as bad as the early 1930s. But much of the developed world, including the United States, is stagnating. So is there any way out? Adam Smith’s prescriptions were more free trade, more encouragement for small business, less bureaucracy, and less crony capitalism. Another alternative is to escape stagnation through technological innovation.
Donna Cassata, AP via Huffington Post - Automatic cuts in federal spending will cost the economy more than 2 million jobs, from defense contracting to border security to education, if Congress fails to resolve the looming budget crisis, according to an analysis released Tuesday.
ECONOMY: Industrial Output Rose in June
Tom Barkley & Josh Mitchell, WSJ - U.S. industrial production picked up in June, as a rebound in manufacturing activity offset declining output in the utilities sector.Separately, U.S. consumer prices were flat in June as energy costs continued to fall, keeping inflation at bay.
INFLATION: US Cost of Living Was Unchanged in June
Associated Press via NY Times - Consumer prices were unchanged in June, held down by cheaper gasoline. Outside the volatile food and energy categories, inflation was mild.
ECONOMY: Retail Sales Cap Sluggish Quarter
Neil Shah & Jie Jenny Zou, WSJ - Americans reined in their spending for the third straight month in June, fueling fears that the economy is stalling after gathering steam early this year.
ELECTION 2012: More Grand Bargains Needed
Gerald F Seib, WSJ, Opinion - The real problem is that America’s economy simply isn’t the high-growth, jobs-producing machine it once was. It’s a problem that will persistlong after the recovery – unless both parties in Washington find some way to break the policy gridlock.
Andrew Ross Sorkin & Evelyn M. Rusli, NY Times - Marissa Mayer, one of the top executives at Google, will be the next chief of Yahoo, making her one of the most prominent women in Silicon Valley and corporate America.
GOVERNMENT: US Tightens Security for Economic Data
John H Cushman Jr, NY Times - Fearing leaks to high-speed traders, the government is overhauling its “lockup room,” where news media wait to hear new inflation numbers, jobless rates and other critical information.
Steven Landsburg, TIME, Opinion - Capital taxes are a disincentive to save, a disincentive to work and a disincentive to innovate.
GOLDMAN SACHS: Goldman Builds Private Bank
Liz Rappaport, WSJ - Goldman Sachs Group Inc. is building an in-house bank to lend money to wealthy people and companies, in a significant shift that underlines the harsh business climate facing Wall Street since the financial crisis.
GOLDMAN SACHS:Goldman’s Earnings Fell 12% in Second Quarter
Michael de la Merced, NY Times Dealbook – Goldman Sachs reported on Tuesday that its profit fell 12 percent in the second quarter, as the investment bank continued to grapple with a moribund economy.
Charles Ferguson, Huffington Post, Opinion – Over the past two decades, the financial services industry has become a pervasively unethical and highly criminal industry, with massive fraud tolerated or even encouraged by senior management. But how did that happen?