TOP NEWS: Economy: August 24th, 2012
- Bankruptcy fears cast cloud over munis
- Plan B Considered on Money Market Funds
- Mitt Romney: What I Learned at Bain Capital
- Sales of New Homes Climb Sharply
- Shares falter as hopes for Fed aid recede
Excerpts and More Top Stories:
MARKETS/MUNICIPAL BONDS: Bankruptcy fears cast cloud over munis – FT
Investors have shrugged off warning signals in municipal debt, such as three Californian cities filing for bankruptcy and Warren Buffett cutting exposure.
MARKETS: Nasdaq’s Facebook Plan Under Fire – WSJ
UBS decried a proposal from Nasdaq to make up losses for firms damaged in the Facebook stock-market debut, joining a growing chorus of Wall Street players that are calling on regulators to reject the exchange operator’s plan.
MARKETS: Morgan Stanley Funds in Big Facebook Bet - WSJ
U.S. mutual funds run by Morgan Stanley, the lead underwriter in Facebook’s initial public offering, have a high level of exposure to shares in the social network.
MARKETS: Activist Fund Wants Ralcorp Sale - WSJ
A hedge fund headed by an ex-lieutenant of Carl Icahn is pushing Ralcorp to sell itself, fueling speculation about whether ConAgra would again express interest in buying the private-label food company after being rebuffed last year.
SEC: Plan B Is Considered to Curb Money Market Funds - NYT
After the failure of one effort to overhaul part of the mutual fund industry, regulators are considering invoking powers that were granted by the Dodd-Frank law to improve oversight.
SEC: Straw That Broke SEC Vote – WSJ
For Luis Aguilar, the last push persuading him to vote against new rules on money-market funds came when the SEC member learned that SEC Chairman Mary Schapiro’s office gave lawmakers a report on the risks of money funds that he viewed as misleading.
SEC: A Case Study in Wall Street Getting Its Way in Washington - BLOOMBERG, EDITORIAL
Every once in a while the financial industry lives up to its critics’ worst expectations: that it operates against the interest of the investing public, in cahoots with captive regulators and Washington’s powerful elite. This is exactly what happened Wednesday, when Securities and Exchange Commission Chairman Mary Schapiro had to cancel an Aug. 29 vote on sensible new rules to make money-market mutual funds safer.
SEC: SEC faces call to reject Facebook offer - FT
UBS and Citigroup have become the latest Nasdaq clients to criticise publicly the size of the exchange operator’s voluntary all-cash offer
ROMNEY/BAIN: Mitt Romney: What I Learned at Bain Capital – WP, OP-ED
My business experience taught me how to help companies grow—and what to do when trouble arises. When you see a problem, run toward it before the problem gets worse.
PAUL RYAN/FINANCE: Prime Time for Paul Ryan’s Guru (the One Who’s Not Ayn Rand) - NYT
Ryan has repeatedly suggested that many of his economic ideas were inspired by the work of Friedrich von Hayek, an awkwardly shy (and largely ignored) economist and philosopher who died in 1992.
ROMNEY/ENERGY: Romney’s Energy Plan Ignores the Success of Solar and Win – BLOOMBERG, EDITORIAL
Mitt Romney sets an ambitious goal with his pledge to achieve U.S. energy independence by 2020. It’s just too bad his plan relies almost entirely on fossil fuels and largely ignores the solid promise of clean energy.
GOP/GOLD STANDARD: Republicans eye return to gold standard - FT
Party platform draft calls for auditing the Fed’s monetary policy and a commission to look at restoring the dollar link to the precious metal.
*MORE ROMNEY/GOP ECONOMICS BELOW
HOUSING: Sales of New Homes Climb Sharply – WSJ
Sales of newly built homes rose briskly in July and inventories declined to the lowest level on record, a sign that builders may need to ramp up construction.
HOUSING: A Slim Recovery for Housing – NYT, EDITORIAL
Without far-reaching federal help for borrowers, the market’s gains won’t be enough to help the broader economy.
FED/MARKETS: Shares falter as hopes for Fed aid recede - FT
Policy comments from China and the US initially support the markets but poor economic data damps morale and sees Europe and Wall St dip
FED/QE3: Why Markets Should Cheer QE3 Is Not Coming Soon – CNBC via RCM, OP-ED
Dhara Ranasinghe: Global equity markets are taking a hit from fading expectations that the U.S. Federal Reserve will act again in coming months to boost growth – but maybe investors should be cheering at this prospect, say some analysts.
FED/AIG: N.Y. Fed Profits on AIG Bonds – WSJ
The Federal Reserve Bank of New York closed the book on its crisis-era acquisition of AIG’s most toxic assets, at a $6.6 billion profit in the latest sale of bonds.
MANUFACTURING: Cars, Planes Push Up Durable Goods – WSJ
Orders for long-lasting goods posted the strongest gain of the year in July due to demand for cars and airplanes, though weakness continued outside the transportation sector.
MANUFACTURING: Boeing Order Cut Strains 787 Plan – WSJ
Qantas Airways’ cancellation of orders for 35 Boeing 787 Dreamliners further clouds the aerospace giant’s efforts to make its flagship jet program profitable.
REGULATION: Reform looms anew for money market funds - FT
Asset managers face the threat that the US Treasury, Federal Reserve, the Bank of England and other US swaps and bank regulators could still act
FINANCIAL AUDITS: Bad Grades Are Rising for Auditors – NYT
In a disturbing trend, more audits are failing quality reviews, and the problem isn’t limited to work done by small firms.
BANKING/CREDIT: Small Banks Revisit Credit Cards – WSJ
Regional and community lenders are making a big push into credit-card lending, as they try to eke out growth in a world of low interest rates.
MADOFF TRUST: Madoff Trustee Cleared to Return $2.4 Billion – WSJ
Irving Picard won bankruptcy-court approval to return up to $2.4 billion to Bernard L. Madoff’s cheated investors, the biggest distribution of funds yet delivered in the wake of the Ponzi scheme.
MILITARY SPENDING: Pentagon Moves Ahead With Humvee Replacement – WSJ
The competition for $4 billion contract to start replacing the U.S. military’s Humvee trucks entered a new stage as the Pentagon awarded three development contracts.
MEDIA/WIRELESS: Verizon Wins Approval for Huge Spectrum Purchase – NYT
The United States government approved a deal in which the company will spend $3.9 billion to buy underused airwaves owned by Comcast, Time Warner Cable and others.
MEDIA/NEWS CORP: News Corp. Digital Chief to Resign - WSJ
News Corp. Chief Digital Officer Jon Miller will step down from his position as the company prepares to split its media and entertainment business from its publishing assets.
MEDIA/ADVERTISING: Liquor Ads Win Airtime – WSJ
Broadcasters are easing decades-old voluntary bans that limited their national alcohol advertising to beer and wine. The move lets them tap a new stream of revenue as advertisers continue to shift their ad budgets to cable TV, the Internet and online videos.
POKER RULING: U.S. Judge Gives Poker a Break – WSJ
A federal judge concluded this week that skill plays a bigger role than luck in determining who wins a poker game, a ruling that might strengthen the hand of companies trying to get online poker legalized in the U.S.
SOCIAL SECURITY: Are Advisers Sexist About Social Security? - MARKET WATCH via RCM
Many financial advisers tell men to take benefits too soon, possibly shortchanging their wives, a new study found.
ECONOMY: A Brief History of Modern Money’s Inadequacy – RCM, OPINION, Jeffrey Snider
ECONOMY/AYN RAND: What Liberals Don’t Understand About Ayn Rand – REASON, OP-ED
Cathy Young: Critics of the Russian-born writer miss what’s important in her ideas.
FTC/SETTLEMENT: FTC Targets ‘Ab Circle’ Ads – WSJ
The FTC said the marketers of exercise device Ab Circle Pro have agreed to pay as much as $25 million in customer refunds to settle allegations of deceptive advertising.
BUSINESS/TECHNOLOGY: Start-Ups as Tech Vendors of Choice – WSJ
Businesses are getting more comfortable buying technology from start-ups and other small outfits, a shift that could usher in a period of slower growth for tech giants such as Hewlett-Packard and Oracle.
BUSINESS/GOOGLE: Google’s audacious bet on fiber — and why it could work – FORTUNE
The company is building an Internet Valhalla in Kansas City. Most observers have scoffed at the effort. But they’re wrong.
BUSINESS: HP’s record loss shows Whitman’s challenge – BLOOMBERG
Almost a year into her tenure, Whitman is boosting investment in R&D and revamping PC, printer and enterprise-services units.
BUSINESS: G.M. Has High Hopes for New, Smaller Cadillac – NYT
Three years after General Motors hobbled out of bankruptcy, it is betting that the new Cadillac ATS will become a global contender in luxury cars.
BUSINESS/KODAK: Kodak in sell-offs to satisfy creditors - FT
The company is putting two of its businesses up for sale to satisfy creditors as it struggles to emerge from its Chapter 11 bankruptcy reorganisation
BUSINESS/KODAK: Kodak to Sell Camera-Film Business – WSJ
Kodak is putting the camera-film business that helped make it a blue-chip name on the block as it reorganizes under bankruptcy protection.
*MORE BUSINESS BELOW
*MORE ROMNEY/GOP ECONOMICS
ROMNEY/ENERGY: Election rivals seek to exploit oil boom – FT
Romney’s pledge to achieve energy independence for North America is not as far-fetched as it might sound, thanks to technological breakthroughs
ROMNEY/ENERGY JOBS: Romney’s Tech-Centric Energy Plan Will Create Jobs - FORBES
Mark Mills: Thus far, every energy plan would work better in Hollywood than Houston. Romney’s new plan is the first that has a shot at succeeding because it reflects technology reality.
ROMNEY/TAX PLAN: Don’t Believe Obama’s Ads, Romney Is A Middle Class Tax Cutter – FORBES
Peter Ferrara: Romney actually proposes cutting income tax rates across the board for everyone by 20%.
BUSINESS/ PHARMACEUTICALS: Bristol Ends Liver Drug’s Development - WSJ
Bristol-Myers Squibb said it stopped development of a closely watched drug that aimed to treat hepatitis C, a deadly liver disease, after one patient died in testing and eight others were hospitalized.
BUSINESS/TECHNOLOGY: Amazon’s Sept. 6 Press Invite Fans Kindle Fire Rumors – WSJ
Amazon invited press to an event in Santa Monica on Sept. 6. There are no details but it’s widely expected to release a new version of its Kindle Fire tablet soon.
BUSINESS: Facebook Reorients Itself for a Small-Screen World – NYT
The company is trying to find ways to show lucrative ads to mobile users without cluttering up their hand-held screens and driving them away in frustration.
BUSINESS: Big Lots Says Profit Fell 38% – WSJ
Big Lots posted a 38% drop in fiscal second-quarter earnings amid pressure from online and other low-price retailers.
BUSINESS: Strong Spam Sales Boost Hormel’s Net – WSJ
Hormel Foods’ quarterly earnings rose 13% as all of the food-processing company’s segments reported increased profits.
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