TOP NEWS: Economy: August 7, 2012
- Fed Official Calls for Bond Buying
- TD Ameritrade, Jefferies Among Knight’s Rescuers
- Business Fears the Fiscal Cliff
- Stagnant Unemployment, Declining Public Sector Jobs
- U.S. probes HCA heart procedures, hospital billing
Excerpts and more top stories
FED/BONDS: Fed Official Calls for Bond Buying
Jon Hilsenrath, WSJ – Eric Rosengren, president of the Federal Reserve Bank of Boston, urged an open-ended and aggressive bond-buying program by the Fed.
Binyamin Appelbaum, NY Times – Eric S. Rosengren, president of the Boston Fed, said significant economic indicators were showing weakness, reinforcing the need for the Fed to expand its holdings.
KNIGHT CAPITAL: TD Ameritrade, Jefferies Among Knight’s Rescuers
Jacob Bunge, Anupreeta Das, Telis Demos – Knight Capital kept itself afloat with a deal that gave financial firms, including a rival, effective ownership of about 73% of the brokerage, in a move meant to avert a worse fate.
KNIGHT CAPITAL: Knight Capital blow spurs SEC action
Kara Scannell, Michael Mackenzie, FT – Trading firms will have to reveal system failures and test computer-code changes under rules being developed in light of software glitch.
KNIGHT CAPITAL: Quick Lunge for a Lifeline Helped Knight Capital Skirt Collapse
Ben Protess, Nathaniel Popper, NY Times – Knight Capital was given a $400 million shot in the arm by a varied group of investors as it narrowly avoided filing for bankruptcy.
FISCAL CLIFF: Business Fears the Fiscal Cliff
NY Times, Editorial – Now that painful budget cuts are imminent, corporate executives seem to have realized that federal spending is important to the economy after all.
Michael Greenstone, Adam Looney, Brookings Institution – While the economy added 163,000 jobs in July, its largest expansion since February, the ten-month decline in government jobs that has made falling public sector employment one of the largest contributors to unemployment throughout the Great Recession and beyond.
HOSPITALS: U.S. probes HCA heart procedures, hospital billing
Bill Berkrot , Reuters via Washington Post – U.S. authorities are probing whether heart procedures performed at HCA Holdings hospitals were medically necessary and are investigating the company’s billing practices, the company said.
LIBOR: Libor, Naked and Exposed
Gary Gensler, NY Times, Opinion – The Barclays case isn’t only about misconduct by large financial institutions. It also raises questions about the reliability and accuracy of these key interest rates, which are largely determined by the private sector, without significant government oversight.
MORTGAGES: Mortgage Demand Increases, Banks Say
Alan Zibel, WSJ – Demand for home loans is growing, but lenders were keeping standards tight for borrowers, the Fed said.
BANKING: The Latest Big Bank Bailout
WSJ, Opinion – If elected President, Mitt Romney will have some tough decisions to make on financial regulation. But here’s an easy one: Do not expand the taxpayer safety net. Mr. Romney can even help protect taxpayers as a candidate by opposing the extension of a subsidy that largely benefits the biggest banks.
Doug Bandow, Forbes, Opinion – Washington is awash in government “stimulus,” without effect. Only productive private investment will spark economic revival.
INSIDER TRADING: Key Insider Informant Takes Witness Stand
Reed Albergotti, WSJ – A government informant who helped build roughly half a dozen cases in the government’s widespread crackdown on insider trading told jurors that she passed on “very powerful” tips to her “friends and buddies on Wall Street.”
CORPORATE FRAUD: More Fraud Settlements for Companies, but Rarely for Individuals
Michael S. Schmidt, Edward Wyatt, NY Times – Corporations may pay a record sum this year to settle charges of defrauding the government, but critics are asking why so few executives have been charged.
MARKETS/SMALL INVESTORS: Why Are Investors Fleeing Equities? Hint: It’s Not the Computers
Andrew Ross Sorkin, NY Times, Opinion – Analysts cite trading blunders as the reason billions of dollars are flowing out of the stock market, but there might be a simpler reason: a lack of trust.
INTERNATIONAL BACKLASH: A Global Backlash Against the Rich
Gideon Rachman, FT – France is clearly taking a big risk by raising its tax rates so much higher than those of its neighbours. But the truth is that the new French government is at the extreme end of a new global trend: an international backlash against the wealthy that is reshaping politics from Europe to the U.S. to China.
AMAZON LOCKERS: Amazon’s New Secret Weapon: Lockers
Greg Bensinger, WSJ – Amazon has installed large metal lockers in grocery, convenience and drugstore outlets that can accept packages for customers for a later pickup.
BEST BUY/TAKEOVER : Best Buy Founder Makes Bid for a Takeover
Michael J. De La Merced, Stephanie Clifford, NY Times – Richard M. Schulze, who founded the company with a single audio equipment store in 1966, announced a proposal on Monday that would give the company a market value of $8.8 billion.
PROFIT DECLINE: Over $1 Billion Wiped From HTC’s Market Capitalization
Aries Poon, Lorraine Luk, WSJ – Over $1 billion was wiped out of HTC’s market capitalization Monday and Tuesday combined, after the Taiwanese smartphone maker warned of weaker third-quarter earnings and reported a 45% plunge in July revenue.
PROFIT DECLINE/DROUGHT: High Grain Costs Hurt Tyson
Tess Stynes, WSJ – Tyson Foods posted a 61% drop in fiscal third-quarter net profit, and the meat processor cut its revenue forecast amid challenges at its beef and pork businesses, as well as rising grain prices.
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