TOP NEWS: Economy: September 14th, 2012
- Bernanke takes plunge with QE3
- Fed Ties New Aid to Jobs Recovery in Forceful Move
- Stocks Add to Gains
- Threat of tax cliff weighing on small businesses
- Retail Sales, Consumer Prices Rise
Excerpts and More Top Stories
FED QE3: Bernanke takes plunge with QE3 - FT
The new round of quantitative easing – nicknamed QE3 – does not have a defined limit but will continue until the outlook for the labour market gets better.
FED QE3: The Fed Makes Its Move - NYT, EDITORIAL
A bold plan to spur economic recovery will not, as in past efforts, be confined by preset limits and expiration dates.
FED/STIMULUS: Paul Krugman: The iPhone Stimulus – NYT, OPINION
If you think sales of the latest iPhone will help the economy, then you should support the government stepping in and doing more, too.
* Paul Krugman will be a guest of The Common Good on October 17, 2012 [RSVP Here]
FED/JOBS: Fed Ties New Aid to Jobs Recovery in Forceful Move – NYT
The Federal Reserve opened a new chapter in its efforts to stimulate the American economy, saying that it intends to buy large quantities of mortgage bonds until the job market improves substantially.
FED/JOBS: Fed Acts to Fix Jobs Market – WSJ
The Fed unveiled an aggressive program to spur the economy through open-ended commitments to buy mortgage bonds and promised to keep rates low for years.
FED/BERNANKE: Bernanke Unbounded – WSJ
The Fed enters a brave new world of unlimited monetary easing.
*MORE ON FED QE3 BELOW
MARKETS: Stocks Add to Gains – AP via NYT
Shares on Wall Street traded higher after the Federal Reserve gave a green light to big asset purchases to boost the American economy.
MARKETS: Optimism Grips the Options Market - BARRONS
Investors have been increasing their call buying of many big financial-services stocks.
MARKETS: Pity the investment bankers, really - ECONOMIST
Their industry is being shrunk by weak markets and higher capital requirements
MARKETS: Is the Stock Market Predicting an Obama Win? - BUSINESSWEEK
Obama’s performance on the prediction market roughly mirrors the movements of the S&P 500
MARKETS: Obama’s Chances Look Less Golden - BARRONS
Adjusted for the dollar’s loss of value, stock prices augur less well for chances of an incumbent’s reelection.
SMALL BUSINESS/FISCAL CLIFF: Threat of tax cliff weighing on small businesses - WP
Business owners plead with lawmakers for long-term solutions that provide more clarity and fewer “on-again, off-again” tax extensions.
SMALL BUSINESS: Spare Small Business the Campaign Spotlight - BUSINESSWEEK
They’re a small fraction of registered voters, aren’t particularly dominant in swing states, and appear to have decided on their vote. Why are nominees so keen on small business owners?
SMALL BUSINESS: States Pass ‘Baker’s Bills’ to Lift Households - BUSINESSWEEK
A raft of cottage food laws in 32 states permit entrepreneurs to sell certain goodies made in home kitchens.
RETAIL/CONSUMER PRICES: Retail Sales, Consumer Prices Rise – WSJ
Retail sales rose 0.9% last month as spending on gasoline and at car dealers increased, while consumer prices posted their biggest gain since June 2009 and industrial production fell.
CONSUMER PRICES: US consumer prices and retail sales rise - FT
Surging petrol prices lifted the cost of living in the US by the most in three years and helped retail sales climn the most in six months
CONSUMER PRICES: Gas Prices Increase Consumer Inflation - REUTERS via NYT
Consumer prices in the United States rose in August by the most in three years, but underlying inflation was fairly muted. Retail sales also rose.
CYBERSECURITY: No Cybersecurity Executive Order, Please – WSJ, OPINION
By John McCain, Kay Bailey Hutchison and Saxby Chambliss: Private firms should not have to choose between sharing cyber-threat information and facing a regulatory backlash.
LEGISLATION/TAXES: House-Senate Hearing Planned on Capital Gains Taxes - WSJ
The House Ways and Means and the Senate Finance committees will sit down for a rare joint hearing next Thursday, this time on the topic of capital gains taxes.
TAXES: A Tax Tactic That’s Open to Question - NYT, OPINION
FLOYD NORRIS: Private equity’s use of carried interest to lower tax bills, though legal, has drawn criticism. But another lesser-known method might not withstand an I.R.S. challenge.
BANKING: Ex-UBS trader accused of ‘fraudulent gambling’ - FT
Prosecution claims Adoboli lost $2.3bn by inventing fictitious deals to hide losses and ‘like most gamblers, believed he had the magic touch’.
BANKING: Goldman Scales Back Analyst Program – WSJ
Goldman is doing away with two-year contracts for most analysts hired out of college, a blow to its junior ranks.
BANKING: Welcome to Goldman Sachs. Don’t Get Too Comfortable - BUSINESSWEEK
A tradition of working hundred-hour weeks, meeting the right people, and then cashing in may be coming to an end
BANKING: Citigroup Puts the Fun Back in Taking Huge Losses – BLOOMBERG, OP-ED
Jonathan Weil: A few months ago, the Bank for International Settlements, which acts as a bank for the world’s central banks, warned in its annual report that “the financial sector needs to recognize losses” and “adjust balance sheets to accurately reflect the value of assets.” We are starting to get a taste of what that means, and it’s not all bad.
BANKING: BofA gains as financials given impetus – FT
S&P 500 rises to its highest intraday level since the financial crisis struck after the Federal Reserve launches a new round of bond buying.
BANKING: Business Loans a Sweet Spot for Banks – WSJ
The growth in commercial and industrial loans is twice as fast as gains in overall bank credit. The loan volume and resulting payments will buoy those banks weighed down by low interest rates, as long as the economy stabilizes or improves.
ENERGY: Shell Gains Boost in Shale Output With Latest Deal – WSJ
Royal Dutch Shell has made its name in the U.S. as a big oil and gas producer in the Gulf of Mexico. But in less than five years, oil from shale could play a role that is almost as important for the Anglo-Dutch energy company’s North American output.
ENERGY: Oil and the Ghost of 1920 - WSJ
The surge of American shale oil will test a protectionist shipping law that may stand in the way of cheaper fuel.
ENERGY: Making Sense of the U.S. Oil Boom - WSJ
Daniel Yergin on the American oil renaissance and what it means for the U.S. economy and diplomacy in a changing world
ECONOMY/HISTORY: Capitalism and Government Are Friends After All – BLOOMBERG, OP-ED
Alex Marshall: Americans will be getting an earful about the perils or virtues of government until they vote on Nov. 6. But they won’t hear anything about what it is exactly. – BLOOMBERG, OP-ED
ECONOMY/OBAMAS: Worse Than the Recession - REASON, OPINION
Tim Cavanaugh: The Obama administration has engineered a “recovery” in name only.
ECONOMY/FISCAL CRISIS: Tallying Full Cost of the Financial Crisis - BUSINESSWEEK
One group attempts to estimate the cost of the financial crisis. It’s a big number.
DEFENSE MERGER: Like Unilever but with fighter jets and missiles - ECONOMIST
The possible merger of EADS and BAE Systems
DEFENSE MERGER:US conditions critical to defence deal - FT
Conditions imposed by the US government to protect advanced military technology will be critical to the outcome of the talks between EADS and BAE Systems
DEFENSE MERGER: BAE warns on political influence in EADS - FT
European group has indicated it would be willing to de-politicise company, but unclear if Paris and Berlin will give up strategic stakes
DEFENSE MERGER: Pentagon Hovers Over European Tie-Up – WSJ
The structure of the EADS-BAE merger aims to appease possible American worries about security, as stocks in both companies fall.
EDUCATION/DOCTOR DEBT: The Debt of Medical Students – NYT
The considerable debt that doctors accumulate in medical school, and the public good that their degrees make possible, may warrant some form of public subsidies.
EDUCATION/STUDENT DEBT: Answers to Your Student Loans Questions, Part 2 - NYT
ANDREW MARTIN: Answers to questions about starting repayment, different ways of paying back loans and consolidation of public and private loans.
EDUCATION FUNDING: Why These Kids Get a Free Ride to College – NYT
Thanks to mystery donors, every kid in Kalamazoo, Mich., who completes high school wins a college scholarship. Will that help the city’s economy?
HEALTHCARE PROBE: Doctor, Hospital Deals Probed – WSJ
California’s attorney general has launched a broad investigation into whether growing consolidation among hospitals and doctor groups is pushing up the price of medical care, reflecting increasing scrutiny by antitrust regulators of medical-provider deals.
CONSUMER PROTECTION/GOP: Consumer watchdog still under GOP fire - WP
The Consumer Financial Protection Bureau continues to face opposition from Republicans.
MORTGAGE CRISIS: Peregrine Founder Allowed Home Confinement – WSJ
A judge said Peregrine Financial founder Russell Wasendorf Sr. could be released from jail on Monday after pleading guilty to fraud, but he will be under home confinement until he is sentenced.
MORTGAGE CRISIS: Peregrine Founder Can’t Profit From Crime - WSJ
Russell Wasendorf Sr., the jailed executive of collapsed brokerage Peregrine Financial Group, won’t be able to pocket money from any book or movie deal about his scheme to defraud clients, according to details of a plea agreement.
REIT’S: Equinix seeks Reit status to aid growth – FT
Data centre operators have seen their growth rates slow as competitors have joined the market, but Equinix remains the industry leader
REIT’S: A Dividend-Rich Investment Gets Lift From Fed - BARRONS
Shares of mortgage REITs are sitting pretty as the Federal Reserve takes a bold step to keep short-term rates under control.
FOOD LABELING: Uneasy Allies in the Grocery Aisle – NYT
A ballot measure to require labeling of foods that contain genetically modified ingredients is putting organic brands like Kashi, owned by Kellogg, at odds with their owners.
TECHNOLOGY: Hello, iPhone 5! Goodbye, Point & Shoot Cameras - BUSINESSWEEK
With the impending demise of casual point-and-shoots, camera makers must move upmarket to ensure a soft landing.
SEC: The SEC Says Speak Up About Hack Attacks - BUSINESSWEEK
Amazon, Google, and others are told to report security breaches
TECHNOLOGY: Robots That Work for the Little Guy - WSJ
A company founded by Rodney Brooks, one of the few rock stars in the world of robotics, is due to unveil its first robots Tuesday, with promises to bring automation to a much broader array of manufacturers.
FACEBOOK/GOOGLE: Watch Out Google: Facebook Social Search Is Coming - BUSINESSWEEK
An approach oriented to a user’s social graph and connections could reinvent search and give Facebook the edge
MEDIA: Taking Pointers From Web Sites, USA Today Modernizes Its Look – NYT
The Gannett-owned newspaper will look more like a Web site and its new Web site will read more like an iPad.
IPHONE 5: Surge in iPhone 5 sales forecast - FT
Plans to launch handest in nine countries, including US and UK, adding HK and Singapore to its opening-weekend for first time
HOME DEPOT: Home Depot packs up big box stores in China - FT
US retailer admits defeat in a country where it has struggled to make a success of the DIY format, resulting in the loss of 850 jobs
FACEBOOK/ADVERTISING: Facebook rolls out real-time ad platform - FT
Global advertising groups sign up to FBX system that social networking website hopes will boost revenues as its competes better with Google and Yahoo
NOKIA: Nokia Laments ‘Poor Judgement’ - WSJ
Nokia said its use of misleading marketing material for its new range of Lumia smartphones was a result of “poor judgment” and the company has taken “appropriate action” to correct the problem.
ICE CREAM: Ice-Cream Bank’s Rocky Road - WSJ
State banking officials want to put the freeze on the owner of an ice-cream parlor who opened a community-bank alternative that pays interest in the form of gift cards for ice cream, waffles and coffee.
NIKE: LeBron X Jumps, but Not Past $300 - WSJ
Nike said its LeBron X basketball sneaker will retail for $270. The shoes contain sensors that track how high a person jumps or far he runs, but speculation that the price could top $300 sparked criticism.
ABC: ABC Sued Over ‘Pink Slime‘ – WSJ
ABC News was sued by Beef Products, which claims the broadcaster unfairly disparaged its “finely textured beef” product by using the term “pink slime.”
INVESCO: Invesco Shares Seen With 20% Upside - BARRONS
The asset manager is showing positive long-term net flows.
FED: Like the ECB, the Fed Vows to Do Whatever It Takes - BARRONS
But Bernanke & Co. are limited in what they can do to create jobs — even if money-printing boosts prices.
IPHONE 5: Supplier Stocks to Play the IPhone 5 Launch - BARRONS
Sterne Agee says Cirrus Logic, Corning and Rubicon could all benefit.
RETAIL: DSW, American Eagle Can Fly Higher - BARRONS
Though the retailers just hit 52-week highs after announcing special dividends, we expect shares to remain special.
CHIPOTLE: Chipotle Set to Wrap Up More Upside - BARRONS
The restaurant chain could roll out soft corn tortillas nationwide.
BANKING: Three Strongly Positioned Big Banks – BARRONS
Credit Suisse cites U.S. Bancorp, Wells Fargo and JPMorgan.
RETAIL: Finish Line Running Behind Foot Locker - BARRON’S
Sterne, Agee says Finish Line is losing share to its shoe-retailing peer.
ELON MUSK: Elon Musk, the 21st Century Industrialist - BUSINESSWEEK
Nations hire him to get to outer space. His solar company is cash-flow positive. His electric supercars seat seven. Superheroes emulate him. He wants to die on Mars
FOOD: Hooters: Fun for the Whole Family - BUSINESSWEEK
The restaurant chain wants more women and couples at its tables
ACER: The Acer Smartphone That Never Was - BUSINESSWEEK
Alibaba says that instead of announcing China’s most expensive mobile phone—powered by an open-source, cloud-based Alibaba system—Acer backed out under pressure from Google
FED/JOBS: Fed’s Bold Plan Still Might Not Jolt Slow Economy AP VIA RCP
Martin Crutsinger, Paul Wiseman: No sooner did the Federal Reserve unveil a bold plan Thursday to juice the U.S. economy than it dangled the prospect of doing even more. Investors celebrated by sending stock prices jumping. Economists were less impressed. Chairman Ben Bernanke himself urged everyone to keep expectations in check.
FED/POLITICS: Fed insists politics had no role in decision - FT
The Federal Reserve pulled the trigger on ‘QE3’, eliciting a hostile reaction from many Republicans, including Mitt Romney, the party’s nominee for the White House.
FED QE3: Fed felt it had to act - FT
US central bank could have been specific or open-ended in its commitment to expanding its balance sheet. In the event it was both.
FED/BERNANKE: Bernanke buys time - WP, Editorial
But the Federal Reserve can’t do Congress’s job forever.
FED QE3: With QE3, We All Win — Poor and Rich Alike - BLOOMBERG, OPINION
Josh Barro: Today’s Federal Reserve announcement is a big deal. We’re not just getting another round of quantitative easing, but an open-ended one that will continue until the labor market improves.
FED/HOUSING: Ben Bernanke Really Wants You to Buy a House - BUSINESSWEEK
The Fed’s decision to buy $40 billion of mortgage-backed bonds each month should push rates down
The Common Good publishes a U.S. domestic news digest every weekday, available here.