TOP NEWS: Economy: October 16th, 2012
Top Five News and Analysis Links (Excerpts Below)
- Citigroup’s Pandit Resigns
- Do Good C.E.O.’s Make Good Presidents?
- Fed Governor’s Plan to Limit Bank Size Fuels Debate
- Consumer Prices Rise 0.6%
- Unemployment Report Not Rigged, But Not Accurate
Excerpts and More Top News and Analysis: (New updates shortly)
CITIGROUP: Citigroup’s Pandit Resigns - WSJ
Citigroup CEO Vikram Pandit resigned, effective immediately, as did the bank’s president and operating chief. Michael Corbat was named the new CEO.
CITIGROUP: Pandit Steps Down as Citi’s Chief - NYT
Citigroup’s board said on Tuesday that Vikram S. Pandit has stepped down as chief executive, effective immediately, and will be replaced by the bank’s head of European and Middle Eastern division, Michael L. Corbat.
CITIGROUP: Citigroup Turns to Mr. Fix-It - WSJ
Vikram Pandit had long turned to Michael Corbat as a repair man. Now the repair man is running the show
CITIGROUP: Corbat to Staff: ‘Some Changes’ Coming – WSJ
With Pandit on his way out, Mike Corbat takes control of Citigroup, and he’s already pledging changes. Here’s Corbat’s memo to staff.
POLITICS/ECONOMY: Do Good C.E.O.’s Make Good Presidents? – NYT
It isn’t easy to apply business savvy to a jobs crisis.
POLITICS/ECONOMY: Mr. Romney Needs a Working Calculator - NYT, EDITORIAL
Mitt Romney’s claim that he can lower tax rates by 20 percent and pay for it by ending deductions has run into a wall.
POLITICS/ECONOMY: Is Mitt Romney’s Tax Proposal Secret or Just Nonsensical? - BLOOMBERG, EDITORIAL
Mitt Romney, who built Bain Capital LLC and ran Massachusetts with technocratic detachment, is a famously astute numbers guy. These twin achievements make it all the more frustrating that Romney has resisted filling in the details on the signature proposal of his U.S. presidential campaign: to cut taxes by 20 percent across the board without raising taxes on the middle class or exploding the deficit.
POLITICS/ECONOMY: One Criticism of Romney’s Math That Doesn’t Add Up – BLOOMBERG, JOSH BARRO
Bloomberg News reporters Richard Rubin and Heidi Przybyla obtained a Joint Committee on Taxation letter today that looks at a number of tax reform options. The headline news is that, under a set of assumptions used by the committee, eliminating all itemized deductions would finance only a 4 percent across-the-board reduction in tax rates.
POLITICS/TAXES: Romney’s Tax Plan and Economic Growth – NYT
Mitt Romney’s proposal to lower tax rates and close tax loopholes is unlikely to produce any meaningful economic growth.
FED: Fed Governor’s Plan to Limit Bank Size Fuels Debate – NYT
The proposal by Daniel Tarullo could indicate a shift in the discussion over “too big to fail” financial institutions.
FED: Fed President: Growth Will Improve - WSJ
The “strong measures” taken by the Fed at its September meeting should spur better U.S. economic growth, the president of the Federal Reserve Bank of San Francisco said.
FED: Memo to Mitt: Take Ben Bernanke’s Resignation On Day One - FORBES
One of the latent issues of the 2012 presidential race is a referendum on the Bernanke Fed. If Romney is in, Bernanke is out.
FED: The Fed’s recession bind, in one chart - WP, DYLAN MATTHEWS
You can’t go below zero. But man, it’d sure be nice if you could. That’s the conclusion of a new report from two economists at the Cleveland Fed, who say that the downturn in 2009 called for Fed interest rates to actually be negative — if only that were possible.
CONSUMERS: Consumer Prices Rise 0.6% - WSJ
U.S. consumer prices rose in September as gasoline costs jumped. After removing volatile food and energy costs, “core” consumer prices were up a mild 0.1%.
CONSUMERS: Confident Consumers Up Spending - WSJ
Retail sales in the U.S. rose in September, the latest sign that the consumer economy is gaining strength even as other sectors weaken.
JOBS: The Unemployment Report Wasn’t Rigged — But It’s Not Accurate, Either. - TIME, CHRISTOPHER MATTHEWS
The unemployment rate is not the cut-and-dry, authoritative statistic that the media often portrays it to be.
JOBS: Unemployment rate raises conspiracy theories - USA TODAY, EDITORIAL
Welch’s tweet-rage provoked conversation about the way statisticians measure joblessness, and how difficult it is to accurately count how many people have jobs every month.
ECONOMY: When it comes to recovery, it’s all relative - WP, EZRA KLEIN
The recovery has been slow and painful compared with what we’d expect following a normal recession. So, when asking whether our economic policymakers have done a good job, we need to ask, compared to what?
ECONOMY: Let It Be Known That No Financial Crisis Was Ever Caused by Stable Money - FORBES, NATHAN LEWIS
There aren’t many blanket statements you can make about economics. Usually, “it depends.” But, there’s one thing I can say with a fairly high degree of confidence: No economic crisis was ever caused by stable money.
INFRASTRUCTURE: Infostructure Is the New Infrastructure - WSJ, WALTER RUSSELL MEAD
We aren’t going to need 20 lanes on the New Jersey Turnpike, or $100 billion high-speed rail lines, to save us from national gridlock.
EDUCATION: Well-Off Will Benefit Most From Change to Student Debt Relief Plan, Study Says - NYT
The federal government’s changes to the income-based repayment plan would provide only marginal help for low-income borrowers who are struggling, the New America Foundation said.
MARKETS: How Worried Should You Be About the Stock Market? – RCM, GEORGE PERRY
Every day’s news reminds us of unusual risks on the economic horizon. The fiscal cliff, which CBO projects as a $600 billion depressant on 2013 GDP, is looming. The European economies are sagging once again, and there is no lasting resolution yet in sight for the Euro currency problem. China’s spectacular growth has slowed. And the upcoming presidential election adds to uncertainty about what lies ahead. Should one be in stocks in this environment?
BAILOUT: Nowadays, Wall Street Saviors May Wish They Weren’t - NYT, ANDREW ROSS SORKIN
The bailouts during the financial crisis of 2008 may have been unpopular on Main Street, but they are turning out to be just as unpopular in certain corners of Wall Street, and perhaps for good reason.
PROTECTIONISM: Both Campaigns Succumb to Foolish Protectionism – BLOOMBERG, RAMESH PONNURU
If you live in Ohio or Wisconsin and own a television, you might be under the impression that America’s main foreign enemies are the exporters of China. They’re the leading villains in political ads from both presidential nominees.
BANKING: Goldman Sachs Swings to Profit as Revenue Surges - NYT
Helped by its powerful trading business, the firm’s revenue more than doubled in the third quarter, to $8.35 billion, exceeding the estimates of Wall Street analysts.
FINANCE: Law and disorder - ECONOMIST
Financial institutions are vulnerable to investigation, prosecution and litigation from every direction
FISCAL CLIFF: Fiscal Cliff? Real Threat Is The ‘Entitlement Cliff’ - IBD, MARK E. LITOW AND MERRILL MATTHEWS
The fiscal cliff coming at the end of the year pales vs. the entitlement cliff forced on us by a multitude of entitlement programs that we can’t afford.
PATENT LAW: In the High-Tech Patent Wars, an Inventor’s Lament - NYT
In high-tech industries, the patent system is tilted in favor large companies that are mainly engaged in incremental innovation, according to Stephen Perlman, a well-known inventor and entrepreneur.
TAXES: The Solyndra Memorial Tax Break – WSJ, REVIEW & OUTLOOK
How Energy passed out tax-loss credits that mean taxpayers will pay twice for failure.
BUSINESS NEWS & ANALYSIS
The company could face fines or legal action if it does not move to give consumers a better idea of what data is being collected and how it is being used.
MOBILE: The BlackBerry as Black Sheep - NYT
The phone once coveted by the elite and the powerful is becoming an object of ridicule as Androids and iPhones corner the smartphone market.
AIRLINES: Airlines Are Likely to Match Southwest’s Fare Increase - NYT
Southwest Airlines revived a plan to increase its domestic fares on Friday, and other airlines are expected to fall in line.
THEATRE: Fraud Accusation Over Broadway Show - WSJ
A Long Island businessman allegedly duped the producers of “Rebecca: The Musical” into believing he had secured $4.5 million from investors to open the show on Broadway..
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