TOP NEWS: Economy: October 17th, 2012
Top Five News and Analysis Links (Excerpts Below)
- U.S. Housing Starts Up 15% in September
- Citigroup’s Pandit and the Selective Use of Facts
- Measuring Employer Confidence
- Chances of Going Over Fiscal Cliff May Be High
- Investors Hope for Clarity, Quickly
Excerpts and More Top News and Analysis: (New updates shortly)
HOUSING: U.S. Housing Starts Up 15% in September – AP via NYT
U.S. builders started construction on homes in September at the fastest rate since July 2008, a further indication that the housing recovery is strengthening and could help the economy grow.
CITIGROUP: Citigroup’s Pandit and the Selective Use of Facts – WSJ, Jonathan Weil
What Citigroup Inc. has always needed is a leader who will be straight about the company’s finances, without spinning the facts. For that reason, the departure of Vikram Pandit as chief executive officer is progress.
CITIGROUP: The Deafening Silence of Citigroup’s Chairman - BLOOMBERG BUSINESSWEEK
Now that Citigroup Chairman Michael O’Neill has said that Vikram Pandit decided to quit as chief executive officer on Oct. 16, there’s one more thing he can do for shareholders: Tell them what happened.
CITIGROUP: The timing of Vikram Pandit’s departure – WP
Even if the seeds for 2008’s reckoning were sown before the Citi CEO took charge, some crises are just too big for leaders to ever untangle themselves from them completely.
ECONOMY/HIRING: Measuring Employer Confidence – NYT
While a lack of confidence about the economy is surely deterring some employer hiring, the effect is far smaller than some contend.
ECONOMY: Economic Health? It’s Relative – NYT
When compared with other nations involved in the financial decline four years ago, the United States has done well.
ECONOMY: Concrete gains – ECONOMIST
America’s big cities are larger than Europe’s. That has important economic consequences.
ECONOMY: Bye-bye, globalization – WP, David M. Smick,
What will replace a dying model?
FISCAL CLIFF: Chances of Going Over Fiscal Cliff May Be Higher Than Experts Think – WSJ
Economists put the probability at just 17% that Congress will trigger a package of spending cuts and tax hikes that will throw the U.S. into recession, but some analysts say that may be too low.
FISCAL CLIFF: Financial Survival in a Time of Fiscal Peril – NYT, PAUL SULLIVAN
However Congress and the White House resolve the problem of the impending “fiscal cliff,” the months ahead are likely to be tumultuous. What should an investor do?
FED/FISCAL CLIFF: Fed’s Dudley and Plosser Spar Over Unwinding Risks – WSJ
The Fed may be in the stimulus game for several years to come, but that doesn’t mean officials are done talking about how they are going to unwind all the liquidity they have provided to the economy.
MARKETS: Investors Hope for Clarity, Quickly – NYT, PETER EAVIS
Analysts see a need to jettison trailing businesses and get more out of the banking giant’s best performers.
MARKETS: Knight Swings to Loss on Glitch – WSJ
Knight Capital reported a $389.9 million third-quarter loss as the U.S. trading firm boosted the final cost of a computer-trading glitch in August above its initial estimate.
MARKETS: Rage against the machine – FT, Michael Mackenzie, Arash Massoudi and Stephen Foley
While technology has made trading cheaper, investors fear the system is too complex to manage.
MARKETS: Bulls kick-start a fresh uptrend – MSN MONEY via RCM
After months in the doldrums, stocks are on the move again.
MARKETS: Brokers urged to speed up US share trades – FT
Ambitious proposal to reduce three-day settlement cycle may prove expensive, but proponents say money could be recouped in three years.
MARKETS: BlackRock Earnings Up on Strength in E.T.F.’s - NYT, NATHANIEL POPPER
The giant money management company benefited from the strong interest among investors in less risky bond funds and passively managed exchange-traded funds
MARKETS: Courting the Next Generation of the Rich - NYT, CHARLES PAIKERT
Programs for the next generation of wealth holders have gained popularity, driven by fear among financial institutions of losing the children of their wealthy clients as customers.
BANKING/REGULATION: Changes Pushed On Capital Rules – WSJ
The senior Republican on the Senate Banking Committee is challenging U.S. banking regulators on their implementation of a new international system of capital standards.
BANKING: BofA Sees Profit Slump – WSJ
Bank of America’s third-quarter profit plunged amid huge charges tied to litigation over its acquisition of Merrill Lynch, U.K. taxes and accounting adjustments.
BANKING: Bank of America Ekes Out a Profit of $340 Million – NYT
The results of zero cents a share exceeded the estimates of analysts of a loss of 6 cents a share.
REGULATION: Despite Its Problems, Dodd-Frank Is Better Than the Alternatives - NYT, STEVEN M. DAVIDOFF
Some parts of the Dodd-Frank Act may already need renovation or even repeal, but the problem is that possible replacements are unlikely to work or would be politically feasible.
POLITICS/TAXES: Missing from Romney’s tax plan: Reality – FORTUNE
Even under the most generous economic assumptions, Mitt Romney’s tax plan simply doesn’t work.
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.
POLITICS/ECONOMY: Michael Spence on the Candidates’ Economic Plans – WSJ
The Big Interview: The Nobel Economics laureate explains what it will take for the U.S. to get back its economic mojo, plus why he favors Obama over Romney.
CONSUMER SPENDING: Where Are Consumers Getting Income to Spend? – WSJ
In some ways, consumer behavior is back to where it was before the Great Recession. But consumers’ behavior seems irrational given sluggish income growth.
JOBS: The September Jobs Report Was Inherently Political – FORBES, BRIAN DOMITROVIC
That was quite a dustup ten days ago, after the jobs report issued by the government had the unemployment rate going down to 7.8%.
JOBS: In Demanding Homes, Help in High Demand – NYT, ALAN FEUER
After a steep decline in the wake of the financial crisis, the domestic staffing business has come back, this time in a market that heavily favors the employers.
HOUSING LOANS: Home Loans From Washington? – NYT, ROOM FOR DEBATE
Should the government consider cutting out the middleman, as it does with student loans, and issue mortgages itself?
HEALTHCARE: Why Private Medicare Plans Don’t Cost Less - NYT
In considering the role of private insurance companies in Medicare’s future, it is worth noting the political factors that have made private Medicare plans more costly to date.
INCOME GAP: Income Inequality May Take Toll on Growth – NYT, ANNIE LOWREY
The concentration of income in a few hands might mean, many economists say, a less vigorous economy.
GOVERNMENT BENEFITS: Benefits to Get a Small Bump – WSJ
Americans’ everyday costs inched up for the second straight month in September, triggering a modest increase in the federal benefits received by millions of retirees and the disabled.
TAX: California Businesses Are Wimps on High Taxes – WSJ, by Steven Greenhut
If you listen to the union-financed advertising campaigns, you would think that corporate interests control California’s capital and are bulldozing the interests of “working-class” taxpayers to promote conservative causes. In the minds of union activists, billionaires are conspiring to turn deep-blue California into a red zone
DEALMAKING: The brashness and bravado in big deals - FT, John Kay
Commercial decisions often reflect policy-based evidence, not evidence-based policy. It is doing the deal that matters.
ENERGY: Electric Car Crash – WSJ
Obama’s green energy industrial policy turns up in Chapter 11.
LEGAL PROFESSION: N.Y.U. Law Plans Overhaul of Students’ Third Year – NYT, PETER LATTMAN
Officials at New York University School of Law said they were trying to shift the curriculum to match what today’s legal profession demands.
BUSINESS NEWS & ANALYSIS
Pepsi’s Profit Slips 4.9% - WSJ
PepsiCo’s third-quarter earnings fell 4.9% as the decline in Americas beverage sales continued to drag on the food and beverage company’s revenue.
BP Nears Deal to Sell TNK-BP Stake – WSJ
BP is nearing a deal to sell its stake in TNK-BP to a Russian state-owned oil company, part of a broader ownership change in the lucrative but nettlesome Russian oil joint venture.
Exxon to Buy Celtic Exploration – WSJ
Exxon Mobil agreed to buy Canadian oil-and-gas producer Celtic Exploration in a deal worth about $3.14 billion, including debt.
Exxon to Buy Canadian Oil and Gas Company for $3.1 Billion – NYT
Exxon Mobil has agreed to buy Celtic Exploration for about $3.1 billion in cash and stock to expand its presence in the energy-rich shale formations of western Canada.
I.B.M. Squeezes Out a Profit as Its Revenue Declines - NYT
Profits slightly exceeded Wall Street’s expectations, but revenue fell below, and the company’s shares were lower in after-hours trading.
In a Slow Market, Intel Exceeds Lowered Expectations - NYT
The chip maker said revenue was down 5 percent from $14.2 billion a year earlier, but it was higher than an estimate made last month.
Nike severs ties with Lance Armstrong – FT
Company is severing ties with the former cycling champion, citing evidence he participated in doping and claiming he misled it for more than a decade
An Unlikely Cheddar Is Suddenly Boastful – NYT
Cracker Barrel’s new ad campaign highlights cheese competitions that the brand has won.
Maker of Batteries Files for Bankruptcy – NYT
The filing by A123 Systems dealt a blow to the Obama administration’s program to jump-start a domestic battery industry and spur development of electric vehicles.
Dutch Tech Firm ASML to Buy Cymer for $2.6 Billion – NYT
In a bid to speed development of new technology, the Dutch semiconductor equipment manufacturer ASML has agreed to buy Cymer, a maker of microchip components based in San Diego.
Strong Dollar Dents Coca-Cola’s Profit - NYT
The soft drink company’s revenue fell short of analysts’ expectations.
The Common Good publishes a U.S. domestic news digest every weekday, available here.