Economy | News-Opinion
TOP NEWS: Economy: October 19th, 2012
Top Five News and Analysis Links (Excerpts Below)
- Google Shares Hit by Weak Results
- U.S. Existing-Home Sales Fall 1.7%
- Fed in Standby Mode as Meeting Nears
- CEOs urge action to avoid ‘fiscal cliff’
- End Too Big to Fail by Putting Large Banks on a Debt Diet
Excerpts and More Top News and Analysis: (New updates shortly)
MARKETS/GOOGLE: Google Shares Hit by Weak Results - WSJ
Google’s quarterly earnings report hit Wall Street more than three hours early on Thursday due to a glitch. The bigger glitch was what the Internet giant’s results actually showed.
MARKETS/GOOGLE: Shares Fall Sharply as Google Earnings Are Released Early - NYT
Google’s quarterly results, released early by mistake, reflected losses at Motorola Mobility and plummeting prices for clicks on ads.
MARKETS/GOOGLE: Google panic over results bungle - FT
Page ‘sorry for scramble’ after figures published prematurely.
MARKETS: A Computer Lesson Still Unlearned - NYT
The Oct. 19, 1987, stock market crash was the beginning of the destruction of markets, as computers came in and human judgment went out.
MARKETS/DEBT: Debt Fuels a Dividend Boom - WSJ
Private-equity firms get big payouts and investors collect high yields in a practice that was popular before the financial crisis. Some critics question whether it loads companies with too much debt.
HOUSING: U.S. Existing-Home Sales Fall 1.7% – WSJ
Sales of previously owned homes fell last month amid a thin supply of homes up for sale, a slight setback for the housing
market’s recovery.
HOUSING: A tale of America’s two economies – FORTUNE
Housing rebounds while business investment falls. What gives?
HOUSING: A Recovering Housing Market is Great News for Too-Big-To-Fail Banks - TIME
Housing starts are a key indicator for the real estate market and the broader economy going forward, as sustained increases in housing starts indicate that homebuilders anticipate a healthy real estate market in the near future.
HOUSING: Doubts About Independent Foreclosure Review Spread - PROPUBLICA, PAUL KIEL
Evidence emerges that the largest banks might be influencing the determination of who was victimized by their own practices.
FED: Fed in Standby Mode as Meeting Nears – WSJ
Federal Reserve policymakers meeting next week are likely to hold off on any new measures in favor of assessing the effects of their September decision to launch more bond buys.
FED: Fed’s Dudley Regrets Penny-Pinching - BLOOMBERG, EVAN SOLTAS
William Dudley, the president of the Federal Reserve Bank of New York, gave a speech on Monday to the National Association for Business Economics, an organization for academic and applied economists. What made the speech particularly remarkable was Dudley did something the Fed almost never does: He disagreed with the consensus opinion of economists.
FED: The Fed Falls to Inconsistent and Contradictory Depths – RCM, JEFFREY SNIDER
The man charged with executing monetary policy for the entire Federal Reserve monetary system is upset that what is ostensibly a banking cartel may not be adhering to monetary policy intentions.
FISCAL CLIFF: CEOs urge action to avoid ‘fiscal cliff’ – WP
Bank chiefs tell Obama and Congress interest rates will spike and markets will be unstable if they don’t make a deal.
BANKING: End Too Big to Fail by Putting Large Banks on a Debt Diet - BLOOMBERG, EDITORIAL
Does size matter? When it comes to U.S. banks, the answer is increasingly yes.
CITIGROUP: A reassuring shock - ECONOMIST
The real lesson from Citigroup: American banks are much healthier than European ones
INSIDER TRADING: Rajat Gupta’s Friends in High Places - BLOOMBERG, JONATHAN WEIL
Here’s some fresh fodder for armchair ethicists to chew on: Should you help a friend who has been convicted of a crime, when that friendship and business interests overlap?
JOB TALENT: How to Reduce America’s Talent Deficit - WSJ, BRAD SMITH
At Microsoft, we have more than 6,000 open jobs in the U.S. Some 3,400 of the positions are for engineers. Schools aren’t producing graduates with the skills needed in the marketplace.
GREEN TECHNOLOGY: A Sad Green Story - NYT, DAVID BROOKS
What happened to the golden days of green technology? It’s a tale of disappointed hopes.
ECONOMY/INEQUALITY: Shrink Inequality to Grow the Economy? - NYT, ROOM FOR DEBATE
Once we thought a rising tide would lift all boats. Now some economists think a few boats need a push, before the economy can really expand.
POLITICS/ECONOMY: Snow Job on Jobs - NYT, PAUL KRUGMAN
Mitt Romney says he has a plan that would create millions of jobs. It’s a five-point plan to nowhere.
POLITICS/ECONOMY: A Financier in Chief – NYT, PETER JOSEPH
What would it really mean to have a man with Mitt Romney’s experience at Bain Capital in the White House?
PERSONAL FINANCE: Why Your Kids Need a Roth IRA - WSJ
Bischoff: Making modest contributions during a child’s teenage years can add up to a good amount by retirement. It’s also tax smart.
MEDIA: At Newsweek, Ending Print and a Blend of Two Styles – NYT
The struggling weekly magazine will publish its final print edition on Dec. 31 and move into an all-digital format next year, announced its editor, Tina Brown.
TAXES: Tax Cuts for Job Creators - NYT
Cutting taxes for the lower 95 percent of the population will stimulate economic growth and job creation far more than cutting taxes for the top 5 percent.
TAXES: Chicago Area Proposes First Local Tax on Guns, Bullets - WSJ
Amid a surge in gun violence in Chicago, officials in Cook County are considering a tax on guns and bullets that could become the first such levy in the nation.
TELECOM/SPRINT/CHINA: Huawei May Surface in U.S. Review of Softbank-Sprint Deal - BLOOMBERG
Softbank Corp. buys mobile-phone network gear from Chinese companies viewed as security threats by U.S. lawmakers, and the relationship may become an issue as regulators review its bid for Sprint Nextel Corp.
GOLDMAN SACHS: Weighing the Factors in the Gupta Sentencing - NYT
It will not be surprising if Judge Jed S. Rakoff starts out at a much lower recommended sentence than what the government wants for Rajat K. Gupta, the former Goldman Sachs director who was convicted on charges of insider trading and conspiracy.
GOLDMAN SACHS: Greg Smith’s Memoir Offers Few New Details on Goldman - NYT
Mr. Smith reminiscences on the pleasures of his job as a former midlevel executive and trader but does not seem to break much new ground on questionable practices at Goldman Sachs.
GOLDMAN SACHS: Greg Smith, Another Wall Street Con Man – BLOOMBERG, WILLIAM D. COHAN
What to make of Goldman Sachs Group Inc.’s release to Bloomberg News of internal self-assessments and peer reviews of Greg Smith, who left the firm in March through a notorious op-ed piece in the New York Times. While the release of the documents does raise troubling questions for the bank itself, what they reveal about Smith — without question — is that he is nothing more than a sweet-talking con man.
CONSUMER CREDIT: Proposed Credit Card Rules Aid Spouses and Partners – NYT
The proposed rule change would let spouses and partners, age 21 or older who don’t work outside the home, apply for credit based on shared income.
ENERGY/COAL: Coal Heats Up Both Sides’ Energy Proposals - WSJ
Coal has risen to become one of the top issues of the presidential campaign, with dueling ads about coal in swing states and attacks by each candidate on the other’s position.
GAS PRICES: California’s Gas Price: Is There a Villain? – WSJ
What’s the lesson from California’s recent spike in gasoline prices, which is costing consumers millions of dollars and prompting calls for an investigation?
ADVERTISING: Caught Up in Voting, Ads Ask Consumers to Cast a Ballot - NYT
Some advertising campaigns are becoming similar to political campaigns as they urge consumers to take sides and adopt a mocking tone.
TECHNOLOGY: For Dell, Consolidation Is Innovation - NYT
Dell just announced a unified system of servers, storage, networking and software. Having so many new products, the company argues, saves it from supporting legacy businesses with its R.&D.
TECHNOLOGY: Silicon Valley Reboots – WSJ
As a new generation of techies moves up, ranch houses are coming down. Replacing them: contemporary homes of glass, stone and steel.
HEALTH: Life-saving medical machinery prone to malware? - WP, MEGHAN KELLY
Botnets, or strings of computers that can be controlled to launch mass attacks or otherwise work in unison for the hacker’s profit, are a particular problem for hospitals.
COMMODITIES: Farms Awash in Peanuts - WSJ
U.S. peanut farmers are harvesting a record crop this year, putting to rest fears of repeating a shortage that drove up prices and prompted some shoppers to load up their pantries with peanut butter.
PATENT PROTECTION: Stop Trying to Protect Your Business Ideas – NYT
There is often a concern among business owners and aspiring entrepreneurs that when they come up with a new idea, they need to protect it so that it won’t be stolen. This mindset is dangerous.
PHARMACEUTICAL REGULATION: Critics: Drug compounders require oversight - WP
An industry board offers voluntary accreditation to drug-compounding pharmacies. But critics say more oversight is necessary to avoid dangerous medical situations.
MARKETING/ROBO-CALLS: Want to win 50K? Tell the FTC how to stop those ‘robo-calls’ - WP
The agency is holding a contest for the best ideas for blocking pre-recorded marketing calls.
HEALTHCARE/HACKING: Life-saving medical machinery prone to malware? - WP
Botnets, or strings of computers that can be controlled to launch mass attacks or otherwise work in unison for the hacker’s profit, are a particular problem for hospitals.
BUSINESS NEWS & ANALYSIS
MARKETS: G.E.’s Earnings Rise 8.3% - NYT
General Electric reported an 8.3 percent rise in quarterly earnings, but revenue fell shy of analysts’ expectations.
TECHNOLOGY: Airtime, a Pedigreed Start-Up, Is Tested - NYT
Just four months after a much-hyped introduction, the video chat company has laid off employees and is tweaking its features.
TECHNOLOGY: Microsoft hit as buyers await Windows 8 - FT
Slowdown in PC demand damps quarterly revenues
FOOD: Chipotle Falls, But Einhorn’s Taco Bell Warning Isn’t Ringing True - WSJ
Chipotle’s falling stock is making Dave Einhorn look muy bueno. But his call isn’t quite perfecto: Taco Bell isn’t to blame.
RETAIL: For 2012 Holidays, War Is On Against Amazon - TIME
Target Matches Online Rival Prices
FOOD: McDonald’s Profit Slips - WSJ
McDonald’s quarterly earnings fell 3.5% and the fast-food chain warned its sales and earnings remain under pressure in an uncertain global economy.
FOOD: Starbucks Opens First Cafe in India - WSJ
Starbucks, in a joint venture with a Tata Group unit, has opened its first café in India–one of its last untapped markets.
TRADE: Failed U.S. Deals Stir Tensions With China - WSJ
A series of scuttled deals is rankling Chinese firms trying to invest in U.S. businesses and throwing fuel on an increasingly tense trade relationship between the world’s two largest economies.
YAHOO: Yahoo to Close South Korean Operations - WSJ
Yahoo Inc. will close its South Korean operations by the end of this year after struggling to make inroads in a market dominated by local Web portals.
DEFENSE: EADS Pushes Plan for Army Helicopter - WSJ
Following failed merger talks, European Aeronautic Defence & Space Co. is looking to improve its position in the U.S. defense industry by aggressively pushing a plan to replace the U.S. Army’s light attack helicopter.
VOLVO: Volvo Replaces CEO, With Eye on China- WSJ
Frustrated with mounting losses and a lack of momentum in the Chinese market, Volvo’s owner has decided to make an abrupt change at the top.
ENTERTAINMENT: Nintendo to Investigate Hon Hai Labor - WSJ
Nintendo plans to investigate a statement by Hon Hai Precision Industry that the parts supplier used underage workers at one of its Chinese plants.
The Common Good publishes a U.S. domestic news digest every weekday, available here.
