What We’re Reading, 6/6/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our iPads and in our inboxes this morning: further Fed stimulus, the human price of austerity, and the marketing pros/cons of canned and packaged margaritas.
"Fed Considers More Action Amid New Recovery Doubts," by Jon Hilsenrath (Wall Street Journal). Ben Bernanke & Co. are weighing another round of economic stimulus ahead of their June 19 meeting. There was no such talk at the Fed’s last meeting, when things looked rosier … but in light of Europe’s shenanigans, dour jobs reports, and all the other things we round up here each day, the Fed may make some small, cautionary moves.
"Save Us, Ben Bernanke, You’re Our Only Hope," by Matthew O’Brien (The Atlantic). This story is accompanied by a photo of Ben Bernanke as Jedi, which everyone should click to for laughs alone. Beyond that, things get a bit more serious (though, er, no less gimmicky). O’Brien’s argument: The Fed is our last hope to improve the faltering economy, and so far, it’s failed to do so. Manipulating interest rates could help.
"Euro Zone on the Brink," by Roger Altman (Washington Post). Another day, another flood of bummer news from Europe. Today, Greece is pretty close to running out of cash, Spain tells the world straight-up that it really needs that bail-out, and Germany struggles to figure out just what role it wants to play in the whole ordeal. Altman suspects this is mounting to another bump in the recession, a la the Great Depression relapse of 1937. Fortunately, he has a three-step plan! (That seems simple, doesn’t it?)
"Children Lose to Bailed-Out Bankers as Crisis Forces Cuts," by Ben Sills and Rodney Jefferson (Bloomberg). In Spain, this is what austerity looks like: crowded emergency rooms and children who can’t get access to crucial medications. In fact, the handicapped and terminally ill are suffering across Europe, where safety nets are falling out from underneath them.
"Senate Republicans Again Block Pay Equity Bill," by Jennifer Steinhauer (New York Times). The Paycheck Fairness Act fell six votes short of the 60 it needed to pass the Senate yesterday. The law would make it easier for women to sue in instances of gender discrimination — an issue that, incidentally, we take on in the June issue!
"Growing Economic Inequality ‘Endangers Our Future’" (Fresh Air). Nobel Prize-winning economist Joseph Stiglitz dropped by the Fresh Air studio to talk lobbying, tax policy and student loans with Terry Gross. Fun fact: He’s largely credited with popularizing the phrase “the 1%,” which we will now never be rid of.
"The Fortune 400," by David Cay Johnson (Reuters). Speaking of tax policy and the 1%, six American families with incomes over $200 million (each!) paid no federal income taxes in 2009. Cue the Occupy outrage!
"Most Recent High School Graduates Not in College Lack Full-Time Job, Study Says," by Bonnie Kavoussi (Huffington Post). Three out of four high school graduates who took the working route do not actually have jobs, according to a sobering new study by Rutgers’ Center for Workforce Development.
And in other news: Warren Buffett graduated from D.C.’s infamous public schools, New York magazine has some “advice” for Wall Street interns, and a business battle is brewing canned and packaged margaritas. (In a war like this, everybody loses.) Also, the Internet now has 340 trillion trillion trillion addresses (that’s a number?) and Michelle Obama was on Letterman last night.
What We’re Reading, 6/4/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radar as the week starts up: economic slowdown, existential crisis, and the many money problems of the ultra-rich and famous.
"Investors Brace for Slowdown," by Jonathan Cheng, Charles Forelle and E.S. Browning (Wall Street Journal). Well, the week is off to a less-than-thrilling start. Investors are getting antsy as Europe, China and the U.S. show fresh signs of economic turbulence. Just a smattering of the rough market news: Asian markets are down sharply, European stocks slumped last week, and on Friday, the Dow dropped to its lowest point in six months. Happy Monday, everyone!
"Euro Zone is Lurching to a Crossroad," by Landon Thomas Jr. (New York Times). The euro zone faces an existential crisis of the most massive (and massively expensive) kind. Key to the region’s proverbial angst: Should it seek greater fiscal unity or just break up? While Spanish and Italian leaders called for euro bonds and central authority this weekend, they face political opposition from the likes of Angela Merkel, who hesitates to bail Spain out. (If this is all starting to sound rather dizzying and Game-of-Thrones-esque, the Times has helpful interactive charts on the timeline of the crisis and the players in it.)
"Remarks at the Festival of Economics," by George Soros (GeorgeSoros.com). While your friendly curator can think of no festival more dull-sounding than the “Festival of Economics” — are there demand-curve roller-coasters? Keynesian funnel cakes? — Soros’ remarks in Trento, Italy are certainly worth a read. The billionaire investor argues, in grandiose TED-talk fashion, that the foundations of economic theory fail to account for human mistakes. Significantly, he also says the eurozone has about three months to right itself. If that seems dense, CNBC has the Spark Notes.
"The Mayor of Mayors," by Gabriel Sherman (New York). He banned trans fat! He shrinks your soft drinks! Michael Bloomberg may be the most visible mayor in the U.S., and certainly one of the most controversial — which leads Sherman to the question, where will he go next?
"Who Has the Spine to Fix the U.S. Economy?" By Fred Hiatt (Washington Post). Spoiler alert: No one. “It’s hard to be optimistic,” Hiatt writes. “Obama has the eloquence, but neither Obama as president nor Romney as governor showed much patience for legislative jawboning or relationship-building … It would be nice to think that the forthcoming campaigns will focus on this issue enough to give voters a basis on which to do more than guess. Judging by the debate so far, any optimism on that score seems even more naïve than refusing to give up on a grand bargain in 2013.”
"Small Fish Burned in Facebook IPO Knew Better," by William Cohan (Bloomberg). Critics railed against Wall Street, Morgan Stanley, Nasdaq, and Facebook itself — but if you fall in Cohan’s camp, small investors who lost big can only blame themselves.
"Life After the NFL a Struggle for Many Former Players," by Jeffri Chadiha (ESPN). Today in people-we-don’t-feel-very-sorry-for: “Terrell Owens hasn’t officially retired yet, and he already has blown the $80 million he earned during his career. Warren Sapp recently filed for bankruptcy. Former first-round picks Michael Bennett and William Joseph currently face federal charges of tax fraud and identity theft.” Apparently uber-rich ex-athletes can’t manage their millions! Seventy-eight percent of NFL retirees are bankrupt or financially strained.
"Mitt Romney Reports He’s Worth Up to $255 Million," by Reid Epstein (Politico). In other breaking news, Mitt Romney’s still rich. (More interestingly, Obama’s tax plan would cost him $5 million. Mo’ money mo’ problems, as they say.)
Happy reading, Tumblers!
What We’re Reading, 5/31/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our collective radar for Thursday: More euro-drama, the incomprehensible wealth of Walmart, and the relative pros/cons of keeping an ATM in the kitchen.
"Europe Fears Bailout of Spain Would Strain Its Resources," by Landon Thomas Jr. (New York Times). If you thought the Greek bailout was stressful, Spain is a problem of an entirely different scale. It’s Europe’s fourth-largest economy, which means a theoretical Spanish bailout would leave very few funds in the EU’s $867-billion emergency fund. Added complication: These endless economic spats are weakening the ties between euro-zone countries. (But look, optimism! The Peterson Institute’s Jacob Kirkegaard sees signs of European progress.)
"After Facebook, Kayak IPO Stalls," by Anupreeta Das, Gina Chon and Brett Philbin (Wall Street Journal). Will the Facebook fallout ever end?! Early evidence suggests that the botched offering was bad not only for small investors, but for the state of California, the stock market, and now, new IPOs — Kayak is stalling its offering until things look up.
"Older Americans Learn New Trades in Tough Jobs Market," by Lucia Mutikani (Reuters). A quarter of Americans aged 50+ lost their life savings during the recession, and 43% of those still haven’t earned it back. That’s led many to seek a new job (or jobs) in unconventional, often minimum-wage fields. Bad news for job-seekers of all ages: HR software may be working against them.
"On Campus, New Deals With Banks," by Andrew Martin (New York Times). Despite reforms, financial institutions are creeping into schools — and they’re banking on students for new customers and profits. Student IDs double as credit cards, banks disburse financial aid, and consumer advocates predictably freak out.
"Woman Who Couldn’t Be Intimidated by Citigroup Wins $31 Million," by Bob Ivry (Bloomberg Markets). Sherry Hunt is the unlikely woman who sounded the alarm on bad mortgages at Citigroup, where she worked as a senior manager for more than eight years. Intriguingly, Hunt grew up in rural Michigan, married at 16, and never went to college. Now she’s won $31 million in a highly publicized lawsuit against her former employer.
"The One Percent’s Problem," by Joseph Stiglitz (Vanity Fair). The combined wealth of the six Walmart heirs equals the combined wealth of the bottom 30% of Americans. (… I’ll just let that sink in for a second.) That’s obviously a bummer for we little folk, Tumbling away for starting salaries. But Stiglitz argues it’s rough on the top earners, as well — in the long-term, inequality will make their lives and work more difficult.
"Facing Down the Bankers," by Annie Lowrey (New York Times). On Dennis Kelleher: Wise guy and powerful finance-reform lobbyist.
"Some Teens Aren’t Liking Facebook as Much as Older Users," by Jessica Guyn and Ryan Faughnder (L.A. Times). Lyke ZOMG, Tumblr is the new Faceook, guys.
Happy reading, Tumblers!
What We’re Reading, 5/29/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. Our our radar as we return from a lovely three-day weekend: unemployment benefits, stock market woes, and the sweet relationship between weird ice cream and the economy.
"U.S. Winds Down Longer Benefits for Unemployed," by Shaila Dewan (New York Times). If you thought Congress extended long-term employment benefits back in February, then you didn’t read the fine print. New restrictions will unexpectedly shorten aid for half a million people — more than 70,000 in June alone. The drop could put an extra drag on the economy, potentially contributing to a recession next year.
"Stock Market Loses Face," by Joe Light (Wall Street Journal). Some small investors are dumping stocks in the wake of Facebook’s messy IPO. Like all jilted exes, they’re feeling vindictive: Small investors pulled $3 billion from U.S. stock mutual funds in the week that ended Wednesday, which, if you’re keeping score, is about how much money J.P. Morgan lost.
"Spring Revival for America’s Housing Market," by Leah Schnurr and Jilian Mincer (Reuters). Finally, some good news! Home sales and prices indicate that the troubled housing market may be ticking up. But don’t call your realtor just yet — even a solid recovery will take some time.
"Dewey & LeBoeuf Files for Bankruptcy," by Linda Sandler, Sophia Pearson and Joe Schneider (Bloomberg). Dewey & LeBoeuf once employed 1,300 lawyers in 12 countries, advised the L.A. Dodgers on their restructuring … and accumulated $245 million in debt. The high-powered firm’s Chapter 11 filing earns it the dubious honor of being the largest law-firm collapse in U.S. history.
"Hope: The Sequel," by John Heilemann (New York). A new election issue seems to spring up every day: private equity, jobs reports, dogs on roofs, “interceptions.” But from where Heilemann sits, the only factors that matter for Obama are how the economy fares and where demographics fall. Says one very confident strategist: “If you’re a woman, you’re Hispanic, you’re young, or you’ve gotten left out, you look at Romney and say, ‘This … guy is gonna take us back to the way it always was, and guess what? I’ve never been part of that.’” In related news, Talking Points Memo suspects that many voters are a bit more split than that — especially in swing states.
"Obama’s ‘Kill List’ Proves a Test of Obama’s Principles and Will," by Jo Becker and Scott Shane (New York Times). The second (very lengthy) installment in the Times’ series on Obama’s record takes us into the White House Situation Room, where Obama personally approves every entry on a military hit list — and oversees unprecedented amounts of the war on al Qaeda. His record is “paradoxical,” to say the very least.
"Mitt Romney’s Economic Failure in Massachusetts," by Michael Tomasky (Daily Beast). While we’re talking political records, Tomasky has a damning column on Mitt Romney’s job-creation history as governor of Massachusetts. It isn’t worse than Obama’s necessarily, he writes — but Romney’s “record here is so lame from any ideological perspective … [he] can make no claim whatsoever that he has access to some magic tonic that grows jobs.”
"College Dropouts Have Debt But No Degree," by Ylan Mui and Suzy Khimm (Washington Post). Just when we thought the student debt situation couldn’t get any scarier, it turns out that nearly 30 percent of students who take out loans later drop out of school.
And in other news: This semi-grating "super intern" scored 47 job offers after a four-month interning stunt, this man has ridden an ostrich (and thus thinks you should vote him into Congress), and these chains think sushi, pizza and hamburger ice cream are the key to sales in a slow economy.
Happy reading, Tumblers!
What We’re Reading, 5/25/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our minds this morning: beaches, barbecues, and the impending three-day weekend. (Er — make that oil prices, Tim Cook and really rich CEOs.)
"Gas Prices Moderately Lower as Driving Season Starts," by Clifford Krauss (New York Times). Some good news to get you in the Memorial Day mood: Gas prices are modestly lower now than they were a year ago, which should make traveling easier for all you weekend road-trippers. Even better, tensions with the Middle East have relaxed, making oil prices less volatile overall. Now for the bad news!
"New Signs of Global Slowdown," by Jon Hilsenrath and Joshua Mitchell (Wall Street Journal). A number of brow-furrowing economic reports dropped this week: U.S. business spending on long-term goods is down, business sentiment in Europe declined, manufacturing around the world dropped off and several international organizations cut their 2012 growth forecasts. “A new economic threat is emerging,” Hilsenrath and Mitchell explain, “… activity is slowing in sync around the globe and not just in a few markets with their own isolated problems.”
"J.P. Morgan Gave Risk Oversight to Museum Head Who Sat on AIG Board," by Dawn Kopecki and Max Abelson (Bloomberg). The guys who oversaw risk at J.P. Morgan are about as qualified for the job as your friendly curator — which is to say, not qualified at all. Of the three, none have worked at banks or as financial risk managers. Only one has Wall Street experience, and it is 25 years (!) out of date.
"Obama Stumbles Out of Gate," by Mike Allen and Jim Vandehei (Politico). The race to the 2012 election is a long one, and things that seem to matter now could fade by November. But there’s no ignoring the fact that President Obama is off to a slow start: Between sluggish fundraising and the Bain back-and-forth, he might lose the edge that Democrats expected.
"CSI: Housing Bust," by Beth Raymer (The Atlantic). While your friendly curator doubts that Digital Risk boasts the theme music and cheesy punchlines of a primetime crime show, the company’s work is pretty intriguing. Analysts there look for evidence of bust-era fraud — as in the case of a Las Vegas man who applied for 15 mortgages in a week, or a Michigan woman who refinanced her house five times in five years (and didn’t tell her lender she didn’t have a job).
"The Choice" (The Economist). While the “Grexit” was on everyone else’s minds, The Economist dreamt up another solution to Europe’s fiscal woes: a semi-federalist “superstate,” where countries rely on each other more than they do now. (What horrible portmanteau can we devise for this? The Euperstate, perhaps?)
"How Tim Cook is Changing Apple," by Adam Lashinsky (Fortune). Apple’s new CEO worked in an Alabama paper mill, eats in the company cafeteria, and cares far more about investors than Steve Jobs did.
“Johns Hopkins Commencement Speech,” by Tim Geithner. Treasury Secretary Geithner talked economic recovery, Barack Obama and public image to graduates at the Nitze School. An excerpt: “If you are going to make a difference, especially in public life, you need to be willing to get close to the flame. You need to be willing to take risk and feel the heat … There was no precedent and no playbook available to any of us, other than the graveyard of mistakes from other crises. But we knew we had to act.”
And in other news: Jack White could teach econ 101, the FTC has its eyes on your POM, people rob banks to pay for dentures, and the country’s highest-paid CEO made — wait for it! — $137.2 million last year.
Happy reading, Tumblers!
What We’re Reading, 5/23/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. What we’re perusing over coffee this morning: Private equity, Facebook fall-out, and why college students don’t study.
"Both Parties Struggling with How to Talk About Private Equity Industry," by David Fahrenthold and Tom Hamburger (Washington Post). Romney’s Bain Capital tenure has pushed private equity into the spotlight, and even within parties, every politician seems to have a different take. Does it create jobs? Does it kill them? (Does anybody know the difference?) A Post editorial claims that Obama wants it both ways.
"Tall Tales About Private Equity," by Steven Rattner (New York Times). Steven Rattner: Frequent op-ed writer, former Obama Treasury advisor, private equity apologist. “That’s not wrong; it’s part of capitalism,” he says of job cuts under Bain. “Whatever its flaws, private equity has made a material contribution to sharpening management.”
"Inside Fumbled Facebook Offering," by Shayndi Raice, Anupreeta Das and Gina Chon (Wall Street Journal). The size and hype of Facebook’s IPO weren’t the only things setting it apart from other recent offerings. According to WSJ, Facebook Chief Financial Officer David Ebersman also stayed unusually involved in the plans — even green-lighting the last-minute share boost that kept first-day prices low. (In related news, Facebook’s once-hot IPO may officially have crossed into hot mess territory: Both the SEC and Massachusetts regulators are investigating.)
"Facebook Stock Collapse Contributes to Mistrust of Wall Street," by Mark Gongloff (Huffington Post). The Facebook IPO is a symbol of everything people hate about Wall Street, Gongloff writes: “Media and analyst cheerleading? Check. The destructive influence of high-speed trading? Check. A system built for insiders to profit while retail investors pick up scraps? Duh.”
"The Facebook Fallacy," by Michael Wolff (Technology Review). Where was Michael last week, when everyone came down with Facebook fever? He argues that Facebook’s business model is fundamentally flawed — and thus likely to fade out, a la Yahoo or AOL.
"Doubts Over EU Summit Send Shares, Euro Lower," by Richard Hubbard (Reuters). Between the crises at Facebook and JP Morgan and the drama around Bain Capital, we’ve had little attention to spare for our beleaguered friends in the EU. But they are indeed beleaguered, and hopelessly so: A summit in Brussels is expected to yield little beside Merkel-Hollande bickering, and European markets have reacted poorly. (The Dow doesn’t seem to like the stalemate much, either.)
"Two Cheers for Our Peculiar Politics: America’s Political Process and the Economic Crisis," by Pietro Nivola (Brookings). One reason to pay more attention to the Europe — the U.S. economy looks magnificent, by comparison!
"Obama Spending Binge Never Happened," by Rex Nutting (Marketwatch). Government spending hasn’t grown much under Obama; in fact, his 1.4% growth rate is the lowest since the early ’80s, when Reagan expanded spending by 8.7% per year.
"History Shows U.S. Can Cut Now, Stimulate Later," by Peter Orszag (Bloomberg). Orszag’s latest editorial argues that stimulus and austerity aren’t necessarily at odds — a refreshing perspective to anyone who’s followed the bitter debates both in Congress and overseas. “Enacting more stimulus today and more deficit reduction to take effect later is exactly what the U.S. needs,” he writes. “It’s also what makes the ongoing jobs-versus-austerity debate so frustrating. What we really need is to be bolder on both jobs and austerity, by pursuing a combination policy.”
"New Rules for Prepaid Debit Cards," by Ben Protess and Jessica Silver-Greenberg (New York Times). At last! Thank the Consumer Financial Protection Bureau for this one.
Happy reading, Tumblers!
What We’re Reading, 5/21/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radar this drizzly Monday: Nasdaq, higher ed, and the economic benefits of a rocking music scene.
"Nasdaq’s Facebook Problem," by Jenny Strasburg, Jacob Bunge and Gina Chon (Wall Street Journal). I know, I know — we’re all sick of Facebook. But Nasdaq still has some explaining to do re: the embarrassing technical difficulties that held up Friday trading. The exchange may reimburse investors who lost money on glitchy trades. Still, Nasdaq says it’s not to blame for the stock’s lackluster performance. (As of this posting, shares have fallen below their $38 issue price.)
"Mitt Romney Could Best Obama in Fundraising," by Chris Cillizza (Washington Post). Both Romney and Obama raised around $40 million in April, meaning Romney’s campaign funds could eclipse the president’s. You know what they say: Money is power!
"The Battleground," by Alec MacGillis (New Republic). Fun fact: No Republican has won the White House without winning Ohio. This year, that critical swing state could also determine who’s in power on the Hill.
"College Graduates Enjoy Best Job Market in Years," by Michael Diamond (USA Today). Finally, some good news for grads! The unemployment rate is down, hiring is up, and college job fairs saw an attendance surge this spring. (To which this 2011 grad says — aren’t you lucky.)
"How Competition is Killing Higher Education," by Mark Taylor (Bloomberg). College rankings are meant to help students find the school that’s right for them. (We make some great college rankings ourselves.) But Taylor, a department chairman at Columbia and the author of a book on college reform, argues that universities big and small are trying hard to game the system — and ultimately, that it’s students who lose out.
"Jumping Through Hoops," by Michael Joseph Gross (Vanity Fair). Among the bills London must foot to host the 2012 Olympic Games: 40,000 hotel rooms, 250 miles of Olympic-dedicated traffic lanes, and 500 air-conditioned limousines (plus uniformed chauffeurs!). The price tag will top $14.5 billion, leading some to question whether it’s all worth it.
"How Apple and Microsoft Armed 4,000 Patent Warheads," by Robert McMillan (Wired). A team of engineers in Ottawa takes apart routers, smartphones and other consumer electronics, looking for proof of patent infringement. It sounds like a pretty fun job. Unfortunately, it could also stifle innovation and entrepreneurship elsewhere.
"CEO Pay Moves with Corporate Results," by Scott Thurm (Wall Street Journal). That’s a shift from 2010, when CEO pay and share prices were not closely correlated.
"When a Music Scene Leads to a Boom," by Michael Seman (Atlantic Cities). A handful of good bands and a big-time music festival have changed the economic tune in Denton, Texas.
And in other news: headphones are the new office walls and no one really has any idea if coffee is good or bad for you.
Happy reading, Tumblers!
What We’re Reading, 5/18/12
Happy Friday, Tumblr! Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. Today’s list is getting up a little late, courtesy the Facebook IPO — but since the weekend’s almost here, please cut your curator some slack.
On our radar today: Facebook, Facebook and … more Facebook! If we played the Facebook IPO drinking game, we’d all be pretty buzzed.
"Facebook Falls Near to IPO Price," by Jacob Bunge, Jenny Strasburg and Ryan Dezember (Wall Street Journal). It would have been hard for Facebook’s first day of trading to live up to the hype that proceeded it. But even by lower standards, this launch felt a little “meh” — shares opened at $42 and closed at $38.16, just a bit above their Thursday offering price.
"For Average Investors, Long Odds on a Big Facebook Payday," by Nathaniel Popper (New York Times). The little guys who got in on Facebook probably shouldn’t expect big returns. (Hey, that’s what we said about IPOs!)
"How Mark Zuckerberg Hacked the Valley," by Brad Stone and Douglas MacMillan (Businessweek). Facebook hasn’t just changed the way we use the Internet, keep up with friends and creep on old acquaintances. The social network’s unconventional business strategies may also change the way tech start-ups operate. In the words of Stone and Macmillan, “Zuckerberg and his crew have made a series of high-risk moves … that were far more daring than wearing a hoodie to an IPO roadshow.”
"Facebook’s Growth and Reach at a Glance," by Avie Schneider and Melanie Taube (NPR). The infographic gurus at NPR have come up with a fascinating look at Facebook’s financial history. Fun fact: None of the cities with the most Facebook users are in the United States.
"Facebook IPO Makes Zuckerberg Richer Than Google Founders," by David De Jong and Devon Pendleton (Bloomberg). Mark Zuckerberg is now the 29th-richest person on Earth — a ranking that makes your friendly curator wonder who the heck cracks the top 10. The company’s other co-founders, Dustin Moskovitz and Eduardo Saverin, will also become billionaires.
And in other (Facebook) news: PC Mag rounds up 10 very strange things that cost the same amount as Facebook stock and the Huffington Post has launched a “Tech Bubble Death Watch" — worth it for the jokes alone.
What We’re Reading, 5/15/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. What we’re perusing over coffee this morning: Wall Street reform, European volatility, and the woes of the modern brickmason.
"In Washington, Mixed Messages Over Tighter Rules for Wall Street," by Ben Protess and Ed Wyatt (New York Times). If you hoped the J.P. Morgan fiasco would end with Wall Street reforms, Ben Protess and Ed Wyatt are here to disappoint you. A number of bank regulators are less than excited about passing new regulations to control risky trades.
"Faith Fades in Eurozone Firewall," by Robin Wigglesworth and Miles Johnson (Financial Times). European markets are growing ever choppier over fears that Greece will drop the euro — and that the repercussions will shake Italy and Spain. Says Luke Spajic of Pimco: “It’s looking alarming right now … The market is effectively trying to price in a disorderly exit for Greece.”
"Taxmageddon Sparks Rising Anxiety," by Lori Montgomery and Rosalind Helderman (Washington Post). While your friendly curator thinks we could do without all these armageddon “puns,” the scary sentiment still stands: After the November election, a lame-duck Congress will have a mere two months to sort out the spending gridlock. Hospitals and government contractors are prepping for “chaos.”
"Facebook Hikes IPO Range to Raise $12.1 Billion," by Olivia Oran and Alexei Oreskovic (Reuters). Facebook raised its price target range to $34 to $38 a share, which will push the company’s value between $93 and $104 billion.
"Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans," by John Hechinger (Bloomberg). Your tax dollars at work: Joshua Mandelman makes $454,000 (!) as a student-loan debt collector, and his company scores government commissions every time he collects on a defaulted student loan.
"The Toughest Guy on Wall Street," by Shawn Tully (Fortune). Much has changed for James Dimon since this profile ran six years ago, but if you’re trying to get into the head of the recently shamed CEO, it’s still a good place to start. From the editor’s note: “For six years, Dimon grew J.P. Morgan into a banking powerhouse, and he emerged from the financial crisis unscathed while most of his bank CEO counterparts were shown the door. He’s been known as one of Wall Street’s best risk managers — until last week, when he disclosed a $2 billion trading loss … Now Wall Street is judging its toughest guy.”
"The Economic Case for Same-Sex Marriage," by Betsey Stevenson and Justin Wolfers (Bloomberg). Regardless of your views on same-sex marriage, Wharton professors Stevenson and Wolfers have penned a fascinating editorial on the household as “economic institution” — and how that unit functions today.
"Why Are Teen Moms Poor?" By Matty Yglesias (Slate). Some counter-intuitive new research suggests that question should actually be the other way around: Teenagers aren’t poor because they have babies — they have babies because they’re poor.
"Heavy Lifting," by Aaron Leaf (Good). Writer goes to one of Canada’s top universities, becomes a warehouse laborer, lives to tell about its economic implications.
And in other news: Newt Gingrich is America’s most indebted politician, brick masonry is America’s fastest-dying profession, 0% unemployment does exist somewhere, and beware of Greeks bearing gifts outside the European Central Bank. (Don’t worry, the last one’s a joke.)
What We’re Reading, 5/9/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our agendas for this afternoon: moderate Republicans, CEOs, and unpaid interns.
"Moderate Republicans Fall Away in the Senate," by Nate Silver (New York TImes). In case you missed it, six-term Indiana Senator Dick Lugar was defeated by a Tea Party-backed challenger in primary elections yesterday. (He went on to write a fascinating 1400-word screed about partisanship.) The Times’ Nate Silver ran some numbers and found that Lugar’s race, while dramatic, is by no means unique: Moderate Republican Senators have an attrition rate of 78 (!) percent.
"CEOs: Don’t Raise Taxes on Dividends" (Politico). The CEOs of 18 major corporations — including UPS, Verizon and Xcel Energy — penned a Politico op-ed re: Obama’s proposed tax hike on dividends and capital gains. An excerpt: “Dividend-paying stocks offer investors a bright spot in a challenging financial marketplace … The threat of looming tax increases on dividends and capital gains could also increase volatility in the stock market this year.”
"Private Jobs Increase More with Democrats in the White House," by Bob Drummond (Bloomberg). If you believe Bloomberg’s latest analysis, almost two-thirds of private sector job growth occured under Democratic presidents over the past 50 years.
"Morgan Stanley’s Grimes Is Where Money and Tech Meet," by Evelyn M. Rusli (New York Times). Silicon Valley’s “banker of choice” wears leaf-print ties, knows computer science, and helps tech companies like LinkedIn, Groupon and Facebook go public.
"How to End This Depression," by Paul Krugman (New York Review of Books). Krugman goes long on austerity, stimulus and the “moral imperative” of getting people back to work.
"Why College Football Should Be Banned," by Buzz Bissinger (Wall Street Journal). As if that Krugman essay weren’t controversial enough, Friday Night Lights author Buzz Bissinger is tackling the economic consequences of college football. “College football has no academic purpose. Which is why it needs to be banned,” he declares early on. “A radical solution, yes. But necessary in today’s times.”
Happy reading, Tumblers!