What We’re Reading, 6/5/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our agendas this morning: emergency conference calls, Wall Street’s best-paid CEO, and the economics of starting a donut empire.
"G7 Hold Emergency Eurozone Talks," by Quentin Pell, Peter Spiegel, Guy Dinmore and Mure Dickie (Financial Times). Your friendly curator has never known a conference call to help with much of anything, but finance ministers from the G7 countries convened via phone line today to discuss the European crisis. By all accounts, little came of it. (Surprise!) The same cannot be said of talks between German chancellor Angela Merkel and European Commission president Jose Manuel Barroso — Merkel announced in a press conference that Germany will at last allow some wiggle room in pooling European debt. The Central Bank is also dreaming up ways to draw Europe closer together.
"Europe’s Fade Becomes a Drag on Sales for U.S. Companies," by Nathaniel Popper (New York Times). No one buys Mac Books and Chevys when the proverbial sky is falling down. That, unfortunately, can also impact U.S. companies and their investors: Cisco, Dell, Netapp and a number of other U.S. firms have already reported a drop in European sales.
"Lower Oil Price Offers U.S. Consumers Hope," by Gregory Meyer and Robin Harding (Financial Times). “Hope” is a word we don’t often see in financial headlines — but oil prices are down 17% in the past month, and that could give both consumers and the overall economy a boost.
"Bitter Wisconsin Recall Race in Voters’ Hands," by Bob Secter (Chicago Tribune). It’s showdown day in Wisconsin, arguably the most polarized state in the country. If you’re not up on the brutal recall election, AP has an FAQ.
"Wall Street CEO Pay Rises 20% with KKR’s Kravis No. 1," by Laura Marcinek and Nikolaj Gammeltoft (Businessweek). Henry Roberts Kravis made $30 million last year — which is, for perspective, about 1/26th the value of the entire Tumblrverse. CEOs saw a 20% pay raise overall, down from 26% in 2010. Ah, how the other half lives!
"How Bank of America Execs Hid Losses — In Their Own Words," by Cora Currier (ProPublica). Shareholders filed suit against Bank of America on Sunday, demanding to know if executives lied about the bank’s losses before it acquired Merrill Lynch in 2008. Lots of skeletons are shaking out, and ProPublica has kindly gathered them up.
"The Last Days of MF Global," by Peter Elkind and Doris Burke (Fortune). MF Global suffered the eighth-largest bankruptcy in U.S. history … and we couldn’t even put a ranking on the broker’s infamy.
"Don’t Eat Fortune’s Cookie," by Michael Lewis (Princeton.edu). Alright, we’re veering from finance a bit — but renowned economics writer Michael Lewis will the commencement speech at Princeton today, and his remarks are really worth reading. A sample: “The ‘Moneyball’ story has practical implications. If you use better data, you can find better values; there are always market inefficiencies to exploit, and so on. But it has a broader and less practical message: don’t be deceived by life’s outcomes.”
What We’re Reading, 5/16/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. In our inboxes this morning: Greek bank runs, the debt ceiling sequel, and several funny videos. (So make sure you make it to the end!)
"Greek Banks See Steady Deposits Outflow," by Kerin Hope, Robin Wigglesworth and Quentin Peel (Financial Times). Spooked by the ongoing economic turmoil and their government’s failure to form a coalition, Greeks withdrew 1.2 billion euros from banks on Monday and Tuesday. (That’s .75 percent of all deposits.) Your friendly curator is reminded of the bank run scene in “It’s a Wonderful Life,” although Greek bankers say there’s no panic yet.
"Why Republicans Are Flirting with Debt Limit Debacle 2.0," by Brian Beutler (Talking Points Memo). It’s starting to feel like Groundhog Day around here, but the House is indeed revving up for yet another showdown on the debt ceiling. Beutler’s explainer covers the hows and whys of Speaker Boehner’s recent posturing on the issue.
"Needy States Use Housing Aid Cash to Plug Budgets," by Shaila Dewan (New York Times). February’s $25-billion mortgage settlement was a win for struggling homeowners across the country. Unfortunately, they aren’t the only ones struggling. States like California and Texas contend with huge budget gaps — and they’re diverting the mortgage funds to cover them.
"Hedge or Bet? Parsing a Trade," by Katy Burne, Aaron Lucchetti and Gregory Zuckerman (Wall Street Journal). The J.P. Morgan controversy, in a nutshell: Was the bank’s disastrous strategy designed to take risks or avoid them?
"Jamie Dimon’s Hubris Unshakable as J.P. Morgan Reelects Him to Two Top Posts," by Nomi Prins (Daily Beast). Nomi Prins clearly falls on the “take risks” side of the J.P. Morgan question. Her thesis: “A self-inflicted loss conjures up images of someone shooting himself or herself during a game of Russian roulette. Sure, the shooter might have shot the gun into his or her brain, egregiously mistaken in the belief it wouldn’t be loaded. But he or she also chose to play.”
"Blood in the Water," by Bethany McLean (Vanity Fair). While we’re talking bankers, Bethany McLean has a great piece in next month’s Vanity Fair re: Goldman Sachs CEO Lloyd Blankfein and who could replace him if he’s forced out.
"Slowly, as Student Debt Rises, Colleges Confront Costs," by Andrew Martin (New York Times). Students aren’t the only ones facing rising college costs — colleges themselves are restructuring to contend with state aid cuts and demand for cheaper tuition. Martin quotes Lawrence Lesick, of Ohio Northern University: “We know the model is not sustainable. Schools are going to have to show the value proposition. Those that don’t aren’t going to be around.”
And in other news: Yankee Candle wants to market to men by selling scents like — we kid you not! — “Man Town,” “Riding Mower” and “2x4.” New York Times reporter Kevin Roose has assembled a collection of “sad Jamie Dimon” photos. And for the video-minded among us, here are mash-ups of Jamie Dimon railing against regulation and Mitt Romney talking about things he likes.
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, 3/14/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radars this morning: Toms shoes, student debt, and boatloads of next-week analysis on the J.P. Morgan loss.
"J.P. Morgan May Lose Sway in D.C.," by Scott Patterson and Victoria McGrane (Wall Street Journal). The fall-out from J.P. Morgan’s massive trading loss continues: as if the big-name executive departures weren’t bad enough, a number of the firm’s political allies are also backing away. Patterson and McGrane quote an unnamed banking lobbyist, who says J.P. Morgan’s loss “sets us all back.”
"Obama’s Wall Street Problem," by Ben White (Politico). Banks aren’t the only ones feeling the J.P. Morgan sting. Wall Street’s suffering image might also hurt Obama, who claimed to shake up Wall Street after the 2008 collapse.
"How Wall Street Killed Financial Reform," by Matt Taibbi (Rolling Stone). No one can say with any certainty that more strident financial reforms would have prevented the latest Wall Street drama. But Dodd-Frank is certainly weaker than it could be — and Rolling Stone has a stinging, longform history to prove it. Taibbi’s true to form: “The giant reform bill turned out to be like the fish reeled in by Hemingway’s Old Man – no sooner caught than set upon by sharks that strip it to nothing long before it ever reaches the shore.”
"Analysis: The Core Problems with J.P. Morgan’s Failed Trades," by David Henry and Carrick Mollenkamp (Reuters). If you’re still wondering how J.P. Morgan managed to lose that startling $2 billion, Reuters has a solid rundown on the firm’s bad investments (and investment strategies). Also worth a read: Maureen Farrell’s take on J.P. Morgan and “massive speculative bets,” which major banks still make en masse.
"Missing: Stats on Crisis Conviction," by Jean Eaglesham (Wall Street Journal). How many executives landed in jail for their role in the financial collapse? Good question! No one knows.
"A Generation Hobbled by the Soaring Cost of College," by Andrew Martin and Andrew Lehrin (New York Times). Ninety-four percent of B.A. students take out loans to go to school — more than double the borrowing rate a mere 20 years ago. (In more optimistic news, however, this year’s graduates will also see better job opportunities than the three classes before them.)
"Can the Euro Avert Collapse?" By Andy Robinson (The Nation). Robinson weighs the euro’s future from Spain, where debt and unemployment look particularly tough.
"Here Be Dragons: Anthony Bolton," by Robert Cookson (Financial Times). ”Britain’s Warren Buffett” composes classical music, can’t use chopsticks, and struggles to recoup two years of poor returns.
Happy reading, Tumblers!
What We’re Reading, 4/27/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radar this fine Friday: GDP growth, Spain’s S&P downgrade, and the sales benefits of resurrecting deceased rappers.
"Economy in U.S. Grew Less than Forecast First Quarter," by Shobhana Chandra (Bloomberg). We, like most of the free world, are closely following the news that the U.S. economy grew only 2.2 percentage points in the first quarter — .8 percentage points less than the previous quarter, and .3 percentage points less than forecast.
"The ‘Small’ Numbers on the Student Loan Interest Rate Hike," by Jason Delisle (Ed Money Watch). We’ve all heard the apocalyptic rhetoric on the student loan interest rate hike — or at least seen Obama “slow-jamming” about it on Jimmy Fallon. But Delisle looked into some of the numbers surrounding the rate hike, and the stakes actually look pretty low.
"Lehman Elite Stood to Get $700 Million," by Walter Hamilton, Andrew Tangel and Stuart Pfeifer (LA Times). Lehman Brothers paid its 50 top employees more than $700 million in the year before the firm’s collapse. (Think yearly salaries in the $15- to $50-million range.) The Times quotes one expert saying “many people are going to be stunned at how well some people were being paid.” Consider your friendly curator stunned.
"Spain, S&P and the Austerity Growth Debate," by Peter Spiegel (Financial Times). The S&P downgraded Spain’s credit rating from A to Triple B Plus yesterday, putting it in the unhappy league of Italy and Ireland. Spiegel’s take: It’s a condemnation of austerity programs.
"The Competitiveness Crisis," by Uri Dadush (Foreign Policy). Must-read context on Europe’s ongoing economic woes, especially in light of Spain’s recent downgrade. Writes Dadush: “The real root of the euro crisis is the gap between Europe’s core and periphery — and it’s getting wider.”
"How to Get Food on Every Table," by Bjorn Lomborg (Slate). A new paper from the International Food Policy Research Institute proposes an economic solution to world hunger. Food production figures heavily.
"Twitter Becomes a Key Real-Time Tool for Campaigns," by Karen Tumulty (Washington Post). Twitter was around for the 2008 election, but Tumulty says it “came into its own” this election cycle, shaping the political debate in occasionally surprising ways. (#tumblr2016?)
And in other news: Everything you ever wanted to know about how they plan the menu at the White House Correspondents Dinner, that creepy Tupac hologram boosted his album sales, and Groupon’s young CEO said the company needs to grow up — immediately after apologizing for drinking too much beer. (“Is Andrew Mason to beer what Steve Jobs was to turtlenecks?” Jokes mag reporter Susannah Snider. “Only time will tell … “)
Happy reading, Tumblers!
What We’re Reading, 4/10/12
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. Making the office rounds this morning: the Buffett Rule, Instagram, and Budweiser as luxury beer.
"White House Makes Case for ‘Buffett Rule,’" by James Politi (Financial Times). The Obama administration has begun to push in earnest for a 30 percent tax on millionaires, but don’t expect the rule to make it into the tax code. “It’s an effort to demonstrate to voters how out-of-touch Mitt Romney and the GOP are with the middle class,” says Letter editor Ken Bazinet. “About two-thirds of Americans say they want to see the rich pay more, but that won’t stop the GOP-controlled House from blocking the bill.” Related reading: “The Numerical Weak Spot of Obama’s ‘Buffett Rule.”
"In Praise of Crowdfunding," by Andrew Leonard (Salon). The JOBS Act has been roundly criticized by reform-minded liberals like Rolling Stone’s Matt Taibi, who recently wrote that it “couldn’t suck worse.” But not so fast, says Leonard: the law’s crowdfunding provision could provide enormous opportunity for small businesses. Kickstarter, anyone?
"Health Care Law Will Add $340 Billion to Deficit, New Study Finds," by Lori Montgomery (Washington Post). Well, there’s a headline that speaks for itself. The study, released today, comes from conservative policy analyst Charles Blahous.
"It’s Time to Accept the Existence of a Social Media Bubble," by Rebecca Greenfield (The Atlantic). Instagram sold to Facebook for a whopping $1 billion yesterday, just weeks before Facebook’s much-anticipated (and highly valued) IPO. How is Instagram possibly worth $1 billion? Greenfield argues that “speculative mania” is driving up valuations for Internet companies — and that investors suffer when the bubble bursts.
"The Amazing Matzo Stimulus," by Adam Davidson (New York Times Magazine). Magazine reporter Susannah Snider has been eating a sad lunch of matzo and brussel sprouts all week — perhaps why she flagged this story. “Can a company thrive on a product that 2% of the population is forced to buy one week per year?” She asks. Apparently, yes!
And finally, in lighter news: a tweet is worth a tenth of a cent (a Yelp review or Foursquare check-in, considerably more); New York City income inequality, as graphed by its supermarkets; and Budweiser as a luxury — in China, anyway.
What are you reading?
What We’re Reading, 4/9/2012
Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. On our radar this fine Monday morning: more on jobs, patent trolls and executive perks.
"U.S. Job Figures Become a Fickle Political Football," by Robin Harding (The Financial Times). Economists and finance writers always note the monthly jobs reports — but now campaign strategists pay attention, too. “The challenge for President Barack Obama and his all-but-certain Republican rival Mitt Romney is to tell a story about jobs that holds true with every report,” Harding writes. (Unrelated challenge: When the Financial Times says “football,” does it actually mean soccer?)
"Federal Funds to Train the Jobless Are Drying Up," by Motoko Rich (The New York Times). 12.7 million people are still looking for jobs, but federal funding for work force training has dropped to historic lows. Both employers and employees suffer.
"For Big Companies, Life is Good," by Scott Thurm (The Wall Street Journal). New jobs report got you down? New analysis from the Journal finds heartening growth elsewhere — among large corporations, which are leaner and more profitable than they were pre-recession.
"The Troll Toll," by Ray Fisman (Slate). ”Patent trolls” buy up huge numbers of patents for the express purpose of litigating. That’s a hassle for small businesses, obviously. But a new study by MIT economist Catherine Tucker indicates a greater problem — patent trolls may actually stifle innovation. (Required listening on this subject: This American Life’s “When Patents Attack!”)
"The Truth About Ric Edelman," by Caren Chesler (Financial Advisor). We’re getting a bit insidery here, but bear with us — FA’s April cover story is an intriguing personality profile of a guy once called “Suze Orman before there was a Suze Orman.” Edelman, who has written a mountain of books and hosts a weekly radio show, is arguably one of the country’s most controversial financial planners.
"A ‘Fat Cat’ With the President’s Ear," by Robert Frank (The Wall Street Journal). While we’re talking profiles, this one’s a must-read: Robert Wolf, the president of UBS’s investment bank, was one of President Obama’s top fundraisers in the last election. The so-called “Pied Piper of Wall Street” might step back in 2012.
"In Chief Executives’ Pay, a Rich Game of Thrones," by Natasha Singer (The New York Times). Apple CEO Timothy Cook makes $42,000 an hour. Enough said.
What are you reading today?
What We’re Reading, 3/15/2012
Making the office rounds this morning: Goldman Sachs satire, cashless living and cheesy grits. Below, a round-up of recommendations from the Kiplinger staff.
"Why I Am Leaving the Empire" (The Daily Mash). ”Greg Smith’s skewering of ex-employer Goldman Sachs yesterday was ripe for satire,” says senior editor Bob Frick. So ripe, in fact, that we’ve been reading little else. There’s also “Why I am Leaving the Knicks,” “Why I Am Applying for an Executive Director Position at Goldman Sachs,” and ”Greg Smith’s Letter to Goldman Sachs is Straight Out of Mad Men.” (That last one is less a parody and more a clever critique, says our social media specialist Amanda Lilly.) But in more serious responses …
"The Vampire Squid Spills Its Ink," by William Cohan (Financial Times). Cohan literally wrote the book on Goldman Sachs, and considers Smith’s controversial resignation an “existential moment” for the firm.
“Yes, Mr. Smith, Goldman Sachs Is All About Making Money” (Bloomberg). The lede to Bloomberg’s scathing editorial: “Apparently, when Greg Smith arrived at Goldman Sachs Group Inc. (GS) almost 12 years ago, the legendary investment firm was something like the Make-A-Wish Foundation — existing only to bring light and peace and happiness to the world.”
"The Devil Wears Pinstripes," by Heidi Moore (Marketplace). Here’s an interesting take: Moore reads Smith’s resignation less as a protest against a morally bankrupt corporate culture and more as “the objection of the underclass of younger bankers and traders stymied by a lack of career mobility.”
"Can You Enjoy a Strip Club Without Cash?" by Seth Stevenson (Slate). Web editor David Mulhbaum reminded us that Greg Smith is not the only news of the day. On Slate, Seth Stevenson’s attempting to live without cash. “It takes a turn for the amusing here,” David notes, not untruthfully.
"A Plan C for Afghanistan," by Doyle McManus (LA Times). Says political editor and Kiplinger sage Ken Bazinet: “It’s becoming clear that in a post-Bin Laden world the mission in Afghanistan is muddled. LA Times wise Washington sage Doyle McManus says it’s time for a ‘Plan C.’”
"Bank of America: Too Crooked to Fail," by Matt Taibbi (Rolling Stone). The provocative Taibbi takes on Bank of America bail-outs, at great length.
"What Every Woman Should Tell Her Daughter About Money," by Sheryl Nash-Nance (Forbes). Says web editor Andrea Browne: “I love the fact that the financial pros featured in this piece are teaching their daughters at a young age the importance of being able to fend for themselves financially as adults.”
"Wolf Blitzer Can’t Get Enough Cheesy Grits," by David Daley (Salon). Today’s token political media story comes courtesy copy editor Liz Whitehouse, who is “tired of newscasters taking one slice of a story and blowing it up. Salon’s David Daley provides a sharp critique of a recent example.”
Did we miss anything? Tweet us your favorites!