Tuesday, June 5, 2012

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.”

And in other news: Apple phones will soon lose Google maps, beautiful people really do have it all, and you too can start a donut empire.

Friday, May 25, 2012

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!

Tuesday, May 22, 2012

What We’re Reading, 5/22/12

Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. What we’re talking about for Tuesday: Facebook, the cult of Glass-Steagal, and what the Greek gods would think about their country’s present woes.

"As Facebook’s Stock Struggles, Fingers Start Pointing," by Michael de la Merced, Evelyn Rusli and Susanne Craig (New York Times). Facebook’s third day of trading is off to a rough start — so rough, in fact, that investors are agitating to know who’s to blame. The most likely candidate? Morgan Stanley, the IPO’s lead banker, though Nasdaq and Facebook are also taking some heat.

"Obama Keeps Bain in His Crosshairs," by Laura Meckler (Wall Street Journal). Speaking of heat, Obama continues to attack Romney’s private equity firm, Bain Capital, even as his allies condemn the attacks. Your friendly curator likes this tweet from Slate’s Matt Yglesias: “Bain debate is the perfect lazy pundit’s controversy, all affect with no policy content.” (We’re on the record as pro-private equity, in case you wondered.)

"Rivals Go to Lunch on J.P. Morgan’s Losses," by Gregory Zuckerman and Lisa Rappaport (Wall Street Journal). Someone’s enjoying Jamie Dimon’s downfall — and I don’t mean all the finance reporters fiendishly covering this beat. J.P. Morgan’s loss will benefit a dozen banks, including Bank of America and Goldman Sachs, to the tune of $500 million or $1 billion. 

"Reinstating an Old Rule is Not a Cure for Crisis," by Andrew Ross Sorkin (New York Times). Call it the cult of Glass-Steagal: Thousands of people, including Massachusetts Senate candidate Elizabeth Warren, have idolized the Depression-era law they think could have stopped the financial crisis. Sorkin’s take? “The facts — basic facts — just aren’t that convenient.”

"Once Made in China: Jobs Trickle Back to U.S. Plants," by James Hagerty (Wall Street Journal). Outsourcing — what outsourcing? A number of manufacturers are finding they can make and sell goods more cheaply in the U.S. (But don’t celebrate yet. The impact on job creation has been minimal.)

"The Cost of College," by Nicholas Lemann (New Yorker). On the economics of American higher education, where too many schools compete for students, too much money is spent on failing programs, and — according to Lemann — too little tuition is charged at top schools.

"George Romney for President, 1968," by Benjamin Wallace-Wells (New York). We’ve already dug through the candidates’ pasts, dredged up their high school dramas, and examined their tax records, which leaves only … psychoanalysis! Wallace-Wells’ long read on George Romney’s failed presidential run examines not only the elder Romney and the ‘68 campaign, but how it might have impacted Mitt.

"Go Small: Why Washington Must Give Up the Illusion of a Grand Bargain," by David Gordon and Sean West (The Atlantic). The argument for small, practical compromises over wide-sweeping meetings of the mind.

"Boomers and Millennials: Who’s Got It Worse in the Workplace?" By Matthew Philips (Businessweek). Your friendly curator doesn’t want to spoil the big surprise, but let’s put it this way — some boomers still have pensions.

And in other news (there’s a lot today!): Video game consoles account for one percent of all energy use in the U.S., some Congress members are only slightly smarter than fifth graders, Mark Zuckerberg lost $2 billion on Facebook’s second day of trading, Fortune now has a “Fantasy Executive League,” for the really nerdy among us, and the Hairpin imagines how the Greek gods would react to that country’s current crisis.

Happy reading, Tumblers!

Tuesday, May 15, 2012

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.)

Thursday, May 3, 2012

What We’re Reading, 5/3/12

Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. What we’re reading this Thursday (besides the latest jobless claims numbers, of course): Fed rebellions, crazy couponing, and why big brother’s watching you eat.

"Boom Time for the Going-Broke Industry," by Pietra Rivoli (New York Times). Someone has to care for those old factories and warehouses when business shuts down. Your friendly curator is reminded of a quote from the Muppet Christmas Carol: “One might say that December is foreclosure season. Harvest time for the money-lenders.”

"A Rebellion at the Federal Reserve?" By Matthew O’Brien (The Atlantic). ”Rebellion” seems too strong a word — we’re talking about bankers, after all — but Chicago Federal Reserve president Charles Evans has championed a number of controversial strategies for the Fed, like more monetary stimulus and greater inflation. “Evans doesn’t look the part of a heretic,” O’Brien writes. “But in the cozy, conservative club that is central banking, he certainly qualifies.”

"The 99 Percent Wakes Up," by Joseph Stiglitz (Daily Beast). What do Wall Street campers have in common with government-toppling movements in the Middle East? If you follow Stiglitz’s argument, both resulted from youth disillusionment — and reflect some kind of major generational epiphany.

"Honey, I Got a Year’s Worth of Tuna Fish," by Amanda Fortini (New York Times). “Coupon clipping as the key to economic rebirth.” Need I say more? (Well, yes: Here’s a clip from Extreme Couponing.)

"Wall Street Doesn’t Know How to Value Private Equity Firms," by Dan Primack (Fortune). Primack’s argument: Wall Price serially misprices private equity firms, and investors stand to benefit. 

"Your Favorite Restaurant’s Secret Ingredient: Data, and Lots of It," by Joe Ray (Wired). You’ve heard of data mining on Facebook and at retail stores. Now restaurants are getting into the data game as well, tracking each sale (“down to the last malbec, martini and red quinoa pilaf”) and using the numbers to sell more stuff.

And in other news: Edvard Munch’s "The Scream" cost $119.9 million, Ann Romney’s zany bird-print shirt cost $990, and Ben Bernanke’s beard is — well, priceless.

Happy reading, Tumblers! 

Tuesday, April 17, 2012

What We’re Reading, 4/17/12

Happy Tax Day, Tumblr! Every morning, we poll the staff and round up their favorite economic, financial and political reads of the day. This being the, ahem, holiday it is, we’re focusing on tax stories. We assure you they’re less taxing than filing your returns.

"Obama’s Politically Astute Tax Returns," by Allan Sloan (Fortune). Much has been made of Romney and Obama’s (very different) tax returns. Sloan has an intriguing hypothesis: “the more I look at Obama’s return, the more it strikes me as being much more a political document than a financial document.”

"For Two Economists, the Buffett Rule Is Just the Start," by Annie Lowrey (New York Times).  Meet the guys behind the current tax fairness frenzy: Emmanuel Saez and Thomas Piketty, left-leaning French academics who claim that income inequality is almost as bad as before the Great Depression.

"A Family’s Billions, Artfully Sheltered," by David Kocieniewski (New York Times). Journalism’s version of the Oscars went down yesterday afternoon, and Times business reporter David Kocieniewski walked away with a Pulitzer for explanatory reporting. This fascinating 2011 piece on tax shelters is from his prize-winning series “But Nobody Pays That.” 

"What My Television Says About Our Broken Tax Code," by Rachel Black (Mother Jones). The tax system pays out $1 trillion in the form of reduced tax bills and refunds. (That’s more than Social Security, Medicare and Medicaid.) But the code’s structure disadvantages 70 percent of taxpayers, paying far more to households that make $100,000 or more.

"Tax Time Pushes Some Americans to Take a Hike," by Atossa Araxia Abrahamian (Reuters). Here’s a novel way to avoid paying taxes — renounce U.S. citizenship all together. Nearly 1,800 people did so last year, eight times more than in 2008.

"Some Tax Breaks Unavailable to Same-Sex Couples," by Tara Siegel Bernard (New York Times). A new study shows that gay couples pay more taxes than their heterosexual peers and face a lot more hurdles in that already painful paperwork. (This is part of the Times’ excellent "Cost of Being Gay" series, which your friendly curator recommends in full.)

In other, less taxing news: Mental Floss has rounded up six stories of kids’ lemonade stands versus the law, baseball attendance is a solid economic indicator, and this video of a military veteran returning to the NYSE trading floor will “warm your heart,” says Business Insider. (“Not many opportunities to call events on the NYSE trading floor ‘heartwarming,’” adds web editor Stacy Rapacon.)

What are you reading?