Wednesday, May 30, 2012

What We’re Reading, 5/30/12

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: Spain, Greece, India, and Amercia (sic).

"Spain Rattles Markets, Greeks Warned of Catastrophe," by Julien Toyer and Karolina Tagaris (Reuters). Oh look, Spain is the new Greece — but in this case, it’s not a fashionable distinction. Spain’s fourth-largest bank is on the brink of collapse, and the European Central Bank rejected a plan to bail it out. Meanwhile, Greece’s biggest bank warned that living standards, incomes and employment would suffer dramatically post-euro. (Considering all that pathos, a lot of investors have begun banking on U.S. treasury notes instead.)

"Most Aid to Athens Circles Back to Europe," by Liz Alderman and Jack Ewing (New York Times). Europe gave Greece 130 billion euros in bailout funds. But like a recent college grad with too many loans, Greece can only use that money to pay off interest on its debts — and not, you know, provide basic services to its beleaguered citizens.

"India’s Economy Slows, With Global Implications," by Jim Yardley and Vikas Bajaj (New York Times). In case all this talk of Europe is boring you, inflation and deficits are also up in India, where government officials only recently predicted growth rates of more than nine percent.

"Romney Clinches Nomination," by Ginger Gibson (Politico). Surprise, surprise. The real story here is Donald Trump, who tagged along but kept mercifully mum on Obama’s “disputed” birthplace. 

"As Governor, Romney Picked Winners and Losers of His Own," by Andy Sullivan (Reuters). New Romney ads skewer Obama for granting tax breaks and extended loans to favored industries. The problem? As governor of Massachusetts, Romney granted similar favors to firms like Bristol Myers-Squibb and Spherics Inc. — the latter of which shut down and defaulted on its loans.

"Campaigns Mine Online Data to Target Voters," by Beth Fouhy (AP). TV ads and direct mail are so 2008. Now, Obama and Romney are spending hundreds of thousands of dollars to target online ads to tiny niches — and collect data on the people in them. Writes Fouhy: “The 2012 election could be decided by which campaign is best at exploiting voters’ Internet data.” 

"Could Latino Voters Turn Deep-Red Texas Democratic by 2020?" By Jason Margolis (The Atlantic). Some thought-provoking demographics, in light of Romney’s Texas win: Fifty percent of the state’s youth are Latino, and Latinos overwhelmingly vote for Democrats.  

"Networks Built on Milliseconds," by Anton Troianovski (Wall Street Journal). To some people, high-frequency trading isn’t frequent enough. A number of firms are developing microwave relays between Chicago and New York, which will work even faster — 2.3 milliseconds faster — than the current fiberoptic system. That could work out to an extra .08 cents per share traded, by some estimates.

"Apple’s Cook Says Focus Remains on Products," by Dan Gallagher (Marketwatch). Apple CEO Tim Cook sat down for an extensive interview at this week’s All Things Digital conference, with some telling revelations for Apple investors and fans. Among them: Cook wants to move more manufacturing to the U.S., and Apple’s hard at work on that fabled TV. (A more detailed live blog from All Things D is here.)

And in other news: Jaguar was pleasantly surprised by its Mad Men cameo, the author of the Black Swan thinks a euro breakup would be no big deal, and someone on the Romney staff is about to lose her job — the campaign’s “With Mitt” iPhone app misspelled America and inspired a parody Tumblr.

Happy reading, Tumblers!

Wednesday, May 23, 2012

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.

And in other news: Facebook wrecks marriages, college students don’t study, and the Pentagon cozies up (too much?) to Hollywood.

Happy reading, Tumblers!

Friday, March 23, 2012

What We’re Reading, 3/23/12

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: Jim Yong Kim, energy independence, and a very good day for Etch a Sketch.

"First Responder," by Kai Falkenberg (Forbes). This morning, President Obama tapped Dartmouth College president Jim Yong Kim to run the World Bank — a surprise pick to many, and an unknown name to some. Here, your Jim Yong Kim primer: A profile that Forbes ran last November, when Kim was just an ambitious college president with a very long resume. 

"Fannie and Freddie: Slashing Mortgages is Good Business," by Jesse Eisinger and Chris Arnold (ProPublica). Here’s more surprising news, this time on the mortgage front: Private analyses by housing giants Fannie Mae and Freddie Mac found that loan forgiveness will not only keep more homeowners in their houses — it will also save Fannie and Freddie money.

"Hello, Cruel World," by Nathaniel Penn (The New York Times Magazine). Penn tracked down 226 graduates from Drew University’s Class of 2011 and interviewed them about their job search. The results are sad and telling — only 39% have full-time jobs.

"The Case Against Google," by Mat Honan (Gizmodo). Gizmodo has an unsettling long read on your data and what Google does with it. “It needs you to reveal your location, your friends, your history, your desires, your finances; nothing short of your essence,” Honan writes.

"U.S. Inches Toward Goal of Energy Independence," by Clifford Krauss and Eric Lipton (The New York Times). America produces more gas than ever, and Americans use less of it. The eventual result, if this trend continues: “Independence from foreign energy sources, a milestone that could reconfigure American foreign policy, the economy and more.” 

"The Coming ‘Hunger Games’ Short Squeeze," by Laura Mandaro (MarketWatch). Hollywood insiders expect this weekend’s Hunger Games opening to rank among the top 10 U.S. openings in history. “Hunger Games (need I say more?)!” Writes Kip reporter Neema Roshania. “It’s a positive economic indicator that movie ticket sales are up overall, though. When people are feeling thrifty they tend to stick to renting or using streaming services at home.”

And to end on a lighter note — it is Friday, after all! — Goldman Sachs is scouring its emails to see if anyone actually calls clients “muppets,” and Etch a Sketch stock surged yesterday after Romney aide Eric Fehrnstrom mentioned the toy on CNN. 

What are you reading?