Links: 2013-09-30
Fed policies effective even with rates at zero: study | Reuters
“Eric Swanson, a senior research advisor at the regional Fed bank, analyzed yields on U.S. Treasuries to test that assumption.
He found that the Fed’s forward guidance – giving markets information about where the Fed expects short-term rates to be in the future – and the Fed’s bond-buying programs on several occasions helped push down long-term borrowing costs by as much as 0.2 percentage point.”
Microsoft’s Windows Phone enjoys strong growth in Europe – Telegraph
“Microsoft’s Windows Phone software has grown to account for almost a tenth of the European smartphone market, new figures reveal. “
Greece plans new anti-racism law amid Golden Dawn crackdown | Reuters
“The Greek government said on Monday it would soon present a bill targeting racist hate speech, part of a crackdown on the far-right Golden Dawn party after the killing of an anti-fascist rapper.”
Michal Kalecki on the doctrine of ‘sound finance’ | LARS P. SYLL
Interesting comments on the intersection of politics and economics regarding full employment, government deficits, and opposition to these policies
Press Review and News Roundup on German Coalition Talks – SPIEGEL ONLINE
This is exactly what we should have expected. Note that the SPD want the finance ministry as I was saying they would:
“It’s quickly becoming clear how hard it’s going to be for Angela Merkel to form a new government. The SPD wants the Finance Ministry and will ballot its members on any deal. In the end, though, they’re likely to reach an agreement, say media commentators.”
Why Judges Are Scowling at Banks – NYTimes.com
““Maybe the judges are tired of the diet of baloney sandwiches the banks have been feeding them,” said April Charney, a foreclosure defense lawyer who for years represented troubled borrowers at Jacksonville Area Legal Aid in Florida. She is now in private practice. “
“In a drastic and much-criticised move that reignited fears for the health of the eurozone’s third-largest economy, the former prime minister and centre-right leader announced on Saturday he was pulling his ministers out of Enrico Letta’s ever-fraught grand coalition government.”
Do not kid yourself that the eurozone is recovering – FT.com
Here’s my problem with this: recovery should not connote normalcy. It’s simply a statistical computation showing an economy growing over a longer period, say more than six months. For example, in the double dip recession of 1980-82 in the US, the recovery between the two recessions was this short. So, it isn’t right to say that recovery is not happening.
“Eurozone gross domestic product expanded 0.3 per cent in the second quarter of this year. It will probably have expanded again in the third quarter. So if you define the end of a recession as two consecutive quarters of positive growth, you might be tempted to forecast that the recession will end at precisely midnight on Monday with the end of the quarter. If you do this, you are either a fool or someone with an agenda to peddle – or both.”
Analysis: Default or not, Asia a hostage to U.S. debt | Reuters
“”Central banks manage the reserve assets and therefore cannot change investment behavior frequently depending on short-term events,” Bank of Korea’s Choo said.
South Korea, which has the world’s seventh-largest foreign currency reserves totaling more than $330 billion, hosted a closed-door conference in Seoul this week at which some 100 central bank officials from 36 mostly Asian and East European countries participated.
Choo said the central bankers were there to discuss the changing investment environment, in particular the question of dealing with a lasting rise in bond yields.
The risk of U.S. debt being downgraded again or a failure to pay creditors temporarily would not affect their thinking, he said.”
Japan September PMI shows manufacturing expanding at fastest since 2011 quake | Reuters
“The Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 52.5 in September from 52.2 in the previous month.
The index remained above the 50 threshold that separates contraction from expansion for the seventh month and showed that activity expanded at the fastest since February 2011, one month before the natural disaster struck the country’s northeast coast.
The output component of the PMI index also gained to 53.8 from 53.5 in August, to show the fastest growth since the quake.”
Abe to Pair Tax Rise With Stimulus – WSJ.com
Isn’t this just tax and spend? Japan does have low taxes but I don’t see why you would increase both taxes and stimulus.
Faltering Chinese factory growth adds to rebound fears – FT.com
“China’s manufacturing growth this month was much weaker than initial estimates, according to an industrial survey that raises concerns about the durability of the economy’s rebound.
The purchasing managers’ index published by HSBC edged up to 50.2 in September from 50.1 in August. While that points to mild expansion for the vast Chinese manufacturing sector, it is well below the preliminary survey result of 51.2 that had been announced just last week.”
Mortgage approvals hit five-year high | Money | theguardian.com
“Bank of England says 62,226 figure is the highest since February 2008, but remains well below the rate recorded in 2007”
ekathimerini.com | Greek retail sales slump shows no sign of slowing in July
This is pretty dire. It makes you wonder if Greece is stabilizing at all.
“Retail sales by volume fell 14.0 percent year-on-year after a revised 8.0 percent drop in June. It was the biggest drop in three months.”
N.S.A. Examines Social Networks of U.S. Citizens – NYTimes.com
“Since 2010, the National Security Agency has been exploiting its huge collections of data to create sophisticated graphs of some Americans’ social connections that can identify their associates, their locations at certain times, their traveling companions and other personal information, according to newly disclosed documents and interviews with officials. “
“When on June 9 Edward Snowden stood up in Hong Kong and revealed himself to the world as an NSA whistleblower, the Justice Department wasted little time in targeting his email provider. A new appeals court filing today shows the government served a court order on Texas-based Lavabit the very next day, demanding metadata on an unnamed customer that the timing and circumstances suggest was Snowden.”
How I learned to stop worrying and love the bubble | FT Alphaville
I have made this point before:
“Over the last three decades, workers in most European countries have taken much of the gains of productivity growth in the form of more leisure. This means 4-6 weeks a year of paid vacation, paid family leave and sick days, and in at least one country, 35 hour work weeks.
These forms of leisure have been integrated into these countries’ social structures in the same way as the weekend is taken for granted in the United States. People in Europe do not think of themselves as being partially unemployed because they work less than 1500 hours a year.”
Americans Reject by 61% Obama Demand for Clean Debt Vote – Bloomberg
“That sentiment is shared by almost three-quarters of Republicans, two-thirds of independents, and a plurality of Democrats. Just 28 percent of respondents backed Obama’s call for a clean bill that has no add-on provisions. “
LOVEINT: On his first day of work, NSA employee spied on ex-girlfriend | Ars Technica
“In 2005, a National Security Agency employee was given his first day of access to the United States’ SIGINT (signals intelligence) capability. So what did he do with his vast powers?
According to a newly published letter (PDF) by the NSA Office of the Inspector General (OIG), “he queried six e-mail addresses belonging to a former girlfriend, a U.S. person, without authorization.””
Germany’s social democrats gamble with coalition referendum – FT.com
“Leaders of Germany’s centre-left Social Democratic party are set to take a big gamble on whether to join a grand coalition with Angela Merkel’s centre-right Christian Democrats, by leaving the final choice up to a party referendum.
Sigmar Gabriel, party chairman, was expected to put the plan to an SPD convention on Friday evening in Berlin, in a bid to persuade the delegates to give the green light for exploratory talks to open next week with the German chancellor.”
Blackstone: We’re in an ‘epic credit bubble’
“Baratta said Blackstone is “bullish” on the U.S. economy, but the “valuations we have to pay relative to the growth prospects are out of whack right now.”
Baratta said the U.S. still has “clear headwinds” and is “range bound” between 1 percent and 3 percent economic growth.”
Alice Rivlin was in charge of the last government shutdown. This is what she saw.
This Spanish-language article says that German Chancellor Angela Merkel is prepared to raise taxes on the rich in order to seal a coalition with the SPD in Germany. Expect to see other changes in German economic policy due to the switch away from the FDP.
BBC News – Apple Maps flaw results in drivers crossing airport runway
“Fairbanks International Airport told a local newspaper that in the past three weeks two motorists had driven along the taxiway and across one of its runways.
Apple’s app had directed users along the taxiway but did not specifically tell them to drive onto the runway.
The firm has now issued a temporary fix.”
“Apple evidently did not fully grasp the complexity involved in deploying a mapping service and its continuing woes show that it is not an easy thing to fix.”
Why We’re Shutting Off Our Comments | Popular Science
“Starting today, PopularScience.com will no longer accept comments on new articles. Here’s why.”
Seymour Hersh on Obama, NSA and the ‘pathetic’ American media | Media | theguardian.com
Ex-Spy Christopher Boyce on Snowden, WikiLeaks, and NSA Backdoors | Threat Level | Wired.com
“Boyce spoke to WIRED about the changing face of espionage; WikiLeaks, Manning, Snowden and the radically changed world that awaited him when he walked out of prison.”
BlackBerry loses nearly $1 billion in quarter, revenues plunge by 49 per cent | Toronto Star
How is this company worth $4.7 billion? It is hemorrhaging losses.
Boston University sues dozens more tech firms for violating 1997 patent — Tech News and Analysis
“As with its case against Apple, Boston University claims that products like Microsoft’s Surface RT and the BlackBerry Z10 include a “gallium nitride thin film semiconductor” that one of its professors patented in 1997.”
“A woman who worked in PR for major banks explains how media training of bankers keeps information out of the press”
Personal Spending, Incomes Rise – WSJ.com
“Personal spending, which measures how much Americans spent on items ranging from cars to health care, rose 0.3% in August from a month earlier, the Commerce Department said Friday. That followed an upwardly revised 0.2% gain in July.
Personal incomes, including wages, investment returns and government aid, climbed 0.4%.
Friday’s report showed that Americans put away a little more of their incomes in savings. The savings rate climbed for the third straight month and is now at 4.6%, still low historically. “
The austerity chart that’s worth 1000 Words | MONEY AND THE REAL ECONOMY
“Governments’ provision to raise taxes and cut spending has, unsurprisingly, acted pro-cyclically.”
www.ateconomics.com austerity economy jobs europe
Shutdown Would Shave Fourth-Quarter U.S. Growth as Much as 1.4% – Bloomberg
“A shutdown of the U.S. government would reduce fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, economists say, as government workers from park rangers to telephone receptionists are furloughed.
Mark Zandi of Moody’s Analytics Inc. estimates a three-to-four week shutdown would cut growth by 1.4 points. Moody’s projects a 3 percent rate of growth in the fourth quarter without a closure. A two-week shutdown starting Oct. 1 could cut growth by 0.3 percentage point to an annualized 2.3 percent rate, according to St. Louis-based Macroeconomic Advisers LLC. “
Yes, some people will pay you for your news — a really, really small number of people — paidContent
“As media-industry veteran Alan Mutter points out, the vast majority of newspaper paywalls are only reaching a tiny fraction of the overall potential audience, which is a problem for a growing number of publishers that are relying on them”
“BlackBerry’s ongoing collapse is becoming a serious drag on the company’s manufacturing partner Jabil Circuit. So much so that Jabil is considering ending its business relationship with the struggling smartphone pioneer.
Discussing Jabil’s fourth-quarter results during a call with analysts on Wednesday, CEO Mark Mondello said that BlackBerry’s downward spiral has given him reason to reconsider his company’s partnership with it. BlackBerry is Jabil’s second-largest customer overall, making up 12 percent of its business (Apple comprises 19 percent), and its gruesome finances and uncertain future are already negatively impacting Jabil’s business.”
BlackBerry suffers as banks switch handsets – FT.com
“Wall Street investment banks and other financial services groups are reducing their reliance on BlackBerry, underscoring the Canadian smartphone company’s challenge as it plans to abandon the consumer market to focus on its core business customers.
Wall Street banks once relied exclusively on BlackBerry when providing devices for employees, but many have now delayed or cancelled plans to upgrade to the latest BB10 smartphones and software.”
NSA reform: how the key Senate bill seeks to limit surveillance | World news | theguardian.com
“The Intelligence Oversight and Surveillance Reform Act is the most ambitious reform yet proposed. How would it work?”
Germany’s election: A new match for black | The Economist
This is yet another article confirming what I told you was the case already in January: <a href=”https://www.creditwritedowns.com/2013/01/merkel-profile-dominant-in-germany-but-politics-still-in-flux.html”/>Merkel profile dominant in Germany but politics still in flux</a>
“The Bureau of Economic Analysis released new data today showing that corporate profits reached an all-time nominal high in the second quarter of 2013. Profits before tax rose to 12.53 percent of GDP from 12.22 percent in the previous quarter, as the following chart shows. That was just fractionally short of the all-time high of 12.60 percent reached in the final quarter of 2011. At the same time, the BEA confirmed that GDP grew by 2.5 percent, the same as the August estimate.”
Looting the Pension Funds: How Wall Street Robs Public Workers | Politics News | Rolling Stone
Read this with your thinking cap on because it definitely has an anti-Wall Street, pro public sector worker slant. The issues raised are important irrespective of the slant.
Shhh … NSA’s Utah Data Center may be open already | The Salt Lake Tribune
“Don’t look for balloons or a big “Grand Opening” sign outside the National Security Agency’s new Utah Data Center.
The facility is expected this fall to quietly begin sucking in massive amounts of information for the intelligence community and storing it in the cavernous buildings in Bluffdale, according to NSA officials — and it could be open now even as the agency faces scrutiny over efforts to collect data on Americans domestically.”
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