Links: 2013-10-02
Reuters to Cut 5% of Newsroom Jobs – WSJ.com
“Thomson Reuters employs approximately 2,800 journalists globally, so the cuts translate to about 140 people. The cuts will begin in the next month, the people said.”
BofA Says Bonds to Beat Stocks in Debt Gridlock – Bloomberg
“Strategists from Bank of America Corp. (BAC) to Wells Fargo & Co. (WFC) predict dollar-denominated corporate bonds will outperform stocks this month if political gridlock persists with the government partially shut down this week.
Company debt in the U.S. has gained 1 percent since Sept. 17, the day before the Federal Reserve surprised investors with its decision to maintain unprecedented economic stimulus, compared with a 0.5 percent decline on the Standard & Poor’s 500 Index. In August 2011, the last time legislators approached a deadline to raise the debt limit, investment grade bonds returned 0.13 percent while U.S. stocks declined 5.4 percent. “
Former aide sorry for dissing Obama – POLITICO.com
This is quite revealing in my view.
Federal Shutdown for a Week Seen Shaving 0.1 Point From Growth – Bloomberg
“Estimates of the setback to gross domestic product ranged from zero to 0.4 percentage point, according to 40 economists in a Bloomberg survey.”
BBC News – Spain’s jobless claims rise in September, government data shows
“Unemployment in September rose by 0.5%, or 25,572, to 4.7 million, with the service sector shedding 52,000 jobs, according to Labour Ministry data.
However, the jobless level in industry and construction continued to fall.”
N.S.A. Experiment Traced U.S. Cellphone Locations – NYTimes.com
“The National Security Agency in 2010 and 2011 conducted a secret pilot project to test the collection of bulk data about the location of Americans’ cellphones, but the agency ultimately decided against putting such a program into play for now, according to intelligence officials. “
Weak Trading, Mortgage Slump, Legal Costs to Cut Results at Banks – WSJ.com
“The effects of slowing mortgage demand, weak trading revenue and higher legal costs are being felt far and wide.
Analysts reduced revenue estimates for the six largest U.S. banks during the quarter and cut profit estimates for all but Wells Fargo.”
US government shutdown: Dollar plunges to eight-month low – Telegraph
“7 years. “
The government shutdown is just a taste of the chaos that could hit the US – Telegraph
“As America woke to the news that its government had shut down on Tuesday morning, months of seemingly abstract negotiations on Capital Hill suddenly made themselves felt in reality. “
A paralyzed superpower: How the world sees the US government shutdown – CSMonitor.com
“As the US government shutdown sinks in, newspapers, commentators, tweeters and readers are trying to figure out what it means for the rest of the globe.”
Checking email now means breaking the law for many federal workers | The Verge
Calculated Risk: ISM Manufacturing index increases in September to 56.2
“The ISM manufacturing index indicated faster expansion in September. The PMI was at 56.2% in September, up from 55.7% in August. The employment index was at 55.4%, up from 53.3%, and the new orders index was at 60.5%, down from 63.2% in August.”
Galaxy Gear Smartwatch Review: A Pain in the Wrist
“Should You Buy It?
Only if $300 means nothing to you. If you can drop that kind of money to satisfy a vague curiosity, then sure. Actually, make that $600, since you’ll need to buy a so Galaxy Note 3 as well (or shell out more for the Galaxy Note 10.1 2014 Edition tablet) to get any use out of it. Let us save you some money, though: It doesn’t do enough, well enough, to be worth it.”
And the gigabit train rolls on: France’s Free launches gigabit service — Tech News and Analysis
“The Free product isn’t symmetrical, offering one gigabit down and 200 Mbps up, but it costs a reasonable €35 ($47.41).
A tipster with the service tells me his broadband bill is €37.97, which is about $20 less than my current bill for 20/5 service.”
Ultimate Ears MINI BOOM Quick Review: The Best Portable Speaker On The Market Just Got Smaller
I got this for my wife. It’s quality
Chance of U.S. government default less than 10 percent, economists say: Reuters poll | Reuters
Ten percent is a huge number for a supposedly safe sovereign bond.
Portugal verfehlt Defizitziel im ersten Halbjahr deutlich – SPIEGEL ONLINE
This German article points out that Portugal has missed its deficit goal by a wide margin in 2013 despite/because of harsh front-loaded austerity. The goal was 5.5% whereas the actual deficit was much higher at 7.1%. Note that while there has been a move toward back loading austerity via timetable slippage, the view is still the same: austerity will continue in Europe.
This German-language article goes to the bad credit sitting on Italian banks’ balance sheets. The IMF believes this needs to be rectified with writedowns and more capital. The article calls this a ticking time bomb.
Ireland must not ease austerity, warns IMF | Business | The Guardian
“Advice comes after Irish finance minister had suggested there might be flexibility in tax rises and spending cuts”
Humans to blame for global warming, says landmark UN report | The Verge
Google’s chief economist understands media better than some industry executives do — paidContent
“Hal Varian, Google’s chief economist, talked about the challenges facing the newspaper business in a recent presentation in Italy, and showed that he understands those challenges better than most media executives.”
‘Grand Canyon’ of Greenland Discovered Under Ice Sheet – Yahoo News
New ‘retail bonds’ offer up to 7.25pc – Telegraph
“Given the rock bottom low savings rates on offer elsewhere it is no surprise investors have been pumping thousands of pounds into these higher-yielding investments, some of which promise more than 7pc a year.
But investors need to bear in mind the risks are high. Despite their name, corporate bonds are not the same as fixed-term savings bonds issued by banks.”
Why have markets ignored Washington risk? | Gavyn Davies
“Many people are asking why the financial markets have so far been unruffled by the political crisis which is playing itself out in Washington. That is a very good question. Yesterday was a case in point. The Financial Times website led with a story by Martin Wolf headlined “America is flirting with self destruction”. Yet equities were up on the day, and gold fell sharply.
The explanation for this conundrum, I believe, is twofold. Part of it is connected to the nature of markets, and part to the nature of this particular episode.”
The government shutdown probably kills the ‘Octaper’
“The government shutdown probably puts an end to the idea that the Fed will taper in October. “
POLL: Just one in four approves of Republicans’ handling of government shutdown standoff
“Barely one in four (26 percent) approve of congressional Republicans’ handling of budget negotiations, while 34 percent approve of their Democratic counterparts and 41 percent approve of Obama’s approach. In each case, larger numbers say they “disapprove” of how Republicans, Democrats and Obama are handling things. Underscoring the disgruntled mood, 27 percent of Americans disapprove of all three.”
The view from the op-ed pages: GOP takes a beating
“The nation’s editorial boards spent Tuesday much the way tourists on the Mall did, expressing their outrage over the government shutdown. The overwhelming number of editorial boards came to the same conclusion: That Republicans — specifically the tea party caucus — are to blame. Even those editorial boards that don’t like the Affordable Care Act think shutting down the government is a bridge too far.
Here’s a sampling of the editorials from around the country”
“The perp, Michael Lee Smith, was apprehended weeks later, thanks in part to the police department’s use of a machine known as a “pen register” to track the threatening phone calls the assailant had started making to his victim. The court wrangling that followed, however, would continue for three years, and eventually land on the docket of the U.S. Supreme Court. In 1979 the court upheld Smith’s conviction, and his 10-year prison term.
Almost 35 years later, the court’s decision — in a case involving the recording of a single individual’s phone records — turns out to be the basis for a legal rationale justifying governmental spying on virtually all Americans. Smith v. Maryland, as the case is titled, set the binding precedent for what we now call metadata surveillance. That, in turn, has recently been revealed to be the keystone of the National Security Agency’s bulk collection of U.S. telephone data, in which the government chronicles every phone call originating or terminating in the United States, all in the name of the war on terror.”
America flirts with self-destruction – FT.com
“Compare the US health system to those of the other large high-income countries. The US spends 18 per cent of its gross domestic product on health against 12 per cent in the next highest spender, France. The US public sector alone spends a higher share of GDP than Italy, the UK, Japan and Canada, though many people are left uncovered. US spending per head is almost 100 per cent more than in Canada and 150 per cent more than in the UK. What does the US get in return? Life expectancy at birth is the lowest of these countries, while infant mortality is the highest. Potential years of life lost by people under the age of 70 are also far higher. For males this must be partly due to violent deaths. But it is also true for women.
The idea that one should close the government – or risk a default – to stop universal insurance, which other high-income countries take for granted, seems mad.”
U.S. ISM Manufacturing Index Rose in September – Bloomberg
“The Institute for Supply Management’s factory index rose to 56.2, the strongest since April 2011, from 55.7 a month earlier, the Tempe, Arizona-based group’s report showed today. Readings greater than 50 indicate growth. “
SPD Women Push To Make Female Issues Part Of Coalition Talks – SPIEGEL ONLINE
“Female members of Germany’s Social Democrats want a coalition government with Merkel’s conservatives to be contingent on a gender quota for company boards. Battered in the election, the SPD’s men may now take these calls seriously. “
Dem senator hints that NSA tracked locations for millions of cellphones – The Hill’s Hillicon Valley
“Sen. Ron Wyden (D-Ore.) suggested on Thursday that the National Security Agency tracked or considered tracking the cellphone location data of millions of people in the United States.
During a Senate Intelligence Committee hearing, Wyden asked NSA Director Gen. Keith Alexander whether “the NSA has ever collected — or made any plans to collect — Americans’ cell site information in bulk.”
As a member of the Intelligence Committee, Wyden has access to classified information about the NSA’s surveillance programs.”
VMware Fusion 6 Review & Rating | PCMag.com
“VMware Fusion is the smoothest-running and least obtrusive app on the market for running Windows or Linux apps under OS X.”
Icelandic bank says it cannot meet £1.5bn debt repayment schedule | Business | The Guardian
“New Landsbanki, said it will go bust if forced to stick to a steep repayment schedule, in euros, from the start of next year”
NSA Internet Spying Sparks Race to Create Offshore Havens for Data Privacy – WSJ.com
This is the unintended consequence of the NSA’s espionage. How REAL these other ventures are is debatable. But I would expect adoption rates of US services to slow somewhat.
Former Qwest CEO Joseph Nacchio: Tales From a White-Collar Prison Sentence – WSJ.com
“Former telecommunications company chief executive Joseph Nacchio entered prison in 2009 out of shape, depressed and anxious.
Fifty-four months later, Mr. Nacchio, 64 years old, who once ran Qwest Communications International Inc., has emerged physically unrecognizable from his pre-incarceration life.
Prison appears to have shaved years off his looks. He has broad shoulders from a daily regimen of lifting weights and 5-mile walks and runs. He has a goatee and his head, formerly covered with black hair, is completely shaved and tan. He says his blood pressure and cholesterol are lower than when he entered prison and his body fat has dropped dramatically. He thinks he looks like actor Edward Norton on his federal Bureau of Prisons identification card.”
Spain Outlines Austere 2014 Budget – WSJ.com
“The budget highlights the huge imbalances created by five years of economic crisis: Spain will set aside €36.6 billion ($49.5 billion) to service its fast-rising pile of public debt, €2 billion more than it will spend on the 13 government ministries.
And it is pledging about €31 billion for welfare and entitlements, up almost 20% from last year. That includes unemployment benefits for the more than a quarter of the working population that is registered as out of work. “
New Warning Issue on China Local Government Debt – WSJ.com
“The state-run Economic Information Daily, quoting the results of a government audit, didn’t give a figure for the new level of local debt. But a doubling of the total found in the last audit in 2010 would put the tally at around 20 trillion yuan ($3.28 trillion)—or almost 39% of the nation’s gross domestic product last year. “
German government dismisses report Schaeuble may raise top income tax to woo left | Reuters
Schäuble wouldn’t pre-emptively agree to raise taxes. But the grand coalition might raise taxes once formed, yes. And I believe that Schäuble would be a casualty of that coalition.
“The German government has dismissed a report that Finance Minister Wolfgang Schaeuble is considering raising the top rate of income tax to help Angela Merkel co-opt the opposition Social Democrats (SPD) in a possible “grand coalition”.”
TIPS Gain Most Since 2011 With Treasuries as Taper Delayed – Bloomberg
“Kung has plenty of company. TIPS, as the inflation-indexed bonds are known, have gained 3.5 percent since Sept. 5, the best three-week rally since August 2011, after losing 8.7 percent in the first eight months, the most ever in that period, according t0 Bank of America Merrill Lynch’s U.S. Inflation-Linked Treasury Index. “
ekathimerini.com | Golden Dawn MPs knew about killing, calls show
“Incriminating evidence against far-right Golden Dawn mounted Monday, as six of the party’s deputies prepared to face a magistrate on criminal charges from Tuesday, with extracts of a leaked prosecutor’s report offering insights into GD’s modus operandi and illicit activities while transcripts of wiretapped phone conversations between members of Golden Dawn appeared to implicate the party in the murder of a leftist rapper last month.”
“The National Security Agency is storing the online metadata of millions of internet users for up to a year, regardless of whether or not they are persons of interest to the agency, top secret documents reveal.”
Rise If You Must – Why the president would get away with issuing debt unilaterally
“The Obama administration claims that prioritizing debt payments isn’t feasible either technically or legally. Let’s set aside our doubts about these claims for a moment and look at two other alternatives: raising taxes or issuing debt.”
Here is every previous government shutdown, why they happened and how they ended
“Since the modern congressional budgeting process took effect in 1976, there have been a total of seventeen separate government shutdowns (or “spending gaps” in Hill jargon). Given that we appear to be headed for another one imminently, let’s look back at those experiences, the political circumstances around them and what happened as a consequence. “
The International Perils in Washington’s Dysfunction – WSJ.com
“While the government was preparing to shut down around him, President Barack Obama sat down Monday with the leader of one of America’s most important allies, Israeli Prime Minister Benjamin Netanyahu, and was planning for a four-country trip to Asia later in the week.
That incongruous picture raises uncomfortable but important questions: When will Washington’s dysfunction, which has become a chronic condition, begin to erode allies’ confidence in the U.S.? And when might America’s foes decide they can take advantage of the paralysis?”
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