Tag Archives: Economics reporting
by Chris Roush
An event examining global economic coverage by the business press will be held in New York on Tuesday morning.
The event, called “Are we Being Served?” will be held at the New York Law School, 185 West Broadway, and begin at 8:30 a.m.
It will explore how the global financial press interprets these crucial developments around the world for its audience, and ask what drives the American media to cover the international economy the way it does.
The speakers include:
- Heidi Moore, the U.S. finance and economics editor for The Guardian. Formerly, Heidi was New York bureau chief and Wall Street correspondent for Marketplace, from American Public Media.
- Kevin J. Delaney, editor in chief and co-founder of Quartz, the new global business site from Atlantic Media. Kevin was a reporter at The Wall Street Journal for a decade, working in Paris and Silicon Valley, before returning to New York to become managing editor of WSJ.com.
- Edmund Lee, reporter for Bloomberg News in New York. Edmund covers the media industry. He’s written for The New York Times, the Daily News, New York, The Village Voice, Women’s Wear Daily, Portfolio, Advertising Age and Bloomberg News.
The event is sponsored by Capital New York and the Association of Chartered Certified Accountants. To reserve your spot, go here.
by Chris Roush
David Warsh of EconomicPrincipals.com writes about the concept of secrecy and the Federal Reserve Board and how it affects journalists who write about the economy.
He pays particular attention to the departure of longtime Fed reporter John Berry from Bloomberg News in the wake of the news organization’s push to get the Fed to release information about what banks it loaned money to.
Warsh writes, “Berry was sloughed off by Bloomberg during the crisis. The details do not matter here. His stock fell as Pittman’s rose. His editors refused to clear his columns as Bloomberg’s special projects team blazed away at the secretive Fed for pandering to the banks. In April 2009 he resigned.
“Eventually he found a way to call attention to what had happened. Last spring, he published ‘Bloomberg vs. the Fed‘ (scroll down) as an article in The International Economy, a controlled-circulation magazine widely reads in Washington, D.C. What is known about the problem of stigma and the FOIA owes mainly to him.
“As a specialist myself, I’m inclined to take Berry’s side. Last spring, I wrote a somewhat ill-tempered weekly about the episode, In Which the Bloomberg Kids Put on a Show, speculating that Bloomberg had nominated the series for a Pulitzer Prize, a conjecture a Bloomberg spokesman would neither confirm nor deny. (Bloomberg’s Amanda Bennett had just finished seven years of service on the Pulitzer Board.) I haven’t added much to it that story here. I bring it up in connection with the renewed interest at meetings of the Allied Social Science Association this year in the role of journalists as mediators between experts and the public. Best practices and all that.
“Tensions of the sort that existed between Mark Pittman and John Berry have been a standard feature of newsrooms as long as I have been in the business. Usually the editors know how to cope. Bloomberg News is a somewhat special case, the creation of a fantastically profitable financial data company, itself a start-up, whose staff has grown in twenty years from scratch to something like twice the size of The New York Times. In 2009, it added BusinessWeek magazine to its holdings.”
Read more here.
by Chris Roush
Journalists are suckers for good economics metaphors because economics like to use them to explain what is going on with the economy, said a prominent economics reporter on Saturday.
“I happen to believe it’s not just a rhetorical truck to use a metaphor,” said Peter Coy, economics editor of Bloomberg Businessweek, at the History of Economics Society at the meetings of the ASSA in San Diego. “I believe that economics works that way. We journalists are in good company when we use metaphors.”
Coy was part of a panel that discussed economics coverage.
Coy used the most-recent Businessweek cover story as an example of how metaphors are used in business journalism to illustrate an economic point.
The cover has the title “Babies” and a picture of Congress showing toddlers in all of the seats to illustrate the politics of the fiscal cliff deal. Coy said the cover was the idea of editor Josh Tyrangiel.
Inside, with Coy’s story, is a picture illustration that shows the Congress building dressed as a clown.
In Coy’s article, he explores the idea of economics, arguing that the “economy-as-family” metaphor as incorrect. He argues for a different metaphor, of an economy stuck in low gear that needs a mechanic.
He originally wrote that the economy was like a machine that was being underused. But he finetuned that description while working with Tyangiel on the article.
“Economists are suckers for a metaphor, and I don’t have a problem with that,” said Coy.
by Liz Hester
Markets on Wednesday breathed a sigh of relief that the U.S. Congress was able to pass legislation avoiding the fiscal cliff.
After much wrangling over the holiday season, the House of Representatives passed a Senate-approved bill that would make most tax cuts permanent and raise taxes on individuals earning more than $400,000 and couples making more than $450,000.
Here are some of the details of the new law from the Wall Street Journal:
The far-reaching agreement will have lasting implications for the tax code, future budget battles and the balance of power in Washington. It raises income-tax rates for the first time in almost two decades and fulfills Mr. Obama’s signature campaign promise to prevent rates from rising on the middle class. Not since 1991 has a Republican in Congress supported such a move—a challenge to its brand as the antitax party.
In policy terms, it permanently codifies most of the tax rates that were set only temporarily in the Bush era. After years of failed efforts, the bill permanently keeps the middle class from being hit by the alternative minimum tax, a 1960s edifice intended only for America’s wealthiest.
At the same time, the bill defers some of America’s toughest spending problems—in particular the ballooning cost of health care—and it doesn’t come close to the kind of $4 trillion deficit-reduction deal the country’s leaders had hoped to negotiate. By some estimates, it would cut the deficit by $600 billion over 10 years.
The compromise dodges one cliff, but it sends Congress barreling toward another. In two months, the delayed $110 billion in spending cuts will again kick in. At the same time, the U.S. will face the need to increase its borrowing limit, a change that can only be made by Congress. That sets up another rancorous fight, one with potentially more damaging consequences. Republicans want to use the debt ceiling to extract spending cuts. Mr. Obama has said he won’t negotiate.
According to Bloomberg, the details of the bill didn’t matter so much as just simply having an end to the standoff. Here’s what it said:
“We sold off on the uncertainty of what it means to go over the fiscal cliff and that’s been removed,” James Paulsen, the chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $325 billion, said in a telephone interview. “We’re re-valuing the market based on what’s closer to the underlying economy and most of the economic reports have been pretty good.”
The House of Representatives passed a bill just after 11 p.m. in Washington yesterday by a vote of 257-167, undoing income tax increases for more than 99 percent of households. The S&P 500 surged 1.7 percent on Dec. 31, the biggest rally on the final day of a year since 1974, as Republican and Democratic lawmakers made last-minute concessions to finalize the deal.
The bipartisan vote broke a yearlong impasse over how to prevent more than $600 billion in tax increases and spending cuts that could lead the economy back into recession. President Barack Obama said he will sign the bill into law.
The measure isn’t the grand bargain on deficit reduction lawmakers wanted when they created the tax-and-spending deadlines over the past three years. While avoiding most of the immediate pain, it is only one step toward curbing the federal deficit — an issue that will return with a February fight over raising the $16.4 trillion debt limit.
The New York Times wrote a whole sidebar on the issue of the debt ceiling. Here’s an excerpt from that:
In the wake of the president’s victory on taxes over the New Year’s holiday, Republicans in Congress are betting that by refusing to unconditionally raise the $16.4 trillion debt ceiling, they can force Mr. Obama to the bargaining table on spending cuts and issues like reform of Medicare and Social Security.
That would inevitably reprise the bitter clash over the debt ceiling in the summer of 2011, when the government came close to shutting down before lawmakers and the president agreed to a $1.2 trillion package of spending cuts in exchange for Republican agreement to raise the debt ceiling by about the same amount.
And that is exactly what Republicans want.
The party’s caucus in the House will discuss its debt ceiling strategy at its retreat In Williamsburg, Va., in a couple of weeks, according to a top Republican aide, who said it was determined to insist again on spending cuts that equal the increase in the amount the country can borrow.
“The speaker told the president to his face that everything you want in life comes with a price. That doesn’t change here,” the Republican aide said. “I don’t think he has any choice.”
That strategy could risk a new round of criticism aimed at Republicans from a public weary of brinkmanship. The 2011 fight ended with a last-minute deal but led to a downgrade in the rating of the nation’s debt and a slump in the economic recovery.
So with Round 1 out of the way, the uncertainty over Round 2 is sure to weigh on investors. At least we had one day of good news and returns before moving onto the next government-created fiscal crisis.
Here’s opening that both sides can come together and find a solution to avoid any last minute deals. But given the rhetoric we’ve seen, that doesn’t seem likely.
by Chris Roush
CNBC reporter Rick Santelli, known for his on-air rants, had another one Thursday morning about the fiscal cliff negotiations in Washington, reports Alexis Kleinman of The Huffington Post.
Kleinman writes, “During a discussion on the so-called fiscal cliff on Thursday, Santelli grew louder, eventually shouting into the camera and overpowering CNBC contributor and traderJim Iuorio, who was attempting to hold back laughter.
“‘The Fed doesn’t have a clue, neither does the president, neither does Congress … Neither does Tim Geithner, who gives a speech about the debt ceiling. I’d like to see if he could count to a million, much less 16.4 trillion!’ Santelli shouted.
“Clearly Santelli, like many Americans, is panicking as the fiscal cliff deadline nears.
“This is certainly not the first time Santelli has lost his cool live on air. At this point, he has become something of an on-air ranting legend. Colleague Carl Quintanilla said that Santelli admits to having ‘blown a gasket‘ on Thursday’s show, but it’s clear that this is just the kind of gasket-blowing that has made Santelli famous.
“The segment ends with an amused Joe Kernan saying, ‘Don’t hold back, Rick.’ Santelli responds, ‘I never do.’”
Read more here.
by Chris Roush
Two noted economists will speak at the 50th anniversary conference of the Society of American Business Editors and Writers in Washington D.C. on April 4-6.
Peter Orszag, director of the Congressional Budget Office in 2007-2008, helped draw attention to the importance of health care reform and how current health care would negatively impact the long-term economic state of the US.
Since 2008, Orszag has worked as a columnist with Bloomberg View and the New York Times and participated as a Distinguished Visiting Fellow at the Council on Foreign Relations. He is currently vice chairman of Global Banking at Citigroup.
David Stockman, former director of the Office of Management and Budget, will also speak during the spring conference at the Marvin Center at George Washington University in Washington, D.C.
Stockman was director of the OMB from January 1981 until August 1985. During his tenure he was a strong proponent of supply-side economics, a macroeconomic philosophy now more commonly referred to as “trickle-down economics.”
After his term as director of the OMB, Stockman went on to a career on Wall Street with the investment bank Salomon Brothers and Blackstone Group, the private equity company.
To sign up for the conference, go here.
by Chris Roush
América Economía and Business News Americas have signed a memorandum of understanding to merge their operations, creating the largest business news company in Latin America.
The combined publishing operations of América Economía and BNamericas reach an audience of more than 1 million business people and executives interested in Latin America, with coverage in Portuguese, Spanish and English in both online and print formats.
América Economía is a business news publication in Latin America in Spanish and Portuguese, with 350,000 readers of its print edition, and more than half a million unique users of its website www.americaeconomia.com.
América Economía has offices in Miami, Florida; Sao Paulo, Brazil; Mexico City, Mexico; Lima, Peru; and Santiago, Chile; and was founded by Elias Selman and Nils Stranberg in 1987.
BNamericas is a business information company focused on projects, investment and business opportunities in Latin America. Founded 16 years ago by Greg Barton, its current CEO, BNamericas is a regional leader in industry intelligence with its range of daily news, data and analysis on 12 industries including mining, oil and gas, electric power, infrastructure, transportation, banking, water, insurance, telecommunications and technology.
Based in Santiago, Chile, BNamericas has 160 employees in six countries in Latin America, more than 1,200 corporate subscribers in 35 countries and approximately 750,000 unique users of its website www.BNamericas.com.
Read more here. Talking Biz News examined the operations of Business News Americas in June during a visit to Santiago.
by Chris Roush
David Graham of The Atlantic posts about how a CNBC set fell on economic adviser Glenn Hubbard on Wednesday while he was being interviewed on the air.
Graham writes, “Hubbard was on CNBC to talk about the fiscal cliff and spending on entitlements when, mid-sentence, a piece of the set fell and smacked Hubbard on the side of the face. Hubbard was unfazed — after fierce battles over the future of Medicare and Medicaid during the presidential race, he’s apparently used to being attacked. ‘That’s what happens when you criticize the welfare state,’ he quipped. Apparently, elections do have consequences.”
Read more here.
by Liz Hester
Well, Wednesday was Fed Day, sending most other business news to the back sections and off the home pages. There were a few interesting things to come out of the statement, and the markets seemed to like the news.
Here’s a blog post from the Wall Street Journal outlining some of the statement’s changes:
The statement included two big changes. The first is an announcement that it will replace its Operation Twist program with $45 billion a month in new Treasury purchases, and the second the Fed said it would be willing to accept inflation somewhat higher than its 2% target and will keep rates low until employment falls below 6.5%.
But there are also some other changes in the statement. The Fed adds employment to its assessment of moderate expansion, but maintains that unemployment still is too high. It notes the weather-related disruptions from Hurricane Sandy played a role in some recent weakness. It tweaks its language to note that inflation is running below its longer-run objective.
Now that the FOMC is buying Treasuries outright, it removes a line saying that it could take on “additional asset purchases” is the labor market doesn’t improve. That suggests that though it may tweak the levels of MBS and Treasuries it’s buying, the Fed won’t be purchasing anything else.
In the paragraph where it outlines conditions for raising rates, the Fed also notes that the end of asset purchases doesn’t automatically mean higher rates. In fact, it says that “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends.”
And a few more thoughts from the New York Times story:
The Fed also said that it would continue in the new year its monthly purchases of $85 billion in Treasury securities and mortgage-backed securities, the second prong of its efforts to accelerate economic growth by reducing borrowing costs.
The announcements continued a policy shift that began in September, when the central bank first made clear that it was focused on reducing unemployment, ending long decades during which inflation was the Fed’s constant priority.
As in September, the Fed sought to make clear that is not responding to evidence of new economic problems, but instead increasing its efforts to address existing problems that have restrained a recovery for more than three years.
“The committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens,” the Fed’s policy-making committee said in a statement issued after a two-day meeting in Washington.
And from Bloomberg:
Chairman Ben S. Bernanke is using his unlimited authority to buy Treasuries in an unprecedented effort to stoke growth and reduce 7.7 percent unemployment. The Fed acted in its last regular meeting of the year as lawmakers and the Obama administration continue talks to avert more than $600 billion of automatic spending cuts and tax increases that threaten to throw the country into a recession.
Stocks and Treasury yields rose after the statement. The Standard & Poor’s 500 Index climbed 0.3 percent to 1,431.93 at 12:35 p.m. in New York. The yield on the 10-year Treasury note was 1.69 percent, compared with 1.66 percent late yesterday.
The buying announced today will be in addition to $40 billion a month of mortgage-debt purchases. The FOMC said asset buying will continue “if the outlook for the labor market does not improve substantially.”
Before the announcement, the WSJ had an interesting story about Central Bank officials from all over the globe meeting to talk monetary policy that’s definitely worth a read.
Of late, these secret talks have focused on global economic troubles and the aggressive measures by central banks to manage their national economies. Since 2007, central banks have flooded the world financial system with more than $11 trillion. Faced with weak recoveries and Europe’s churning economic problems, the effort has accelerated. The biggest central banks plan to pump billions more into government bonds, mortgages and business loans.
Their monetary strategy isn’t found in standard textbooks. The central bankers are, in effect, conducting a high-stakes experiment, drawing in part on academic work by some of the men who studied and taught at the Massachusetts Institute of Technology in the 1970s and 1980s.
While many national governments, including the U.S., have failed to agree on fiscal policy—how best to balance tax revenues with spending during slow growth—the central bankers have forged their own path, independent of voters and politicians, bound by frequent conversations and relationships stretching back to university days.
If the central bankers are correct, they will help the world economy avoid prolonged stagnation and a repeat of central banking mistakes in the 1930s. If they are wrong, they could kindle inflation or sow the seeds of another financial crisis. Failure also could lead to new restrictions on the power and independence of central banks, tools deemed crucial in such emergencies as the 2008-2009 financial crisis.
Well, thank goodness the central bankers are cooperating on fiscal policy. Now if we could only get our own government on the same track.
by Chris Roush
Janet Yellen, the vice chair of the Federal Reserve Board, will be the opening keynote speaker April 4 at the 50th anniversary conference of the Society of American Business Editors and Writers.
Yellen, second in command at the nation’s central bank, will open the annual conference at the Marvin Center at George Washington University in Washington, D.C.
The educational event will go over three days – April 4-6, 2013 – and feature keynote speakers from government and business, panel discussions and skills sessions. It will culminate in a special gala program as SABEW commemorates 50 years as the largest and oldest fraternity of business and financial journalists in the world.
The Federal Reserve has been in the news for its aggressive use of quantitative easing and other measures to stimulate the flagging economy following the so-called Great Recession. Yellen began a four-year term as vice chair of the Fed board in October 2010; her term as a Fed governor runs through 2024.
“We’re thrilled to have such a big-name economic thinker open our conference, especially since a former Fed chairman addressed our first conference so many decades ago,” said Jill Jorden Spitz, president of SABEW.
Prior to joining the Fed, Yellen was president and CEO of the 12th District Federal Reserve Bank in San Francisco. She also is former chair of the Council of Economic Advisers.
Read more here.