Tag Archives: Economics reporting

yellen_janet

Fed vice chair to speak at SABEW conference

by

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.

Margot Roosevelt

OC Register hires economy reporter

by

Economy reporter Margot Roosevelt is the latest addition to the Orange County Register’s business staff.

Eric Morgan of The Register writes, “‘I’m excited to join the Register, one of the most dynamic newspapers in the country right now,’ Roosevelt said. ‘The economy beat is a great way to explore many aspects of Orange County, including workplace trends, jobs and how local companies and workers grapple with a constantly changing world of work.’

“Fluent in Spanish and French, Roosevelt is an award-winning journalist with more than 30 years reporting experience at major news outlets across the U.S. and abroad. She joins the Register from Reuters, where she wrote in-depth pieces on the 2012 Presidential campaign throughout the year.

“Prior to that, Roosevelt served as an environment reporter at the Los Angeles Times from 2007 to 2011, where she covered climate change policy and science, air pollution and developments in alternative energy. In that role, she traveled the world – including Copenhagen and Cancun for global climate talks, Brazil for stories on the Amazon and carbon trading, and Alaska to write about Arctic climate change.

“In 2010, Roosevelt won an award for climate change science reporting from the American Meteorological Society.

“From 1994 to 2007, Roosevelt served as a National Correspondent at Time Magazine, covering politics, environment, energy, food, agriculture, business, crime, labor, race, trade, education and immigration stories.”

Read more here.

Jim Tankersley

Washington Post hires economics reporter

by

Jim Tankersley, the economics correspondent for National Journal, has been hired to cover the economy for the Washington Post.

The announcement sent out to the Post staff on Friday states:

 

The Financial staff is thrilled to announce that economics reporter Jim Tankersley will be joining us from The National Journal.

Jim is one of the finest writers about the economy and economic policy anywhere. He is a creative and insightful thinker who can make the biggest subjects seem interesting and accessible, and we’re excited about having him join our talented economic policy team.

For the past two years at National Journal, he’s written extensively online and in print about the breakdown in American job creation, the decline in economic mobility and the failure of policy makers to adapt to an increasingly complex set of global economic challenges. He co-created and co-edited “Restoration Calls,” National Journal’s 2012 election issues series, which explained America’s largest challenges through stories about the people struggling with them.

Jim joined National Journal from the Tribune Washington Bureau, where he covered energy, the environment and politics, with a heavy focus on economic issues during the 2008 presidential campaign, for newspapers including the Los Angeles Times and the Chicago Tribune. He previously worked at the Toledo Blade, the Rocky Mountain News and The Oregonian.

Jim and a colleague at The Blade won the 2007 Livingston Award for Young Journalists for their “Business as Usual” series of stories revealing the true roots of Ohio’s economic decline. He was also part of the “Coingate” team at the Toledo Blade that was a finalist for the Pulitzer Prize.

An Oregon native and 2000 graduate of Stanford University, Jim lives in Alexandria with his wife, Marci Prenger, and his son Max, who is 6. Please welcome Jim when he arrives at the end of the month.

Weisenthal

Top econ reporters on Twitter

by

Bonnie Kavoussi of The Huffington Post lists the top 32 economics reporters to follow on Twitter.

She writes, “We can’t blame you for finding the economy complicated. Thankfully, there are good economics reporters available to explain what is happening out there and why. Want easy access to their articles and what they’re reading? Just follow them on Twitter.”

He list includes:

1. Joe Weisenthal, Business Insider;

2. Heidi Moore, The Guardian;

3. Ezra Klein, The Washington Post;

4. Annie Lowrey, The New York Times;

5. Matt O’Brien, The Atlantic;

6. Ryan Avent, The Economist;

7. Jim Tankersley, National Journal;

8. Kevin Roose, New York Magazine;

9. Josh Barro, Bloomberg View;

10. Phil Izzo, Wall Street Journal.

See the entire list here.

 

bad-economy

More bad economic news

by

The economy is getting better. The government says so. But don’t break out the champagne yet. There are several factors that can drag it down.

Here’s the Wall Street Journal take:

The U.S. economy expanded at its fastest pace since late 2011, but those gains could be reversed as superstorm Sandy and the fiscal cliff create a drag during the final three months of 2012.

The nation’s gross domestic product—the broadest measure of goods and services produced in the U.S.—advanced at an annual rate of 2.7% between July through September, the Commerce Department said Thursday. The revised figure is up from the previously reported 2.0% gain and nearly matched economists’ expectations for a 2.8% advance.

But the factors that led to the upward revision—growing inventories, strong federal spending and robust exports—may not persist. Add in other headwinds, and the economy could struggle to grow in the fourth quarter.

“We will have a negative impact on fourth-quarter GDP from the effects of Sandy, but there’s a rebuilding process and we’ll have a positive impact in subsequent quarters,” Dallas Fed President Richard Fisher said in a speech Thursday.

And from the New York Times story:

“It’s a nice headline number,” said Nigel Gault, chief United States economist at IHS Global Insight, “but it exaggerates the underlying momentum in the economy. Sustainable improvements in growth are not driven by inventories.”

What’s more, the revised figures show that spending by businesses on equipment and software declined by 2.7 percent in the third quarter, the first decrease since the end of the recession in mid-2009.

Mr. Gault attributed the weak spending by companies in large part to growing uncertainty among executives about whether Congress and the White House can reach a deal before Jan. 1 that prevents more than $600 billion in automatic tax increases and spending cuts from going into effect early next year. “The No. 1 thing is the fiscal cliff,” Mr. Gault said.

The impasse in Washington has not only dominated the political debate since the election, but also become a leading worry for corporate America. President Obama met with business leaders on Wednesday to seek their support in negotiating a compromise, the second time he has sat down with prominent corporate chiefs this month, while Wall Street has wavered with each zig and zag of the debate.

While many pundits have reminded people that the fiscal cliff is a negotiation, Republicans rejected President Obama’s opening deal. The Wall Street Journal reported:

President Barack Obama made an opening bid in budget talks with Republicans that calls for a $1.6 trillion tax increase, $50 billion in infrastructure spending in 2013 and new power to raise the federal debt limit, a provocative set of demands that Republicans said represented a step backward in efforts to avoid looming tax increases and spending cuts.

The proposal marked an opening salvo in negotiations over the fiscal cliff and represented a particularly expansive version of the White House’s wish list, with a heavy focus on tax increases and spending proposals—including keeping in place a payroll-tax cut and extended unemployment benefits.

Republicans haven’t put any comparable offer on the table. They have indicated willingness to accept $800 billion in revenues over 10 years, half the amount Mr. Obama proposed. And they have sought far more in spending cuts in exchange for their concessions on taxes.

Retailers aren’t doing so well either. Here’s from the New York Times:

Sales at stores open at least a year declined in November at major American store chains, including Macy’s, Nordstrom, Kohl’s and Target, sending a shiver through the retail world Thursday.

The reporting period included Thanksgiving and Black Friday, the official kickoff of the critical holiday shopping season. Early reports regarding those days had been mixed, and the individual retailers’ dim results suggest a big challenge in the coming weeks for retailers.

Over all, the 16 retailers tracked by Thomson Reuters that reported results Thursday recorded a 1.6 percent increase in sales at stores that were open at least a year. Analysts had expected a 3.3 percent jump.

It was the major chains’ results that were most troubling. Target, Kohl’s and Macy’s typically promote holiday shopping heavily, while Nordstrom sales tend to give an indication of how higher-income consumers are feeling.

Lagging retail sales, slowing GDP, and the uncertainty of the nation’s budget all combine for a bleak picture heading into next year. Let’s hope economics reporters can keep up with it all.

Money

Money fund regulations

by

One of the biggest surprises to come out of the financial crisis was the so-called “breaking of the buck,” or when a few large money market funds (mutual funds for cash) dropped below a net asset value of $1 per share. Many investors didn’t realize that these investments weren’t savings accounts and began pulling money out in a panic.

The problem for the system is that money funds provide much needed and important liquidity. When they stopped buying short-term debt such as commercial paper, many companies found themselves without financing. And the rest, well, you know what happened.

So, Treasury Secretary Timothy Geithner outlined Tuesday proposals to regulate the $2.6 trillion industry. Here are a few details from the Bloomberg Businessweek story:

Geithner, speaking today in Washington at a meeting of the Financial Stability Oversight Council, a group formed by the Dodd-Frank Act and charged with addressing systemic financial risks, said the SEC should consider a plan for a capital buffer of 3 percent of assets that may be lowered if other steps are taken to reduce risk. Two other solutions Geithner offered are opposed by the funds industry and were rejected in August by a majority of SEC commissioners.

Representatives for the fund industry, who last month put forth their own plan to reach a compromise, rejected the proposals, saying they didn’t advance the debate. While Geithner has said the SEC is best positioned to address money funds, he has also said that the regulators’ panel, often referred to as FSOC, might intervene and subject funds to oversight by the Federal Reserve if the SEC fails to act.

Two of the options proposed by Geithner today included the major elements of a plan backed by SEC Chairman Mary Schapiro that she abandoned for lack of votes in August. That proposal would have given money funds a choice to either drop their traditional $1 share price for a floating value, or create capital buffers to absorb losses and temporary holdbacks on all withdrawals to discourage investor runs.

Here’s a clear explanation of the proposals from the Wall Street Journal:

One alternative is for money-market funds to float their prices along with the value of their holdings, rather than fixing values at $1 a share, as they currently do. With a so-called floating NAV, investors would be less likely to rush to pull their cash out of the funds before they “break the buck,” as happened during the 2008 crisis, regulators say.

The money-fund industry has opposed a floating-NAV solution, however, arguing that investors will lose confidence in the funds, which are commonly seen as tantamount to a bank deposit. Ms. Schapiro said in a statement at Tuesday’s meeting that the floating NAV is “the simplest option” and is the most consistent with broader SEC oversight of financial markets.

Another FSOC proposal: money funds could potentially maintain a stable NAV as long as they have a buffer of capital to absorb day-to-day fluctuations in value. Money-market funds have also opposed such a measure, which they say could cause the funds to become unprofitable and threaten the stability of the industry.

The third alternative includes a capital buffer as well as other measures, such as wide diversification of investments so the funds aren’t exposed to blowups of a single firm. The industry opposes this option as well.

Apparently, the industry doesn’t think there’s anything wrong here. According to the Journal, they want to impose fees on people who pull their money out during a crisis.

That seems problematic: they don’t want to put in place buffers to help create a more stable fund and then charge to pull out your money if it starts going south. I guess it’s not much different than a hedge fund, but these investments are marketed as safe. They have the reputation of being akin to savings accounts (whether deserved or not.)

Here’s a good point from the MarketWatch story:

According to reports citing people familiar with the industry, some money-fund firms have floated a proposal to the SEC that would prohibit investors from redeeming some money only when a fund is under stress.

However, the council in its proposal said it was concerned with such an approach, arguing that it could increase the potential for industry-wide pre-emptive runs by investors motivated to redeem their investments before restrictions are implemented.

At the same time the council is considering other approaches to limit the risk of money funds, including an approach that could designate some money funds as systemically risky and subject them to higher capital and liquidity requirements, according to a government official.

With the industry fighting to stay unregulated, it will be interesting to see the final outcome. Either way, the funds’ sterling reputation remains tarnished.

Neil Irwin

WaPo econ reporter takes on job as Wonkblog economics editor

by

Neil Irwin, who has covered economics and the Federal Reserve for the Washington Post for the past five years, has been named economics editor of Wonkblog, which also runs on the Post’s site.

Ezra Klein of Wonkblog writes, “When I got to the Post, Neil was our Federal Reserve reporter. But he was also, as it turned out, our macroeconomy reporter. And one of our market interpreters. And the guy who dealt with new, weird economic data. And the only person in the office who seemed really, truly comfortable using the Bloomberg terminal. And the only person I knew who was writing a book on the global efforts that central banks mounted against the financial crisis (that book, titled ‘The Alchemists: Three Central Bankers and a World on Fire,’ will be published in the Spring, and you can pre-order it here).

“Here’s the thing about my ‘ask Neil Irwin’ plan: It pretty much always worked. He either knew the answer, or knew who knew the answer. I’d usually walk away from our conversations thinking that rather than hearing me recount whatever fraction of his explanation I understood, it’d be much better if you all could hear from Neil directly.

“Well, now you can.

“I’m thrilled to announce that, as of today, Neil is joining Wonkblog as our economics editor. In that capacity, he’ll be writing a daily column called Econ Agenda, as well as helping expand our coverage of the U.S. and global economies, central banks, business and finance — as well as whatever else he thinks worth writing about, which has, in the past, been everything from Sweden’s curious strength in the face of recessions to the financials of the Olive Garden and Red Lobster chains. Neil will also lead a broader effort on the site to expand our coverage of U.S. and global economic trends and what’s going on at the world’s central banks and financial markets.

“Wonkblog’s mission has always been to provide you with the best, most informed, most comprehensive coverage of domestic and economic policy available anywhere. With Neil on-board, we’ll be able to do a much better job of that.”

Read more here.

Seib & Wessel

WSJ.com launches Seib & Wessel

by

The Wall Street Journal launched Tuesday a new page on WSJ.com, Seib & Wessel, showcasing the journalism of Gerald F. Seib and David Wessel, two of the Journal’s most senior Washington journalists.

The page features the weekly columns that Seib, the Journal’s Washington bureau chief, and Wessel, economics editor, write for the Journal, as well as their daily analysis of politics and economics, video interviews, including the weekly “DC Bureau” show on WSJ Live, and more.

“With the U.S. election over, the next act of the continuing drama in Washington begins –and the entire world will be watching to see what comes next,” said Seib in a statement. “While Washington is our base, the focus of Seib & Wessel will be broad, both domestic and global. David will concentrate on his specialties, economics and economic policy, and I’ll concentrate on mine, politics and foreign policy.”

Added Wessel: “We’re excited about experimenting with new ways to share our reporting and analysis, both breaking news and putting the news into perspective for our readers in the U.S. and abroad.”

Seib, who joined the paper in 1978, writes a weekly column, Capital Journal. Earlier this year, he won the Gerald Loeb Lifetime Achievement Award for his contributions to business and financial journalism. With former Journal colleague John Harwood, he is the author of “Pennsylvania Avenue: Profiles in Backroom Power.”

Wessel joined the paper in 1984 and writes Capital, a weekly column on the economy. He has shared two Pulitzer Prizes. Wessel is the author of two best-sellers, “Red Ink: Inside the High Stakes Politics of the Federal Budget,” and “In Fed We Trust: Ben Bernanke’s War on the Great Panic.”

Both will continue in their current positions and will be assisted in the new venture by Wall Street Journal editor Kate Milani.

fiscal cliff

The fiscal cliff – peering over the edge

by

Two days after the election, many in the press have turned to analyzing the fiscal cliff and how the president and congress will solve the looming problem. With less than six weeks until the end of the year, it’s not a minor problem.

First off, the Congressional Budget Office said if nothing is done the economy will be pushed back into a recession next year and unemployment would climb back to 9.1 percent by the end of 2013. More from the Wall Street Journal story:

The CBO analysis said if Congress reaches a deal to avoid the fiscal cliff later this year the federal budget deficit would be $503 billion higher than it otherwise would have been in fiscal 2013, and $682 billion higher in fiscal 2014.

Barring congressional action, federal income, dividend and capital-gains tax rates will increase on Jan. 1., 2013, and the estate tax will revert to a higher rate while applying to smaller estates. Meanwhile $110 billion in cuts to federal spending on defense and other domestic programs will take place as an initial down payment for $1 trillion in cuts that are required through the next decade under last year’s deficit deal.

Negotiations between the White House and Congress are expected to begin soon to reach a budget compromise to avoid the fiscal cliff.

Let’s hope they start today since no one wants to see the economy slide backwards. But it isn’t just up to the president, as Bloomberg News points out:

Obama can’t do it alone. Prospects for a broad deficit- reduction deal also turn on whether Republicans — who kept their majority in the U.S. House in the elections while falling short of capturing the Senate — are willing to compromise with the president on using tax revenue to reduce the deficit. They have refused to consider raising taxes to help pay for a deal, even one underwritten disproportionately by spending and entitlement cuts.

At a news conference on Capitol Hill yesterday, U.S. House Speaker John Boehner, a Republican, said all sides are “closer than many think” to a U.S. tax-code overhaul. Still, he didn’t waver from his party’s opposition to tax increases, which Democrats have said is a prerequisite for any deal that cuts spending on social programs or curbs the growth of programs including Medicare.

Obama campaigned on a proposal to raise taxes on individuals earning $200,000 annually and couples making $250,000. Exit polls indicated that while voters overwhelmingly don’t want to see their own taxes rise, 47 percent back raising taxes on the wealthy.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said the divided-government election result showed that voters want Obama to do more to collaborate with Congress to fix the nation’s problems.

Investors are certainly signaling that a solution can’t come soon enough. This from Reuters:

Shares on Wall Street fell on Thursday as investors continued to adjust for upcoming negotiations over the so-called fiscal cliff, overshadowing a batch of positive economic data.

Investors worry that if no deal is reached in Congress over the fiscal cliff — some $600 billion in spending cuts and tax increases set to kick in early next year — it could derail the American economic recovery.

But the prospect of haggling among lawmakers about ballooning federal budget deficits has deepened the uncertainty for investors, who have sold stocks partly on the expectation taxes will go up on capital gains and dividends.

And as CNN Money points out, some think the election brought the President and lawmakers closer together, while others believe the partisan divide on taxes grew wider:

The fiscal cliff is the legislative equivalent of a slow-motion train wreck that Congress and President Obama can avoid … but only if they work together.

Some seasoned Washington observers think they will do just that, despite their troubled history, because they don’t want to be blamed for what happens if they fail.

But others say there’s a good chance they won’t because the election did nothing to ease the partisan chasm over taxes. They argue that only a market crash or a crisis over the country’s debt ceiling will force their hand.

Among the fiscal cliff policies at issue: reductions in both defense and non-defense spending; the expiration of the Bush tax cuts; the end of a payroll tax holiday and extended unemployment benefits; and the onset of reimbursement cuts to Medicare doctors.

 Lawmakers must choose whether to leave those measures in place, replace some or all of them, postpone them or cancel them entirely. Their decision will affect the economy, the country’s credit rating and the U.S. debt burden.

With all this at stake, no wonder stocks have been down and all eyes are turned to Washington to see what happens. Even if a final deal isn’t close, we’re guaranteed to get every update – including who sneezed in the committee meeting.

I hope the coverage is robust. We’re all depending on it.

Obama

The next four years for business journalists

by

There’s no rest for the weary, journalists or the president. Now that we’ve got a clear winner, let’s take a look at some of the biggest business stories that President Barack Obama will have to focus on in the coming months and years.

First, there’s the so-called fiscal cliff and overhaul to the tax code looming. U.S. stock market investors quickly shifted to thinking about this the day after the election, sending the Standard & Poor’s Index down 2.4 percent on Nov. 7. Here’s what the New York Times said about the situation:

After his speech, Mr. Obama tried to call both Mr. Boehner and the Senate Republican leader, Mitch McConnell, but was told they were asleep. The efforts from both sides, after a long and exhausting campaign, suggested the urgency of acting in the few weeks before roughly $700 billion in automatic tax increases and across-the-board spending cuts take effect at year’s end — the “fiscal cliff.” A failure to reach agreement could arrest the economic recovery.

Corporate America and financial markets for months have been dreading the prospect of a partisan impasse. Stocks fell on Wednesday, with the Standard & Poor’s 500 Index closing down 2.4 percent. The reasons for the drop were unclear, given that stock futures did not drop significantly on Tuesday night as the election results became clear. Analysts cited fears about the economic impact of such big federal spending cuts and tax increases, but also about new economic troubles in Europe.

Here’s the Wall Street Journal’s take on the fiscal cliff:

In carefully worded comments Wednesday, major actors in the fiscal drama were both conciliatory to their adversaries and resolute in sticking to their principles. Whether this represents a temporary truce, or a step toward a pact to trim the deficit, won’t be known for weeks.

But the pressure is on. Deep, automatic federal-spending cuts and tax increases—a combination widely known as the “fiscal cliff”—will hit in January unless Mr. Obama and Congress agree to some other way to reduce the budget deficit.

Going over the cliff, economists say, would not only risk another recession, but would intensify anxiety about the dysfunction of the U.S. political system. Uncertainty over political turmoil could lead to more turbulence like Wednesday, when the Dow Jones Industrial Average fell 312.95 points, or 2.4%, to 12932.73. That was this year’s largest decline in both points and percentage terms. Asian markets also fell in early trading Thursday, with Tokyo down 1.2% and South Korea down 1.4%.

And the fiscal cliff is just the beginning for the president. Business journalists will have their hands full covering many topics that touch the president’s next four years. Here’s my unscientific list:

Domestic stories will include:

  • Fiscal cliff (see above);
  • Changes to the tax code;
  • Jobs, the unemployment rate (especially in swing states like North Carolina and Nevada);
  • Inflation and monetary policy – what will happen with low interest rates through 2014;
  • Home prices;
  • Bank regulation, especially rule making for derivatives and other structured products. We’ll have to watch the CFTC particularly closely;
  • Who will be the next Treasury Secretary as well as fill the other senior administration posts being vacated;
  • Student loans and the rising cost of education;
  • Small business and if we’re actually creating jobs;
  • The role of government in rebuilding after natural disasters;

International:

  • Europe, particularly Greece, Italy and Spanish debt;
  • China and the rise of its economic prowess;
  • Foreign ownership of U.S. debt;
  • Import and export tariffs;
  • All the economies in the BRIC countries;
  • Transparency of global markets;
  • The state of the European Union and its currency;

I’m sure I’ve forgotten some important ones, so leave a comment with your ideas of what’s going to be important over the next four years. Business journalists are going to be busy and so will our government leaders.