Tag Archives: News event

Talking Biz News Today

Talking Biz News Today — Sept. 19, 2013

by

Some of Thursday’s top business stories:

Wall Street Journal

Blackberry to slash workforce by up to 40%, by Will Connors

Google may stop using ‘cookies’ to track web users, by Elizabeth Dwoskin

Bloomberg

Bernanke resets policy by doing nothing as markets soar, by Caroline Salas Gage and Craig Torres

Morgan Stanley CEO says he invests in muni bonds, biotech, by Michael J. Moore

Reuters

Singapore Air and Tata to form full-service Indian carrier, by Devidutta Tripathy

JPMorgan keeps top spot in investment bank lead table – poll, by Clare Hutchison

CNNMoney

Colorado floods: Costly and often uninsured, by Chris Isidore

Are we still heading toward 5% mortgages?, by Les Christie

Bloomberg Businessweek

Apple chiefs discuss strategy, market share – and the new iPhones, by Sam Grobart

Today in business journalism

Long Island Business publisher leaving

Finalist names for business book of the year

Building a business news startup

The Fed surprises everyone

Why is Reuters Next being dumped? Money

Entrepreneur.com names Fell its managing editor

Justin Smith’s mission at Bloomberg

Wall Street Journal names two international bureau chiefs

This date in business journalism history

2007: Business 2.0 closure due to Time Inc. neglect

2012: WSJ China online edition starts luxury section

 

Fed

The Fed surprises everyone

by

The Federal Reserve Board surprised everyone Wednesday by saying it would actually continue its unprecedented stimulus efforts despite the expectations of everyone. And investors cheered the news, sending the stock market to record highs.

The New York Times had this story, excerpted below:

All summer, Federal Reserve officials said flattering things about the economy’s performance: how strong it looked, how well it was recovering, how eager they were to step back and watch it walk on its own.

But, in a reversal that stunned economists and investors on Wall Street, the Fed said on Wednesday that it would postpone any retreat from its monetary stimulus campaign for at least another month and quite possibly until next year. The Fed’s chairman, Ben S. Bernanke, emphasized that economic conditions were improving. But he said that the Fed still feared a turn for the worse.

And the Fed undermined its own efforts when it declared in June that it intended to begin a retreat by the end of the year, causing investors to immediately begin to demand higher interest rates on mortgage loans and other financial products, a trend that the Fed said Wednesday was threatening to slow the economy.

Investors cheered the Fed’s hesitation. The Standard & Poor’s 500 stock-index rose 1.22 percent, to close at a record high, in nominal terms. Interest rates also fell; the yield on the benchmark 10-year Treasury reversed some of its recent rise.

Some analysts, however, warned that the unexpected announcement was likely to worsen confusion about the Fed’s plans, increasing the volatility of the markets in the coming months as investors sort through the Fed’s mixed messages about how much longer it plans to continue its bond-buying campaign. The delay also means that the decision to retreat may ultimately be made by the next Fed chairman, after Mr. Bernanke steps down at the end of January. President Obama has said that he plans to nominate a replacement as soon as next week. Janet L. Yellen, the Fed’s vice chairman, is the leading candidate.

The Wall Street Journal story added this context about the program and how long it’s been in place:

The bond-buying program, also known as quantitative easing, or QE, was relaunched last year and is meant to stimulate economic growth and hiring by holding down interest rates and encouraging households and businesses to spend and invest. This round of purchases, together with earlier efforts along the same lines, has swelled the Fed’s holdings of securities to nearly $4 trillion.

Mr. Bernanke began signaling in May that, because the job market was gradually improving and because the Fed anticipated faster growth by year-end, the central bank might pull back on the bond-buying program.

After two days of deliberations, however, Fed officials decided Wednesday the economy hadn’t lived up to their expectations for growth. In fact, they lowered their growth estimates for this year and next—and expressed worry that a jump in long-term interest rates over the past several months could squeeze an already weak upturn.

The Financial Times added the details of the purchasing programs and said that interest rates will likely stay low for years to come:

The Fed will continue to purchase mortgage-backed securities at a pace of $40bn a month and Treasury securities at a pace of $45bn a month. It made no change to its 6.5 per cent unemployment rate threshold for a rise in interest rates. The vote for the decision was 9-1 in favour.

One factor may have been a downgrade to the FOMC’s growth forecasts for this year and next. The Fed now expects growth of 2.2 per cent in 2013 compared with a June forecast of 2.5 per cent; and 2014 growth of 3 per cent compared with a June forecast of 3.3 per cent.

In a strong signal that the Fed intends to keep rates low for a long time into the economic recovery, the FOMC estimated that interest rates would be 1 per cent at the end of 2015 and 2 per cent at the end of 2016.

The interest rate forecast for 2016 is low even though the Fed expects the economy to be close to full employment by then. It predicted an unemployment rate of 5.7 per cent at the end of 2016 compared with a long-run equilibrium of 5.5 per cent.

The markets obviously liked the news, and I’m sure real estate agents and mortgage brokers were thrilled with the thought of low interest rates for the foreseeable future. It’s interesting that Bernanke is potentially punting the decision to the next Federal Reserve head. All eyes are now on Obama to make a choice.

Talking Biz News Today

Talking Biz News Today — Sept. 18, 2013

by

Some of Wednesday’s top business headlines

New York Times

Reaping profit after assisting on health law, by Sheryl Gay Stolberg

Wall Street Journal

FedEx earnings: Profit up 6.5% on higher margins, ground-shipping strength, by Nathalie Tadena

Starbucks declares guns unwelcome, but doesn’t ban them, by Julie Jargon

Bloomberg

Bernanke saves companies $700 billion as Verizon leads sales, by Lisa Abramowicz

Yellen as labor favorite seen pressing Fed emphasis on stimulus, by Caroline Salas Gage and Steve Matthews

Bloomberg Businessweek

Boehner gets it over with, agrees to tie overall budget to Obamacare funding, by Joshua Green

Why Microsoft keeps on buying investors’ faith, by Ashlee Vance

Reuters

U.S. CEOs less optimistic about economy – survey, by Bijoy Koyitty

Britain’s productivity gap with G7 peers widest in 20 years, by Christina Fincher

CNNMoney

IOS 7 is here: A whole new iPhone experience, by Adrian Covert

Home care workers win minimum wage protection, by Emily Jane Fox

Today in business journalism

Biz journal founder receives entrepreneurship award

Reuters Next cancelled, Roberts leaving company

WSJ names senior finance reporter in Europe

WSJ beefs up its Europe finance team

WSJ’s “Heard on the Street” names Europe editors

Markets calm before Federal Reserve

This date in business journalism history

2006: Times: H-P tried to plant bug on journalist’s computer

2011: Bloomberg Radio available on iPhone and iPod

 

Stock-Market

Markets calm before Federal Reserve

by

In the biggest non-story of the month is that the stock markets aren’t moving. Normally this would warrant no coverage at all expect for the fact that it’s before the Federal Reserve Board is expected to announce the end of its stimulus actions.

The Wall Street Journal had this story:

If investors are concerned about the imminent end to the Federal Reserve’s monetary stimulus, the markets haven’t noticed.

Despite widespread expectations that the Fed will announce a trimming of a bond-buying program aimed at pushing down interest rates and propping up the economic recovery, fund managers have been in a buying mood lately.

The blue-chip Dow Jones Industrial Average on Tuesday advanced for the 11th time in 14 trading sessions, and U.S. Treasury prices rose for the fifth straight day.

Many investors expect the Fed to decide to cut its $85 billion monthly purchases of bonds by about $10 billion to $15 billion. Markets were roiled in May and June after Fed chief Ben Bernanke said the U.S. central bank would consider reducing purchases in a process dubbed “tapering.”

Some investors dismiss the prospect of much turbulence this time. They say players in stock, bond and commodity markets have had time to prepare for potential Fed action, assuming the Fed acts largely within market expectations, and that a selloff in bonds since Mr. Bernanke’s comments means there is less potential for a large price decline now.

The bond market, however, showed some signs of paying attention, according to a Bloomberg story:

Federal Reserve Chairman Ben S. Bernanke sent bond yields a percentage point higher just by talking about adding stimulus at a slower pace. The rout serves as a warning to monetary policy makers that their exit from record accommodation won’t be easy to control.

The jump in yields has pushed up the cost of mortgages for millions of Americans, curbed demand for homes and prompted thousands of job cuts at Bank of America Corp. and Wells Fargo & Co., all at a time when the Fed’s policies are aimed at creating jobs and supporting housing.

Bernanke has stressed that any reduction in the amount of money the central bank pumps into the financial system each month doesn’t mean policy is getting any more restrictive. That message hasn’t been heeded by bond investors, demonstrating how hard it will be for the Fed to control long-term interest rates as it moves toward tightening, according to Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey CityNew Jersey.

“Getting out of ultra-low interest-rate policy was never going to be easy, and this is a perfect illustration of why,” Crandall said. “It is possible that this will make it even harder because the market will be even more primed to view inflection points as messy and destructive, and therefore a reason to sell early.”

Fed policy makers meeting today and tomorrow will probably lower the monthly pace of bond purchases by $10 billion, to $75 billion, according to the median response of 34 economists in a Bloomberg News survey on Sept. 6. That’s down from expectations of a $20 billion reduction in a July survey.

Reuters added this commentary about analysts’ expectations around what the Fed might do and how the markets might react:

For the Fed, consensus has congealed around a reduction of $10-$15 billion a month with all purchases ending by the middle of next year. Yet even that cautious timetable would be contingent on the economy performing as well as expected.

With such an outcome largely priced in, it could lead Treasuries and the dollar to rally modestly. A slower tapering would tend to benefit bonds and stocks but hurt the dollar.

The bigger reaction would likely come if the Fed pulled back more aggressively, as that would lead market to price in an earlier start to rate rises as well.

That would be especially painful for emerging market countries that rely on foreign capital to fund current account deficits, with India and Indonesia among the most vulnerable.

Still, dealers warned against a hasty reaction as there were so many moving parts in play.

As well as the tapering, the Fed may chose to alter its threshold for tightening, perhaps by lowering the trigger level on unemployment from the current 6.5 percent.

It will also publish its first economic forecasts for 2016 and the stronger the picture the harder it will be to convince markets that any future rise in interest rates will only be slow and measured.

Indeed, the Fed has already had trouble convincing the market that it intends to keep rates near zero out to 2015 no matter how much the economy improves.

After all the ups and downs this year as the markets tried to determine when the Federal Reserve would act, investors seem to have priced in the potential move already. So as this story goes, it’s really a non-story, but the media is required to write something, no matter if the markets are reacting or not.

Talking Biz News Today

Talking Biz News Today — Sept.17, 2013

by

Some of Tuesday’s top business stories

New York Times

For Twitter, key to revenue is no longer ad simplicity, by Vindu Goel

JPMorgan Chase is said to admit fault in settlement of trade loss, by Ben Protess and Jessica Silver-Greenberg

Wall Street Journal

Outerwall cuts guidance as Redbox rentals disappoint, by Ben Fritz

Forecast envisions a weak holiday season, by Suzanne Kapner

Bloomberg

Aging Boomers befuddle marketers eyeing $15 trillion prize, by Matthew Boyle

Less Tapering becomes tightening credit, no matter what Fed says, by Caroline Salas Gage

Reuters

Coty results beat estimates in first quarter after going public, by Siddharth Cavale and Jessica Wohl

Citigroup must pay couple $3.1 million for not overseeing broker: panel, by Suzanne Barlyn

Bloomberg Businessweek

How to turn a tidy profit on a miserable Carnival cruise, by Kyle Stock

Wharton puts first-year MBA courses online for free, by Louis Lavelle

Today in business journalism

The business of media

How long should I keep my notes?

San Antonio Biz Journal names new publisher

Boston Globe biz reporter McKim joins New England journalism center

Gina Chon joins Financial Times

This date in business journalism history

2007: New business magazine launches in Canada

2010: Redesigned Forbes to hit newsstands next week

 

Talking Biz News Today

Talking Biz News Today — Sept. 16, 2013

by

Some of Monday’s top business stories:

New York Times

Summers pulls name from consideration for Fed chief, by Annie Lowrey and Binyamin Appelbaum

Looking to Twitter to reignite tech I.P.O.’s, by Michael J. de la Merced and David Gelles

Wall Street Journal

Drugs for inherited cancers get fresh push, by Joseph Walker

Retailer REI ends era of many happy returns, by Kirsten Grind 

Bloomberg

U.S. stocks rise on Summer’s exit, Syria weapons deal, by Adam Haigh and Wes Goodman

Industrial production in U.S. rises by most in six months, by Michelle Jamrisko

Reuters

Arrested prelate tells magistrates of secret accounts in Vatican, by Philip Pullella

Bombardier’s all-new CSeries makes inaugural flight, by Solarina Ho

CNNMoney

Chrysler to file for IPO this month, by Virginia Harrison and Chris Isidore 

Your guide to a government shutdown, by Jeanne Sahadi

Fortune

We’re still 8.3 million jobs from full recovery, by Nin-Hai Tseng

Today in business journalism

How design helps Forbes.com increase traffic

Kiplinger Letter celebrating 90th anniversary

Institutional investor is the new softball king

What Forbes’ ad strategy might mean in the long run

Summers withdraws from Fed race

This date in business journalism history

2007: New WSJ magazine to be called Pursuits

2010: Kneale set to exit CNBC

 

Fed

Summers withdraws from Fed race

by

In an unexpected move, Larry Summers has decided not to try to succeed Ben Bernanke as the head of the Federal Reserve Board despite being the presumed front-runner for the job.

Here’s the story from the New York Times:

Lawrence H. Summers, one of President Obama’s closest economic confidants and a former Treasury secretary, has withdrawn his name from consideration for the position of chairman of the Federal Reserve amid rising opposition from Mr. Obama’s own Democratic allies on Capitol Hill.

In a statement released by the White House on Sunday afternoon, Mr. Obama said he had accepted the decision by his friend even as he praised him for helping to rescue the country from economic disaster early in the president’s term.

—-

Mr. Summers appeared to have been the White House’s favored candidate to succeed Ben S. Bernanke as chairman of the Fed, though Mr. Obama had repeatedly said he had not yet made a decision between Mr. Summers, Janet L. Yellen, who is a vice chairwoman of the Fed, or someone else.

But Mr. Summers’s reputation for being brusque, his comments about women’s natural aptitude in mathematics and science, and his decisions on financial regulatory matters in the Clinton and Obama administrations had made him a controversial choice.

Three Senate Democrats on the Banking Committee had come out against Mr. Summers’s nomination, meaning that the White House might have had to barter for as many as three Republican votes for him even to pass out of committee.

In a letter to the president, Mr. Summers said, “I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the administration or, ultimately, the interests of the nation’s ongoing economic recovery.”

For Mr. Obama, the concession by Mr. Summers ends a frustrating period in which the most private of White House deliberations became a public spectacle and fodder for an ugly disagreement among the president’s supporters and allies.

The Wall Street Journal reported on some of the other names President Obama may be considering now that Summers is no longer in the mix:

Lawrence Summers pulled out of the contest to succeed Ben Bernanke as chairman of the Federal Reserve after weeks of public excoriation, forcing President Barack Obama to move further down the list of contenders to head the central bank.

One leading candidate is Janet Yellen, the Fed’s current vice chairwoman, who has garnered substantial support among Democrats in Congress and among economists. But the public lobbying on her behalf appears to have annoyed the president, say administration insiders, and may lead him to look elsewhere.

Mr. Obama has said he interviewed Donald Kohn, a former Fed vice chairman who is now a senior fellow at the Brookings Institution. Administration insiders say Timothy Geithner, the former Treasury secretary, also is a possibility, though he has said he doesn’t want the job. Dark horse candidates include Stanley Fischer, an American citizen who recently stepped down as governor of the Bank of Israel, and Roger Ferguson, another former Fed vice chairman and now chief executive of TIAA-CREF, the nonprofit pension company.

Bloomberg explained the issues surrounding Summers confirmation at the end of their story:

The decision by Tester, Brown and Senator Jeff Merkley of Oregon, to publicly oppose the nomination of Summers created a hurdle for the administration on the banking panel, where Democrats hold a 12-10 edge. Support from Republicans, none of whom declared support for Summers, would have been needed for the nomination to clear the committee.

If Summers had been sent forward by the committee, a Senate floor fight would likely have followed. Lawmakers who have been critical of the Fed under Bernanke, such as Senator Rand Paul, a Kentucky Republican, and Sanders, indicated they might have been willing to try holding up the nomination.

Sanders today praised Summers for withdrawing and clearing the way for a better candidate.

“The truth is that it was unlikely he would have been confirmed by the Senate,” Sanders said in a statement e-mailed to reporters. “What the American people want now is a Fed chairman prepared to stand up to the greed, recklessness and illegal behavior on Wall Street, not a Wall Street insider.”

Behind the scenes, staff and lawmakers, even those who said they would support Summers, voiced concern in interviews about the intraparty fight a Summers nomination would cause. Democrats, who hold a majority in the Senate, face negotiations on the budget and an increase in the debt ceiling in the coming weeks.

The shock of Summers withdrawing from consideration will wear off and the race to name the next person to top the list is now underway. I just hope that the speculation will die down soon and there will be a substantive debate about monetary policy and the future of our economy. The nation deserves a vetting process that will hopefully spark a good debate.

Institutional Investor team 2

Institutional Investor is the new softball king

by

Institutional Investor’s Tom Lamont, who is an editor in its newsletter operation and who has worked for the business news operation for more than 30 years, filed this report about it winning the New York Media Softball League championship on Sunday.

Institutional Investor beat High Times 12-6 in the championship game after defeating Forbes in the semifinal. The Wall Street Journal had won the league the last four years.

The key players were shortstop Johnny Diaz, who is a subscription salesman for our high-priced newsletters. In addition we had second baseman/catcher Marissa Pick, who is head of all social media at II.

softball trophyThe rightfielder is Lorenzo Pena, who works in the mailroom. The first baseman is Pierce Rowe, who also works in subscription sales. The center fielder is Dave Rowe — a Brit who is just learning the game but has excellent athletic skills (though few personal ones)

The other key player is Ty McLamb, who is with ISI, a sister company.  He pitched the championship game and I pitched the semi-final. They wouldn’t allow a DH in the finals and since I’m 66 years old (a former director who now edits a couple publications and runs the trainee program) I don’t usually bat but would have if necessary in the finals. But it wasn’t necessary.

We were missing a few key people, including subscription salesman and shortstop Victor Tolentino and team captain and subscription salesman Joey Rogers.

Dethroning the WSJ wasn’t really a motivation for us. It was our first year in the league. We just wanted to play well and show we belonged.

We had the third-best record. When High Times chose to play the WSJ in the first round (top seed had first choice), even though WSJ had the second-best record, that gave us a big chance. We took advantage of it and maybe a letdown from High Times after they beat WSJ to win by a big score.

The key to the final game was in the top of the third inning. We were up 5-3 and our first two batters made out. Then we got eight hits in a row and scored six runs to break the game open.

The French tourists wandering by didn’t know what was going on, but they knew enough to stop and take a bunch of photos!

econcrisis

Experiencing fear on the business reporting job

by

Neil Irwin of the Washington Post writes what it was like five years ago to cover the financial crisis the weekend that Lehman Brothers closed and Bank of America bought Merrill Lynch.

Irwin writes, “So I went into the office, and indeed the source was correct. That evening, Lehman Brothers announced it would go bankrupt, Bank of America was buying Merrill Lynch, AIG sat on the precipice of failure, and a global financial rout was set to begin. We ripped up the front page of the next day’s Post and tried, in the late evening of that Sunday night, to figure out what we could about what had happened and what it meant. The lede on one of the stories I wrote that evening holds up well: ‘The U.S. financial system this weekend faced its gravest crisis in modern times, as regulators resorted to triage on Wall Street to contain the spreading damage from a meltdown in the housing and mortgage market.’

“Financial writers don’t usually experience fear on the job. War correspondents put their lives on the line as a matter of course; the biggest risk that economics writers usually face on the job is that they will eat an undercooked piece of chicken at some conference.

“But that fall, as I did my work as the Post’s Federal Reserve reporter, it was against a backdrop of deeply felt fear, for what the world’s economic future had in store.”

Read more here.

Talking Biz News Today

Talking Biz News Today — Sept. 13, 2013

by

Some of Friday’s top business stories:

Wall Street Journal

U.S. begins new crackdown on hiring illegal workers, by Miriam Jordan and Julie Jargon

Twitter files for initial public offering, by Shira Ovide, Telis Demos and Yoree Koh

New York Times

An initial filing, in fewer than 140 characters, by Steven M. Davidoff 

Labor Dept. reports plunge in jobless claims, then says figures were flawed, by Annie Lowrey

Bloomberg

BRIC markets sink to worst place for investors in poll, by Shamim Adam

Factory rebirth fizzles in U.S. as work shipped overseas, by Thomas Black

CNNMoney

Twitter CEO’s advice to startups, by Laurie Segall

Investors wait for the Fed’s next move

Today in business journalism

Five years later: Time versus Businessweek

Minneapolis-St.Paul Biz Journal launches redesign

CNBC’s “Money Talks” premieres to low ratings 

Former Louisville biz reporter Ward dies at 71

TheStreet.com and The Deal celebrate one year together

MSN Money cutting freelancer/contractor content

This date in business journalism history

2010: Attorney for Fox Business to testify before Congress

2011: WSJ Live now available on iPad and internet televisions