Category Archives: Business

Chinese agency downgrades US credit rating

Chinese agency downgrades US credit rating

17 October 2013

AFP – A Chinese ratings agency downgraded its US sovereign credit rating Thursday despite Washington’s resolution of the debt ceiling deadlock, warning that fundamentals for a potential default remained “unchanged”.

Dagong lowered its ratings for US local and foreign currency credit from A to A-, maintaining a negative outlook, the agency said in a statement.

The announcement came after the US Congress passed and President Barack Obama signed a bill that extends the nation’s borrowing authority and ends a two-week government shutdown.

“The fundamental situation that the debt growth rate significantly outpaces that of fiscal income and gross domestic product remains unchanged,” Dagong said in the statement, adding Washington’s solvency was vulnerable as old debts were still repaid through raising new debts.

“Hence the government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future,” it said.

 

Read more at France 24

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Poll: Parents and Teens Share (Often Unrealistic) Dreams About College

Poll: Parents and Teens Share (Often Unrealistic) Dreams About College

Most still see a college degree as ticket to the middle class. But they’re unprepared for the cost.

By   September 24, 2013 |  3:07 p.m.

This article is part of a special weeklong series on American education.

It’s easy to assume that teenagers don’t listen to their parents. But, according to the latest All State/National Journal Heartland Monitor Poll on childhood in America, when it comes to expectations about school, kids are listening loud and clear–even through their earbuds.

If anything, the U.S. teenagers surveyed as part of the poll are much more likely to think their parents are concerned about how they’re doing in school than parents seem to be. When asked about their parents’ worries, teens guessed that the No. 1 concern was their performance in school. In fact, parents are most worried about unsafe driving. School performance ranked far down the list of parental anxieties, showing up as only the fifth-biggest concern of parents.

The disconnect between teenage and parental thinking wasn’t limited to concerns about academic success. In general, teenagers were also more likely to say that they have more opportunities to get ahead than their parents did at the same age (62 percent of teenagers agreed, compared with 41 percent of parents of teenagers). They were also far less negative than parents on the question of whether it is better to be a teenager in America today than decades ago. Fifty-four percent of teenagers reported that this is a preferable time to be a teen; only 18 percent of teenagers’ parents thought the same. (Cue the “Kids these days!” rant.)

 

Read more at National Journal

Fed surprises, sticks to stimulus as it cuts growth outlook

Fed surprises, sticks to stimulus as it cuts growth outlook

By Pedro da Costa and Alister Bull : WASHINGTON | Wed Sep 18, 2013 7:33pm EDT

(Reuters) – The U.S. Federal Reserve defied investor expectations on Wednesday by postponing the start of the wind down of its massive monetary stimulus, saying it wanted to wait for more evidence of solid economic growth.

Investors responded by propelling U.S. stocks to record highs and driving down bond yields. Yields on U.S. Treasury debt had risen over the summer on expectations the Fed would cut back its $85 billion a month in bond purchases that have been the cornerstone of its efforts to spur the economy.

Furthermore, Fed Chairman Ben Bernanke refused to commit to begin reducing the bond purchases this year, and instead went out of his way to stress the program was “not on a preset course.” In June he had said the Fed expected to cut back before year end.

“There is no fixed calendar schedule. I really have to emphasize that,” he told a news conference. “If the data confirm our basic outlook, if we gain more confidence in that outlook … then we could move later this year.”

The reaction in markets was swift and sharp. The U.S. dollar fell to a seven-month low against major currencies and the price of gold, a traditional inflation hedge, soared more than 4.0 percent.

 

Read more at Reuters

Insight: At Apple, Tim Cook leads a quiet cultural revolution

Insight: At Apple, Tim Cook leads a quiet cultural revolution

By Poornima Gupta and Peter Henderson | SAN FRANCISCO |  Thu Aug 22, 2013 3:08am EDT

(Reuters) – Shortly after signing on as chief operating officer at Facebook, Sheryl Sandberg was looking to connect with people in a similar role – No. 2 to a brilliant and passionate young founder. She called Tim Cook.

“He basically explained nicely that my job was to do the things that Mark (Zuckerberg) did not want to focus on as much,” Sandberg said of the 2007 meeting that lasted several hours with the chief operating officer of Apple Inc.

“That was his job with Steve (Jobs). And he explained that the job would change over time and I should be prepared for that.”

While Sandberg has enjoyed a steady run at Facebook, it is Cook’s job that has changed radically since then. Now, the man who was handed one of the more daunting tasks in business – filling the shoes of the late Steve Jobs and keeping Apple on top – may himself need a spot of advice.

Two years into Cook’s tenure, Apple is expected to unveil a redesigned iPhone next month. It will be a key moment for Cook. The company he inherited has become a very different creature: a mature corporate behemoth rather than a scrappy industry pioneer, with its share price down 5 percent this year, despite a recent rally. The S&P 500 is up about 15 percent this year.

A transition was, perhaps, inevitable after an astonishing five-year run in which Apple’s headcount tripled, its revenues rose over six-fold, its profits grew 12-fold, and its stock price jumped from $150 to a peak of $705 last fall.

 

Read more at Reuters

Accounting for pensions, The Boston Globe sold for negative $40 million, 20 years after selling for $1.1 billion

Accounting for pensions, The Boston Globe sold for negative $40 million, 20 years after selling for $1.1 billion

Daily Caller | 8:26 AM  08/05/2013

Like everyone else I’ve seen the headlines remarking on the fact that a New  York Times Company which bought The Boston Globe for over a  billion dollars is selling it this weekend for just $70 million. But if you read  the body text of those articles you’ll see that the paper actually sold for much  less than $70 million. It in fact sold for a negative quantity of money.

That’s because the terms under which John Henry is buying the paper stick the  New York Times Company with the Globe‘s pension obligations, which  are said to amount to around $110 million. Which is to say that the worth of the  overall Globe enterprise is negative $40 million, not $70 million.

That’s shocking. What’s even more shocking is that the Globe has been doing  great journalism — winning Pulitzers, etc. — and even turning a modest profit.  But that’s the difference between a growing industry (where Tumblr can sell for  $1 billion with no profits or even meaningful revenue in sight) and a shrinking  one.

Read more at Daily Caller

Asian Futures Signal Extension of Fed Rout as Gold Sinks

Asian Futures Signal Extension of Fed Rout as Gold Sinks

By Emma O’Brien – Jun  20, 2013 7:17 PM ET

Asian stock futures slid, indicating shares in the region may extend the global market retreat, on prospects the Federal Reserve will start paring back stimulus later this year and concern over China’s cash crunch. Gold futures sank and crude slipped for a third day.

Futures (NHU3) on Japan’s Nikkei 225 Stock Average due in September closed at 12,805 in Chicago, down from 13,030 yesterday in Japan. They were bid in the pre-market at 12,830 by 8:05 a.m. in Osaka, while Hang Seng Index futures in Hong Kong dropped 1 percent, and contracts on Australia’s (XPU3) S&P/ASX 200 Index slumped 1.7 percent. Futures on the Standard & Poor’s 500 Index were little changed by 8:12 a.m. in Tokyo, after the gauge sank the most since November 2011 in New York. Gold futures due in August fell 0.2 percent and oil sank 0.4 percent. The yen and the Australian and New Zealand dollars gained.

The MSCI All-Country World Index (MXWO) of global equities plunged the most in 19 months yesterday after Fed Chairman Ben S. Bernanke said bond buying that has fueled gains in markets around the world may be trimmed this year and ended in 2014 should risks to the U.S. economy continue to decrease. The $85 billion in monthly purchases will be cut by $20 billion at the Fed’s September meeting, a Bloomberg survey of economists showed. Chinese policy makers added 50 billion yuan ($8.2 billion) to the financial system yesterday after money-market rates ballooned, according to Bank of Communications Co.

“Exiting quantitative easing gracefully will not be easy as the stimulus has seen global equities dramatically outperform fundamentals,” Sharon Zoellner, senior economist at ANZ Bank New Zealand Ltd. in Wellington, wrote in an e-mail today. “The hangover is kicking in at the mere mention that the punchbowl will need to be watered down.”

Read more at Bloomberg

Are Treasury and the Fed at Odds Over Big Banks?

Are Treasury and the Fed at Odds Over Big Banks?

Treasury Secretary Lew keeps hands off as Wall Street giants grow larger.

By  | Updated: May 24, 2013 |  9:37 p.m.

Treasury Secretary Jacob Lew has been cagey about whether he thinks Wall Street’s giant banks are getting dangerously large and out-of-control once again, as many experts believe. But at a hearing on Capitol Hill this week, Lew gave the clearest indication yet that he’s not especially worried and is going to take the light-fingered approach of his predecessor, Tim Geithner—and that he doesn’t appear to agree with recent Federal Reserve proposals to correct the “too big to fail” problem.

Asked at a Senate Banking Committee hearing by Sen. Elizabeth Warren, D-Mass., whether Treasury is “still opposed to capping the size of banks,” Lew responded that he did not see a need for additional action beyond implementing the Dodd-Frank regulatory law, which attempts to set orderly procedures for the liquidation of even the largest banks if they get into trouble. “This is not the time to be enacting big changes to Dodd-Frank or to the regulatory system,” Lew said. After Dodd-Frank is implemented, he said, he’ll “take stock.”

That would seem to put Lew at odds with Federal Reserve Governor Dan Tarullo, who in recent months has floated a number of proposals to further shrink the banks, a problem that he says “seems to inexorably call for a set of complementary policy measures” to Dodd-Frank. In a series of speeches, Tarullo has proposed limiting the expansion of big banks by restricting the funding they get from sources other than traditional deposits, and adding liquidity and capital requirements that will make it more expensive and burdensome to be too big.

Read more at National Journal

Meet the new neighbor: Howard Stern reportedly pays $52 million for Palm Beach home

Meet the new neighbor: Howard Stern reportedly pays $52 million for Palm Beach home

By Darrell Hofheinz, Daily News Staff Writer, Updated: 3:24 p.m. Thursday, May 16, 2013

Radio personality said to be the buyer of County Road property

America’s Got Talent judge and radio shock-talk personality Howard Stern is the likely buyer behind a $52 million private sale recorded Wednesday for an oceanfront house at 601 N. County Road. The property was sold by textile and apparel executive Martin Trust and his wife, Diane, according to sources familiar with the deal.

Stern, who hosts The Howard Stern Show on the Sirus Satellite Radio network, has reportedly been looking for a house in South Florida for weeks with his wife, Beth Ostrosky.

Stern, who has a home in New York City, where he produces his radio show, adds his name to the list of media celebrities with homes in Palm Beach. Those include conservative talk show host Rush Limbaugh, whose home is near the northern tip of the island, and conservative firebrand Ann Coulter.

 

Read more at Palm Beach Daily News

A Playbook for Undoing the Sequester

A Playbook for Undoing the Sequester

When Congress voted this week to give the FAA more flexibility with its cuts, it set off a race among other special interests to push for exemptions.

By , Updated: April 28, 2013 |  1:32 p.m.

Who would have guessed that the air-traffic controllers and meat inspectors would be the first ones lucky enough to avoid the across-the-board spending cuts known as sequestration?

So it went on Friday, when Congress passed legislation to give the Federal Aviation Administration special flexibility in implementing its sequester cuts. The bill exempted air-traffic controllers from furloughs, which had caused flight delays at major airport hubs throughout the Northeast for the past five days. Meat inspectors also received a carve-out in late March following a powerful lobbying push and under the guise of ensuring food safety.

Now, with two sequester tweaks on the books, other special-interest groups, unions, and lobbyists are planning to rev up their efforts to undo the cuts bit by bit or, in this case, by a few billion dollars here or there. The actions of the FAA over the past week, alongside airline groups and unions, offer a playbook for others to use as they too seek exemptions.

 

Read more at National Journal

States That Lead and Lag in Job Growth and Competitiveness

States That Lead and Lag in Job Growth and Competitiveness

Joshua Wright, Forbes.com Contributor, April 7, 2012

When a state expands its workforce from one year to the next, some of the spike might be related to the growth in an industry at the national level, like the continuing demand for health care. Some might stem from the overall growth of the national economy. Or some of the job growth might be explained by a third factor, what economists call the regional competitive effect.

Regional competitiveness explains how much of the job change in a given industry is due to some unique competitive advantage that a given region or state possesses. EMSI aggregated the results for each industry sector in all 50 states plus Washington, D.C. to see which states are growing more competitive – in other words, gaining a larger share of total job creation – and which are becoming less competitive.

The answer: North Dakota is far and away the leader, Nevada and New Mexico are at the bottom – a host of surprises are in between.

Read more at Forbes.com