Ultra-easy central bank policies are about to come back to bite the economy, Gross said in his latest letter to investors.» Read More
It's almost an open secret: American businesses are on strike.
Hiring remains staggering slow and unemployment grimly high. Business expansion is at a slow-slog. Banks aren't lending, but businesses aren't borrowing either.
Anyone paying attention to these things has heard a lot of explanations. It's Obama's fault: the threats of higher taxes, Obamacare and Dodd-Frank is creating regulatory uncertainty. Or it's the fault of Republicans and deficit hawk Democrats who are resisting calls to replace falling private sector spending with more government sector spending. Or it's the animal spirits haunting us for our past sins of excess.
But what is really going on, I think, is a refusal by businessmen to play the business cycle.
All too often the American debate about immigration seems to be about a fantasy world in which the value and economic needs of the United States will decide our immigration future.
The usual economic debate is about whether we need low-skilled workers to do "jobs Americans won't do" and high-skilled workers to do jobs Americans allegedly can't do. The values debate swirls around the vagaries of America's commitment, on the one hand, to provide a safe haven for the world's "huddled masses yearning to breathe free" and, on the other hand, the importance of America's cultural integrity to the success of our political and economic systems.
There's always been some obvious sense of unreality to all of this. In a very real sense, our immigration reality has long been out of our control entirely. Family reunification policies mean that recent immigrants control a vast portion of new immigration. The lack of effective means of border enforcement means that economic conditions beyond our southern border are far more important than whatever our policies are favored in Washington, DC.
Here's the disturbing headline statistic: Portugal, Ireland, Greece, and Spain have sucked out 93 percent of the total liquidity taken from the ECB and other central banks.
The Financial Times reports, in a disconcerting Alphaville blog post today , the sordid details. Basically, the net capital usage of eurozone member states is seriously out of whack. In fact, Alphaville has republished a data table from CreditSights that sums up the problem with and almost devastating simplicity.
Why the phrase 'devastating simplicity'?
The recent insider-trading dragnet conduct by federal authorities, in the most public way, has created a wave of fear stretching from Goldman's offices in lower Manhattan through the hedge-fund strip of Connecticut and beyond.
This is not an accident. The Justice Department and the Securities and Exchange Commission view fear as one of their best friends. They know full well that they cannot catch every violator of securities laws. Instead, they depend on the deterrent effect—which is to say, fear—to prevent violations before they occur.
But the recent terror campaign by federal regulators may be going too far. Instead of just preventing violations of securities laws, it may have a chilling effect on gathering information to aid in better investing and trading.
It's the Anna Pereira "Prosperity" custom t-shirt JWoww of MTV's "Jersey Shore" wore while punching the Mike the Situation in season one. The shirt was not for sale on the boardwalk, the local mall or department store. It's available on handmade marketplace Etsy.com.
It all started with a leap of faith. Pereira, who has been on Etsy for a little over a year, gifted the t-shirts to the cast hoping they would wear them.
"I've seen a few more sales on Etsy since the 'Jersey Shore.' But, it was never mentioned on the show where to purchase the shirts, since I wasn't a paid sponsor. So, most of my marketing has been through Twitter. Twitter and Etsy are a great combo, " says Pereira.
Nicole Lapin, of CNBC's Worldwide Exchange, explains what she's long and what she's short this week.
Black Friday marks the official kick off to the holiday shopping season and the battle over the gaming space is no child's play. This is serious business and it has come a long way from its meager beginnings in 2000 when total video game sales including PC games totaled $7.98 billion. According to researchers at NPD, game sales at brick-and-mortar retail alone has since grown more than 250 percent in recent years.
One of the companies in this tech gauntlet is Sony's PlayStation. The company has also been in the news as of late with the rumors surrounding a smart phone which, if the rumors are true, the may come to be considered the ultimate gamer "must have."
I sat down with Jack Tretton, President and CEO of Sony Computer Entertainment America , to talk about his expectations this holiday season and to dig into the rumors on a phone launch.
Black Friday Underway (Wall Street Journal) "Lines wrapped around stores and parking lots across the nation as shoppers sought early morning deals, especially on consumer electronics and toys. About 138 million Americans are expected to go shopping this weekend, and the Friday after Thanksgiving—frequently referred to as "Black Friday"—is expected to be the busiest shopping day of the year. 'We do it for the fun of it,' said Gail Giordano, who was in line preparing to enter a Target Corp. store in Hackensack, N.J., opening at 4 a.m." (I'm pleased Gail is having fun—but I'd rather have root canal without anesthesia.)
Portugal Claims no Bailout Immanent; Approves 'Austere' 2011 Budget (CNBC via Reuters) "Portugal denied on Friday a news report that it is under pressure from most euro zone countries and the European Central Bank to seek a bailout." In reference to reports about a push on the country to seek an aid package, a Portuguese government spokesperson said: "This news article is completely false, it has no foundation." Optimism in Lisbon notwithstanding, does anyone else recall this nearly identical BBC news headline – from just nine days ago? "Ireland denies bailout rumours after record budget cuts ."
Spain: We're not Next (Financial Times) "Spain has warned financial traders betting against its debt that they will lose money, in a defiant challenge to the markets which are driving Madrid’s cost of borrowing sharply higher." Let's hope not: Spain's economy may simply be too big for an effective bailout. Spain also has enormous private liabilities to foreign investors.
More on the 'warning': "José Luis Rodríguez Zapatero, Spanish prime minister, on Friday ruled out any rescue package for the country even as the premiums demanded by investors to hold Spanish sovereign debt over that of Germany’s rose to euro-era highs. This week’s sharp rise in Spanish 10-year bond yields to 5.2 per cent is an indication of growing concern in eurozone bond markets that the fiscal crisis in Ireland could spread to other debt-laden countries including Portugal and Spain. 'I should warn those investors who are short selling Spain that they are going to be wrong and will go against their own interests,' Mr Zapatero said in an interview with Barcelona-based broadcaster RAC1, according to Bloomberg. He 'absolutely' ruled out any need for a rescue." You have to wonder: Is threatening investors an effective national economic strategy?
As you may have read recently in The Wall Street Journal, Starbucks is planning to open 1,000 new stores in China .
In many ways, it's a heartwarming tale: Starbucks is a true American—and now international— business success story. After going public a little less than two decades ago, Starbucks now has a market capitalization of over $20 billion . And the success of Starbucks has been more than merely financial: Not only have they managed to reinvent coffeehouse culture, but they've maintained many of the core progressive values the company grew up around. (The best-known example of this is probably Starbucks commitment to providing health insurance to its employees—even those who work only part-time—a topic Starbucks Chairman Howard Schultz recently spoke of with justifiable pride in an interview with the New York Times.)
Superimpose this inspiring narrative of financial and cultural success onto the hot Chinese emerging markets growth storyline and the results are sure to be something to anticipate with great expectations. Well, perhaps not.
Markets Up—Significantly—Ahead of Holiday Weekend (Marketwatch) "Down 167 points after the past two days of trading, the Dow Jones Industrial Average on Wednesday climbed 144.14 points, or 1.3 percent, to 11,180.51, with all but two of its 30 components trading higher. The S&P 500 Index rose 16.04 points, or 1.4 percent, to 1,196.77, with the consumer-discretionary sector leading gains among its 10 industry groups and Tiffany & Co. among its notable advancers. "
Investment banks are looking to grow their consumer side. New York Times reports.
Citigroup said it has agreed to sell its consumer finance unit OneMain Financial to subprime lender Springleaf for $4.25 billion in cash.
David Rubenstein also says the pre-IPO investment market has changed considerably from the period before the tech bubble burst.