Puerto Rico’s poverty rate hit 44.9%, according to new data released today by the US Census Bureau—that’s nearly double the poverty rate in Mississippi, the most impoverished of the fifty states. It’s the latest in a string of bad economic news for the self-governing US territory.
The US Federal Reserve has been looking at how to cut back on its hefty stimulus program, fearing that the easy money policy could start to distort prices in certain areas of the economy. But the central bank is also leery of persistent low inflation; the measure has continued to fall well below the Fed’s target inflation rate of 2%, which would argue for continuing the stimulus.
Various news reports suggest that JP Morgan is likely to pay more than $700 million in fines over losses related to the “London Whale” trade—a big bet on European corporate debt that went awry by more than $6 billion. But bigger even than the fines: JP Morgan is likely to admit guilt (paywall).
Five years after it filed for bankruptcy on September 15, 2008, Lehman Brothers still employs about 300 people, according to the company. Most of them toil on the 39th and 40th floors of the Time & Life Building in Manhattan, and their job is to wind down the failed bank’s remaining assets, liquidate its portfolio, and litigate ongoing legal disputes. Though the staff has shrunk from some 340 a year ago, the company isn’t likely to shut its doors for several years more.
A malfunction in its trading system forced CBOE Holdings to briefly shut down two of its exchanges today. This news comes just a day after representatives of exchanges across the country met with regulators in Washington, DC (paywall), to discuss a glitch in August that caused Nasdaq to shut down for three hours. Ominously, the problem CBOE’s stock exchange encountered appears strikingly similar to the one that caused Nasdaq to go offline, suggesting that there are ongoing and serious problems with the way trades are processed on most exchanges.
Twitter just announced its long-awaited and much-hyped initial public offering (IPO) on, predictably, Twitter. But just four days before, it was doing something else: acquiring MoPub, a mobile ad serving platform and marketplace, for $350 million in Twitter shares.
On Sept. 9, Reuters reported that Kevin Kaiser of Hedgeye Risk Management had sent shares of Kinder Morgan, North America’s third largest energy company, reeling 6%. Kaiser had emailed clients advising them to short the stock (i.e., bet it would fall). The following day, Kaiser published a full report on the company, arguing that it was overvalued. In the two days since, Kinder Morgan’s share price has rallied and then fallen sharply.
Apple’s share price fell nearly $20, or 4%, yesterday when it announced two new iPhones that will cost more than many analysts expected.
Believe it or not, primates may have invisible hands as well as opposable thumbs. New research published this month (registration required) in the journal Proceedings of the National Academy of Sciences (PNAS), and reported at Phys.org, suggests that monkeys can be rational economic actors, just like humans.
Reports surfaced this weekend that the Port Authority of New York and New Jersey had sold the rights to the name “World Trade Center” back in 1986 for just $10. The buyer, a not-for-profit named the “World Trade Centers Association” (WTCA), has been licensing the name to buildings around the world for a yearly fee of $10,000, plus a $200,000 initial registration. In return for use of the name on New York’s new One World Trade Center tower and on associated souvenirs, WTCA is asking for free office space in the tower worth $500,000.
Lloyds of London chairman John Nelson issued an eerie warning on Wednesday. The huge amounts of money flowing into the insurance industry right now “on a scale not seen before” (paywall), he suggested, could pose a systemic risk to the financial system. ”We all vividly remember the systemic problems that arose in the banking industry, where capital became detached from the underlying transaction of risk,” Nelson said. “The insurance industry must avoid these traps.” So is this the dawn of a (potentially catastrophic) insurance bubble?
A spate of recent trading glitches and problems in the US—most recently this morning, when a hiccup on the Nasdaq briefly affected some stocks—have brought higher scrutiny to the trading world. Such glitches always prompt the exchanges to conduct internal reviews and promise they’ll do better next time, but the rash of problems may be something no single company can really control: There are, critics of the system say, simply too many exchanges.
New details are emerging about the suicide of Pierre Wauthier, the 53-year old CFO of Zurich Insurance, that can only be bad for Josef Ackermann, his boss and the former CEO of Deutsche Bank. After Wauthier took his own life last week Ackermann promptly resigned as Zurich’s chairman, saying it was because Wauthier’s family was blaming him—an explanation that seemed dubious to some. Now, various reports published over the last 24 hours have revealed a troubled relationship between the two men.
Today, the Wall Street Journal reported (paywall) that General Electric, the massive US conglomerate, is looking to spin off its consumer lending segment, a part of the lucrative GE Capital, with a public offering. The $15.58 billion unit manages dedicated credit cards for US retail chains like Walmart, GAP, and Lowe’s, but also accounts for $50 billion in GE’s $274 billion in debt.
Is investing your money with hedge funds worth the expense? And should you pay more to invest with the ones that are? Those are the questions many money managers have been struggling with during the last few years, as hedge fund performance has soured.
Yesterday evening in New York City, Google’s Glass team threw a party. It brought together “Explorers” and “Influencers”—the lucky few people who got to try out the computerized glasses Google is developing. Over cocktails and hors d’oeuvres, the diverse crowd gushed about the joys and dissected the drawbacks of the device, which they’ve been wearing for the last few months.
Germany’s job market, the hallmark of economic resilience in Europe, showed weakness for the first time since May. Wall Street analysts expected the country to add 5,000 jobs. Instead, it lost 7,000 jobs.
The next Ernest Hemingway might not craft his masterpiece online. He might still publish some futuristic form of a book, and his works will be printed in publications—digital or print. Still, people will want more from a literary hero. He’ll probably have online accounts—Twitter, Facebook, Instagram, YouTube, new social networks as yet uninvented—and chances are that he’ll use them not only to promote his books, but to document his personal life. Over the years, he’ll compile a lifetime’s worth of photos, videos, sarcastic status updates, random blog posts, interesting links, and messages to friends.
Google Glass isn’t just for techies anymore. Today, financial services firm Fidelity announced that it has launched a market monitoring app for the wearable phone-computer hybrids.
If you’re a frequent Quartz reader, then you’re probably aware that the US housing market has been doing a lot better lately. But if you live in some cities in the US, then you’re probably asking where the recovery is—and how long the foreclosures will continue against homeowners struggling to pay off their mortgages.
Portugal’s unemployment rate sank to 16.4% in the second quarter from 17.7% in the quarter before, reversing what has been a steady upward march. It’s the latest sign of green shoots in the euro zone economy after six years of bad news. Portuguese officials hope that economic data will be enough to convince investors that it’s the right time to capitalize on cheap assets in a slowly rebounding Europe.
Yesterday, the Wall Street Journal reported that the Federal Bureau of Investigation (FBI) had found “vulnerabilities” (paywall) in the US government’s system for distributing data. According to the article the “black boxes” several departments use to ensure that data is released simultaneously to all news outlets at a scheduled time are easy to manipulate. Depressingly easy, in fact, as the graphic accompanying the article (reproduced below) shows.
After months of stagnation, German manufacturing is roaring back to life. Manufacturing orders jumped 4.3% from a year ago, exceeding analyst expectations. It seems that Europe’s economic engine is steaming ahead, boosting predictions that Europe may be recovering.
Jeremy Grantham, the 74-year-old chief investment strategist of Boston-based investment fund Grantham Mayo van Otterloo (GMO), has made his career forecasting market bubbles—with remarkable success. When writing an article on the slowing pace of global growth last week—for which Grantham’s ideas provide significant fodder—my colleagues and I were spellbound by one statistic: of the 36 major bubbles GMO says it tracks, 33 have completely popped, or returned to their prior trends.
