Busy day for the news!
From Bloomberg:
Nick Kokonas Is Selling Tickets to Dinner
Nick Kokonas is standing at a giant whiteboard in his office above Next, one of three acclaimed Chicago restaurants he co-owns with chef Grant Achatz. Somewhat feverishly, he begins to chart out the current state of booking a table for dinner. “Reservations are predicated on two people lying to each other,” he begins. Good restaurants hedge bets on their availability, claiming they have fewer spots than they do. Patrons cancel for a host of fictitious reasons. Short of actually picking up the phone, the most popular method of scoring a reservation is OpenTable, an online platform that Kokonas says does well only because the company got into Internet reservations first. “It’s mind-numbing to me,” he says. “They earn money from leasing this antiquated technology.” (More)
This Woman Turned Her Stoner Instagram Feed Into a Career
Before Caroline Goldfarb posts a photo to Instagram under the handle officialseanpenn, she sends a group text to three of her closest confidants. Many are images of celebrities with a strong gay following, such as Barbra Streisand or Kathy Griffin, and her informal board—all gay men—is quick to tell her when one isn't funny. Goldfarb, a 25-year-old living in Los Angeles, calls the system "gay quality control." Not everyone would subject their social media account to such careful vetting, but not everyone has the 105,000 followers Goldfarb does. (More here)
Twitter Buy Button Pops Up for Event Tickets
It's been a year and a half since Twitter Inc. hired the CEO of Ticketmaster to be its head of e-commerce. While the social site hasn't exactly morphed into a shopping destination, hints of the company's plans are starting to emerge. (Read more)
After 22 Years, Appellate Judge in Epic Pollution Case Suggests a Do-Over
Judge Richard Wesley of the U.S. Court of Appeals in New York has a big, bold idea for the next step in a 22-year-long courtroom war over oil pollution in Ecuador: Start again, from scratch. (Continue)
Let Greece Stumble Out of the Euro
As the weeks since the Greek election have rolled into months, the government elected in January seems no closer to resolving the dichotomy between its anti-austerity inclinations and the reforms its creditors demand as the cost of handing over more money. Today's news that the government has seized the cash of the nation's local governments, citing "extremely urgent and unforeseen needs," suggests the money really is running out. And none of the likely scenarios for what happens next seems compatible with Greece staying in the euro. (Here)
Dollar Rebounds on Rates Divergence as Stevens Talks Down Aussie
Monetary policy divergence returned to the fore as central bank officials flagging prospects for interest-rate moves spurred the greenback to rebound and killed off a rally in the Aussie. (More)
Global Stocks Climb on Stimulus, Earnings; Euro Slides on Greece
Stocks rose around the world as companies reported better-than-estimated earnings amid central bank efforts to spur growth. The euro retreated against all major peers as the region’s central bank was said to be studying options to rein in aid to Greek lenders, while oil slipped. (Read more)
U.S.-Japan Fail to Seal Trade Agreement Before Abe U.S. Trip
U.S. and Japanese officials failed to reach agreement in marathon trade talks in Tokyo, a setback for Prime Minister Shinzo Abe’s hopes of arriving for a summit in Washington next week with a pact in hand.
U.S. Trade Representative Michael Froman left Tokyo after negotiations concluded around 4 a.m. Tuesday, with differences remaining over auto and rice imports. Froman had traveled to Japan on Sunday for two days of talks with Japanese Economy Minister Akira Amari to help pave the way for a broader Asia-Pacific agreement involving 10 other nations. (Full article)
RBA Says Household Rate Response Uncertain, Investment Weak
Australia’s central bank said households’ response to easy monetary policy was “unusually uncertain” and it saw an advantage in waiting for more economic data before deciding on further rate reductions. It also warned the nation’s business investment outlook could weaken. (Here)
Asia Stocks Rise as Chinese Shares in Hong Kong Gain After Slump
Asian stocks rose as a weaker yen buoyed Japanese exporters and Chinese equities in Hong Kong rebounded. Phone companies and banks led gains. (Read more)
Japan Nominates Former Toyota Executive to BOJ Policy Board
The Abe administration picked a veteran executive of Toyota Motor Corp., one of the biggest beneficiaries of Abenomics, to replace a Bank of Japan board member who in October had opposed expanded monetary stimulus. (Continue reading)
PBOC Halts Reverse Repos as Rates Slide After Reserve-Ratio Cut
The People’s Bank of China refrained from adding cash in open-market operations for the first time in two months after a cut in lenders’ reserve requirements pushed borrowing costs lower. (Read here)
Hong Kong Buys $5.85 Billion This Month to Defend Currency Peg
Hong Kong’s de facto central bank bought U.S. dollars for the first time in a week to maintain the local currency’s peg, taking this month’s purchases to $5.85 billion. (More)
Five Things You Need to Know About Student Loans
Student loan debt has become a big economic concern, voiced by policy makers from presidents at the Federal Reserve's regional banks to the Treasury Borrowing Advisory Committee. They and other economists worry it's causing millennials to delay household formation and home purchases, which minimizes the boost to growth from such a large, young population. Here are five things any economy-watcher ought to know about the state of U.S. student debt. (More here)
Hillary Clinton Signals Willingness to Get Tough on Wall Street Traders
KEENE, N.H. – Hillary Clinton is likely months away from offering policy proposals on taxes and financial regulation, but she hinted on Monday that she hopes to get tougher on traders and reexamine the capital gains tax. (More)
This Johns Hopkins Professor Can Guarantee You a Job in Finance
People aspiring to work on Wall Street often try to get into “target schools”—top colleges for investment bank recruiters. Johns Hopkins University isn’t a target school. It doesn’t even offer an undergraduate degree in finance. But the Baltimore mecca for medicine, Bloomberg Markets reports in its May issue, has what could be called a target course: Applied Economics and Finance, taught by professor Steve Hanke. (Read here)
Think Positive! It Actually Works (BloombergView)
I wrote last week about Wesley So’s loss by forfeit in round nine of the U.S. chess championship in St. Louis. It’s only fair, then, to note that the 21-year-old So, one of the top 10 players in the world, has been on a tear ever since. He won his final two games in St. Louis, and now three of his first four at the Gashimov Memorial in Azerbaijan, one of the strongest tournaments of the year. His current score of 3.5 puts him in first place, ahead of the world champion. In other words, he’s been playing great. (More)
Norway Will Be the First Country to Shut Down Analog FM Radio
If you live in Norway, your radio may stop working soon. This month, the country announced it will shut down its national analog FM radio stations in 2017 — becoming the first nation to set a shut-off date. (Read more)
Greek Bonds Look Uglier and Uglier
The yield on the Greek 3-year bond passed back above 28 percent today (it had briefly gone above 28 percent on an intraday basis last Thursday). (More)
Tsipras to Seize Public-Sector Funds to Keep Greece Afloat
Running out of options to keep his country afloat, Greek Prime Minister Alexis Tsipras ordered local governments to move their funds to the central bank. (Here)
The Mystery of China’s Gold Stash May Soon Be Solved
China’s push to challenge U.S. dominance in global trade and finance may involve gold — a lot of gold.
While the metal is no longer used to back paper money, it remains a big chunk of central bank reserves in the U.S. and Europe. China became the world’s second-largest economy in 2010 and has stepped up efforts to make the yuan a viable competitor to the dollar. That’s led to speculation the government has stockpiled gold as part of a plan to diversify $3.7 trillion in foreign-exchange reserves.(More here)
China Has Even More Megacities Than You Thought
How many megacities does China have? The United Nations puts it at six. Try 15.
China is urbanizing at a staggering rate—in 35 years, it has added more than 500 million people to its cities. As a result, it looks like the world has vastly underestimated the size and scope of growth in China's megacities, defined as those with more than 10 million people, according to a new report by the Paris-based Organization for Economic Cooperation & Development. (Read more)
Netflix’s Pursuit of TV Domination Has a New Step: Ownership
For most of its rapid ascent of the TV business, Netflix Inc. has rented shows. Now it wants to own them.
Like a major Hollywood studio or competitor HBO, the company will own many of the 20 or more original shows that debut on its streaming service next year, Chief Executive Officer Reed Hastings said in an interview. (More)
Japan’s Maglev Train Economics Are as Mind-Boggling as Its Speed
Japan’s faded economic prowess received a boost after a magnetic-levitation train operated by Central Japan Railway Co. set a new world speed record of 603 kilometers per hour (375 miles) on a test run in Yamanashi Prefecture just outside of Tokyo.
Whether any of this makes a shred of economic sense is another matter. (Read more)
EU Probe on Android Threatens Google’s Position in Apps Market
A European Union probe into Android mobile software poses a threat to Google Inc.’s position in the $35 billion applications market and may give the likes of Samsung Electronics Co. more leeway in the programs they use on devices. (Read here)
Big Oil Wants You to Help End U.S. Export Ban
In a quest to overturn the decades-old restrictions on exporting American crude, the oil industry is seeking the help of an unlikely ally: consumers.
ConocoPhillips Chief Executive Officer Ryan Lance wants to convince the public that allowing exports would actually help push U.S. gasoline prices down. (More)
Amazon Offers Cheapest Grocery Delivery in NYC, Study Finds
Amazon.com Inc., which has been seeking to push further into shoppers’ everyday lives, was the least expensive grocery-delivery option in New York City, beating the closest competitor by $20 on a 30-item order, a study found. (Continue)
The Fed Still Wants Easy Money
Janet Yellen wants you to know that while the era of zero rates may be drawing to a close, money will stay cheap for a long time to come.
The Federal Reserve chair and her colleagues have stressed in recent speeches that monetary policy will remain unusually easy after they begin to tighten this year for the first time in almost a decade. They are telling investors that the pace of increases is more important than the liftoff date. (Continue here)
Emerging Stocks Climb as Chinese Equities Rebound; Ruble Weakens
Emerging-market stocks rose for the first time in three days as telecommunications companies rallied and a gauge of Chinese shares in Hong Kong rebounded from its steepest loss in three months. Russia’s ruble led currencies lower. (Read more)
Indian Rupee Falls to Three-Month Low as Stocks Fall on Outflows
India’s rupee fell to a three-month low as overseas investors sold the nation’s stocks and on lingering concern that Greece will struggle to meet its debt obligations. (Continue)
Druckenmiller's Bond Focus Risks Underestimating Greek Turmoil
To hear Stanley Druckenmiller talk, there’s little to fear these days if Greece exits the euro.
“I prefer to see Greece stay in the euro zone for a lot of economic, market reasons and maybe humanitatian reasons,” the billionaire investor said in an interview with Bloomberg’s Stephanie Ruhle last week. “But as a market participant I think it’s way over-analyzed and way over-rated.” (More)
NYC Apartments, Art Top Gold as Stores of Wealth, Says Fink
Gold’s traditional role as a store of wealth has been usurped by contemporary art and apartments in cities such as New York and London, according to Laurence D. Fink, head of the world’s biggest asset manager. (Here)
ARM Shares Surge as New Chips Power Next-Generation Smartphones
Shares of ARM Holdings Plc, the chip designer whose technology is in almost all of the world’s smartphones, rose the most in two years as consumers snapped up the more powerful devices that use its products.
First-quarter revenue increased 22 percent to 227.5 million pounds, the Cambridge, England-based company said in a statement. That compared with the 224.4 million-pound average estimate from analysts, according to data compiled by Bloomberg. As reported in dollars, sales rose 14 percent to $348.2 million. (Read more)
Sky Profits From Surge in U.K. and Europe Customer Numbers
Sky Plc signed up 242,000 customers in the third quarter, a 70 percent increase on a year earlier, helped by demand for its NOW TV Internet service. The shares rose the most since October 2013. (Read here)
ECB Is Studying Curbs on Greek Bank Support
The European Central Bank is studying measures to rein in Emergency Liquidity Assistance to Greek banks, as resistance to further aiding the country’s stricken lenders grows in the Governing Council, people with knowledge of the discussions said. (Continue)
Euro Weakens for Second Day as Greece’s Funding Concerns Mount
The euro fell for a second day against the dollar as investor concerns over Greece’s future grew, with the European Central Bank said to be studying ways to rein in emergency financing to the nation’s lenders.
The 19-nation single currency depreciated against all 16 of its major peers. ECB staff produced a proposal to increase the so-called haircuts that banks take on the collateral they post when borrowing from the Bank of Greece, people with knowledge of the discussions said. (Full article)
Putting Bill Clinton's Speaking Fees Into Perspective
When it comes to getting paid to make speeches, no one can compete with Bill Clinton, and that might be a problem for Hillary Clinton.
As the former secretary of state continues her presidential campaign, more attention is being paid to the hundreds of speeches her husband has given since he left the White House, and who wrote the checks paying for them. A new book, Clinton Cash, alleges that some of the groups that paid Clinton (and donated to the Clinton Foundation) received special favors from the Clinton State Department. The Washington Examiner raised similar questions about the former president’s 2009-2013 speeches in a report last summer. (Here)
David Koch Says Scott Walker 'Should Be' the GOP Presidential Candidate
As Wisconsin Governor Scott Walker moves toward a bid for the Republican presidential nomination, one of the world's wealthiest businessmen and biggest political influencers, David Koch, had high praise for him on Monday.
Inside a Manhattan fundraiser for the New York State Republican Party, Koch said he would support any Republican presidential nominee, "but it should be Scott Walker," according to a report in the New York Times. His comments build on a history of affection for Walker, who has battled public unions and won three tough statewide elections in five years. (More here)
The Left Battles Obama, Clinton on Trade, but Only She Seems to Be Listening
On Monday afternoon, the sidewalk in front of the U.S. Trade Representative's Washington office was blocked by a horse. A coalition of progressive groups — the AFL-CIO, the CWA, the Campaign for America's Future, etc and etc—were rallying against the Trans-Pacific Partnership, in full circus mode. A "Trojan horse" was the centerpiece of a swarm of signs and protesters, many of them wearing badges from the Populism 2015 conference that was concluding down the street. Right at noon, they were cheering for the only progressive senator who might run for president. (Read more)
Courts' War on FDR Continues With Obama (BloombergView)
More than any president since Franklin Delano Roosevelt, Barack Obama has seen his signature programs blocked or impeded by the courts. In the latest episode, a federal appeals court in New Orleans heard arguments Friday about what to do about his executive action on immigration, which has been blocked by a single district judge in Texas. Similar judicial roadblocks have profoundly affected Obama's efforts in health care, environmental protection and Internet regulation. So it's worth asking: What's going on? Why has the judiciary taken such a big role in opposing the president’s efforts to make policy? (Read more)
Imagine: Brokers Who Work for Investors (BloombergView)
In 2011, the Securities and Exchange Commission published a study, mandated by the Dodd-Frank Act, which concluded that all financial advisers and stock brokers should be placed under “a uniform fiduciary standard.” Basically this meant that brokers and advisers would have an obligation to put the interests of clients first and must disclose any conflicts of interest that might compromise that duty. (Continue)
IBM’s Profit Tops Estimates on Mainframe, Cloud Services
IBM’s first-quarter earnings beat analysts’ estimates that were already significantly lowered, helped by sales of its new mainframe and cloud-computing services. (More)
Target's Lilly Pulitzer Boom and Bust (BloombergView)
When Target Corp.’s website went offline early Sunday morning, under pressure from the demand for its Lilly Pulitzer capsule collection, and its stores were quickly picked bare by frenzied shoppers, consumers were frustrated. The company issued an apology. “We realize there is an extreme amount of excitement around this collaboration, and we apologize for any disappointment this may have caused,” it said. (Read more)
Credit Suisse Falls as Capital Concern Overshadows Profit
Credit Suisse Group AG fell the most since January in Zurich trading after the bank said a key measure of financial strength dropped in the first quarter, stoking concerns it may have to boost capital.
The ratio of capital to risk-weighted assets was at 10 percent, down from 10.1 percent at the end of 2014, the bank said in a statement Tuesday. The firm targets 11 percent. Net income in the period rose 23 percent to 1.05 billion Swiss francs ($1.1 billion) on increased trading activity. (More)
German Investor Sentiment Falls on Shaky Economic Outlook
German investor confidence unexpectedly fell for the first time in six months, signaling that the uncertainty induced by Greece’s debt crisis may be weighing on Europe’s largest economy.
The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to 53.3 in April from 54.8 in March. Economists had forecast an increase to 55.3, according to the median of 33 estimates in a Bloomberg News survey. (Read more)
Default Taken in Stride as China Traders Learn to Live With Risk
It turns out defaults in China aren’t such a bad thing for financial markets after all.
In the first trading day after Chinese developer Kaisa Group Holdings Ltd. reneged on its dollar debt, the Shanghai Composite Index climbed 1.8 percent to a seven-year high and China’s interbank borrowing rates dropped to a four-month low. Offshore stock-index futures held most of their gains after Baoding Tianwei Group Co. became China’s first state-owned company to default on a local bond. (Continue)
Banks Paid to Borrow as Three-Month Euribor Drops Below Zero
Banks in the euro area can now get paid to look after each others’ cash for three months as the European Central Bank’s bond-buying program floods the region’s money markets with excess liquidity.
The euro interbank offered rate, or Euribor, for that time period dropped to minus 0.001 percent on Tuesday, according to data from the European Money Markets Institute. That’s the first negative reading since Bloomberg started collecting the data at the end of 1998. The index represents the average rate at which the region’s banks say they see each other lending in euros for three months. (Full article)
China Sees First Bond Default by State Firm With Tianwei
A Chinese power-transformer maker became the country’s first state-owned company to default on an onshore bond, signaling the government’s willingness to let market forces decide an enterprise’s fate. (Here)
Medvedev Sees $27 Billion Bill for Crimea as Russian GDP Slumps
Russia acknowledged the surging cost for its takeover of Crimea from Ukraine, with Prime Minister Dmitry Medvedev blaming the standoff and sanctions that followed for helping push the economy into its first recession since 2009. (Continue here)
Euro-Area Debt Levels Surge to Record, Led by Greece
Government debt in the euro area surged to the highest levels since the introduction of the single currency, underscoring the challenges still confronting the 19-nation bloc as it wrestles with Greece over new aid payments. (More)
U.S. Pushing for Greek Solution in ‘Interest of Entire World’
The U.S. is pushing Greece and its creditors to reach a deal that returns the country to growth, President Barack Obama’s chief economist said.
It’s in the interests of Greece, its creditors and “the entire world” for the sides to determine the structural economic reforms that will get the country growing and enable it to pay its debts, Jason Furman, chairman of Obama’s Council of Economic Advisers, said in a Bloomberg Television interview in Berlin on Tuesday. U.S. officials aren’t convinced by European reassurances that the fallout from a Greek euro exit would be contained. (Read more)
Deutsche Bank Credit Risk Rises as Review Fuels Funding Concerns
Deutsche Bank AG bondholders are concerned that a sale of the retail business to concentrate on investment banking would deprive Germany’s biggest lender of deposits it needs for funding and increase risk for creditors.
Investors demand a yield premium of 83 basis points over benchmark rates to hold Deutsche Bank’s 1.5 billion euros ($1.6 billion) of senior bonds due March 2025, according to data compiled by Bloomberg. That’s up from a spread of 55 basis points when the notes were issued last month. (More)
Mom-and-Pop Traders Went on a Buying Binge During Friday's Market Plunge
Individual investors in the stock market are often referred to as “retail.”
This is because they trade in discount online brokerages like E*Trade’s and Fidelity’s, which is sort of like buying off the rack instead of the tailored suits and couture offered at the brokerages run by the Goldman Sachs or Morgan Stanleys of the world. (Read more)
Fink Says Central Bankers ‘Destroying’ Insurers With Low Rates
Low interest rate policies by central banks around the world are threatening insurance companies and pension funds, said Laurence D. Fink, chief executive officer of BlackRock Inc., the world’s largest asset manager.
“As we live in a world of persistent low rates and, in the case of Europe, negative rates today, when you put a macro-prudential framework on it, we are destroying the value of pension funds,” Fink said at a conference in Singapore on Tuesday. “We are destroying the viability of insurance companies.” (More here)
Five Things Everyone Will Be Talking About Today
German investors lose some confidence, tech earnings deliver, and another default in China. Here are some of the things that people will be talking about today. (Here)
Another Poll Shows American Economic Optimism Hitting Its Highest Level in Years
A new poll released this morning shows public confidence in the future of the U.S. economy hitting multi-year highs.
The poll, conducted by CNN and ORC between April 16 – 19, asked participants about the economy, their current financial state, and their view of American politicians. In general, adults are becoming more optimistic, with 52 percent rating current economic conditions as 'good.' The last time this many Americans called the economy "good" in CNN/ORC polling was September 2007. (Continue reading)
