Links: 2013-09-19

Jobless Claims in U.S. Increase Less Than Forecast – Bloomberg 

Average jobless claims are now running a full 60,000 below the year ago level. That says we are still in recovery and should be for a while.

Manufacturing in Philadelphia Region Expands by Most Since 2011 – Bloomberg

“The Federal Reserve Bank of Philadelphia’s general economic index jumped to 22.3 this month from 9.3 in August. Readings greater than zero signal growth in the area, which covers eastern Pennsylvania, southern New Jersey and Delaware. Measures of orders, sales and factory employment increased at faster rates in September, while a gauge of the six-month outlook was the strongest in a decade. “

Mossberg Leaves Wall Street Journal as AllThingsD Talks Fail – Bloomberg

“Walt Mossberg will end his two-decade tenure as the Wall Street Journal’s personal-technology columnist after failing to reach a deal to keep managing the All Things Digital conference and website.

Mossberg and journalist Kara Swisher, who both led the AllThingsD events and news outlet owned by Dow Jones & Co., won’t renew their contracts when they expire by the end of this year, according to a statement. In their absence, Dow Jones said it will expand its technology coverage and conference business. “

Japan’s trade deficit at record high – Telegraph

“Japan posted its widest August trade deficit on record last month, as the country’s soaring energy costs overshadowed a rise in exports that saw shipments jump to a three year high. “

Manufacturing confidence hits 18-year high – Telegraph

“Confidence among Britain’s manufacturers is at an 18-year high on the back of booming factory orders from both home and abroad.”

JPMorgan hit with $920m in fines over ‘whale’ trade –

How does making shareholders pay for the mistakes of individuals make any sense. You need to prosecute individual wrongdoers, not penalize the many and varied stockholders.

“US and UK authorities slammed JPMorgan Chase’s senior management for having “deprived its board of critical information” about the London whale trading fiasco and hit the bank with $920m in fines.”

Germany’s eurosceptic party on course for seats, says leading poll –

“If the Alternative für Deutschland party (AfD) can cross the 5 per cent hurdle to enter parliament, it would almost certainly mean Angela Merkel, German chancellor, would be forced to negotiate a grand coalition with the centre-left Social Democratic party.”

BBC News – Ireland exits recession as economy grows

“The economy grew by 0.4% in the second quarter of the year, although this was much weaker than many economists had forecast.

Economists had expected growth of at least 0.8%. “ | Quarterly unemployment drops for first time in almost four years, to 27.1

“Quarterly unemployment figures in Greece fell for the first time in almost four years in the second quarter of 2013, declining from 27.4 percent in Q1 to 27.1.

The Hellenic Statistical Authority said the number of Greeks employed in Q2 stood at 3,632,184 people, while the number of unemployed amounted to 1,350,435.”

Taperless Fed sets off share and bond market surge |

This is why the Fed did not taper. It’s reaction function is recursive, meaning a rise in bond yields due to expected tapering made tapering less likely.

“The Fed also cut its projection for 2013 economic growth to a 2.0 percent to 2.3 percent range from a June estimate of 2.3 percent to 2.6 percent. The downgrade for 2014 was even sharper.”

Security Researchers Claim Apple Technically Capable Of Intercepting iMessages | TechCrunch

“Two security researchers have posted an outline for a talk about Apple’s iMessage security to be presented next month. The report claims that Apple could — but not that it does — intercept iMessages and read them if it wishes.

Apple had previously claimed, via its security documents, that iMessages were encrypted end-to-end and that it is unable to read them”

iOS 7 Adoption Already As High As 35% In One Day, Apple And Developers Reap The Rewards | TechCrunch

This shows how Apple’s control over its ecosystem can reap big rewards. These adoption rates are unheard of anywhere else. If developers can win from this, it is a good reason to continue supporting the platform even if Android takes share.

“iOS 7 is getting such rapid adoption because it’s like getting a brand new phone instantly and for free,” Onswipe CEO Jason Baptiste told me via email. “Its adoption is also being accelerated by developers pushing a brand new iOS 7 redesign to their large user bases.”

Nokia CEO Stephen Elop Will Get $25.5M If The Microsoft Deal Closes | TechCrunch

Here’s a guy who basically failed at Nokia as he selected the Microsoft operating system over Android. And yet, going back to his old employer, he gets $25 million. That’s not good leadership practice.

Google Makes Quickoffice For iOS And Android Free For Everyone | TechCrunch

This is a direct threat to Microsoft. Notice that this app is free whereas Microsoft receives a good chunk of revenue from its own Office apps. 

German Left Party Strong But Shunned by Mainstream – SPIEGEL ONLINE

“Social Democratic candidate Peer Steinbrück could win Sunday’s election, but he would have to partner with the Left Party in order to prevail. The leftists continue to be surprisingly strong, but their Communist roots make them an unpalatable partner.”

Never underestimate the Fed’s dovishness | Gavyn Davies

This is important. I will have more to say on this later.

“It is no longer as likely that the start of tapering will come this year, though December now seems to be the best single bet. Not can it be assumed that the 7 per cent unemployment rate is a good guide about the end point. Although the FOMC’s economic projections still show unemployment dropping below this rate somewhere around mid-2014, the chairman seemed to pour cold water on the importance of the 7 per cent figure, a consideration he himself had voluntarily introduced in the June press conference.”

Apple CEO Tim Cook on cheap smartphones: ‘We’re not in the junk business’

“Facing criticism over higher-than-expected pricing of the new iPhone 5c, Apple Chief Executive Tim Cook has defended his company’s strategy, saying there’s plenty of room to grow — and retain its profits — in the high-end handset market.”

Fed recoils from 1937 tightening error as jobs evaporate – Telegraph

Ambrose is a monetarist and so he sees the Fed’s about face as completely necessary. The whole debtae about monetary and fiscal policy is very-much tied to your particular paradigm of how the economy works. In mine, monetary policy works through the credit channel i.e. via debt and since private debt is the problem, monetary policy can only ever be a stopgap in changing the real economy. Real income gains are what we want to see.

Bernanke Recouples With World Offering Bond Yield Relief Abroad – Bloomberg

“Federal Reserve Chairman Ben S. Bernanke is granting his international counterparts some relief from the tighter borrowing costs he forced on them this year.

Four months of rising bond yields around the world and reduced capital flows into emerging markets were thrown into reverse by the Fed’s surprise decision yesterday not to pare its $85 billion in monthly asset buying. Yields on the bonds of Spain, France, Thailand and Turkey were among those to fall in response, and currencies including those of India and Malaysia dropped against the dollar. “

China’s Trade Policies Get a Bum Rap – Real Time Economics – WSJ

““Germany’s surplus surpassed that of the larger Chinese economy, and is three times larger in relation to the GDP, “ write Guonan Ma and Robert McCauley in a September paper. “It is an irony of this contrast that the much-criticized renminbi management has produced an adjustment in the direction that serves to narrow China’s current account surplus, while the free-floating euro has interacted with domestic cost trends to maintain Germany’s competitiveness” and its surplus.”


Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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