Programming Note: This is the last newsletter produced with the assistance of Khadeeja Safdar, who for some reason has decided to further her education rather than continue her daily search for tweets and calendar items. You may soon notice a distinct drop in newsletter quality. Thanks for everything, Khadeeja.
Thing One: Future Shock: Last night, New Jersey Governor Chris Christie delivered a rousing speech accepting the Republican nomination for the presidency in 2016.
Christie's stern message at the 2012 Republican National Convention, which may well be of pressing national interest by the year 2016, was that what America needs the most right now is a giant helping of austerity. "With $5 trillion in debt added over the last four years, we have no other option but to make the hard choices, cut federal spending and fundamentally reduce the size of government," the governor yelled at our TVs. He boasted (not entirely truthfully) that he had managed to balance his state's budget three years in a row with lower taxes. He said it wasn't easy (apparently not, because it didn't exactly, you know, happen), and he said it wasn't popular, but gosh darn it, he got it done, and if he can get it done, then so should America.
We may well hear a similar bitter-medicine argument tonight from Rep. Paul Ryan (R-Wis.), the running mate of former Massachusetts Governor Whats-His-Face. One of Ryan's goals will be to introduce himself to the American people as a non-scary humanoid. But Ryan's entire spiel, the reason he is the Boy Wonder of Republican politics, is that he is the blue-eyed angel of grim austerity, so it will be odd if he doesn't try to echo Christie's warnings about the horrors of large government. It was a message delivered frequently throughout the first night of convention speeches.
It is also a message that is oddly out of step with where the American public is in the year 2012. Americans are deeply concerned about the economy, yes, and disappointed with President Obama's stewardship of it. But they are more specifically concerned about where the hell their next paycheck is going to come from than they are about federal spending. In poll after poll after poll, concerns about the budget deficit rank very far behind concerns about jobs and/or the economy.
And most economists would agree that is as it should be, given the ongoing weakness in the economy. Nobody disagrees that the government has fiscal issues that need to be addressed, but the lesson Europe has taught us is that too much austerity too soon is self-defeating. The time to worry about austerity might well be in 2016, when the economy has had some time to heal and Christie's premature acceptance speech might be better received.
Thing Two: Europe: Yep, Still Screwed: Speaking of austerity, how are our friends in Europe doing today? Not so great. The recession in Spain got even deeper in the second quarter. And Spain's Catalonia region, which has an economy the size of Portugal, is about to ask the Spanish government for a bailout, the Financial Times reports. Meanwhile, European companies are having to get creative in the search for financing, because their banks are toxic cesspools, writes the Wall Street Journal. So, not great.
Thing Three: Housing's Comeback: Housing continues to weirdly be one of the brighter spots in the U.S. economy -- though we still haven't forgotten how you ruined the economy that one time, housing! The S&P/Case-Shiller home-price index posted a small gain in the second quarter from a year earlier, the Washington Post writes. Some of the hardest-hit cities are among those on the rebound, The New York Times writes.
Thing Four: Farmers Heart The Drought: You'd think with the Biblically awful drought in the Midwest, U.S. farmers would just be on constant suicide watch, but apparently they are comforting themselves with big stacks of money. Farmers are on track for their most-profitable year ever, as the crop shortage has sent prices through the roof, the Financial Times writes.
Thing Five: Let's Get Small: U.S. auto makers have to get average fuel efficiency up to 54.5 miles per gallon by 2025, up from 29 mpg today, according to new rules issued by the Obama administration yesterday. Naturally, auto makers and Governor Whats-His-Face grouched about how costly the new rules will be, but 13 years should be enough time to make this happen pretty comfortably, no? Also, the tradeoff in lower gas prices might help ease the sting. And anyway, we were promised freaking flying cars by now, so.
Thing Six: We've Gotta Get Out Of This Place: Moving overseas to avoid taxes: It's not just for private equity any more. Everybody's doing it, the Wall Street Journal writes, despite a 2004 law that was supposed to stop companies from fleeing: "Since 2009, at least 10 U.S. public companies have moved their incorporation address abroad or announced plans to do so, including six in the last year or so, according to a Wall Street Journal analysis of company filings and statements. That's up from just a handful from 2004 through 2008."
Thing Seven: Samsung Begins Comeback: Samsung, still reeling from being nuked by Apple in court, will take its first steps on the comeback trail today, unveiling a new version of its Galaxy Note tablet at a show in Berlin, Reuters writes.
Thing Seven And One Half: Is There Anybody Out There? Ever wonder how many alien civilizations there might be out there trying to find us? Via Wired, here is an elegant, customizable infographic that lets you plug in various parameters to calculate just how many alien worlds there might be out there with the ability to communicate across space. Spoiler alert: It's a cookbook.
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Calendar Du Jour:
Economic Data:
8:30 a.m. ET: GDP - Second Estimate for Q2
10:00 a.m. ET: Pending Home Sales for July
2:00 p.m. ET: Fed's Beige Book for August
Corporate Earnings:
Not a lot.
Heard On The Tweets:
@ReformedBroker: Christie closes his speech by grabbing Ann Romney and King Konging himself up the side of the building. #RNC
@fema: #Isaac tip: include copies of imp. insurance, financial, & legal documents in a water-proof container as part of your emergency kit
@mattyglesias: If you think presidential campaign partisanship is nasty and dumb, try wading into iPhone vs Android disputes some time.
@zerohedge: Oh lord, here comes the China is buying Spanish bonds rumors again
@ObsoleteDogma: We must destroy the economy to stop punishing savers.
-- Calendar and tweets rounded up by Khadeeja Safdar.
And you can follow us on Twitter, too: @markgongloff and @byKhadeeja