Thing One: Companies Feel Your Pain: Are corporations not people, too, my friend? If you prick them, do they not bleed money?
The answer to the first question is, obviously, yes, of course corporations are people. They have hopes, fears and unlimited cash to bankroll politicians, just like the rest of us. The answer to the second question was unclear until recently. Despite a sluggish, grim "recovery" in the broader economy from the recession of 2007-09, corporate profits bulled ahead, quarter after quarter, to new record highs. Why, it was almost as if companies made more money by not hiring many expensive, what do you call them? Oh yeah, "people."
But something has changed lately, The New York Times warns us: Companies like FedEx and Intel have dialed back expectations for their profits in the latest quarter, citing a recession in Europe, a sharp slowdown in China and the annoyingly slow economy in the U.S., made worse recently by uncertainty about the looming "fiscal cliff." Wall Street analysts expect corporate profits to shrink in the third quarter, for the first time since the bad old days of 2009.
Then again, the brain trust of Wall Street also warned of a profit slowdown in the second quarter, which did not happen. The stock market, meanwhile, is approaching record highs. It either blissfully ignores the profit crunch or assumes the Federal Reserve's latest money-printing exercise is going to refill those corporate coffers. Either way, a slowdown in corporate profitability is something to cheer if it's happening because companies are hiring and spending for the future. This slowdown is happening for all the wrong reasons, and it's a big reason why unemployment is still hanging above 8 percent.
Thing Two: It's Once Again The Economy, Stupid: Buckle up for a wild fun-ride, people: Mittens Romney is going to turn the focus of the election back to the economy this week, warns The Washington Post. This would seem to be a intelligent move for Romney, whose campaign is apparently in complete disarray, according to Politico, and who has lost his edge in the polls on the question of who can better handle the economy, according to the NYT. The trouble is that Romney is going to have to provide "details" for his plans, which may be politically unpalatable. For example, what tax loopholes can he possibly close in order to lower tax rates for high incomes without squeezing the middle class?
Bizarrely, Romney will start the week talking about the deficit, according to the WaPo, a subject most Americans don't care about nearly as much as they care about jerbs. Even on the question of who would handle deficits best, Romney is starting to lose his edge in the polls to the socialist, free-spending President Obama, according to WaPo's Zachary Goldfarb.
Thing Three: What's JPMorgan Gone And Done This Time? JPMorgan Chase is under investigation by U.S. regulators. Again! According to Reuters, regulators this time are poking around the big bank's practices when it comes to making sure terrorists and drug kingpins and such-not aren't just stone-cold laundering money. This comes after HSBC, Standard Chartered, and other banks have been slapped with fines and embarrassment for their shoddy money-laundering prevention practices. Reuters points out that JPMorgan itself got hit with a fine for its practices a little more than a year ago.
Thing Four: Japan Is Totally Getting Dis-Invited From China's Birthday Party: So this is just what the global economy needs: Japan and China are suddenly really, really angry with each other over some disputed islands. The flare-up has led to riots in China and damage to some Japanese corporate properties, Bloomberg BusinessWeek writes. Japanese companies are shutting down their plants in China, writes Reuters.
Thing Five: Mortgage-Torium: Peter Eavis of the NYT wrote on Friday about how the Fed's latest round of quantitative easing is not a sure bet to help Main Street nearly as much as it helps Wall Street, pointing out that banks aren't cutting mortgage rates to match Fed efforts to lower the rates of mortgage-backed securities. The Financial Times today sort of shows the bank's side of things, I guess, by writing that banks are being flooded with mortgage applications, hurting their ability to give people cheap loans. Hmmm, how long does it take to say "no?"
Thing Six: Generally Problematic: The Obama administration may be making political hay out of the fact that it kept General Motors alive, but it is not willing to take a discount for the GM shares it still owns, the Wall Street Journal writes. GM is tired of being called "Government Motors" and wants to buy out the government's stake. Unfortunately, the Treasury Department doesn't like that idea, since it would take a big, awkward loss.
Thing Seven: School's Still Out: The Chicago teachers' strike has stretched into a second week, Reuters writes, with the teachers digging in their heels and Mayor Rahm Emanuel cussing and spitting up a storm as he threatens to get a court to force them back to work. One big question is how much this showdown is ultimately going to affect union enthusiasm to get out the vote for Emanuel's old boss, President Obama.
Thing Seven And One Half: A Penny For Your Art: So, this is cool: Teeny, tiny oil paintings on pennies, via BuzzFeed.
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Calendar Du Jour:
Economic Data:
8:30 a.m. ET: Empire State manufacturing index for September
Corporate Earnings:
None.
Heard On The Tweets:
GSElevator: Israel mulling, China cracking, Muslims attacking, EU stagnating, Brazil reversing, QE3 inflating, oil spiking... Equity markets rising!
greg_ip: That was fast. Thursday, Fed relaxes its inflation obsession. Today, my sushi joint raises the price of bibimbap $1.
KidDynamiteBlog: If your #QErection lasts longer than 4 hours, you should see a... banker? portfolio manager? Fed Chairman?
TeresaKopec:
Lots more sympathy for striking NFL refs amongst Washington media than for teachers. Pretty sure the refs make good $ & get summers off too!
moorehn: My entire Twitter feed is Downton Abbey and football.
JennyJohnsonHi5: I'd rather be a pallbearer than a bridesmaid.
You can follow me on Twitter, too: @markgongloff