Science has determined that people need to know 7.5 things per day, on average, about the world of business. You can't argue with science. Lucky for you, the Huffington Post has an email newsletter, delivered first thing every weekday morning, boiling down the day's biggest business news into the 7.5 things you absolutely need to know. And we're giving it away free, because we love you, and also science. Here you go:
Thing One: Let Us Now Praise Panicky Men: Good news, America: Our brave corporate leaders are back to doing what they do best: Panic at the first sign of change.
At least that is what the Wall Street Journal says our corporate leaders are doing. In a front-page report today, the WSJ says companies all across the land are clamping their wallets and their hiring offices shut because of a shroud of "uncertainty" that has fallen across the globe, partly because of the looming "fiscal cliff" of tax increases and spending cuts due to start taking effect at the beginning of 2013. The Congressional Budget Office and other economists have made scary predictions that the fiscal cliff is going to cause a horrible recession, so you can sort of understand why business leaders might be a little nervous. There is also, of course, the not-insignificant fact that Europe and Japan, two of the largest economies in the world, are in recessions of their own, which is slowing down growth here and in China. But it's more viscerally satisfying to blame President Obama and Congress for stuff, so that's what some of our brave, independent-minded job creators are doing.
They are also scrambling desperately to shield their income from higher tax rates they expect to hit them next year, the New York Times writes. They are selling businesses, paying dividends early, dumping winning stocks like Apple and planning to take long income-avoiding vacations, all to prepare for higher tax rates in Obama's America. At least, that's what they're telling the public. And, again, who can blame them? We all remember the horrific depressions that followed tax increases under Presidents Reagan and Clinton.
A hint that maybe some of these business leaders are just throwing a short-lived tantrum came on Friday, when Obama and some congresspeople made positive noises about maybe being able to work together without trying to murder each other. The stock market -- which has been tumbling ever since the election amid all this panic about the fiscal cliff -- made an abrupt u-turn higher on the faint sounds of "Kumbaya" coming from Washington. Global stocks are still higher this morning. Of course, they're going to fall again the first time Harry Reid gives John Boehner the stinkeye and makes him cry. Stocks are dumb like that.
Stocks are also compellingly, historically cheap right now, Bloomberg points out, while interest rates are near rock bottom due to all of this panic, meaning bonds offer a lot of long-term risk and little reward. The truth of the matter is that a deal on the fiscal cliff could clear away a lot of this "uncertainty" and make some of these investors, and corporate leaders, feel pretty sheepish about how panicky they've been acting.
Thing Two: Europe To Raise Taxes, Too: The sad thing for our nation's big companies is that there is a dwindling number of places for them to hide their income from the tax man. Europe, which has a bit of a budget problem of its own, is starting to wonder why it lets U.S. multinationals like Google and Starbucks make billions of dollars on its shores, but pay so little in taxes there, the New York Times writes. More than just wondering, some European countries are already starting to hit these companies with higher tax bills, foiling their accounting tricks. Of course, those same cash-strapped European countries are starting to wonder why the European Union itself is constantly increasing its own budget, Reuters writes.
Thing Three: The Shadow Knows: We all like to blame big banks for the financial crisis, but there are lots of non-banks that also played a pretty big role in destroying the financial system. Of course, they did that in the service of the big banks, but anyway. The so-called "shadow banking" system, which includes money-market mutual funds and off-balance-sheet investment vehicles, was at ground zero of the crisis, and it is growing larger, according to a new report by the global Financial Stability Board. Shadow banking makes up $67 trillion, with a "T," up $6 trillion from the FSB's prior estimate last year, Bloomberg writes. And unlike banks proper, which are constantly being hit with more regulation and higher capital requirements, the shadow banking system is having an easier time slipping out of regulatory scrutiny.
Thing Four: Energetic Energy Regulator: If you've noticed the Federal Energy Regulatory Commission has been unusually active lately, you're not alone. FERC has launched a wide-ranging campaign to crack down on market manipulation, the Wall Street Journal writes, ensnaring JPMorgan Chase, Barclays Capital, Deutsche Bank and more.
Thing Five: The Definition Of Insanity: The New York Times has an interesting story raising questions about why governments in New York and New Jersey are rushing to re-develop vulnerable coastal areas slammed by Sandy. Of course, this follows by a week The Huffington Post's definitive opus on the same subject.
Thing Six: Attention, Wal-Mart Managers: Similarly, the New York Times' Business section has another interesting story about how Wal-Mart is freaking out about planned Black Friday protests at its stores in support of its low-paid workforce. This follows by a week or more the news about Wal-Mart being broken constantly by The Huffington Post's Alice Hines, including last week's report of a company memo showing how Wal-Mart has a system in place to keep workers from making too much money. The Huffington Post: Next week's news today.
Thing Seven: Think Of The Twinkies: But what's on everybody's mind is: Who will save the Twinkies? With Hostess Brands on the verge of filing for bankruptcy today, its workers hope that a savior will swoop in to buy its brands and keep making the nuclear-winter-resistant cakes, the Wall Street Journal writes.
Thing Seven And One Half: And That's The Word: Have three and a half hours to kill and have already accomplished all of your life's goals? Then maybe you won't mind watching this video of the longest word in the English language being pronounced (via BuzzFeed). Or maybe it's just enough for you to know that the longest word in the English language takes three and a half hours to pronounce.
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Calendar Du Jour:
Economic Data:
10:00 a.m. ET: Existing Home Sales for October
10:00 a.m. ET: NAHB Housing Market Index for November
Corporate Earnings:
Lowe's
Tyson Foods
Urban Outfitters
Heard On The Tweets:
Breakthrough in Fiscal Cliff discussions - both parties agree that today is Friday...
— Downtown Josh Brown (@ReformedBroker) November 16, 2012
-- Tweets rounded up by Alexis Kleinman.
And you can follow me on Twitter, too: @markgongloff
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