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: We Just Can't Quit You, Fed: It's still the Federal Reserve's world. We just live in it.
Any doubts about that were quickly erased yesterday with the routine release of drier-than-Mars minutes of the most recent Fed policy meeting. Wall Street traders and headline-reading robots waited for this fairly mundane release like Randolph and Mortimer Duke on orange-crop-report day, and they reacted to it with nearly as much despair. That's because the minutes included a discussion of the pros and cons of the Fed's high-wire experiment in monetary policy, known as quantitative easing, or QE3 (as in, they're trying it for the third time in the past four years). This policy involves spending hundreds of billions of dollars on open-ended purchases of bonds, flooding the system with cash. Naturally, discussions of said policy included some talk about the potential downside of flooding the system with cash, along with some talk about when and how to end such a policy. Predictably, there are some Fed officials who are less comfortable with this approach, and some who are more comfortable with it.
Wall Street traders and headline-reading robots read these understandable theoretical discussions as OH MY GOD NO MORE FREE MONEY and dumped gold, oil and stocks furiously. Even some headline-writing humans took the bait: The Financial Times, for example, headed its story about the minutes as "Fed doubtful on open-ended QE3 policy." But this is mostly wrong. Some Fed officials are doubtful about the Fed's approach. But the majority are not, as this handy Reuters chart demonstrates. Most Fed officials, including Chairman Ben Bernanke and Vice Chairman Janet Yellen, are labeled cool-blue "doves," or proponents of more stimulus. Only a handful are red-hot "hawks," inclined to be anxious about Fed policy. And even most of those "hawks" voted to keep up QE3, despite their reservations. The Washington Post's headline, "Fed unlikely to end stimulus soon," is spot-on.
And that's too bad. The best news for investors, and the economy, would be that the Fed has decided everything is hunky-dorey and plans to start taking back some of its stimulus. But with unemployment still too high, growth still too weak, and sharp federal budget cuts, and federal worker furloughs, looming at the end of the month as part of Washington's endless, pointless fights over the budget deficit, the Fed's not going to be able to extract itself any time soon.
Thing Two: Still Waiting On That European Recovery: Any hopes for a near-term recovery in the euro-zone economy were stuffed into the hatch of a Yugo and driven to a shady Slovakian hostel for torturing this morning. Purchasing managers indexes for the region showed a shocking decline in service-sector activity in February and no change in already-dismal factory activity. Reuters notes that economists had hoped that the euro zone's long-suffering economy might at least be upgraded to "stagnating" this month, but no such luck. It seems likely now the recession will continue another quarter, after an entire year of decline in 2012.
Thing Three: Republican Governor Hearts Obamacare: Obamacare got a major PR boost yesterday when Florida's Republican Governor Rick "Nosferatu" Scott agreed to sign his state up for a Medicaid expansion under the Affordable Care Act. "While the federal government is committed to paying 100 percent of the cost of new people in Medicaid, I cannot, in good conscience, deny the uninsured access to care," Scott said. The Huffington Post's Jeffrey Young points out that Scott is just the seventh GOP governor to join the program, while 13 Republican governors, mostly in southern states, have opted out.
Thing Four: Foxconn Plants No Longer Quite As Full Of Joy And Life: Chinese electronics manufacturer Foxconn, which assembles iPhones for Apple and became infamous for installing suicide nets to catch despairing workers, has frozen hiring in response to sluggish iPhone demand, the FT writes. It's the latest in a string of bad news for Apple, whose stock price has tumbled from $700 a share in September to about $450.
Thing Five: What Is China, Communist Or Something? China, the world's largest carbon emitter, took a big step toward fixing that, announcing the imposition of a carbon tax, writes Christopher Mims of Quartz. Europe and the U.S. continue to dither about such a move, which may be an effective way to curb greenhouse-gas emissions and global warming. China might also tax the use of coal and water -- which is still unfit to drink, despite a multibillion-dollar cleanup, Reuters writes.
Thing Six: European Banks Pretty Selves Up: European banks, scrambling to meet new regulatory standards for the amount of capital they keep on hand for rainy days, are using accounting tricks to bolster their capital ratios, the Wall Street Journal reports. Actually, check that: These banks always use accounting tricks to bolster their capital ratios, but now they are doing it even harder, the WSJ writes.
Thing Seven: Just Two More Months, And Boeing's Battery Problems Could Be Solved: Boeing is close to proposing fixes to battery problems in its new(ish) 787 Dreamliner jets that could have the grounded planes back in the air in just a couple of months, the New York Times writes. The planes have been grounded for more than a month already after a series of alarming glitches, including smoke and fires on planes filled with passengers.
Thing Seven And One Half: A Fellow Of Infinite Jest: Happy birthday to David Foster Wallace, born on this day in 1962. He committed suicide in 2008 at the age of 46, which happens to be the age Kurt Cobain would have been yesterday (Feb. 20) if he had not committed suicide in 1994 at the age of 27. Ugh, quick, we need an actual happy birthday: How about the New Yorker, which debuted on this day in 1925, and NASCAR, founded on this day in 1948.
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Calendar Du Jour:
Economic Data:
8:30 a.m. ET: Consumer Price Index for January
8:30 a.m. ET: Weekly Jobless Claims for Feb. 16
10:00 a.m. ET: Existing Home Sales for January
10:00 a.m. ET: Philadelphia Fed Index for February
10:00 a.m. ET: Leading Indicators for January
Corporate Earnings:
AIG
Hewlett-Packard
Wal-Mart
Heard On The Tweets:
I’m so hungry I could eat a horse.Kidding Europe, just a ham sandwich will do.
— Calamity ClamRocks (@TrueTorontoGirl) February 20, 2013
Slept like a baby last night which explains the tear stains and soiled underwear this morning.
— The Anti-Panda Bear (@EvilPandaX) February 20, 2013
-- Calendar and Tweets rounded up by Alexis Kleinman
And you can follow us on Twitter, too, if you want, no pressure: @AlexisKleinman and @MarkGongloff
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