Mark Gongloff Is off the newsletter this morning so today's 7.5 Things are brought to you by Jillian Berman.
Thing One: Corporate America Squeezing Workers. Again: After squeezing its workers for years and making piles of cash doing it, Corporate America is hoping to squeeze something else out of its employees: Money. Investors are hoping that last week’s unemployment report -- which showed both a boost in jobs and wages -- is an indication that Americans will have more money to spend and therefore boost corporate profits, The New York Times reports. Of course, corporate profits have been getting a boost to record highs for the past few years, as the NYT notes, thanks partly to the Federal Reserve’s stimulus programs, which may only now be hitting ordinary Americans. The wages of those ordinary Americans, meanwhile, have been stagnant.
Still, investors shouldn’t get too excited too quickly. You see, America has been fooled before. February’s jobs report marks the third time since the recession that we’ve seen a sudden uptick in jobs only to have it peter out later, the Wall Street Journal notes. Though last month’s employment gains cover more sectors than the during the last job booms, everyone should approach their optimism with caution. Last month was the 34th month in a row that more job seekers stopped looking for a job than found one, according to the WSJ.
Thing Two: Companies Parking More Cash Overseas: Speaking of Corporate America screwing the rest of us, companies are stashing more of their cash abroad in order to avoid U.S. taxes, according to a Wall Street Journal analysis. Sixty major U.S. companies parked $166 billion overseas last year, the analysis found. That’s about 40 percent of their profits. The companies are able to shield their profits from U.S. taxes thanks to a complicated corporate tax code that incentivizes companies to keep the money they make abroad overseas to avoid taxes. Still, corporate leaders are arguing that they need a tax code with more loopholes to avoid paying U.S. taxes. A lobbying group is in the works to push a “territorial” tax system, or one that allows U.S. multinationals to avoid paying almost all of the U.S. taxes on the money they make abroad.
Thing Three: Defense Contractors Actually Scared Of Something: How do you get the makers of deadly weapons to shake in their boots? Just mention budget cuts. CEOs at Boeing, Lockheed Martin and other defense contractors are warning of tough times ahead due to the sequester, or billions in across-the-board spending cuts that took effect earlier this month, according to the Wall Street Journal.
And they have legitimate reason to be concerned. President Barack Obama may try to use the sequester as a justification for cutting back programs he’s long wanted to scale down, The New York Times reports. Congress has resisted some of the cuts on Obama’s wish list, including closing some bases, restructuring the military insurance program and scaling back on deployed nuclear weapons. But with the sequester as convenient excuse, Obama could have an easier time reducing these programs and instead direct money toward things like building drones, developing cyberweapons and special operations.
Thing Four: Pay Curbs Sweeping Europe: European banks are scrambling to make sure their staffers’ pay adheres with common sense. The European Union passed a cap on senior bankers’ bonus pay last week, and now banks are rushing to try to make sure their pay complies with the new rules, according the Financial Times. Though it’s still unclear exactly how the banks will restructure pay, the fix that looks most likely is a boost in base salary, which would allow for the bonuses to comply with the new rules. Its not just European banks that are facing new pay curbs though: The EU may consider a proposal that would give shareholders the power to set executives’ pay.
Thing Five: Robots Closer To Taking Over The World: The New York Stock Exchange is reportedly preparing to run without humans. The Wall Street Journal reports that the company is readying a disaster plan that would allow it to operate without human traders in the event of an emergency like last fall’s superstorm Sandy. If the plan is approved by the Securities and Exchange Commission and is ever activated, it would be the first time in the Big Board operator’s 221-year existence that it would be relying entirely on computers to handle the trading.
Thing Six: Amazon Trying To Rule The Internet: Amazon’s bid to take over the internet is hitting some opposition. The company is trying to register domain names that include “.book,” “.author” and “.read,” the Wall Street Journal reports. The Author’s Guild, the Association of American Publishers and Barnes & Noble are opposing the bid, arguing that it would stifle competition. Companies like Google, Microsoft and Apple have also tried to apply for domain names with bizarre suffixes, and for some the goal is to later sell the suffix and make some money.
Thing Seven: Colorful Hedge Fund Manager Arrested: More than five years after fleeing a Spanish island with $500,000 stuffed in his underwear, fugitive hedge fund manager Florian Homm was arrested in an art gallery in Florence Friday. Yes that’s a true story. Homm allegedly defrauded investors in his hedge fund of $200 million, according to Bloomberg. If convicted, he could go to prison for as long as 75 years. Before he went into hiding, Homm was one of the most famous financiers in Germany, often appearing on television with a huge cigar just to remind everyone how wealthy he was, according to the New York Times. Though Homm acknowledged in a November interview with the NYT that he has been a “rogue operator” much of his life, he claims the charges he’s facing are based on lies.
Thing Seven And A Half: The Good News About Sitting In Traffic: Sitting in traffic may be terrible for you, but it’s good for all of us. The amount of time travelers spent in traffic has been going up in recent months, a sign the economy is feeling a boost, according to Businessweek.
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Calendar Du Jour:
Heard On The Tweets:
Probably the worst part of being a cop is when you have to arrest a baby.
— rob delaney (@robdelaney) March 11, 2013
Never buy anything someone in a suit tries to sell you.
— Becky Dorf (@bthedorf) March 8, 2013
I'm a triple threat. Especially if those threats are Halo, Mountain Dew and buffets.
— Shawn Garrett (@ShawnGarrett) March 9, 2013
Sex is like riding a bike: you can't do it on the road if there are too many nails.
— Zach Broussard (@ZachBroussard) March 10, 2013
What people forget is they have the power to stop talking about south by southwest right this second.
— claudia cogan (@blaudiablogan) March 10, 2013
-- Calendar and Tweets rounded up by Mark Gongloff