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Thing One: All About The Arithmetic: The election is over, but our politicians are still fighting over numbers.
We just went through an election season that involved endless arguments over the reality of polling data and analysis and whether they were "skewed" to favor the Democrats. The election also featured debates over the math in Mitt Romney's tax plan, which most experts agreed did not, how do you say, add up. The election was decided in favor of those Democratic polling numbers and against Romney's tax math. Nevertheless, now that we are consumed with panic over the approaching "fiscal cliff" of tax increases and spending cuts looming at the end of the year, Republicans are trying to get the public to buy the same tax math it rejected little more than a week ago.
Rather than raise tax rates on the highest-earning Americans as President Obama would do, they propose raising revenue by closing loopholes and deductions -- the Mitt Romney tax plan, in other words. Obama observed this in his press conference about fiscal-cliff talks yesterday, saying the Republican math on taxes "tends not to work." But wait! The Republicans would also have us believe that further revenue can be raised by cutting taxes, Reuters writes, which according to their theory will spread so much joy throughout the economy that the government can just step outside with a burlap sack and catch the dollars falling from heaven. This math, more commonly known as "supply side" or "trickle down" or "bullshit" economics, has also been disproven repeatedly.
Obama mostly stuck to his guns yesterday, which the Wall Street Journal says helped give the stock market a giant case of the sads. But he also left a little bit of wiggle room, the WSJ notes, giving Republicans hope that he may yet compromise. His meeting with CEOs to discuss the fiscal cliff apparently did not devolve into shouting and dish-throwing, the New York Times writes, which is bad for America, because many of these same CEOs tend to be hypocrites with bad ideas about the deficit. Is Obama about to abandon the math that won him reelection?
Thing Two: Meet The New Boss, Similar To The Old Boss: China just wrapped up its own "election" of sorts, one much simpler and cheaper than America's. The results were about the same, however: Nothing much changed. There's no need for a Nate Silver in China: There's no polling, and no voting. Instead, Xi Jinping was handpicked long ago to take over the country from Hu Jintao, and that's what happened yesterday in a formal ceremony introducing the country to its new leaders. Reuters notes the new leadership tends to the older and more conservative side, meaning we can expect little in the way of economic reforms. That could eventually be a bit of a problem for all of us, given that China has the world's fastest-growing economy, one that has been mired in a slowdown recently.
Thing Three: FHA FUBAR: Four years after the financial crisis and in the middle of a modest housing recovery, the Federal Housing Authority may need a bailout for the first time in its history, the Wall Street Journal's Nick Timiraos writes. The agency's annual report, due later this week, is going to show a capital shortfall as a result of a whole bunch of mortgage loans gone sour, Timiraos writes. Any need for an infusion of fresh cash would almost certainly spark a political firestorm, as Republicans want to scale back the FHA's involvement in the market.
Thing Four: JPMorgan Trading Unit In Penalty Box: The Federal Energy Regulatory Commission slapped the energy-trading unit of JPMorgan Chase with a six-month suspension yesterday, accusing it of submitting false information to regulators during a probe of alleged power-market manipulation in California. It's the latest muscle-flexing by FERC, which recently hit Barclays with a $470 million manipulation fine, and the latest regulatory headache for JPMorgan Chase, which is also involved in the Libor scandal and under investigation for its London Whale trading debacle.
Thing Five: Seventy New Gods Walking Among Us: Goldman Sachs named 70 new partners yesterday, a designation that confers on them a Wall Street status similar to those of made men in the Mafia. Their base salary soars to $900,000, they join a stock bonus pool, and they get First Night rights with junior employees' wives. All very medieval. Sadly, though, because business is not so great on Wall Street, this was the smallest number of new partners at Goldman since it went public in 1999, Bloomberg writes.
Thing Six: It Was Corzine's Fault: Republicans on the House Financial Services Committee are expected to say today that former Goldman Sachs partner Jon Corzine was partially responsible for the collapse of MF Global, the brokerage firm he ran after he was Governor of New Jersey. The Democrats on the House committee aren't expected to endorse the criticism of Corzine, a fellow Democrat, The New York Times writes.
Thing Seven: BP Soon To Get Stinging Wrist-Slap: BP is close to a settlement with the Justice Department over the Gulf oil spill in 2010, Reuters writes. BP will plead guilty to criminal misconduct and pay a record fine, according to Reuters. Currently the record for a criminal penalty is held by Pfizer's $1.3 billion fine for marketing fraud, Reuters says. To help you put BP's eventual penalty in perspective, the company made more than $234 billion in revenue and nearly $34 billion in gross profits last year.
Thing Seven And One Half: Temporarily Joy In Mudville: The sad-sack New York Mets struggled through yet another miserable season in 2012, but their one source of happiness was the performance of knuckleball pitcher R.A. Dickey, who cruised to a 20-6 record with a 2.73 E.R.A. and led the National League in strikeouts. On Wednesday he won the NL's Cy Young award, making him the first knuckleball pitcher ever to win the honor. And of course the razor-sharp Mets ownership, who gave all their money to Bernie Madoff, probably can't afford to keep him next year.
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Calendar Du Jour:
8:30 a.m. ET: Weekly Jobless Claims for Nov. 10
8:30 a.m. ET: Consumer Price Index for October
8:30 a.m. ET: Empire State Manufacturing Index for November
10:00 a.m. ET: Philadelphia Fed Index for November
Heard On The Tweets:
BREAKING: A man named David Schwimmer was just made partner at Goldman Sachs.
— Max Abelson (@maxabelson) November 14, 2012
Two theories:1. Romney really believes that 47% stuff, & it wasn't a gaffe.2. Romney believes that rich donors believe in that 47% stuff.
— Justin Wolfers (@justinwolfers) November 14, 2012
"28 more years!" -Obama's dog Bo.
— Kumail Nanjiani (@kumailn) November 14, 2012
Writing a scathing Yelp review of my daughter's pretend ice cream shop. I love her but the people deserve the truth.
— Downtown Josh Brown (@ReformedBroker) November 14, 2012
-- Calendar and tweets rounded up by Alexis Kleinman.
And you can follow me on Twitter, too: @markgongloff