Ed’s Daily Notes for May 15th   3 comments

Bloomberg: Euro Growth Diverges; Strong Germany Offsets France

Bad news for Europe, but good news for Germany:

German economic growth accelerated more than economists forecast last quarter, providing fuel to help the euro area’s recovery offset an unexpected stalling in France and renewed slump in Italy.

Expansion in the region’s biggest economy accelerated to 0.8 percent from 0.4 percent in the the previous quarter, the Federal Statistics Office said today. Economists forecast 0.7 percent, according to the median of 40 estimates in a Bloomberg News survey. France, the second-largest economy, unexpectedly stagnated in the period, while Italy shrank 0.1 percent.

But things aren’t perfect in Germany either:

Growth in Germany was driven by domestic consumption by private households and the government, the statistics office said. Investment in construction and machinery also increased. External trade subtracted from growth with lower exports and higher imports than the prior quarter, the office said.

This is why I avoid Europe. On the other side of the Earth…

Bloomberg: Japan’s Economy Accelerated in First Quarter

Japan’s economy grew at the fastest pace since 2011 in the first quarter as companies stepped up investment and consumers splurged before the first sales-tax rise in 17 years last month.

Gross domestic product grew an annualized 5.9 percent from the previous quarter, the Cabinet Office said today in Tokyo, more than a 4.2 percent median forecast in a Bloomberg News survey of 32 economists. Consumer spending rose at the fastest pace since the quarter before the 1997 tax increase, while capital spending jumped the most since 2011.

Unfortunately, the reason for the dramatic improvement is a planned tax increase by the Japanese government. The future doesn’t look quite as bright:

The economy will contract 3.3 percent in the April-June period before expanding 2 percent the following quarter, according to a separate Bloomberg News survey conducted prior to today’s data.


When I first heard Jill Abramson was fired from her job as New York Times executive editor and managing editor, I gave it a shrug. Then I found out why:

…Abramson discovered that her pay and her pension benefits as both executive editor and, before that, as managing editor were considerably less than the pay and pension benefits of Bill Keller, the male editor whom she replaced in both jobs. “She confronted the top brass,” one close associate said, and this may have fed into the management’s narrative that she was “pushy,” a characterization that, for many, has an inescapably gendered aspect. Sulzberger is known to believe that the Times, as a financially beleaguered newspaper, needed to retreat on some of its generous pay and pension benefits; Abramson, who spent much of her career at the Wall Street Journal, had been at the Times for far fewer years than Keller, which accounted for some of the pension disparity. Eileen Murphy, a spokeswoman for the Times, said that Jill Abramson’s total compensation as executive editor “was directly comparable to Bill Keller’s”—though it was not actually the same. I was also told by another friend of Abramson’s that the pay gap with Keller was only closed after she complained. But, to women at an institution that was once sued by its female employees for discriminatory practices, the question brings up ugly memories. Whether Abramson was right or wrong, both sides were left unhappy. A third associate told me, “She found out that a former deputy managing editor”—a man—“made more money than she did” while she was managing editor. “She had a lawyer make polite inquiries about the pay and pension disparities, which set them off.”

Here we have the New York Times, the de facto mouthpiece for the modern progressive movement, caught in a blatant act of sexism. The irony of replacing her with a black man isn’t lost on me: It rings of the 2008 Democratic presidential race.

Don’t get me wrong: I can appreciate the business aspect of their decision to pay her less. The New York Times isn’t as profitable as it used to be (that is putting it mildly). Unfortunately, this makes them look like hypocrites, even as it displays an ugly side of the modern progressive movement, where race takes precedence over sex. What would the New York Times say if Fox News had been caught in this scandal? I doubt they would have accepted the same excuses they used.


3 responses to “Ed’s Daily Notes for May 15th

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  1. http://www.cnbc.com/id/101673552

    I read or listen to Crammer every 10 days to two weeks. For some reason his headline caught my attention today. I thought his piece was interesting (not talking about a stock but did take the time to plug Geithner’s book). Basically he is asking the question, “Has the Great Recession changed the mind set of the average American?”

    In the past: interest rates down; stocks go up and rising inflation rate; then rising interest rates

    Today: interest rates down; must be a recession just around the corner and everyone bails the stock market

    He also uses this fact: Spain ten year bonds pay 2.8% while U.S. bonds pay 2.5% — why would anyone buy Spanish bonds with all their risk when you only gain 0.3% more in interest

    • Latetom,
      Ask yourself who is buying these bonds? In many cases, it’s central banks. In the case of Spain, it’s probably the ECB.

      On top of this, most banks are required to have certain levels of tier 1 capital in reserve. For most banks around the world, tier 1 capital usually consists of a lot of their own country’s bonds. In addition to the ECB, Spanish banks are buying a lot of Spanish bonds.

      • Must be buying them all to force the interest rate from +7% to 2.8%. And, if the central banks buying is forcing the interest rate down wouldn’t it make since when they stop buying the rate would go up? Oh yea, the U.S. Fed has significantly reduce the amount they are buying and rather than the rate going up it went down.

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