The Ticker Quick Views on Politics, Economics and Finance
The diplomatic spat between Russia and Azerbaijan over the Eurovision song contest illustrates a strange truth: In the lands of the former Soviet Union, bad pop is big politics.
To an uninitiated viewer, the Eurovision contest is a silly display of overblown musical schlock that bears little relation to actual pop charts. Other than Swedish band ABBA and Swiss siren Celine Dion, few winners in its 57-year history have gone on to distinguished careers.READ MORE
Earlier today Bloomberg View columnists Margaret Carlson and Ramesh Ponnuru met online to chat about the upcoming election in New York City and the comeback of Anthony Weiner, whose political career seemed dead in the wake of his "sexting" scandal two years ago.
Margaret: I woke to good news for journalists: Former Representative (I omitted the "disgraced" which almost always appears before "former") Anthony Weiner is running for mayor of New York. Was Weiner encouraged by Mark Sanford's win in South Carolina? I think there are differences, other than geography, of course. New York isn't nearly as liberal as South Carolina's First District is conservative. Those voters weren't prone to elect Stephen Colbert's sister, who acted as if her brother's show was all the campaigning she needed. And in the South, there is more forgiveness in general. Most country songs are about sinning and confession and redemption.READ MORE
Anyone expecting Federal Reserve Chairman Ben Bernanke to tip his hand on reducing the pace of asset purchases will have to wait a few more months. Bernanke's testimony to the Joint Economic Committee of Congress today gave no hint the Fed was ready to pare its monthly purchases of $85 billion of Treasuries and mortgage-backed securities until the outlook for employment improves.
Here's a recap of what he said in his prepared testimony and the Q&A, interspersed with a few comments of my own. You can decide for yourself what it means for the next meeting on June 18-19:READ MORE
You have to wonder how long an industry that underperforms the broader market will stay around.
Goldman Sachs Group Inc. published a chart today comparing the performance of hedge funds that invest in equities with the major stock-market indexes. Based on Goldman's research, the average hedge fund is up just 5.4 percent so far this year. During the same period, the Standard & Poor's 500 Index has risen 15.4 percent, and the average mutual fund has gained 14.2 percent.READ MORE
The Walt Disney Company announced yesterday it is eliminating 300 to 400 jobs at ESPN, the network that brings us “Sunday Night Baseball,” “Monday Night Football” and five other nights of chubby sportswriters arguing loudly over who loves golf the most.
It’s a curious cutback considering just how central the division has been to Disney's soaring fortunes of late. The House of the Mouse announced on May 8 that profits were up 32 percent in the second quarter, on net income of $1.15 billion. While booming business at the company's theme parks earned the headlines, earnings from cable networks such as ESPN and the Disney Channel were up 15 percent, with the sports channel’s advertising on track to jump by 10 percent in the current quarter.READ MORE
The International Monetary Fund has decided to stop beating up on the U.K. Or that's how it looked when the fund's first deputy managing director, David Lipton, launched the latest Article IV consultation on the U.K.
Some slightly better-than-expected recent economic news probably contributed to the change in tone, and no doubt there was some arm-twisting from the U.K. government. But it may also reflect a simple recognition of the art of the possible.READ MORE
Tunisia's Islamist government has turned against the radical Ansar al-Sharia group. I think it is a healthy sign.
Last week, the government banned Ansar from holding an annual conference to which the group had hoped to attract tens of thousands of followers from around the region. On Sunday, when the Salafists tried to meet in defiance of the ban, the police intervened aggressively, and a protester was killed. Ansar's spokesman was arrested (its leader was already in hiding), and Prime Minister Ali Laraydeh, for the first time, said the group "has ties to and is involved in terrorism."READ MORE
President Barack Obama hails it. Super Bowl commercials celebrate it. But is it real? I refer, of course, to the vaunted recovery of the Detroit automakers. Do you see the resurgence in the data as well as in the high-gloss ads? Not really.
There's a recovery of sorts. Sales of domestic autos are running at 400,000 to 500,000 a month. Americans spent $114 billion on them last quarter. In both cases, that's a return to pre-recession levels. But it's probable that the rebound is merely cyclical rather than the start of the secular revival that many have been quick to proclaim.READ MORE
Paula Dwyer & Jonathan Weil
Editor Paula Dwyer and columnist Jonathan Weil met online today to discuss JPMorgan Chase & Co.'s shareholder vote and next steps for the company.
Dwyer: Jamie Dimon just won today's JPMorgan Chase shareholder vote, on whether he should give up his job as chairman. The margin of victory was bigger this year than last. Only 32.2 percent supported a split, versus 40 percent in 2012.READ MORE
The Internal Revenue Service's Inspector General released a report last week detailing how the agency inappropriately singled out conservative nonprofit groups for investigation. Among the IRS's many problems, the report said, were its employees' confusion about the two sections of the tax code governing many nonprofit organizations that are active on public policy: “We also believe that Determinations Unit specialists lacked knowledge of what activities are allowed by I.R.C. § 501(c)(3) and I.R.C. § 501(c)(4) tax-exempt organizations.”
On Friday, the Thomas More Society, a conservative public interest law firm, released documents providing more evidence that the IRS had agents enforcing laws they didn’t understand. The society released communication between three anti-abortion groups (its clients) and the IRS regarding their 501(c)(3) status. The questions the IRS asked often reflected a misunderstanding of the law.READ MORE
Last week, when President Barack Obama fired Steven Miller, the acting Internal Revenue Service commissioner, some people wondered whether he was a fall guy. He had only been running the IRS since November, meaning he wasn’t in charge when the agency was harassing conservative nonprofit groups.
If the president was looking for someone at the IRS to fire, Miller was his only option. Other bad actors, like Lois Lerner, who directs the IRS division in charge of overseeing tax-exempt organizations, are civil servants whose firing must go through a process removed from the White House.READ MORE
Perhaps it's not surprising that the company that redefined personal technology, entertainment and communications would also redefine the meaning of a tax haven.
A new U.S. Senate report on Apple's offshore tax strategy describes more than just a byzantine structure of subsidiaries. It also shows the company claims that three of those subsidiaries are tax residents of nowhere -- not Ireland, where the subsidiaries are nominally located, nor the U.S., from which a layman could be forgiven for concluding those subsidiaries are run.READ MORE
Peggy Noonan's latest column in the Wall Street Journal is an exercise in ahistorical punditry.
Writing about the triple threat to President Barack Obama posed by the Internal Revenue Service's targeting of conservative groups seeking exemption from taxes -- along with the Justice Department's subpoenas of journalists' telephone records and the attack on the U.S. mission in Benghazi, Libya -- Noonan writes: "We are in the midst of the worst Washington scandal since Watergate."READ MORE
The knives are out -- and the media feeding frenzy is on -- for Steven A. Cohen and his $15 billion hedge fund, SAC Capital Advisors.
The firm last week told its investors in a letter that it no longer will cooperate unconditionally with federal investigators, and that the updates it provides about the progress of the government’s probe may be scant. The New York Times has reported that Cohen received a subpoena to testify before a grand jury.READ MORE
Virginia Attorney General Ken Cuccinelli is this year’s Republican nominee for governor, but he might be too extreme to win -- even against Democrat Terry McAuliffe (himself not known for generating great press). This weekend, the Virginia Republican Party came up with an unusual strategy for making Cuccinelli seem reasonable and moderate: give him a running mate who is even more extreme.
Cuccinelli’s running mate will be Bishop E. W. Jackson, a black minister with no experience as an elected official and a penchant for saying outrageous, hateful things. Last year, Jackson ran in a Republican primary for U.S. Senate and got less than 5 percent of the vote. Jackson won this time because the Virginia Republican Party picks its candidates for state constitutional offices through a convention of party activists instead of a primary. If you were an anonymous British political insider, you might say the convention process empowers the party’s “mad, swivel-eyed loon” element.READ MORE
Ben Bernanke, the chairman of the Federal Reserve, recently expressed concern that investors were taking too much risk. To some investors, this was heavy with irony -- most of the risk-taking can be attributed to the policies that Bernanke has pursued during his tenure.
Nayarana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, reinforced this point May 17. He said the Fed's policies would produce "financial market phenomena" that "pose macroeconomic risks." He made similar arguments last month in a speech I covered here and here. I'm not going out on a limb when I say that we've all endured enough "phenomena" for a while. Wouldn't it be nice if there were an alternative?READ MORE
If I were an ambitious Republican in Congress, I would focus on the one truly egregious scandal of President Barack Obama's administration.
It's not the White House response to the attack in Benghazi, Libya. The smart money is already fleeing that one. It's not the Internal Revenue Service episode, either. The IRS went off the rails, and Republicans will get political mileage from it. But the notion that White House political staff would direct IRS employees to crack down on citizen Tea Party groups is more than dubious. Democrats have had no greater allies in securing their Senate majority or in undermining Republican credibility by transforming the House of Representatives into bedlam.READ MORE
Tumblr Inc. users were not too happy about the news yesterday that Yahoo! Inc. had approved a $1.1 billion bid to buy the blogging platform, popular among the creative, the young and the social-media savvy.
Searching the tag “Yahoo” on Tumblr uncovers legions of the discontented: GIFs galore -- of a guy punching a screen, a “Tumblr" cat fighting a “Yahoo” baby and new terms and conditions to kill creativity. An image of Tumblr Chief Executive Officer David Karp stamped with the scarlet seal of “traitor” had been reblogged more than 30 times by yesterday night.READ MORE
In my column this week, I discuss some steps President Barack Obama could take to get past the current spate of faux scandals threatening to undermine his second term.
Forced resignations of high-level officials after controversies or scandals aren't uncommon in the modern American presidency. Some of the closest presidential advisers over the past half century or so have been forced out.READ MORE
The IRS scandal offers plenty of reason to be upset. It also contains some nuggets of good news: The inspector general did his job. The administration fired the agency's acting commissioner. And IRS investigators may now think twice before applying partisan filters.
In the end, the system worked.READ MORE