9.25.14: Political Risk Goes AWOL
Today and Tomorrow in Business
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U.S. warplanes are hitting oil refineries operated by Islamic State in eastern Syria, hoping to shut off the money spigot -- some $2 million a day in oil sales -- that finances the terrorist group. And yet oil prices are declining instead of shooting through the roof like in past Mideast flare-ups. North Sea Brent crude has been under the symbolic $100 a barrel since Sept. 5. Weak global demand and plentiful supply (including from the U.S. and Libya) explain why.
Is Kissinger Wrong?
In his new book, Henry Kissinger describes a scary world in which disorder threatens Western prosperity. Violence in Ukraine and the Middle East, tensions in the South China Sea and the Ebola outbreak in Western Africa all seem to vindicate him. In theory, multinationals are more vulnerable than ever. Yet none of the recent geopolitical turmoil has had much effect on companies or financial markets, the Economist concludes.
President Barack Obama may be reviled for his handling of the economy by political opponents, yet he is getting support from a surprising quarter: currency traders. The U. S. dollar, after one of its more prolonged weak spells, has emerged as the preferred currency for global investors, writes Landon Thomas in the NYT. The dollar hit a two-year high against the euro and a four-year high against the yen.
Sins of Low Wages
We all know the Thomas Piketty storyline: The wage gains of the U.S.'s top 10 percent have outstripped the bottom 90 percent's since 1982, the reverse of the trend in preceding decades. Yet this chart of the Piketty data that Matt Yglesias writes about on Vox.com is still startling.
All Change at Samsung
“Change everything except your wife and children.” Lee Kun-hee, the boss of Samsung, said that two decades ago at an emergency meeting with senior managers, the Economist reports. He wanted the conglomerate to stop churning out cheap products and focus on quality. It did -- and became one of the world’s leading companies. Now Samsung is again at a point in its 76-year history at which much has to change. Here at Bloomberg View, tech writer Katie Benner debuts with a Samsung piece that warns the company not to have Apple envy.
Gender Bias Interruptus
If the U.S. tech industry’s leaders are serious about gender diversity, they should break with the diversity industrial complex, writes Joan Williams, a professor at the University of California Hastings College of Law, in Harvard Business Review. Avoid token hires, sensitivity training, mentoring networks and other changes that focus on altering women’s behavior, she writes. When an organization lacks diversity, it’s not the employees who need fixing, it’s the business, says Williams.
What Lies Beneath
Sometimes a very negative headline number on an economic indicator masks good news lurking beneath, and today's durable goods figuresoffer a perfect example. Orders for long-lasting manufactured goods slumped in August as demand for commercial aircraft fell from record highs. More important, however, core capital goods, the proxy for business investment, showed that business spending continued to expand at a healthy pace.
Apple's No Good, Very Bad Week
After yesterday’s bendygate, Apple discovered the latest version of its iOS 8 mobile operating system was screwing up people’s iPhones, including disabling its phone service. Apple acknowledged the problems and quickly withdrew the software update. Today, Apple almost singlehandedly drove the stock market down. The S&P 500 closed down 1.6 percent in large part because Apple's woes triggered a broader fear factor.
Hackers launched attacks exploiting a newly identified Shellshock computer bug as news surfaced that an initial patch was incomplete, Reuters reports. Shellshock is a bug in a piece of software known as Bash, which runs many computers, servers and consumer devices. Bash could pose a bigger threat than the Heartbleed bug from April, cyber experts warned.
And Don't Forget
- U.S. gross domestic product, personal consumption and core inflation for the second quarter (final figures) will be released at 8:30 a.m. Friday in Washington.
- University of Michigan consumer confidence index will also come out Friday morning.
- Indian Prime Minister Narendra Modi meets with U.S. President Barack Obama.
Like scorpions in a bottle, media mogul Rupert Murdoch and Google founders Larry Page and Sergey Brin are fighting over which of their companies observes the higher digital moral code. Murdoch started the fireworks last week by arguing in a letter to the European Commission that Google "is a platform for piracy and the spread of malicious networks." He closed by saying Google will cause a "less informed, more vexatious level of dialogue in our society." Today, Google had a bit of fun with its response, saying "People probably have enough evidence to judge that one for themselves :)"
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Paula Dwyer at firstname.lastname@example.org