In the News, 3-30-15

From Bloomberg:

Latest Products At The Wearable Device Technology Expo

FDA 'Taking a Very Light Touch' on Regulating the Apple Watch

With Apple Inc. and fellow Silicon Valley companies edging further into health care, the U.S. agency in charge of oversight says it will give the technology industry leeway to develop new products without aggressive regulation.

Bakul Patel, who oversees the new wave of consumer-focused health products at the Food and Drug Administration, said most wearable gadgets such as the soon-to-be-released Apple Watch and health-focused applications for smartphones have a way to go before warranting close scrutiny from the agency. (Read here)

<p>A lagging indicator.</p> Photographer: Scott Olson/Getty Images

Wages Will Dominate Big Week for U.S. Data

This week’s heavy load of economic data releases from the U.S. (and, to a lesser extent, China and the euro area) comes at a particularly opportune moment. Views about the prospects for the U.S. economy are all over the map. There also is significant divergence in the assessments of the effects of a probable increase in interest rates this year by the Federal Reserve. And there is an even greater diversity of opinion about whether the U.S. will help pull the rest of the world out of the doldrums or, instead, be dragged down. (More)

Big Oil Pressured Scientists Over Fracking Wastewater's Link to Quakes

In November 2013, Austin Holland, Oklahoma’s state seismologist, got a request that made him nervous. It was from David Boren, president of the University of Oklahoma, which houses the Oklahoma Geological Survey where Holland works. Boren, a former U.S. senator, asked Holland to his office for coffee with Harold Hamm, the billionaire founder of Continental Resources, one of Oklahoma’s largest oil and gas operators. Boren sits on the board of Continental, and Hamm is a big donor to the university, giving $20 million in 2011 for a new diabetes center. Says Holland: “It was just a little bit intimidating.” (More)

You May Want to Pay Extra Close Attention to the Economic Data This Week

The beginning of the month always has a lot of economic data. From the Non-Farm Payrolls report to ISM to Factory Orders, there's a ton for people to sift through. Typically the Jobs Report, which is scheduled to be released on Friday, sucks up the vast majority of attention. (Continue)

Frigid February Saps Spending as U.S. Consumers Stay Home

Consumer spending barely rose in February as frigid temperatures kept households away from malls and automobile dealerships, adding to signs the U.S. economy slowed at the start of 2015.  (More)

Economic Confidence Shows Euro-Area Recovery Defies Greek Risks

Euro-area economic sentiment rose to the highest level in more than 3 1/2 years, adding to signs that the fragile recovery is stabilizing despite Greece’s struggle to secure funding.

An index of executive and consumer confidence jumped to 103.9 in March from a revised 102.3 a month earlier, the European Commission said Monday. The reading is the strongest since June 2011 and exceeds the median of 30 estimates in a Bloomberg News survey, which was for an increase to 103. (Read more)

London Restaurant Will Be U.K.'s First Where Diners Buy Tickets

A restaurant in London's Shoreditch is to become the first in the U.K. to introduce a system in which diners must purchase tickets in advance—as for a sporting event or the theater—rather than booking a table in the conventional way.

Clove Club Chef Isaac McHale said customers regularly fail to show up or else arrive in fewer numbers than specified on the reservation. In the future, guests will pay for meals when they book, and it will be their loss if they don't come along to eat. (Continue)

U.K. Banks Face China Slump, Deflation in Second Stress Test

The Bank of England will assess the resilience of Britain’s seven biggest banks against a slump in the Chinese economy, a further drop in oil prices and a prolonged period of deflation in its second set of stress tests.

Banks such as HSBC Holdings Plc and Barclays Plc will also be examined on their ability to weather shocks including “severe” market stress leading to reduced liquidity, the BOE said in a statement on Monday. Lenders must maintain a core tier one capital buffer of 4.5 percent of risk-weighted assets to pass, as well as a new 3 percent leverage ratio requirement. (Read more)

The Real Greek Bank Stress and Why It Doesn't Matter—Yet

 It is no secret that Greek banks have been losing deposits in recent months. Data released by the Greek central bank show deposits have plunged to their lowest level in 10 years.    


Banks Face Global Push to Prepare for Interest Rate Rise

Banks face a push from international regulators for stiffer rules on the capital needed to handle an increase in interest rates.

The Basel Committee on Banking Supervision is weighing updating its standards for capturing interest-rate risk on assets banks plan to hold to maturity, Stefan Ingves, the regulator’s chairman, said in an interview.

“We are working on interest-rate risk in the banking book,” Ingves said on March 27 in Frankfurt. “We are looking into that presently and we hope to put out something in this field fairly soon.” (Full article)

This Magic Number Can Make or Break You in China’s Stock Market

It’s the magic number in China, a figure that conjures up public companies and private fortunes.

The number is 23 — and it’s one of the most powerful forces in China’s $6.4 trillion equity market today.

As the Shanghai benchmark index posts the world’s biggest rally, 23 has become a ceiling for firms trying to tap into it. Even though market valuations have climbed, virtually no companies have gone public at prices of more than 23 times their earnings per share. (More)

                                    The Invisible Hand of Government

Free Speech Inc.

The most illuminating free-speech case of 2015 has nothing to do with political speech, or civil-rights protests, or hate speech, or any other issues we used to associate with the First Amendment. It has to do with an obscure provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act that directs the Securities and Exchange Commission to require companies to inform the public if their products use conflict minerals. (Read more)

China Loosens Home-Buying Rules to Counter Economic Slowdown

China announced steps today to make buying and selling a home cheaper, intervening to revive a slumping property market that’s weighed on economic growth and cut demand for commodities from copper to steel.

<p>In the eye of the beholder.</p> Photographer: BRENDAN SMIALOWSKI/AFP/Getty Images

Global Economy Is Now a Rorschach Test

After more than half a decade of inactivity on interest rates, theU.S. Federal Reserve believes economic conditions have improved enough that it can raise borrowing costs. The only question is when, rather than if, to move. 

Central bankers in the U.K, by contrast, are suggesting they could raise, or lower, or leave their key rate unchanged from the 0.5 percent level that's also prevailed for the past five years. Their lack of certainty should make the Fed less gung-ho in its rush to escape the so-called zero bound. (Continue)

<p>The costs of cost-cutting.</p> Photographer: Adam Berry/Getty Images

Low-Cost Airlines Are High Stress For Pilots

Andreas Lubitz, the co-pilot who last week steered a Germanwings flight into a mountainside, had a history of depression so debilitating that he left his pilot training program for six months in the late 2000s, according to Germany’s Bild newspaper. When he was ready to return, he had to pass a battery of psychological tests required for pilot certification, as well as another series of tests that were a prerequisite for his job at Lufthansa, which owns Germanwings. But in all likelihood, that was the last time Lubitz’s employer or government subjected him to a formal psychological evaluation.

Ritholtz's Reads: Tim Cook Leads Different

Welcome to the weekend. Pour yourself a mug of Guatemalan Antigua Valley coffee, and settle in for our long form Saturday morning reads:

  • At Kodak, Clinging to a Future Beyond Film (NYT)
  • Stanford’s Most Popular Class Isn’t Computer Science — It’s Something Much More Important. It’s Called “Designing Your Life,” A Course That’s Part Throwback, Part Foreshadowing Of Higher Education’s Future. (Fast Company)
  • The Deadly Global War for Sand (Wired)
  • How Chicago has used Financial Engineering to Paper over its Massive Budget Gap (Medium)
  • The Brain’s Empathy Gap: Can mapping neural pathways help us make friends with our enemies? (NYT Magazine)
  • Apple’s Tim Cook leads different (Fortune)



Inside Brookfield Place, the Swanky Mall Opening Near the World Trade Center

In the shadow of One World Trade Center, the colossal skyscraper in Lower Manhattan, lies a newly renovated luxury mall that hopes to be a mecca for swanky shopping.

Brookfield Place will open the doors to its glitzy new fashion stores and food marketplace on Thursday. Located in the building complex formerly called the World Financial Center, the project is four years and $300 million in the making, an ongoing saga that’s drawn much media attention for its ambitiousness. But though it's connected to one of the most expensive transit hubs ever built, the mall is actually aimed at locals. (More)

We Just Got Some Ugly Numbers out of Texas

There's been a lot of debate about how well the Texas economy will hold up in light of collapsing oil prices.

While it's just one datapoint, the latest Dallas Fed Manufacturing Index shows some trouble in the Lone Star State.

The general business activity index declined from -11.2 to -17.4 in March, vs expectations for a rise to -9.0. The February report also missed expectations, coming in at -11.2 from the previous reading of -4.4. (Read here.)

Natural Gas Advances in New York on Outlook for Cooler Weather

Natural gas futures rose in New York on speculation that cooler weather will boost demand, limiting gains in stockpiles of the power-plant fuel.

The East Coast and Midwest may see cooler-than-normal weather April 4 through April 6, according to MDA Weather Services of Gaithersburg, Maryland.

“We could see some upcoming injections disappoint,” said John Kilduff, partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “These temperatures are going to be below normal in April, which could drive demand.” (Continue)

Yuan Fell in Global Payment Ranking in February, Swift Says

China’s yuan fell two levels to a seventh place among the most-used currencies in the global payment system in February, according to the Society for Worldwide Financial Telecommunications.

The currency’s market share declined to 1.81 percent, a 20 percent decline from January, according to Swift, the financial-messaging service. The drop was likely due to fewer transactions during the one-week Chinese New Year holiday, the La Hulpe, Belgium-based organization said. (More)


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