Bottom line: The headline data look very weak, but the details show a much more mixed picture. This first estimate will probably be revised upward over the next two months. In any event, the weakness should be offset in the fourth quarter, as exports rebound.
Bottom line: The October CPI rose 0.3%, much more than the consensus forecast of 0-0.1%. However, other than highlighting yet again the inability of the forecasters to handle the fluctuations stemming from seasonal factors, the latest data have no long-term significance. But they are sufficient to neutralize the yammering on the part of some analysts for another interest rate cut – at least until early 2014.
There is, without doubt, a growing sense of concern among Americans of all political leanings, in all parts of the country, with regard to the fecklessness of the Obama Administration. This goes beyond partisan politics – obviously, those opposed to Obama and his policies are angry, especially over the disaster that ‘Obamacare’ is proving to be, but it is the dismay of his supporters that is a more telling indicator that something is very wrong.
It is therefore all the more remarkable that the more interesting part of the American political system is its conservative wing, traditionally centred on and in the Republican party. Perhaps this is the case because it is on that wing that a major ideological debate is taking place, whereas on the liberal wing there is no parallel struggle, at least on the same scale.
Bottom line: This was the best set of trade data in a long time, probably since mid-2012. The headline is that the trade deficit shrank significantly in October, but the key development responsible for that outcome is the sharp recovery in high-tech exports in the August-October period. There are other positives, notably that imports are also rising, led by machinery and raw materials.
Bottom line: The improving trend in the budget deficit remains intact. The deterioration in October was largely caused by seasonal factors, which offset the exceptionally strong September data.
Yesterday (Thursday) saw the long-awaited arrival of Twitter on the New York Stock exchange. Following weeks of intense build-up toward its IPO (initial public offering), the price of the company’s shares to be sold in the offering was raised from below $20 –just last week – to an expected $22-$24 and finally to $26 in the actual ‘pricing’, which took place on Wednesday evening.
Israel is faced by a fearsome new threat – the ‘brain drain’. The smartest people in the country, tenured rofessors and those with the potential to be prominent academics or researchers and developers in ‘cutting edge industries’, are fleeing in droves, thereby weakening – possibly fatally – Israel’s high-tech sectors and the science that underlies them.
That, at least, is the impression that many people have, both in Israel and around the world. Supposedly convincing proof of the seriousness of this threat is to be found in the number of former Israelis who have won Nobel prizes over the years – including this year. These people, now ensconced in America’s elite universities, could have been in Israeli institutions and, according to the fashionable criticism, that’s where they should have been and would have been, had Israeli governments done their job and been focused on the country’s long-term interests.
(This artice was originally published at Knowledge@wharton)
Over the summer, Israel’s regulatory agencies unveiled a number of new directives on their charges, telling them what to do, and, especially, what not to do. The policies, which target the financial sector and others, have emerged at a time when the population is becoming increasingly restive and critical of the scions of Israel’s big business community. Now, observers are debating who will be the winners and losers in this new environment.
David Zaken, supervisor of banks at the Bank of Israel, issued the latest set of restrictions regarding mortgage loans in an effort to stop homebuyers — especially young couples — from burying themselves in debt as they attempt to get a foot on the housing ladder. Next, the agency fired off a directive to banks on the controversial subject of remuneration packages for senior executives. Neither of these topics is new; on the contrary, Zaken has been trying to constrain the mortgage boom since 2010, so far with little success. The latest move on executive pay similarly reflects the failure of previous efforts.
Anyone following the news this week will be aware that the United States is in trouble. Its vaunted political system is driving it to ungovernability and whilst the monied elite still finds ways to benefit from the slide into self-imposed paralysis, the overhwelming majority of the people are paying a steadily-rising price.
For Israelis, even more than for others among America’s traditional allies, this process cannot but generate deep concern — indeed, after the latest round of antics in Washington, alarm is justified and even required.
President Obama finally got around to formally announcing the nominee for the post of Chairman of the Board of Governors of the Federal Reserve Bank – the position commonly referred to as ‘the second most powerful in the United States”. Note that this was not HIS nominee, because the man Obama wanted for the job, Larry Summers, backed out of the race a few weeks ago. Summers felt he had no choice, because he had no chance. Despite Obama’s clear blessing, the Democrats in the Senate – Obama’s own party, mark you – made it clear that they would not support his nomination. Having thus been loudly and very publicly slapped in the face by his own party, Obama was obliged to nominate Janet Yellen, whom he does not want but who will sail through the nomination process, thanks to the Democratic majority in the Senate.