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business newsWould A Government Shutdown Boost the Market?
Minyanville's daily roundup of some of the best commentary from around the Web.
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The Curious Capitalist
Link: Would A Government Shutdown Boost the Market?
"Wall Street and Washington haven't been getting along for a while. So perhaps it isn't a surprise that the stock market seems somewhere between indifferent and gleeful at the prospect of a possible government shutdown. Stocks are up today, even as the likelihood of a government shutdown seems to have climbed from no-way to probably. But maybe that the recent market climb is not that strange. In fact, if the shutdown were happen it could actually be a boost to the market. Here's why..." (Also read Debt Ceiling Woes: Four Investment Moves to Consider as Government Shutdown Looms.)
All Things Digital
Link: Dell Plans to Spend A Billion Dollars to Build 10 New Data Centers
"Dell is announcing a big push around cloud computing services today, and is promising to spend $1 billion in an effort to build 10 new data centers around the world between now and 2013 as key aspect of it. The new data centers would add to its sizable footprint of 36 data centers already in operation. While it won’t yet say where they’ll all be, but, some will be in Asia, a few in the Europe-Middle East-Africa region, and at least three will be in the US. Steve Schuckenbrock, president of Dell Services, wouldn’t go into any further detail than that. He did say Dell selected the locations based on a combination of where it already has a data center presence and where it sees new demand emerging."
The Baseline Scenario
Link: Big Banks Have a Powerful New Opponent
"As a lobby group, the largest U.S. banks have been dominant throughout the latest boom-bust-bailout cycle – capturing the hearts and minds of the Bush and Obama administrations, as well as the support of most elected representatives on Capitol Hill. Their reign, however, is finally being seriously challenged by another potentially powerful group – an alliance of retailers, big and small – now running TV ads (by Americans for Job Security), web content (by American Family Voices), and this very effective powerful radio spot directly attacking “too big to fail” banks. The immediate issue is the so-called Durbin Amendment – a requirement in the Dodd-Frank financial reform legislation that would lower the interchange fees that banks collect when anyone buys anything with a debit card. Retailers pay the fees but these are then reflected in the prices faced by consumers." (Also read Factchecking Banks' Dubious Claims on Interchange Fees.)
Freakonomics
Link: Yankees-Red Sox: Boston Rough Start Good News for Wall Street?
"There’s always fun to be had comparing baseball results to market returns, especially beginning two years ago, when a study by Standard & Poor’s Capital IQ found that, from an economic standpoint, we should all be Yankees fans: the year after they win the World Series, the S&P averages double-digit gains. Not bad, considering the Yankees have 27 titles. The Red Sox, however, have a much worse market record. The last time Boston won the World Series in 2007, the S&P crashed 37 percent, as reporter Joe Flood reminds us. Of course, they won it in 2004 as well. The S&P returned a healthy 7 percent in 2005."
Real Time Economics
Link: How the Year of the Rabbit Makes Trade Data Squirrely
"Movable feasts give U.S. government statisticians fits. Because holidays like Easter, Labor Day and Thanksgiving don’t arrive on the same date from year to year, adjusting for the twists in the economic data they bring about, like jumps in marshmallow Peeps sales, is a difficult thing to do. But it is an Asian holiday, not an American one, that has lately been causing the biggest headaches. As China’s role in the world economy has grown, so too have the swings in global trade around Lunar New Year Holiday, notes Goldman Sachs economist Andrew Tilton. Chinese manufacturers ramp up production ahead of Lunar New Year, which can come any time from late January to mid-February. Then once the holiday starts, the country goes idle."
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