Browse by Tags

Global Economic Watch » All Tags » Bloomberg (RSS)

KnowNOW!

Global Economic Watch

Syndication

Recent Posts

Tags

View more

Other Useful Blogs

Archives

  • Giving Inventiveness its Due

    There are those who think that GDP is limited as a measure of a nation's progress. Bhutan, for example, has its GNH: Gross National Happiness. Could there be a way to measure inventiveness? If there were, Nathan Myhrvold would surely get on board and push that measure as a way to forecast future economic health. In a column for Bloomberg , Myhrvold--former chief strategist and chief technology officer at Microsoft, and founder and chief executive officer of Intellectual Ventures--argues that inventiveness and innovation are difficult to measure, and therefore get short shrift by economists. The economy of the world is not based on the simple interplay of capital and labor. Sure, these are involved. But they are secondary characteristics, not fundamental ones. Macroeconomists are often said to have their fingers on the pulse of the economy, and that’s an apt analogy. A pulse is a decent secondary indicator of life because blood flow is one prerequisite for the body’s survival. But the pulse is a weak and incomplete measure of life. A brain-dead patient, after all, may have a pulse even though the person’s life is over. Conversely, a machine can drive a pulse without giving life. So while it’s all well and good to measure the flow of capital and the markets for labor, don’t mistake this data for the forces that really drive growth, which are inventions (or, if you prefer, ideas) and the ways that they are made real. In response to these forces, capital is deployed and labor is expended. Physics is obsessed with conservation laws; mass and energy can be neither created nor destroyed. Economics, on the other hand, obsesses about growth and recession, in which economic value is explicitly created and destroyed. Invention is, directly or indirectly, a primary source of the value we call growth. Yet economists give invention short shrift. That is partly because they are still hazy about the origin of inventions. I find talking to economists about invention’s role in the economy a bit like talking to fourth graders about where children come from. A smart fourth grader can tell you all about how kids progress through elementary school. They can even tell you about infants, and that mommy’s belly gets big before one appears. But how and why the spark of conception occurs may be a mystery. Read Invention Is the Mother of Economic Growth here .

  • Self-Employed no More: Slowdown in Job Creation Among Entrepreneurs and the Smallest of Firms

    Bloomberg News reporters Anna-Louise Jackson and Anthony Feld write that at least a million formerly self-employed Americans, aggregate, have lost their businesses since the start of the recession. This knocks down one silver-lining narrative of the global economic crisis: that more people will take the opportunity to work for themselves as big corporations shed jobs. The 18-month contraction that started in December 2007 initially resulted in more would-be business owners, as the number of people who work for themselves grew to 16.3 million in July 2008 from 15.7 million at the end of 2007, according to data from the Bureau of Labor Statistics. Since then, the total has fallen about 10 percent to 14.7 million in July, the data show. Employer businesses - those that provide work for individuals including the founder - "have been starting in fewer numbers, with fewer workers and growing at a slower pace than in the past," according to Robert Litan, a vice president at the Kauffman Foundation, which supports research on startups. "Therefore, these entrepreneurs are generating increasingly fewer new jobs for the U.S. labor market." The number of new employer businesses dropped 24 percent to 505,473 on an annual basis in 2010 from 667,341 in 2006, according to Litan, who co-wrote a report published in July on small-business job creation. Read Economy knocks self-employed out of business here . The Kauffman Foundation report to which the article refers provides helpful detail and analysis of the loss of jobs among small businesses and startups. We'll share just one chart from the report that illustrates the central point of Jackson and Feld's reporting: Read Starting Smaller; Staying Smaller: America’s Slow Leak in Job Creation here .

  • The Story Behind Bloomberg's Environmental, Social, and Governance Data

    If you have a Bloomberg terminal in your office then you are able to access all sorts of data on companies. And for the last couple of years you have been able to see ESG data on companies. ESG stands for environmental, social, and governance. And, according to Fast Company 's Paul Tullis , the ESG ratings were added after Bloomberg's susatainability director, Curtis Ravenel, stumbled across such ratings while working to make Bloomberg's operations more green . Ravenel came across an increasing number of clients (mainly in Europe, Tullis notes) that wanted more sustainability data. But not for egalitarian reasons. Tullis writes: If a company treats its employees well, for instance, it should have less turnover and lower HR costs; if a manufacturer gets serious about safety, it can avoid expensive lawsuits. There's increasing evidence -- and, correspondingly, a growing belief among portfolio managers -- that companies taking such factors into account are forward-thinking and well managed, and therefore places investors should consider. The biggest indicator in the ESG matrix right now is environmental impact. "The financial community likes the E because it's easy to quantify," Ravenel says. "And within E is the big C: carbon." And within that C is another C: cost. Some European countries, such as Sweden and Denmark, tax the carbon emissions of companies with offices there. The EPA's rules to regulate CO2, which went into effect January 2nd, will affect many American balance sheets. If companies wake up one day to find it costs $15 to emit a ton of CO2, a financial analyst considering ExxonMobil would see it emitted 128 million metric tons in 2009. That adds nearly $2 billion to the oil giant's operating costs -- hardly extra-financial data. Ravenel used this kind of argument to persuade Bloomberg to add ESG data to its terminals. His team spent countless hours assembling and entering data into the system (often by hand) before going live in July 2009. Today, when Bloomberg's 300,000 market-savvy customers turn on their terminals in the morning, they can see ESG data such as greenhouse-gas intensity per sales, water usage, employee fatalities, toxic discharge, and more than 100 other indicators as part of their basic package alongside the rest of the Wall Street alphabet soup. (The ESG data does not cost extra.) And investors are using it: In the second half of 2010, 5,000 unique customers in 29 countries accessed more than 50 million ESG indicators via Bloomberg's screens -- a 29% increase over the first half of last year. "We expect that trend to continue," Ravenel says. Read Bloomberg's Push for Corporate Sustainability here .

  • ADP Payroll Report: US Companies Added 297,000 Jobs in December

    ADP just released its December payroll report, and it shows a big boost in private sector hiring. Bloomberg 's Timothy Homan reports that companies "boosted payrolls" more last month than any previous month since the survey began in 2001. Seasonal hiring always makes December payroll numbers a bit different from other months, and the ADP report only includes private sector jobs, but this is likely welcome news ahead of Friday's Labor Department jobs release. Homan: Employment increased by 297,000, exceeding the highest projection in a Bloomberg News survey, after a revised 92,000 rise in November, according to figures from ADP Employer Services. The median estimate in the Bloomberg survey called for a 100,000 gain last month. Faster job growth will fuel the income gains necessary to further spur consumer spending, which accounts for about 70 percent of the economy. A Labor Department report in two days will show companies added 150,000 workers last month and the unemployment rate eased to 9.7 percent, according to the Bloomberg survey median. Read the full article here .

  • Black Friday Retail Sales Rise Only Slightly, But Overall Data Encouraging

    ShopperTrak reports that sales at retail outlets increased 0.3% on Black Friday 2010 over Black Friday 2009. Not exactly a sharp increase--the increase from 2008 to 2009 was 0.5%. But when you take a look at other factors, there is a lot for retailers to like about holiday shopping so far: ShopperTrak's data shows early holiday sales and door buster promotions impacted Friday's performance as the company saw some unexpected strength in early November - as sales and traffic for the first two weeks of the month through Nov. 13 increased 6.1 and 6.2 percent respectively versus the same two week period in 2009. ShopperTrak founder Bill Martin says this early boost could impact retail performance beyond Black Friday and into the weeks leading into Super Saturday. "Retailers were very conscious of driving traffic early in November and in doing so some might have thinned Black Friday spending a bit," Mr. Martin said. "The reality is we have a deal driven consumer in 2010 and that consumer responded to some of the earliest deep discounts we've even seen for the holidays. Additionally, a percentage of retailers concentrated on pushing folks to their Websites with various online only sales which most likely influenced Black Friday performance as well." Martin continued: "That being said, we still saw a record amount of money spent on Friday so it's hard to say Black Friday wasn't a success, it's just not the success we saw in the mid 2000's when the day really became a phenomenon with the American public. And if retailers continue the pattern of early sales and online promotions, this could be the new norm in Black Friday performance." While sales were essentially flat, ShopperTrak reports total U.S. foot traffic increased 2.2 percent on Black Friday which points to a shopper driven by various sales and promotions. Read the full release here . Meanwhile, online shopping seems to be doing exceptionally well this year. EBay and PayPal report that sales doubled on Black Friday (see TechCrunch ). And Bloomberg is reporting that a big day today, Cyber Monday, could push online sales for Thanksgiving weekend over $1 billion for the first time .

  • Jobless Claims Rise

    The Labor Department will release monthly unemployment data tomorrow. But there were some bad figures released today on jobless claims. From the Labor Department's news release: In the week ending July 31, the advance figure for seasonally adjusted initial claims was 479,000, an increase of 19,000 from the previous week's revised figure of 460,000. The 4-week moving average was 458,500, an increase of 5,250 from the previous week's revised average of 453,250. The advance seasonally adjusted insured unemployment rate was 3.6 percent for the week ending July 24, unchanged from the prior week's unrevised rate of 3.6 percent. Bloomberg 's Bob Willis said the increase was "unexpected" : Economists forecast claims would fall to 455,000, according to the median of 43 projections. Estimates ranged from 444,000 to 470,000. The government revised the prior week's total to 460,000 from a previously reported 457,000. There were no special factors influencing last week's report, a Labor Department spokesman told reporters are the figures were being distributed. The timing of auto plant retooling shutdowns, which caused claims to gyrate last month, are probably no longer affecting the data, he said. The four-week moving average of claims, a less-volatile measure, increased to 458,500 last week from 453,250, today's report showed. Read the Labor Department's report here .

  • China's Exports Up 48.5% from Previous Year

    The economic troubles in the West should be hurting Asia's manufacturing economies, right? With buyers having to scale back? The news out of China this morning then might come as a bit of a surprise: China's exports were up 48.5% in May over the same month last year. It is the highest jump in exports in six years, according to Bloomberg/Business Week . But, as Bloomberg points out, one big reason for the startling figure is that May of 2009 was a a particularly bad month for exports from China. The question now is whether the impact of the problems in Europe are simply on hold, and we'll see lower numbers next month. As Jacob Greber writes, the Asian/Pacific economies (China, South Korea, Australia) that seem to be great places to "weather the European Crisis" right now, will feel the pain of Europe in some form: East Asia wouldn’t be unscathed by a return to recession in the advanced economies, Burns said. “That’s going to have important knock-on effects in East Asia, particularly because it is a very heavy trading region.” The Bank of Korea cited the European situation in keeping its benchmark interest rate at a record-low 2 percent today. “There is a considerable degree of uncertainty over the actual growth path, caused by the fiscal problems of European countries,” Governor Kim Choong Soo and his policy board said in a statement today. At the same time, Asia will continue to lead the global rebound, International Monetary Fund Deputy Managing Director Naoyuki Shinohara said June 9. That brings its own challenges, with increasing capital inflows and the risk of overheating if policy makers fail to take “appropriate” action, he said in a speech in Singapore. Read the full article here .

  • New Bloomberg Poll Reveals Americans Distaste for Bankers, Banks, Execs, and Desire for Regulation--but not Much Faith in Politicians

    Bloomberg has released the results of a new national poll on Americans' attitudes toward Wall Street, bankers, and regulation of financial institutions. The poll shows that Americans are not too fond of anyone at this moment::bankers, insurance companies, Wall Street, corporate executives. And while they favor "punishing banks," nearly 70% say they want the government to regulate consumer protection through currently available means, rather than establish a new agency. John McCormick and Alison Vekshin report: As Democrats and Republicans seek to tap populist ire, the poll shows there may be political advantage in taking on big financial institutions such as Charlotte, North Carolina-based Bank of America Corp. , and New York’s Goldman Sachs Group Inc. The majority of poll participants -- 56 percent -- say big financial companies are more interested in enriching themselves at the expense of ordinary people, while 40 percent say such firms play a vital role in enabling the economy to grow. At the same time, Americans are divided over the scope of government regulation. More than 40 percent of Americans say the government has gone too far in measures to fix the financial industry; 37 percent say it hasn’t done enough. Almost six out of 10 people say Wall Street hasn’t gone far enough on its own to protect against future emergencies. “Anything the government gets their fingers in, they mess it up,” said poll participant Norman White, 60, a community college electronics instructor who lives in Colfax, Louisiana . “I don’t have a very high opinion of the government running anything.” Read Wall Street Despised in Poll Showing Majority Want Regulation here .

  • Skype Partnership with Verizon Reveals Growing Strength of VOIP in Global Business

    After years of being dismissed or ignored as a potential competitor by phone companies, Skype --a global market leader in Voice of Internet Protocol (VOIP)--is now getting a little respect. Verizon Wireless and Skype announced a partnership that will allow Verizon customers to use Skype on their mobile phones. Skype CEO Josh Silverman spoke with Bloomberg 's Mike McKee about what this partnership reveals about the success of his company:

  • Bllomberg: SEC's Mary Schapiro 'In Conversation'

    Securities and Exchange Commission Chair Mary Schapiro has a big task: to build up the public's trust in the SEC after the Bernard Madoff disaster, and myriad questions about what exactly happened during Bank of America's takeover/rescue of Merrill Lynch. In an interview with Judy Woodruff for Bloomberg , Schapiro says that the SEC is already doing a better job of catching other "Madoffs." She also says the SEC has replaced a lot of its senior leadership, and is poised to run more smoothly:

  • Blinder, Inflation/Deflation Follow-up

    After his op-ed on inflation concerns (see post here )--or lack thereof-- Alan Blinder spoke about inflation and deflation to Bloomberg. Take a look:

  • Bloomberg's Doctoroff on the 'New Dynamism' of the US Economy

    Bloomberg LP president Dan Doctorof f says his company has added 1800 new firms as customers in the last 6 months. A lot of those firms are brand new companies--a sign, Doctoroff says, of how "dynamic" the economy is now. And he talks about the new dynamism in this BigThink video:

  • Restaurants Struggling Through Recession

    If there was any doubt as to how restaurants are doing in this recession, a few recent developments have made the struggles of dining establishments clear. Last week's National Restaurant Association Show--its 90th annual show-- drew just 54,000 attendees . That's a 24 percent drop from last year. And the cable tv news station TV1 found in a poll that half of New Yorkers have stopped eating out . Monica Bertran of Bloomberg spoke about the challenges for restaurants with Julia Stewart , chairman and CEO of DineEquity . DineEquity owns Applebees and IHOP, and Stewart tells Bertran that the restaurant is probably paying the price for overbuilding during the last decade. But she is optimistic that things are turning around: Meanwhile, New York restaurateur Danny Meyer tells the Wall Street Journal's Katy McLaughlin that many eateries will have to accept lower margins, as he has. And he expects more and more higher end restaurants to close in the coming months, as the economy just isn't supporting expensive meals: I don’t think there’s going to be sustainable demand for restaurants that force you to spend hours there. Long tasting menus will continue to be elected by some but cannot be legislated by the restaurant. We’re going to have more bistros and trattorias. People will have luxury items—caviar, foie gras, truffles—less frequently, having done without them for a year and a half, but they will come to appreciate them more because it won’t be at every bar and grill in the city. Read A Future with Fewer Reservations here .