By Alex Plough October 10, 2014
(Shanghai at night. ©Dennis Jarvis)
“Fed Minutes Show Wariness Over Global Growth,” Wall Street Journal, by Jon Hilsenrath
US central bankers hinted this week that the current era of ultra-low interest rates will last a little longer than most market watchers expected.
The U.S. Federal Reserve Open Market Committee, responsible for setting benchmark interest rates, indicated that the U.S. economic recovery is still very fragile, according to minutes from the latest policy meeting. The Fed’s economists fear that weak growth overseas combined with a strong U.S. dollar could significantly slow US exports.
Chairperson Janet Yellen and her colleagues singled out “persistent shortfall of economic growth and inflation in the euro area” and lowered the Fed’s projection for medium-term domestic growth.
The Dow Jones Industrial Average index surged 276 points, at least in part due to optimism among Wall Street traders that the central bank will delay tightening the money supply in the near-term even as the US economy improves. (The following day, Thursday Oct. 9, the market gave all of those gains back and more, however.)
Many traders fear an interest rate hike could halt the bull-run in the US stock market that began around 2009, when the benchmark interest rate was set at a record low of between zero and 0.25%.
“The Empire Reboots,” Vanity Fair, by Bethany Mclean
The resignation of Microsoft CEO Steve Ballmer in February this year caught many by surprise and sparked a fraught five-month search for a new leader of the software giant.
Behind the scenes, the relationship between Ballmer and Microsoft founder Bill Gates was far more toxic than most people realized, according to a gripping account by Bethany Mclean for Vanity Fair. The story also offers a peek at the road ahead for the company’s new CEO Satya Nadella.
“Nope, China’s economy hasn’t yet surpassed America’s,” Quartz, by Gwynn Guilford
We all knew it was going to happen at some point—that China was going to surpass the U.S. as the world’s largest economy, throwing the U.S. position as the world’s greatest super-power into doubt.
On Tuesday, Oct. 7, the International Monetary Fund estimated that China was already there. According to the IMF, in 2014 the size of China’s economy reached $17.6 trillion while the US economy was $17.4 trillion. (By 2019, the IMF expects the Chinese economy to be 20% bigger than the U.S. economy, according to the Financial Times.)
But wait: are these numbers really comparable? The question came from an unlikely corner: China itself. Michael Pettis, a finance professor at Peking University, claims that a “significant amount” of China’s growth is overstated. This week he explained that the issue comes down to differences in how China and the US report Gross Domestic Product (GDP), the standard measure of a country’s economic output.
Either way, the numbers are staggering given that China’s economy was less than half the size of the US economy as recently as 2005.
“The Bacon Boom Was Not an Accident,” Bloomberg BusinessWeek, by David Sax
Who doesn’t love bacon? With the obvious exception of vegetarians…and Muslims…and people who eat kosher. Everybody else, especially the foodie crowd, seems to have become utterly obsessed with fried cured pork belly over the past ten years. It has inspired devoted online fan clubs, bacon-infused beers, bacon ice creams, and even a range of bacon perfumes. It is also big business that generates more than $4 billion in annual sales.
But it has not always been so: The industry’s image was badly damaged by anti-fat health and diet trends in the 1980s. Bloomberg Businessweek writes about how the pork industry’s modest marketing team transformed an underappreciated cut of meat into one of our most adored, salivated-over food staples.
“13 Charts That Explain Why Your College Major Matters,” Vox, by Libby Nelson
I hate to break it to journalism students, but you’re not going to get rich quick majoring in this field—even if you attend one of the top journalism schools, such as Columbia University. (Granted, a big fat paycheck is unlikely to rank high among reasons why a journalist choose the profession.)
The clever people at Vox have analysed the future earnings of US graduates by university major. The data itself comes from the US American Community Survey, a goldmine for economic stories about the value of a college education.
This entry was posted on Friday, October 10th, 2014 at 8:00 am. It is filed under Week in Review and tagged with Bill Gates, federal reserve, International Monetary Fund, MIchael Pettis, Microsoft, Peking University, Satya Nadella, Steve Ballmer. You can follow any responses to this entry through the RSS 2.0 feed.
Comments are closed.
