Time (May 19)
“It was bound to happen, but no one really thought it’d happen this fast.” Amazon announced that it is now selling more e-books than paperbacks and hardcovers combined. Amazon began marketing Kindle e-books books less than four years ago, and is now selling roughly 105 Kindle books for every 100 print versions.
Tags: Amazon, E-books, Hardcovers, Kindle, Paperbacks, Print
Financial Times (May 17)
Is Japan’s revival dependent on stronger ties with China? The former editor-in-chief of the Asahi Shimbun argues just this point. “While talk of a new industrial revolution may sound optimistic, recall that some of Japan’s best-known companies, including Panasonic, Sharp, and Toyota, laid the foundation of their manufacturing business atop the wreckage of the Great Kanto earthquake of 1923. For a repeat, China may be the key.” Much as relations with the U.S. were central to the post-war recovery, “a more stable and trustworthy relationship between Japan and China is also essential to Japan’s rebuilding. This is the moment of truth as to whether or not Japan will remain a global power.”Is Japan’s revival dependent on stronger ties with China? The former editor-in-chief of the Asahi Shimbun argues just this point. “While talk of a new industrial revolution may sound optimistic, recall that some of Japan’s best-known companies, including Panasonic, Sharp, and Toyota, laid the foundation of their manufacturing business atop the wreckage of the Great Kanto earthquake of 1923. For a repeat, China may be the key.” Much as relations with the U.S. were central to the post-war recovery, “a more stable and trustworthy relationship between Japan and China is also essential to Japan’s rebuilding. This is the moment of truth as to whether or not Japan will remain a global power.”
Tags: China, Earthquake, Japan, Revival, U.S.
Bloomberg (May 17)
“A Greek default would be “highly destabilizing” for banks, causing losses that “far exceed” the size of their loans and investments there, according to Moody’s Investors Service.” European banks hold approximately €95 billion of Greek assets. Moody’s calculated direct possible losses on these assets at €34.4 billion.
Los Angeles Times (May 16)
“California is a test case for whether high-speed trains can succeed in the U.S. — and so far, the state is failing the test.” The Los Angeles Times endorsed the initial plan in 2008 and still believes the benefits will “outweigh the costs, and none of the $43-billion project’s troubles are insurmountable.” There are sensible proposals for bringing the project “back on track” and these should be adopted. The high-speed rail project should not be abandoned, but it does need to be fixed to succeed.
Tags: California, Rail, Trains, U.S.
Financial Times (May 16)
“The March 11 earthquake and tsunami caused Y2,000bn ($25bn) in damage to plant and equipment at Japanese companies and left many too uncertain of their business prospects to issue forecasts for the current fiscal year.” While quake-dampened consumer demand remains a concern, “it is the problems on the supply side that have contributed most to the uncertainty.”
Tags: Consumer demand, Damage, Earthquake, Forecasts, Japan, Supply chain
Institutional Investor (May 15)
Emphasizing the growing importance of environmental, social and governance factors (ESG) to investors, two major pension funds announced sustainable investment initiatives. The $236 billion California State Employees Retirement System (CalPERS) pension plan will “fully integrate ESG factors in all investment decisions, and across all asset classes.” Meanwhile, the $152.9 billion California State Teachers Retirement System (CalSTRS) has pledged that all of its “external managers will include an analysis of how environmental, social, and governance (ESG) issues factor into their strategies.” CalSTRS CEO Jack Ehnes said, “No matter what you’re doing with us, there are ESG risks that we think will have a long-term impact on the portfolio, and we want to be sure that you’re articulating for us how you’re looking at them.”
Tags: CalPERs, CalSTRS, ESG, Pension funds, Sustainable investment
Wall Street Journal (May 14)
The next federal bailout will be the United States Postal Service (USPS). Congress gave the USPS a $15 billion line of credit, but with Q1 losses of $2.2 billion (a 25% increase over last year), the credit “will be used up by the end of this year, with low odds on ever being paid back.” E-mail has battered the USPS. By decade end, 20 billion fewer letters will be mailed according to current projections. Instead of cost-cutting, however, the USPS has offered its union workers a new 4.5 year contract with a 3.5% pay raise, cost of living wage hikes and protections against layoffs. The WSJ wishes USPS management would protect taxpayers instead.
New York Times (May 13)
A year after Europe’s leaders put together a $140 billion bailout packaged for Greece, they are now expected to propose “a further $86 billion dose of the same failed medicine.” They shouldn’t. Delaying the inevitable simply inflates the final bill. Greek debt needs to be restructured. “The longer Europe’s leaders hide from this fact, the bigger the eventual bill will be, and the longer Greeks will have to wait for renewed growth.”
Tags: Debt, Europe, Greece, Restructuring
Economist (May 12)
“If the stakes were not so high, Europeans’ incompetence in the euro-zone debt crisis would be comic.” A year after the Greek rescue began, there is still no end in sight. A new plan is long overdue, but instead “Europeans are bickering like children in a playground.” Call it what you will, it is time for a reprofiling or orderly debt restructuring.
“If the stakes were not so high, Europeans’ incompetence in the euro-zone debt crisis would be comic.” A year after the Greek rescue began, there is still no end in sight. A new plan is long overdue, but instead “Europeans are bickering like children in a playground.” Call it what you will, it is time for a reprofiling or orderly debt restructuring.
Tags: Debt, EU, Greece, Restructuring
Washington Post (May 12)
Hedge fund billionaire Raj Rajaratnam, who headed Galleon Management, was convicted of fraud and conspiracy in connection with insider-trading. “The verdict is a historic achievement for the Justice Department.” The government was able “to show the jury a dark side of the hedge-fund business that was long suspected.” Evidence included recorded wire taps of Rajaratnam receiving and forwarding tips. Alleged tipsters in this high profile trial included Rajat Gupta, the ex-head of consulting firm McKinsey & Co and a former Goldman Sachs board member.
Hedge fund billionaire Raj Rajaratnam, who headed Galleon Management, was convicted of fraud and conspiracy in connection with insider-trading. “The verdict is a historic achievement for the Justice Department.” The government was able “to show the jury a dark side of the hedge-fund business that was long suspected.” Evidence included recorded wire taps of Rajaratnam receiving and forwarding tips. Alleged tipsters in this high profile trial included Rajat Gupta, the ex-head of consulting firm McKinsey & Co and a former Goldman Sachs board member.
