The papers are all about slowing global growth today, featuring articles that talk about how the U.S. has gone from grow-grow in the first quarter to slow-grow in the second: “Wary Fed Is Poised to Act” on page A1 of the Wall Street Journal (WSJ), “Fed hints at fresh action on economy” on page 1 of the Financial Times (FT), and “Fed Defers New Action But Growth Has Slowed” on page B1 of the New York Times (NYT).
Other countries and areas have been hit as well: the NYT has “Local Governments Face Fiscal Peril, State Comptroller Warns” on page A15, the FT has “Asian output hit by global headwinds” on page 1 and “Weakness in Europe and Asia dents US revenues” on page 13, and the WSJ has “Factories Lose Steam As Global Fears Rise” on page A2. Even hedge funds are shrinking, as seen in “A Hedge Fund Too Big To Profit” on page B1 of the NYT and “Bacon to pay investors $2bn” on page 13 of the FT, which talk about the voluntary downsizing of a large and famous hedge fund.
Another meta-story today, making the front page of all three papers, is the trading glitches that roiled the New York markets yesterday. The NYT has “Runaway Trades Spread Turmoil Across Wall Street,” the FT has “Flash crash memories spur NYSE to review trading in 148 stocks,” and the WSJ has “Electronic Trading Glitches Hit Market.” All three stories reference the flash crash and point to the latest problem as another signal of how fragile the technological infrastructure underlying the financial markets can be. One more thing to worry about in the financial markets.
Finally, and potentially one less thing to worry about for a change, is progress being made by Congress—now there is an interesting phrase—on resolving the fiscal cliff before we actually drive off it. The NYT has “House Approves One-Year Extension of the Bush-Era Tax Cuts” on page A2, while the WSJ has “Senate Agrees on Tax Breaks” on page A4. How great is it that Congress is actually starting to get ahead of the curve on this? Resolving that uncertainty, or at least postponing it, is one of the most constructive things our government can do at this point.
Have a great day!