The Independent Market Observer

9/17/12 – No Single Story Today

Posted by Brad McMillan, CFA, CAIA, MAI

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This entry was posted on Sep 17, 2012 11:30:51 AM

and tagged Fiscal Cliff, Yesterday's News

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Looking at the news over the weekend and today, there is no overarching theme, just continuations of earlier stories.

The story that has the most coverage is that of the ongoing riots in the Middle East and beyond. The New York Times (NYT) had “Anti-American Protests Flare Beyond the Mideast” on Saturday’s front page and “Cultural Clash Fuels Muslims Raging at Film” on Monday’s front page. The Wall Street Journal (WSJ) had “Anti-US Mobs on Rampage” on the front page of its weekend edition with a follow-up on page A6; “Internal Rifts Color Anti-US Protest” offered a nuanced analysis on page A6 of Monday’s WSJ. The Financial Times (FT) had much less coverage, with “Film fury ripples across globe” (p. 5) over the weekend and nothing on Monday. Sounds about right—while the Libya murders were a tragedy, it is neither the first nor the last time we’ll see riots like this.

Riots were also the story on the other side of the world. Over the weekend, the FT had “Japan warned in island dispute” (p. 2); on Monday there was a front-page picture and story, “Chinese anger: Protests against Japan sweep nation,” followed by “Anti-Japan protests grip China” (p. A2). Although the U.S. papers did not put the story on the front page, they certainly covered it, with “Beijing Mixes Messages Over Anti-Japan Protests” (NYT, p. A4) and “Anti-Japan Protests Mount in China” (WSJ, p. A10). The confrontation appears to be getting more intense over time. The reappearance of Xi Jinpeng (Saturday’s NYT, p. A8, Monday’s WSJ, p. A10) ratchets down one source of risk, but make no mistake, this is getting hotter.

Just as the risks in East Asia keep rising, we are also reminded that the risks in the rest of the world have not gone away. On Saturday, the NYT had “Slovenia Encounters Debt Trouble and May Need Bailout” and “Spain’s Struggling Economy Tops Agenda at Meeting of European Financial Ministers,” both on page A6, and the WSJ had “Illegal Immigration Emerges as New Crisis for Greece—And EU” on the front page, to remind us of noneconomic risks. The weekend WSJ had “Spain Tests Waters on Aid Conditions” (p. A8), and on Monday, risks from Spain made both the NYT (p. B1) and the WSJ (p. A15). Despite the action by the European Central Bank, this story is not over. As we found out in New Orleans, having a levy system does not mean the hurricane won’t hit you.

And just in case you thought the U.S. was immune, we had a couple of articles on the pending risks from the fiscal cliff. On Saturday, the NYT had “White House Details Potential Effects if Automatic Budget Cuts Go Through” (p. A17) and the WSJ had “Federal Budget Cuts Detailed” (p. A5). As the cliff gets closer, there is a concerted effort to focus Congress’s attention by getting the public to look at the consequences. This is all to the good, as is anything that will encourage responsible deal-making by our representatives, but it does reemphasize the risks of not getting it right. For a broader look at the risks we face here in the U.S., an op-ed in Monday’s WSJ, “The Magnitude of the Mess We’re In,” does an excellent job of laying out exactly that.

Have a great day!

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