The big story in the U.S. papers was the Democratic National Convention, and this time, Bill Clinton took his turn in the spotlight. The Wall Street Journal (WSJ) led with “Clinton Makes the Case for Obama,” and the New York Times (NYT) went with “Clinton Delivers Stirring Plea for Obama Second Term.” Not sure this counts as news—that the Big Dog is for the Democrat—but whatever.

The real news of the day, in the sense of something that might make a difference, is the announcement of the European Central Bank’s (ECB’s) plan to support the market for European government bonds. The Financial Times (FT) covered this story in “ECB resists capping bond yields in debt plan,” the NYT in “Fear of More Austerity Fuels Greek Unrest Ahead of Crucial Talks” (p. B1, the front business page), and the WSJ in “Europe Outlook Dims as Bank Meets” (p. A9) and “Moment of Truth for Draghi’s Plan” (p. C12). To get ahead of the news cycle a bit, the actual plan announced by the ECB, which will be in the papers tomorrow, is the most aggressive to date. The bank proposed the open-ended purchase of government bonds at short maturities (up to three years) for countries that are in one of the eurozone economic support facilities. In other words, if countries in trouble are willing to commit to an approved plan to balance their finances, the bank will make sure their interest rates don’t spike.

http://www.youtube.com/watch?v=WC5gHNME04E 

No news is good news

The front-page news today is the Democratic National Convention. The Financial Times (FT) leads with “Economy blow in key week for Obama,” which discusses the weak manufacturing report just released in the context of the election. The Wall Street Journal (WSJ) leads with “Democrats Rush to Rebut GOP,” and the New York Times (NYT) leads with “First Lady Tops Opening Night for Democrats.” Less meat in those articles, but that is what happened.

Not much else happening today, but there are some good stories looking ahead and some good coverage of things we have discussed in the past. The big pending issue is the European Central Bank (ECB) meeting tomorrow, and all three papers hit that. The FT has “All eyes on Draghi over bond proposal” (p. 2), stating correctly that the world will be parsing whatever he says or—possibly more importantly—doesn’t say about the ECB bond buying program. He is widely expected to announce such a program, but the details will matter—a lot. The WSJ did not deal directly with the pending meeting but did hit on a problem the ECB has that we discussed yesterday in “Lending Gaps Challenge Central Bank.” Borrowing costs are getting higher in the peripheral economies, as the euro convergence reverses, making it harder for the ECB to help them and complicating whatever is announced. Finally, we have “European leaders step up talks before policy meeting” in the FT. They have a lot to talk about. Make no mistake: this is a very important meeting for the future of the euro in the near term. Stay tuned.

So, I started off the morning doing the September Market Thoughts video. While prepping for that, I realized how much had actually happened in August, but how little of it got translated into public perception and the markets.

Politics made the front pages again, but Isaac got moved back. “Romney Vows to Deliver the Country from Economic Travails” and “A Suitor Makes the Case for Divorce” in the New York Times (NYT) and “Romney Vows to ‘Restore’ US” and “After the Celebrating, the Race Moves to Battleground States” in the Wall Street Journal (WSJ) pretty much sum up the political news, while “Storm Weakens But Still is Wreaking Havoc in the South,” (NYT, p. A20) and “Reckoning With Isaac” (WSJ, p. A3) are pretty self-explanatory. The Financial Times (FT) passed on Isaac completely but did have political analysis on page 2, with “Health insurance scheme for elderly rises to top of agenda” and “Parties prepare for tightest of votes in Florida’s bellwether area.” You can see the transition from the convention coverage to the race coverage, from hype to real analysis. Should be a very interesting fall. Once again, I recommend Nate Silver at the NYT as an excellent political analyst.

Europe is the other major meta-story. The deadline is coming near for many European issues, with “Judgment Days Arrive for Euro Crisis” in the WSJ (p. A16) and “Eurozone banks facing sweeping regulation” in the FT (p. 1). In the next two weeks, we have several critical events scheduled in Europe. On September 6, the European Central Bank meets and is widely expected to announce a bond-buying program to support the government bond markets; on September 9, Greece presents its latest attempt at budget cuts; and on September 12, Germany’s constitutional court rules on the legality of the bailout fund and Dutch elections take place, which will probably result in a change of government. I have no doubt I will be hitting all of these issues here in the blog, probably at length.

Once again, politics and Isaac are the big stories. Ryan’s acceptance of the vice presidential nomination hit the front pages of the New York Times (NYT) with “Rousing GOP, Ryan Faults ‘Missing’ Leadership” and the Wall Street Journal (WSJ) with “Ryan Pledges GOP Rebirth in Accepting Nomination,” but the Financial Times (FT) sat this one out. Lots of political commentary in both papers but not much actual analysis.

The hurricane made all three front pages, with “Isaac tests Louisiana’s defenses seven years after the devastation of Katrina” in the FT, “Storm Drenches Gulf Coast; High Water Cuts Off Many” in the NYT, and “Isaac’s Deluge Rolls Wide” in the WSJ. The basic story is that Isaac is a bad storm, causing extensive damage in some areas, but, overall, it isn’t as bad as it could have been—and certainly not as bad as Katrina. The strengthened defenses in New Orleans seem to have worked, by and large. Best wishes to everyone living through the storm and its aftermath.

The two lead stories today are no surprise. Romney’s acceptance of the Republican nomination made two of three front pages: “Republicans Anoint Romney” in the Wall Street Journal (WSJ) and “Romney Secures GOP Nomination After Long Quest” in the New York Times (NYT). The story did not make the Financial Times (FT); the British paper did include election analysis but did not report on the Republican convention.

The second big story today is Hurricane Isaac, which also made two of three front pages—“Hurricane Gains Power and Hits Louisiana Coast” in the NYT and “Obama warns gulf residents not to ‘tempt fate’ as hurricane Isaac nears” in the FT. Isaac only made it to the second page of the WSJ with “Hurricane Isaac Roars Ashore.” Good luck to everyone in Isaac’s path.

You could certainly think so from the headlines. On the front pages: the Financial Times (FT) leads with “Ghost of Katrina haunts Republicans as storm threatens Romney’s party,” the New York Times (NYT) has “As Storm Disrupts Plans, GOP Takes Up Tensions,” and the Wall Street Journal (WSJ) opens with “Isaac Heads to New Orleans: Echoes of Katrina as GOP Gathers.” A couple of points to make here. First, a major hurricane rolling in will always be newsworthy. Second, gas prices are going up as the Gulf refinery complex shuts down, insurance companies start to get nervous, and people prepare for and/or flee the coming storm. Put all of this in conjunction with a presidential nominating convention right in the storm’s path— the storm is actually threatening reporters—and you get even more coverage. Combine that with a prior natural and political disaster . . . well, you get the picture. Expect to see more front-page coverage.

The other up-front meta-story for the day is the Apple-Samsung patent ruling, in which Samsung was ruled to have infringed on Apple’s patents. Because intellectual property is the key to the technology business, the ruling has been felt across the industry, as reported in the FT with “Tech stocks reel from Apple court victory” (p. 1) and in the NYT with “Samsung Case Puts Apple Closer to Fight With Google” (p. B1). This ruling will play out in the near term with inter-company battles intensifying, per the NYT headline. Longer term, it may play out in generally lower levels of innovation, as it becomes tougher to navigate through existing patents. Good for large companies, not good for society as a whole.

Many stories today that deal with issues we have discussed before, with only two new things really worthy of note.