Looking at the headlines, again it’s more evolution than revolution, continuing with ongoing themes. Spain continues to be a topic of interest, with the Wall Street Journal (WSJ) running an article on page A7 about how Spain will have to cede bank control to European regulators. The Financial Times has a front-page article on how Spain is stepping up austerity, while the New York Times (NYT) has an article in the business section on how, now that Spain has negotiated easier terms, it must meet them.

The LIBOR rigging scandal remains a hot topic, with a shift in focus. Where earlier discussion was on what happened and who was to blame, now the articles focus on who will be paying for it. The NYT has a front-page article on how the scandal has instigated a scramble for damages, and the WSJ has an article on page C2 about U.S. lawmakers joining the LIBOR probe. This will be a much bigger topic in days to come, as it has been described as banking’s “tobacco moment,” with prospective liabilities that could go into the billions.

We have another day without a single overarching theme in the newspapers. The U.S. papers, the Wall Street Journal (WSJ) and the New York Times (NYT), lead with domestic politics. The WSJ hits on union political spending and on the beginnings of the battle over the extension of the Bush tax cuts. The NYT looks at fundraising by the presidential campaigns—Romney is ahead—and the evolving political incentives on the tax-cut extensions and health care. This is a pretty interesting article, as it highlights the evolution of the incentives we discussed in an earlier post in the context of intra-party politics. The bright line for a cutoff of $250,000 in income for the tax-cut extension, as opposed to $1 million, actually appears to run through the Democratic Party to a greater extent than I would have expected. Likewise, there appears to be some evolving Republican support for parts of the health care bill. These intra-party arguments will only get more complicated, particularly on the health care side, as voters start to process what they will now be losing, either on the expiration of the tax cuts or on a repeal of the health care bill. Don’t expect simple party line votes on either—that may be what we get, but it really is not as simple as that.

The Financial Times (FT) focused on Europe and China again. Key issues include an accelerated plan to aid Spanish banks, which also makes the “What’s News” column in the WSJ and the business section of the NYT. Overall, this is probably a good thing, but it does not seem to have impressed the markets to any degree. The LIBOR fixing scandal is also highlighted in the FT; the problem continues to expand to other banks besides Barclays. and we can expect to be hearing a lot more about this going forward.

There is nothing particularly new today—mostly commentary of a follow-up nature on trends already in place. The common focuses are China and Europe.

For China, the New York Times (NYT) has an article on the front page of the business section about the premier’s call to spur the economy. Given the recent policy actions that China has already taken, this seems to be confirmation that weakness is continuing. China has taken a big hit from weakening demand in both Europe and the U.S. The situation may be getting worse for them, with a front-page article in the Financial Times (FT) about a pending China/EU trade dispute. As I discussed in an earlier blog post, protectionism is on the rise, and this is one of the latest manifestations. Rounding out coverage, the Wall Street Journal (WSJ) had an article on page A6 about China’s growth challenge. China is becoming a larger issue, as the “certainty” of a soft landing seems to be getting much less certain.

This will be a quick post because I am actually on vacation today and for the rest of the week, but am still reading the papers and thought I would write a quick note.

One of the things I do every morning is read at least three papers, the New York Times, the Financial Times (FT), and the Wall Street Journal (WSJ). I like to see what is going on—or, at least, what the paper’s editors think is going on. Even in our 24-hour Web world, I still think there is value in looking at what the editors and reporters think is worth putting on paper. With that said, I thought I would try a regular posting called Yesterday’s News that sorts among those papers to identify what is most interesting and important. I will be doing this most days.

The lead economic and business story today, from both the WSJ and FT, was the factory output report. U.S. industrial production, as shown in the Institute of Supply Management (ISM) report, was at the lowest level for three years and had the first actual decline for three years. The figure dropped from 53.5 to 49.7, which was well below expectations. Any level below 50 means a decline, and industrial production is now at 2009 levels.