The Ticker >> Quick commentary on economics, politics & the world from Bloomberg View
Egypt's Generals Play the Old Trick: The Ticker
When Egyptian officials on Dec. 29 stormed the offices of 17 organizations working to promote democracy in the country, closing some of them, state media said the raids were part of an investigation into foreign financing of the groups. That's quite a statement coming from a government that receives billions a year in foreign financing -- including $1.3 billion in military assistance from the U.S.
Apart from the obvious hypocrisy, the claim was an old authoritarian trick. Repressive regimes are forever accusing civil-society groups of being tools of foreigners, the "hidden hands," in this case, that Egyptian generals warn are subverting the country.
In the Gulf, Looking for a Few Good Small Ships: The Ticker
If Iran actually tried to shut down the Strait of Hormuz, a U.S. squadron of small, speedy and versatile ships that could operate close to shore might come in handy. Too bad the U.S. Navy doesn't have any.
Actually, that's not exactly right. More than a decade after the Navy announced that it would build the so-called Littoral Combat Ship -- intended to hunt submarines, clear mines, thwart speedboat attacks and insert special forces close to shore -- we have two of them. The first developed a crack in its hull; the other, severe corrosion near its propulsion system. At well over $500 million apiece, they cost more than twice their original estimate of $215 million. Various weapons systems seem unlikely to work as advertised. And as a Pentagon report delicately put it last December, they are “not expected to be survivable in terms of maintaining a mission capability in a hostile combat environment.”
Facebook Contemplates a Big Status Update: The Ticker
After a tough year for Internet-company initial public offerings, Facebook Inc. is considering what could be the largest Internet IPO on record. Like the cautious roll-out of its new Timeline feature, the social-networking site is making sure that, if it updates its status to public next year, investors will be ready.
Facebook is considering a $10 billion public offering that would value it at more than $100 billion, Bloomberg News reports. With its more than 800 million users, brand integration, strong ad sales and a platform designed to keep users on the site, Facebook is hoping its shares will stay above the opening-day price, a feat that other Internet companies were unable to achieve this year. LinkedIn Corp. and Groupon Inc. both had successful offerings but their shares are now well below the first day's trading prices. LinkedIn is more than 24 percent below its May debut, and Groupon is almost 18 percent below its first trades in November.
Brazil's Economy Now Matches Its Soccer Prowess: The Ticker
Brazil has moved up one place in the rankings of the world's largest economies, displacing the U.K. for the No. 6 spot, according to a study by the London-based Center for Economics and Business Research Ltd.
Said CEBR Chief Executive Officer Douglas McWilliams: "Brazil has beaten the European countries at soccer for a long time, but beating them at economics is a new phenomenon. Our world economic league table shows how the economic map is changing, with Asian countries and commodity-producing economies climbing up the league while we in Europe fall back."
Europe's Banks Push the ECB Back Door Wide Open: The Ticker
Italy's successful bond auction today is a positive harbinger for 2012 -- with a caveat. The government sold 9 billion euros ($11.6 billion) of six-month debt at an average interest rate of 3.25 percent. That yield is exactly half the 6.5 percent rate Italy paid to sell bonds of similar maturity a month ago. At the same time, Italy auctioned two-year notes at a 4.85 percent interest rate, down from 7.8 percent in November. This could mean Italy will have an easier time in 2012, when it must sell almost 450 billion euros in government paper to finance its debts.
It would be comforting to believe that the bond market is rewarding the Italian government with sharply lower interest rates now that Prime Minister Mario Monti has pushed through an austerity package to cut spending and raise taxes by 30 billion euros.
Next North Korea Risk Could Be U.S. Campaign Gaffes: The Ticker
Even for gaffe-prone Rick Perry, it was a cringe-worthy blunder.
The Republican hopeful put out a press release last week to comment on the death of Kim Jong Il. It described North Korea's leader as Kim Jong the Second, mistaking one of his names as a Roman numeral denoting him as the second generation of the Kim dynasty. It made headlines in Asia, where the current crop of GOP candidates aren't known for foreign-policy expertise.
A Blooper in the SEC's Fannie Mae Lawsuit: The Ticker
Time for a pop quiz. See if you can spot what's wrong with this sentence from the Securities and Exchange Commission's lawsuit last week against former Fannie Mae chief executive officer Daniel Mudd:
"Additionally, during the relevant period Mudd was a member of the board of directors, the audit committee, a regular attendee at the board's risk policy and capital committee meetings, held regular weekly meetings with his direct reports the business units, and attended quarterly business unit briefings."
Cutting U.S. Diplomacy Budget May Have Costs: The Ticker
As part of the congressional $1 trillion dollar spending deal, the core international affairs budget was cut by 9 percent, to $43.7 billion for 2012. Specifically, the State Department's operations budget decreased by $2.6 billion and the U.S. Agency for International Development's went down $258 million.
These cuts could have been much deeper. Republican legislators in the House had threatened to slash the overall foreign operations budget by 27 percent. Democrats such as Representative Nita Lowey, ranking member of the House Appropriations Committee, argued that this would have crippled foreign operations and threatened U.S. leadership around the globe.
Fox Is Fair, Balanced, Loquacious: The Ticker
The standard objection to Fox News is that the network's on-air personalities are biased. A better complaint may be that they talk too much.
A certain level of blabber is necessary on television, of course -- not to mention in opinion-writing -- and until recently it would have been hard to say that Fox News was any better or worse on that score than anyplace else. Now, thanks to Eric Ostermeier, a political scientist at University of Minnesota who measured the speaking time during this year's Republican presidential debates, we can say with precision: Fox News people are precisely 40.1 percent more talkative than anchors at the other networks.
Will Other Arab Women Follow Egyptian Sisters Into the Street?: The Ticker
It's horrifying to watch: Egyptian soldiers viciously beating a woman, then peeling back her abaya to expose her torso and bra, before a soldier delivers one last stomp to her chest.
The image from a Dec. 17 crackdown on protesters in Cairo's Tahrir Square, circulated over the Internet and on news broadcasts globally, helped sparked a Dec. 20 protest march through central Cairo by thousands of outraged women. Other women had been attacked and stripped that day in what was clearly an attempt by soldiers to humiliate female protesters.