Editor’s note: Welcome to the new, right-sized Opening Bell. Since February, our young-yet-wizened Ryan Chittum has toiled in the wee hours to bring you a morning roundup of the business news. From now on, Ryan will offer a shorter version of the Bell, freeing up one the brightest business minds on the Web for a normal day’s work to comment on, critique and advance with his own reporting the business stories that we think matter. See his work unspool all day on www.cjr.org/the_audit/ and help us welcome him off the shift of the undead.
The Wall Street Journal reports on page one that the abysmally delayed rebuilding of the World Trade Center is facing major delays yet again.
Now the memorial is unlikely to be ready for the tenth anniversary of the attacks in 2011, the office buildings won’t all be up until somewhere around 2015, and it’s all going to cost up to $3 billion more than expected. That’s according to a report that the Port Authority of New York and New Jersey, which owns the WTC site, will release today even as its spokesman “dismissed the estimates as overly pessimistic.”
The Journal says the delays will also make it harder for developer Larry Silverstein to lease the buildings for now, though it says it could ultimately help by giving him more time. The report doesn’t blame Silverstein for the delays—it says the proposed transportation center and the memorial are causing the holdup. The Journal notes that “Decisions at one project affect the other, but they are being designed and built by different teams,” and that the delays will also screw up the schedule for the half a million square feet of retail space slated to open around the transit station.
The paper says the completion of the Orwellianly named Freedom Tower is likely to be pushed back a year to 2012.
Food crisis worsens
The New York Times on page one reports that at least twenty-nine nations have sharply curbed or eliminated food exports in the last few months, a phenomenon that is deepening the food crisis by driving prices higher, in part by encouraging hoarding.
Negotiators have been working for years to free trade in farm goods, but today’s crisis actually makes that more difficult for them. Food protests in places like Haiti and Indonesia that rely heavily on imported food have convinced many nations that it is more important than ever that they grow, and keep, the food their citizens need.
It’s hardly unsurprising that countries facing double and triple prices for their most basic foodstuff are reacting against free trade by limiting exports. That’s one of the reasons why countries should be self sufficient in their production of goods—especially food—in the first place and not dependent on the willingness of others to trade with them in order to eat.
Bloomberg thin comparison
Bloomberg, in a story that’s all over the map, reports that the second quarter has been unusual in that stocks and bonds have both fallen at similar paces, a sign it says in its headline the losses may be end up closer to those of the 1974 bear market than those of the 1994 one.
We’re not sure how the wire service came up with those comparisons. It certainly doesn’t support them in its story. And why do a story about second-quarter results when there’s still a day left in the quarter?
The Wall Street blues
The Journal says on C1 that diverging performance of financial companies’ shares and the cost to insure their debt shows that while the Fed won’t allow them to go bust, financial firms’ profits are likely to be hammered for a long, long time.
The poor performance of financial stocks also signals that investors have a grim view of the longer-term fundamental outlook for these companies, even if the risk of short-term collapse has diminished. Important businesses—like the bundling of mortgages—have collapsed. And the reduced reliance on debt, or leverage, to finance their activities also diminishes profitability.