The Times notes a Vietnamese vase-maker who upped what it charges Pier 1 by 10 percent to recoup some of its increased labor costs, which are soaring three times as fast.
Further evidence of the banana republicization of the U.S.:
Not long ago, it would have been unlikely for a poor country with high inflation to see its money strengthen in value against the mighty dollar. But the dollar is not quite as mighty as it once was. Large American trade deficits and other problems have weakened its appeal.
And there are signs that the dollar could fall further if developing countries’ central banks stopped supporting it, particularly in Asia.
The Times does a solid job with this story, balancing evidence with just the right amount of convincing anecdote to give us a real grasp of what’s going on in this part of the world economy.
The Atlanta Journal-Constitution reminds us that inflation is already hitting home, and not just at the Pier 1.
Revenge of the activist shareholder
The WSJ says in a C1 Heard on the Street column that some board directors are facing pressure because of the credit crisis. It scoops that the head of Citigroup’s audit and risk committee is resigning from that position under pressure.
While Mr. Armstrong will remain a member of the audit committee, his exit as its head is a victory for activist shareholders who feel burned by the credit crisis. Audit committees—charged with overseeing financial statements, work by auditors and risk-management procedures —have gained stature in the post-Enron world. But until now, they have rarely faced intense outside pressure.
Shareholders are targeting directors, including audit-committee members, at other banks and Wall Street firms, including Washington Mutual Inc. and Morgan Stanley… The campaign against Mr. Armstrong could energize similar efforts, while forcing directors and companies to reassess how effectively audit committees are doing their job.
“It tells them that … they’re going to be held accountable,” says Joseph Carcello, director of research for the corporate-governance center at the University of Tennessee.
Greenspan: no regrets
The WSJ goes page one with Alan Greenspan’s campaign to salvage his increasingly shot reputation (yesterday he wrote a column about it in the Financial Times). The former Federal Reserve head honcho and Ayn Rand follower says “he doesn’t regret a single decision.”
Really? What about deciding to tell borrowers in 2004 it was a good idea to take out adjustable-rate mortgages? (Check out this on-the-money takedown by Slate’s Daniel Gross way back then.)
The Journal flat out says in its headline that Greenspan’s legacy is “tarnished” and that how successful he is at defending it will go a long way toward directing the reform of the financial system and how far it goes:
If Mr. Greenspan’s critics prevail, then financial companies will likely face tighter oversight and less freedom in the products they offer. If Mr. Greenspan’s views carry the day, the trend toward self-policing will continue. A repudiation of Mr. Greenspan’s monetary policies could tempt the Fed to raise interest rates relatively quickly after the current crisis passes, and even attempt to deflate future bubbles with higher interest rates.
The Journal’s Fed guru Greg Ip does a nice job of spelling out the case against Greenspan, while letting the old wizard defend himself. The story notes that critics contend the Fed lowered interest rates too much in the first part of this decade, reinflating the technology bubble and moving it to real estate. But also that they say the Fed was asleep at the switch regulation-wise.
Ip got everything but a PowerPoint presentation from Greenspan in the former banker’s self-defense, including copies of speeches and even a deathbed letter, but this stain won’t out.
Vegas shell game
In other Greenspan news, Bloomberg quotes him saying that the housing prices will stop falling by the end of this year, and that most of the housing market’s surplus inventory will be cleared out by early 2009.
This Los Angeles Times story about the glut of million-dollar homes in Las Vegas, makes that seem unlikely, at least in Sin City. It says more than 1,000 such houses are on the market, and many of them are already dated despite being built in the last four years. The LAT notes that more than half of all homes for sale are vacant.
In most of the country, prized neighborhoods become even more desirable over time (think Beverly Hills or Greenwich, Conn.). But Las Vegas isn’t about stately trees, old lawns and older money, said Gene Moehring, chairman of the University of Nevada, Las Vegas, history department and a specialist in urban history.
“In Vegas, new is the most important thing,” Moehring said.