Money Talking

The federal government is up and running again after a last minute deal that ended the shutdown AND raised the debt ceiling so the government can pay its bills.  For now. This week on Money Talking, WNYC contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine review the economic damage from the 16-day shutdown, what happens next, and how business leaders are considering getting involved in Republican primaries.  Plus, what's in store at Apple after the company hired the CEO of Burberry to run its popular stores.

The federal government could default on its debt if it does not increase the amount of money it can borrow by October 17.  This week on Money Talking, WNYC contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine examine what will happen to the U.S. economy and Wall Street if Washington doesn’t raise the debt ceiling. Some members of the financial sector already have the pre-default jitters. Fidelity, the nation’s largest money market fund manager, has sold all of its short-term U.S. government debt. As the United States struggles over the issue, domestic and foreign investors are closely watching and making decisions that could affect the nation's economy for years to come.

The federal government is shutdown, but the stock market is holding steady. What gives? This week on Money Talking, WNYC contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine explain why investors are not worried for the moment, because they're looking ahead to an even bigger threat. And Twitter finally reveals the details of its public stock offering: It's losing money, but that's not going to stop investors from wanting a piece of the biggest web IPO since Facebook. Also, the fight for control of the auction house Sotheby's.  Does hedge fund manager Dan Loeb have better artistic judgement?

JPMorgan is reportedly in discussions to settle scores of government investigations with a settlement estimated at $11 billion. That's more than what Google earned last year and more than two and a half times as much as BP paid to settle after the massive oil spill in the Gulf of Mexico. The potential payout is expected to put an end to various federal and state agency probes into how the bank handled mortgage-backed securities before the financial crisis. This week on Money Talking, regular contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine examine what could be the largest settlement with the Justice Department ever by a single company. Some of the money would go to relief for consumers. Foroohar and Nocera also discuss whether the settlement will satisfy the public's desire to see Wall Street held accountable. Is this the last chapter in the story of the financial crisis?

October 1 is a watershed moment for Obamacare because that's the day people can start signing up health insurance, online, through public exchanges. But against this backdrop, there are also signs of a sea change in how private employers will offer health insurance. This week on Money Talking, regular contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine weigh in on the future of private-employer health care.  Walgreens this week announced it's going to shift employees from a company plan to one where workers chose their own health care through private exchanges. Change is also coming for thousands of retirees at companies like IBM and Time Warner. Goodbye company health plan. Hello, choosing one through exchanges.

Five years ago Sunday, Lehman Brothers filed for bankruptcy and set off the financial crisis that threatened the entire global financial system and plunged the nation further into recession, one it's still recovering from today. This week on Money Talking, regular contributor Rana Foroohar from Time magazine and Alan Blinder, Princeton economist and former vice chairman of the Federal Reserve, reflect on the causes of the crash and whether the financial sector is any safer.. As she writes in her cover story for this week's Time magazine, Foroohar argues "the biggest banks in the country are larger and more powerful than they were before the crisis."  Blinder says a lack of regulation leading up the crisis played a key role.  Today, he worries that banks could be, once again, taking on too much risk.

The debate in Congress this week over whether to give President Obama authorization to take military action in Syria crowded out talk of economic issues like funding the government, raising the debt limit, picking a new boss at Federal Reserve and immigration reform. That trend is likely to continue as discussions and pending votes stay front and center over the next few weeks. This week on Money Talking, regular contributor Rana Foroohar from Time magazine and Ben White from Politico weigh in on Syria's effect on the U.S. economy, budget negotiations and critical parts of President Obama's economic agenda.  White says the Syria debate changes the timetable for budget negotiations, pushing back a discussion of the debt ceiling and other issues. Foroohar says if the U.S. were to engage in long-term military operations in Syria, some Republican lawmakers may want to open up some sequester funds. "You would have a situation where you couldn't be doing military cuts at the same time you're doing military action," she said. 

September is historically the worst month for the stock market. Add to that, a showdown over government spending, unrest in the Middle East and nerves about what the Federal Reserve is going to do, and things start to look dire.  But is there really anything to worry about? This week on Money Talking, guest contributors Diane Brady of Bloomberg Businessweek and Robert Armstrong of the Lex column in the Financial Times weigh in on what economic indicators and other factors say about whether the market might soar, tank or just do OK this September. Looking ahead, Armstrong is watching gold and bank stocks, which he calls great markers of irrational panic.  Brady is keeping an eye on Russia's economy (and how many push-ups President Vladimir Putin can do).

Computer glitches on the Nasdaq stock exchange brought a halt to trading of thousands stocks and options Thursday in what some are calling "the flash freeze." It's just the latest software malfunction to disrupt the markets, and it's not even the first one this week. Goldman Sachs lost as much as $100 million Tuesday after erroneous algorithmic trades. This week on Money Talking, guest host Heidi Moore of the Guardian speaks with Joe Nocera of the New York Times and Rana Foroohar of Time magazine about why there are so many software-related problems on stock exchanges these days and whether regulators can do anything about it.  Looking ahead, Foroohar talks about when the Federal Reserve Bank might start tapering off its asset-buying programs. Nocera talks about e-cigarettes, which are currently not regulated.

It's been a week of ups and downs for shareholder activists — powerful investors who buy up stock in companies to shake them up and get the stock price moving.  Hedge fund manager Carl Icahn announced he has a large position in Apple — more than $1 billion worth of shares. Meanwhile, Bill Ackman — perhaps the most combative investor on Wall Street — resigned from the board of J.C. Penney after failing to reshape the retailer's fortunes and getting into a very public dispute with other board members. This week on Money Talking, guest host Heidi Moore of the Guardian speaks with regular contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine about shareholder activists, their tactics and their impact on the companies whose stock they buy.  Looking ahead, Foroohar talks about new six-year high schools in Chicago focused on science and technology that offer associate's degrees.  Nocera discusses the proposed merger of American Airlines and US Airways, which was blocked by the Justice Department this week.

Amazon CEO Jeff Bezos' purchase of the Washington Post this week for $250 million amounts to less than one percent of his net worth. This week on Money Talking, regular contributors Joe Nocera with the New York Times and Rana Foroohar with Time magazine explore why Bezos has followed in the footsteps of so many business titans before him by purchasing a newspaper.  Looking forward, Foroohar talks about fast food workers walking off the job to protest low wages.  Nocera looks at how JPMorgan Chase has suddenly found itself in a lot of hot water. The SEC wants the bank to admit wrongful conduct in the "London Whale" trading scandal that resulted in $6 billion loss. The bank also revealed that it is facing civil and criminal investigations related to the sale of mortgage-backed securities in the days leading up to the financial crisis.

The SEC secured a courtroom win against an employee of a Wall Street bank at the center of the financial collapse. A jury Thursday found former Goldman Sachs trader Fabrice Tourre, the self-proclaimed "Fabulous Fab," liable on six counts of fraud. The SEC accused him of misleading investors about mortgage securities that the agency said he knew would fail, and in the process, enrich a hedge fund client of Goldman. This week on Money Talking, regular contributor Joe Nocera of the New York Times and guest contributor Heidi Moore of the Guardian examine the SEC's case against Tourre.  Looking ahead, Moore is watching as Wall Street firms bundle rent payments in a way that's eerily similar to the mortgage-backed securities that helped lead to the collapse of the housing market five years ago.  Nocera is keeping an eye on Facebook's stock price, which is flirting with its $38 IPO price since announcing Q2 earnings on July 24.  

After years of circling billionaire Steven Cohen, federal authorities brought criminal charges Thursday against his hedge fund SAC Capital Investors.  The U.S. Attorney's office in New York charged SAC with four counts of securities fraud and one count of wire fraud for looking the other way and even encouraging illicit behavior among its traders.  Preet Bharara, the U.S. Attorney for the Southern District of New York, said the indictment is not just a narrative of names and numbers.  "It is more broadly an account of a firm with zero tolerance for low returns but seemingly tremendous tolerance for questionable conduct," he said. "SAC became over time a veritable magnet for market cheaters." This week on Money Talking, regular contributors Rana Foroohar of Time magazine and Joe Nocera of the New York Times weigh in on the insider trading charges.

It’s been a real scorcher this week in New York with temperatures in the 90s that feel like the low 100s. Whenever the thermometer goes way up, people start mentioning droughts, melting glaciers, rising sea levels and what can be done to stop climate change. President Obama recently said he will push for reductions in greenhouse gas emissions using executive powers, primarily through the Environmental Protection Agency.  His proposals include limiting CO2 from existing power plants and those coming online in the future, as well as faster development of cleaner energy sources like wind and solar power. Mr. Obama's goal is to cut emissions 17 percent from 2005 levels by 2020. Not surprisingly, the president has his critics. Some have complained that it will be too expensive, that it will kill jobs and reduce U.S. competitiveness, that it's an unnecessary step and that it bypasses the legislative process. This week on Money Talking, regular contributors Joe Nocera of the New York Times and Rana Foroohar of Time magazine weigh in on how American businesses are reacting to the President's proposals and whether they are likely to drive up the cost of fuel, energy and energy-efficient products like lights bulbs and refrigerators. Plus, the larger issues raised by Thursday's bankruptcy filing by the city of Detroit.

Investors have been on tenterhooks in recent weeks ever since the Federal Reserve said it might start winding down some of its economic stimulus programs. In the midst of this worry, President Obama hinted that the current Fed chair, Ben Bernanke, probably will not be renominated in the months ahead. This week on Money Talking, regular contributors Rana Foroohar of Time magazine and Joe Nocera of the New York Times weigh in on the strengths and weaknesses of some of Bernanke's potential successors.  Plus, a look at the war for market share in digital books following the ruling this week that Apple conspired with publishers to raise the price of e-books.