October 18, 2017

A Mogul Gets a Landmark in the Capital

Yet now, from his tech frontier in Seattle, Mr. Bezos has bridged those far-flung worlds by buying The Washington Post.

The purchase price of $250 million is a pittance for a man who ranked 19th on Forbes magazine’s list of billionaires, with an estimated fortune of more than $25 billion. But the deal was still an astonishing move for a magnate who has kept a low profile in politics and has said almost nothing about his interest in newspapers, except that he reads them.

Nonetheless, Mr. Bezos will now have a microphone as powerful as anyone in Washington and outside the West Wing. Keeping with a lot of his tech industry peers, he brings with him a sort of libertarian bent, having supported gay marriage in the state of Washington and fought higher income taxes on wealthy people.

“Of the businesspeople I know, he and Bill Gates are the two most intellectually curious people I know,” said Rob Glaser, the founder of another Seattle technology company, RealNetworks, who has known Mr. Bezos since the 1990s. “It doesn’t surprise me that Jeff would find something with the intellectual depth of The Post an intriguing, compelling thing to be involved with.”

Mr. Bezos, 49, said in a statement on Monday that he would leave the day-to-day operations at The Washington Post to others. But his history — rising quickly as a Wall Street whiz, then starting Amazon.com out of a garage and building it into a retailing giant — is chock-full of cold calculations to improve his company’s fortunes. Many of his decisions have panned out, as Amazon has muscled its way into nearly every corner of retailing, leaving many competitors chafed its his wake.

The purchase of The Washington Post fits into one of the more eclectic — some might say, eccentric — patterns of investing and charitable giving of today’s billionaires. On top of the usual ream of stakes in technology start-ups like Uber and Twitter, Mr. Bezos has indulged his passion for space by financing the recovery from the seabed of an Apollo rocket that carried the first men to the moon.

He is paying for creation of a clock buried in a mountain in West Texas that will tick once a year for the next 10,000 years.

And now, Mr. Bezos — a man known for being an unsentimental businessman — has invested squarely in a sentimental business steeped in tradition. Of course, The Washington Post deal could feed his demonstrated appetite for reinventing venerable industries, from retailing to book publishing. Amazon’s Kindle business has turned Mr. Bezos from a merchant into a media mogul, as celebrated in some circles as another digital disrupter, Steven P. Jobs, Apple’s former chief executive.

Mr. Bezos and Donald E. Graham, The Washington Post’s chief executive, have longstanding connections that may have helped the discussions. As an article on The Post’s Web site noted on Monday, Mr. Graham gave the Amazon chief advice on how to promote newspapers on the Kindle device. And Amazon is an investor in LivingSocial, an e-commerce venture led by Tim O’Shaughnessy, Mr. Graham’s son-in-law.

He has provided few clues about what changes might be in store. In an interview last year, though, he stated that he did not think people reading the Web would pay for a newspaper subscription because they were too trained to get it free. The Washington Post started an online subscription plan this year.

He said in the same interview that there would be no printed newspapers in 20 years. The Washington Post had more than 457,000 subscribers to its daily edition in the first quarter of this year.

This year, Mr. Bezos was one of a group that put $5 million into the Business Insider, a news site founded by Henry Blodget. Mr. Blodget rose to fame as a Wall Street analyst in the late 1990s with a wild forecast for Amazon’s shares that came true.

Drew Herdener, a spokesman for Amazon, who works with the Amazon chief on his personal initiatives, said Mr. Bezos was not available for an interview.

Nick Wingfield reported from Seattle and David Streitfeld from San Francisco. Nicholas Confessore contributed reporting from New York.

Article source: http://www.nytimes.com/2013/08/06/business/media/a-mogul-gets-a-landmark-in-the-capital.html?partner=rss&emc=rss

Reports Heighten Concerns About German Economy

FRANKFURT — Underwhelming earnings reports Thursday from several of Germany’s largest companies, along with a report showing a slump in confidence among European business and consumers, raised concerns that growth could be slowing even in the Continent’s strongest economies.

Siemens, the electronics and industrial conglomerate that is a bellwether for German industry, reported that net profit in the three months ending June 30 fell 65 percent to €501 million, or $716 million, worse than expected. The decline was caused partly by charges related to Siemens’s exit from a joint venture with the French nuclear technology company Areva, but also by lower demand for health care equipment and the effects of a strong euro.

Volkswagen, Europe’s largest carmaker, said that profit in the quarter more than tripled to €4.8 billion, in line with expectations, as it sold more cars both in Germany and abroad. However, the company’s preferred shares plunged 5 percent after Martin Winterkorn, the chief executive, warned that Europe’s sovereign debt crisis could hurt sales.

“The coming months will be challenging for us,” Mr. Winterkorn said.

Meanwhile, the European Union’s economic sentiment indicator fell by 2.2 points to 103.2 in the euro area, as both businesspeople and consumers became less optimistic about their prospects. The reading, the lowest in almost a year, indicates that growth is likely to continue, but at a slower pace.

“The slowdown should be temporary,” Lavinia Santovetti, an analyst at Nomura, said in a note. However, “uncertainty remains on the spillover effects from the ongoing sovereign debt crisis onto the economy directly and through confidence indirectly,” she added.

Italy and Spain showed the biggest declines in overall confidence, but a sharp fall in optimism among German exporters could be a bad omen.

A deceleration of German growth would add to the challenges Europe faces in getting the sovereign debt crisis under control.

Germany’s success in exporting cars and machinery to China and other foreign markets has helped drive growth for the Continent and compensate for economic weakness elsewhere, especially in countries like Greece, Spain and Italy that are trying to cope with excessive debt.

“All in all, this survey provides more evidence of the loss of momentum in the euro area economy in the beginning of the third quarter,” analysts at Barclays said in a note.

In another sign that the economic outlook remains tentative, the European Central Bank reported that the increase in demand for business loans slowed, while demand for consumer credit declined.

“Prospects for loan demand remain generally subdued,” the E.C.B. said in a statement Thursday.

Banks are hoarding cash while there is little activity on debt markets, said Dougald Middleton, head of capital and debt advisory at the consulting firm Ernst Young.

“What this means for corporate borrowers is that funding will be more difficult to come by and is increasingly expensive,” he said in a statement. “This will be most acute for smaller borrowers and the peripheral economies inside or outside the euro zone.”

Credit Suisse, the second-largest bank in Switzerland, continued a pattern of weak earnings from big banks this week. Credit Suisse said Thursday that it planned to cut about 2,000 jobs after a “disappointing” second quarter that saw a big drop in earnings in investment banking.

Net income fell more than expected to 768 million Swiss francs, or $958 million, in the three months ended June 30, from 1.6 billion francs in the period a year earlier.

On Tuesday UBS, Switzerland’s largest bank, said it would also have to cut jobs after profit fell by half, also largely because of poor results in investment banking.

Deutsche Bank, Germany’s largest bank, said Tuesday that net profit rose 6 percent, but that was below analyst forecasts.

There was some good news, as German unemployment continued to decline on a seasonally adjusted basis. The jobless rate remained at 7 percent, according to official data.

But hiring could slow if demand for German autos and industrial technology, the two pillars of Europe’s largest economy, begins to slow.

Siemens reported that profit improved in a division that supplies products and services for industry, such as factory automation equipment. But earnings declined sharply in the division that supplies health care equipment like X-ray scanners, as well as the energy division.

Siemens said its renewable energy unit, which had been one of its fastest-growing businesses, was suffering from increased price pressure in the market for wind turbines.

While Volkswagen’s profit met expectations, some analysts expressed concern about a dip in the profit margin on cars carrying the company’s core Volkswagen badge. The company makes a host of other brands including Audi and Skoda.

Growth in China, VW’s largest market, also slowed.

“Although Audi and Skoda still shine,” Christian Aust, an analyst at UniCredit in Munich, said in a note, “the lower gross margin and margin decline at the VW brand raise some questions.”

Julia Werdigier contributed reporting from London.

Article source: http://feeds.nytimes.com/click.phdo?i=dc2a7137a39e50528c07967d03ec6f04

Economix: Greenspan and Unemployment

Alan Greenspan presiding over a meeting of the Fed Board of Governors in 2005.David Scull/Bloomberg News Alan Greenspan presiding over a meeting of the Fed Board of Governors in 2005.

Alan Greenspan’s reputation obviously isn’t what it used to be, and for good reason. His re-entry into partisan politics — arguing that Wall Street is over-regulated — probably won’t help. But it would be a mistake to turn him into a caricature of an unsuccessful central banker, just as it was a mistake to lionize him in the past.

In the late 1990s, Mr. Greenspan took a difficult, even courageous, stand for a Federal Reserve chairman. He defied its usual bias toward fighting inflation over fighting unemployment. As Business Week recalled:

When Alan Greenspan took charge of the Federal Reserve in August, 1987, businesspeople and economic cognoscenti thought they knew what they were getting: a dedicated — even obsessive — inflation fighter who would be willing to provoke a recession to hold down prices. As one Republican told Business Week at the time, Greenspan “feels in his bones that austerity is good for you.”…

[But] Greenspan was one of the first economists to embrace the notion of a technology-driven productivity boom in the second half of the 1990s — the so-called New Economy. His willingness to keep rates low despite criticism from inside and outside the Fed helped fuel business investment and growth.

In the process, Mr. Greenspan helped demonstrate that unemployment could fall lower than many economists had believed without setting off inflation. The late 1990s remain the only sustained period over the past 35 years when incomes rose at a healthy rate all across the income spectrum. The jobless rate, at its nadir, was below 4 percent.

The contrast with the today’s situation — when unemployment is near a 27-year high, median household income is lower than a decade ago, core inflation is far below its long-term average and yet some Fed officials are more worried about the economy being too strong than it being too weak — is telling.

Article source: http://feeds.nytimes.com/click.phdo?i=6cd614578d16387309d66ee0c1a7bdbb