March 20, 2023

Bucks Blog: Tuesday Reading: Hip Surgery for a Better Sex Life

Today in Your Money

All the news from The Times that will hit you in the wallet.

A variety of consumer-focused articles appears daily in The New York Times and on our blogs. Each weekday morning, we gather them together here so you can quickly scan the news that could hit you in your wallet.

Technology lets teachers know if students do the reading. (Business)

Student loan rate set to rise (again). (National)

Morning sickness drug returns to market. (National)

Buying airline tickets by the pound. (Business)

Shutting out the noise while traveling. (Business)

Hip surgery leads to a better sex life. (Well)

Morning after pill not a cure-all. (Well)

Remedies for nail fungus. (Well)

Walnuts may fend off diabetes. (Well)

A view of e-books from the inside. (Bits)

Advice shifts on feeding babies. (Well)

Teaching children to hide from guns and their fears. (Motherlode)

At ease with a body fighting gravity. (Booming)

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Draghi Seeks to Quiet Talk About Global Currency War

BRUSSELS — The president of the European Central Bank sought Monday to ease fears that countries including Japan were deliberately weakening their currencies and that European exporters were threatened by a round of competitive devaluations among the world’s major economies.

The comments by Mario Draghi appeared to show how some of the world’s most senior economic policy makers were continuing to grapple with the prospect of a “currency war,” even after finance ministers from the Group of 20 pledged over the weekend to refrain from devaluing their currencies to gain a competitive advantage in global trade.

During an afternoon of scheduled testimony before the European Parliament’s Economic and Finance Committee in Brussels, Mr. Draghi noted that the euro’s current exchange rate was close to its long-term average. He advised officials not to make alarmist comments.

“Most of the exchange rate movements that we have seen were not explicitly targeted; they were the result of domestic macroeconomic policies meant to boost the economy,” Mr. Draghi told the committee, without mentioning any countries by name. “In this sense, I find really excessive any language referring to currency wars.”

But Mr. Draghi also seemed to suggest that central banks could succumb to mutual suspicion about whether they were deliberately seeking to set exchange rates. “The less we talk about this, the better it is,” he said.

Underscoring the point, Mr. Draghi said he had “urged all parties” to exercise “very, very strong verbal discipline” at the G-20 finance ministers’ meeting in Moscow over the weekend.

The euro hit a record of ¥127.18 on Feb. 2, up from ¥114.48 at the start of the year. It stood at just ¥94.31 in July 2012. The euro traded at ¥125.46 on Monday, up slightly, and was flat against the dollar, at $1.3352.

Since the rapid strengthening of the euro against the yen and other major currencies, there has been a concerted push by industrialized nations to convey the message that they will let the markets determine the value of their currencies.

Last week the Group of 7 sought to quell fears of a developing currency war. Then, over the weekend, the G-20 finance ministers issued a statement saying they had concluded that loose monetary policy, including steps to weaken currencies, were acceptable if used as a means to stimulate domestic growth. But they also warned that such policies should not be used to benefit a country’s position in global trade.

Guntram B. Wolff, the deputy director of Bruegel, a research organization, said that he believed Japan’s central bank policy makers were carrying out an expansionary monetary policy in an appropriate way — as a means to spur economic growth, not as a way to aid Japanese exporters.

Instead, Mr. Wolff said, Mr. Draghi might be concerned about the U.S. Federal Reserve, where policy makers are considering continuing their expansionist monetary policy until the unemployment rate falls significantly, and about the Bank of England, which may end up pursuing similar policies as it revises the way it sets goals for economic growth.

“The bigger question is what central banks in the developed world are doing — I’m thinking here about the Bank of England and the Federal Reserve — and whether we have a danger of competitive devaluation,” Mr. Wolff said. “While we claim that all of this is done for domestic purposes, the internal and external goal can become the same, and then you have the risk that this turns toxic.”

A loose monetary policy intended to spur growth often has the effect of devaluing a currency, making a country’s exports more affordable and its competitors’ exports more expensive. For example, a strong euro means that exports like cars and wines become more expensive abroad. That puts European producers at a disadvantage in competing with foreign producers on world markets.

Yet a strong euro also brings some advantages for Europe. Certain imports — like energy, in the form of oil and natural gas — become more affordable.

Over the past few years, emerging-market countries like Brazil have openly accused slow-growing advanced countries like the United States of unfairly pushing down the value of their currencies with their aggressive monetary policies. And, for years, the United States has accused export-reliant emerging economies, in particular China, of manipulating their currencies, too.

More recently, in Japan, stimulus programs backed by the newly elected prime minister, Shinzo Abe, have kept interest rates near zero and flooded the economy with money, which has reduced the cost of Japanese products around the world.

In Europe, while confidence has grown that the Union will be able to manage its sovereign debt crisis, the euro has made significant gains against the dollar and other currencies. That is making European exports more expensive, a factor that could hamper growth.

The gains have prompted François Hollande, the president of France — which has traditionally taken a more interventionist stance in economic matters — to call for a European exchange-rate policy.

Mr. Draghi did allow that the relative strength of the euro “is important for growth and price stability” and that “to the downside,” an “appreciation of the euro is a risk.” He said the E.C.B. would assess whether the exchange rate was having an effect on inflation.

But for now, Mr. Hollande has very little traction on the issue. Jeroen Dijsselbloem, the newly appointed president of the Eurogroup of euro zone finance ministers, gave the French request short shrift this month, and a senior German official has decried the French initiative as a poor substitute for policy overhauls.

“Can you have a managed exchange rate in Europe?” asked Karel Lannoo, the chief executive of the Center for European Policy Studies, a research organization in Brussels. “Probably not, when you consider how hard it would be to agree on a rate and the means to maintain it. ”

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Personal Spending Rose in September

Opinion »

Monsters vs. Sexy Nurses

Room for Debate asks: Does the prevalence of racy Halloween costumes mask our fears of death and dying?

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Off the Charts: After a Rating Downgrade, U.S. Treasuries Turn a Profit

The rating downgrade, along with continued turmoil in European markets and fears that the United States might be entering a new recession, caused a flight to safety among investors. And, notwithstanding the agency’s opinion, money flooded into Treasuries and the demand for American dollars grew.

Since then, Treasury bonds have been one of the few investments that have produced good profits. As can be seen from the accompanying charts, an investor in long-term Treasuries would have earned a double-digit return, counting the small interest earned and the larger capital gains from rising prices. Shorter-term Treasuries have also rallied, although by smaller amounts.

When S. P. cut the United States’ rating from AAA to a still-high AA+, it went out of its way to praise France, which retains a AAA rating. Investors in long-term French bonds have not done badly over the period, with a gain of nearly 4 percent, measured in euros, since the S. P. move. Unfortunately, however, the weakness of the euro has more than offset that return.

Among the world’s major currencies, the dollar has been nearly the strongest since the downgrade. Only the Japanese yen has outpaced it, and that by a small amount. The Chinese renminbi, whose value is set by China and allowed to rise gradually against the dollar, is also up, but that would have been true no matter what happened in other markets.

If the Chinese currency did trade freely, it would no doubt be much higher than it is, but it too might have had a bad two months. Many currencies from emerging markets had been strong until recently, in part because foreign investors were buying them to invest in their stock markets. But it appears some investors are fleeing those markets as part of the flight to safety.

Both the Korean and Indian stock markets are down significantly in local currencies, and their currencies have depreciated against the dollar. In Brazil, the stock market came close to holding its own, so long as you look at local prices. But the real has lost about a tenth of its value, so the performance in international terms has been poor.

China’s stock market has been among the worst in the world, losing nearly a fifth of its value over those two months. The American market, by contrast, has been among the best after adjusting for currency movements.

It is a feature of the modern world that many countries, less concerned about the loss of buying power for their own citizens, welcome weak currencies, hoping that will help their exporters. As a result, the recent rise of the dollar has itself been a cause of worry in the United States.

Floyd Norris comments on finance and the economy at

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Workstation: Working at Making the Most of Your Vacation

Well, maybe not.

Assuming that they get a paid vacation — far from a given in the United States — employees may be reluctant to take time off because of towering workloads and fears that their jobs are vulnerable. If they do arrange for time off, there is the stress of getting work done in advance or delegating duties to co-workers.

Once a vacation starts, it can be exciting, refreshing and relaxing. But not always: it can also be profoundly destabilizing, with the lack of a predictable routine causing anxiety. And there is the heightened possibility of losing things, whether luggage, hotel reservations, cabin pressure, directions or respect for a travel companion.

Then, after time off, employees face a flood of pent-up e-mails and demands — unless they were obsessively responding to them during the vacation, thereby wiping out the restorative value it may have had.

These days, because of technology, it’s very hard to disengage completely from the office during a vacation, says Daniel H. Pink, the author of “Drive: The Surprising Truth About What Motivates Us,” who answered questions about vacations while he was on a recent vacation.

The border between what is work and what is personal is more porous than ever, and that cuts both ways, Mr. Pink says. So while people may have to answer an e-mail from their boss on a Sunday, he notes, they may also order shoes online or make an orthodontist appointment for their child while at work.

Whereas the transition from working to going on vacation used be like an on-off switch, it’s now more of a dimmer switch, Mr. Pink says, and people need to adjust it in a way that works for them. For example, during his vacation, he tends to check e-mail only a few times a day.

Barbara Adachi, a principal in Deloitte Consulting’s human capital practice, started creating a stricter separation between vacation and work when she was in Patagonia on vacation several years ago. Her BlackBerry didn’t get reception there, she said, “and I had no choice but not to check it — it was very freeing.”

Now she doesn’t check e-mail at all during vacations, and if there is an urgent situation, people can contact her assistant, who knows how to reach her.

In the belief that vacations ultimately make employees more productive, Deloitte Consulting keeps a “watch list” of people who are billing a lot of hours and haven’t taken time off in a while, Ms. Adachi says. The company also keeps track of when people on the same project are planning to take time off, to ensure that “somebody’s got your back when you’re out,” she says.

Cross-training and planning are crucial to ensuring that people take all their vacation time, thereby improving their health and happiness, says John de Graaf, executive director Take Back Your Time, an organization that promotes work/life balance. In European Union countries, where a minimum of four weeks of paid vacation is mandated, companies take this training much more seriously, he says.

Mr. de Graaf’s plea to have the United States require companies to provide time for vacation has fallen on deaf Congressional ears. Such a law would be a tough sell. Is it any coincidence, after all, that the United States is among the most productive nations in the world and that American workers take just about the least amount of vacation?

It’s true that American businesses are highly productive, Mr. de Graaf says, and that can be linked in part to the fact that Americans work more hours.

But companies need to be aware that not taking time off exacts a price in the form of employee burnout, poor physical and mental health and high turnover, he adds.

Also, vacations just plain make people happier, right?

Interestingly, a recent study out of the Netherlands, though confirming that vacations do heighten happiness, found that the greatest benefit occurred before the vacation — in short, anticipation appears to trump reality.

In recognition of this, people may want to consider taking more trips of shorter duration, Jeroen Nawijn, the lead author of the study,  told The New York Times last year.

“If you have a two-week holiday, you can split it up and have two one-week holidays,” he said. “You could try to increase the anticipation effect by talking about it more and maybe discussing it online.”

So perhaps bosses should be understanding if they happen to see their employees sneaking a look at or while sitting at their desks.

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Stocks End Sharply Lower Amid Fears About Europe

After sweeping declines on Monday were followed by huge gains on Tuesday, stocks on Wall Street finished steeply lower on Wednesday as each of the three main indexes dropped more than 4 percent. Wednesday’s trading completely wiped out the gains of the previous day in the broader market as measured by the Standard Poor’s 500 index.

The last time there were three consecutive days of 4 percent moves on the SP was in October 2007.

In the United States, the financial sector again took a beating, shedding more than 7 percent.

Analysts said a variety of worries have clouded the markets in recent weeks, but on Wednesday they singled out fears about exposure to French banks as a factor as shares in those institutions dropped during European trading. The concern is whether big countries like France in the heart of Europe might now be called upon to bail out their own banks as well as economies like Spain and Italy.

“Today it’s fears about French banks and France,” Michael Gapen, United States economist at Barclays Capital in New York, said, singling out the French bank Société Générale, whose shares fell about 18 percent. “SocGen is the name that is really driving trading.”

The plunge on Wall Street on Wednesday, a day after the biggest daily gain in the Dow and Standard Poor’s 500 index since March 2009, drove home a powerful message to investors: For now, at least, in this market, a rally has no basis to last.

Stocks on Tuesday had turned around, racing up after Monday’s steep declines, in response to a Federal Reserve announcement that, while it would not be coming to the rescue with some new program to stimulate the economy, it would leave rates low until the middle of 2013.

“The market psychology is such that investors no longer seem to know who or what to root for and all that they do know is, according to the Fed, that rates will remain low until the middle of 2013,” said Kevin H. Giddis, the executive managing director and president for fixed-income capital markets at Morgan Keegan Company.

In recent weeks, investors have been focused, to varying extent, on factors including the Standard Poor’s downgrade of the United States credit rating; weak data related to the United States economy; and contagion fears related to the euro zone’s fiscal problems. Some said that the market was already unsettled, and that the downgrade and the debt ceiling negotiations that preceded it made things worse, or that the downgrade had already been priced in by the market but added another layer of uncertainty over how the domestic and global economies would be affected.

For its part, the Fed is hoping that its statement, which three of the 10 members of the Federal Open Market Committee voted against, will encourage investment and risk-taking by keeping the cost of borrowing extremely low until at least mid-2013. Still, it suggested that the United States monetary authorities are now adopting the same policy pursued by the Bank of Japan over the last decade with marginal effect.

“It has been a very eventful two-week period,” said Robert S. Tipp, managing director and chief investment strategist for Prudential Fixed Income.

“What the markets began to digest though with the downgrade, and have continued to chew on with the Fed’s announcement yesterday, is the fact that the economy really is in much worse shape than most people realized,” Mr. Tipp said.

He said those developments have “taken the wind out of the sails of the equity market” and pushed yields lower.

On Wednesday, the Dow was down 519.83 points, or 4.6 percent, at 10,719.94. The Standard Poor’s 500-stock index fell 51.77 points, or 4.42 percent. at 1,120.76. The Nasdaq were was down 4.09 percent, or 101.47 points, at 2,381.05.

The action in government bonds highlighted where investors were calculating their priorities. Even after the credit rating downgrade, the flight from risky assets heated up, with a rise in 10-year government bonds prices rose. Yields declined to 2.14 percent from 2.25 percent on Tuesday, when the yield also reached fell to 2.03 percent.

“It is rivaling the lows hit at the end of ’08,” said Mr. Tipp, referring to the yield. “You are basically at historic lows here.”

Bruce Bittles, the chief investment strategist for Robert W. Baird Company was watching what he described as “waterfall” declines on the monitors following the stock market on Wednesday. He said the debt ceiling problems and downgrade by the S.P. set off underlying market-moving concerns about another recession that had already existed, as well as worsened the uncertainty about what further action the government and central bank could take.

“The government has used up a lot of bullets,” he said, “And the problem is its global in nature.”

The markets now need to see corrective government policy action on the fiscal and debt problems, he added.Gold, a traditional safe haven, surpassed $1,800 an ounce at one point during the day. And the VIX, a measure of the fear in the markets, sharpened to 42.9 from its level of 35 on Tuesday.

On Wednesday, Asian markets drew from the strong rally on Tuesday in the United States and rose but European shares fell back.

The Tokyo benchmark Nikkei 225 stock average rose 1.2 percent. The main Sydney market index, the S. P./ASX 200, gained 2.6 percent. In Hong Kong, the Hang Seng index rose 2.5 percent, and in Shanghai the composite index added 0.9 percent.

The FTSE 100 Britain closed at 5,007.16, down 157.76 points, or 3.05 percent. The DAX Germany closed at 5,613.42, down 303.66, or 5.13 percent. The CAC 40 France closed at 3,002.99, down 173.20, or 5.45 percent.

The downturn in Europe was led by banking shares. French banking stocks dropped amid rumors that a downgrade of France’s AAA credit rating was imminent, but the agencies and the French government have said France is not in danger of a downgrade.

In addition to the decline in the French bank Société Générale, its rival BNP Paribas fell more than 9 percent. Intesa Sanpaolo, the Italian lender, fell almost 11 percent.

Laetitia Maurel, a spokeswoman for Société Générale, said the bank’s fundamentals remain strong, with a first-half 2011 net profit of 1.663 billion euros, even after booking losses for its share of the Greek rescue.

Graham Bowley, David Jolly and Bettina Wassener contributed reporting.

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Room For Debate: Can Manufacturing Fuel a U.S. Recovery?


General Motors Orion Assembly PlantFabrizio Costantini for the New York Times The General Motors Orion Assembly Plant in Lake Orion, Mich.

Yes, the economic news is grim this week.

Stocks plunged on Thursday amid heightened fears that the United States may be headed toward a double-dip recession. Today’s monthly jobs report, though better than expected, is unlikely to ease those concerns. Earlier in the week, a key index reported that manufacturers recorded their weakest growth in two years in July.

But is there a bright spot in the manufacturing numbers? While the growth slowed significantly, the trend is still up: output increased a small amount, and the sector has been expanding slowly but steadily for 24 consecutive months.

Is it possible that manufacturing might help the U.S. economy recover and produce needed jobs? Or is domestic manufacturing — at least in the traditional sense — a relic of the past, incapable of rescuing the American labor market?

 Read the Discussion »


Topics: Economy, labor, unemployment


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