May 24, 2017

European Central Bank Holds Rate Steady at 0.5%

“I can’t share the enthusiasm” about budding growth in the euro zone, Mario Draghi, the president of the E.C.B., said at his monthly news conference. “These shoots are still very, very green.”

The E.C.B. left its benchmark interest rate unchanged at a record low of 0.5 percent Thursday, a decision that had been expected after recent economic indicators showed the euro zone economy was beginning to recover, albeit weakly. But he said the central bank had not ruled out future rate cuts.

“We certainly are alert to the geopolitical risks that may come from the Syrian situation,” he added.

Mr. Draghi’s remarks were unexpectedly pessimistic and could dampen hopes by some economists and political leaders that the euro zone is finally on the mend, following a stubborn recession that has pushed unemployment to more than 25 percent in Spain and Greece.

The central bank also revised down slightly its forecast for euro zone growth in 2014, to 1 percent from 1.1 percent.

The E.C.B. may not welcome undue optimism about the euro zone economy because it could cause market interest rates to rise and make credit even more unaffordable for the businesses and households in Southern Europe that need it most.

“Mr. Draghi believes investors are jumping the gun on the state of the euro zone economy and is providing a reality check in an effort to talk down market rates,” Nicholas Spiro, managing director of Spiro Sovereign Strategy, said in an e-mail.

European stocks headed higher and the dollar reached a six-week high against the euro while Mr. Draghi was speaking, as investors took his words as a sign the bank would keep interest rates low.

On Thursday in Britain, which does not use the euro currency, the Bank of England also held interest rates at a record low, as policy makers there, too, were hesitant to celebrate tentative signs of an economic recovery.

Mr. Draghi indicated that the E.C.B. Governing Council, which held its monthly monetary policy meeting Thursday, had not ruled out further cuts in the benchmark interest rate. During the debate Thursday, he said, some members argued against a cut because of signs of better growth, while others noted that growth remained tentative.

Some analysts agreed that it was too soon to feel optimistic about the euro zone economy.

The E.C.B.’s outlook showed “caution that we think is warranted,” Marie Diron, an economist who advises the consulting firm Ernst Young, wrote in an e-mail.

Mr. Draghi also addressed suggestions that Greece might need further restructuring of its debt, which many analysts argue is still well beyond the country’s ability to pay.

He repeated his recent insistence that the central bank would not be willing to take any losses as the largest holder of Greek bonds in any sort of debt relief that international creditors might be planning for Greece. Replying tersely to a question on the topic, Mr. Draghi said that the E.C.B. charter prohibited it from financing governments.

Earlier in the day, Jeroen Dijsselbloem, the head of the Eurogroup of finance ministers, told the European Parliament that Greece would need more aid next year. But he studiously avoided using terms like bailout or loans, opting instead for terms like “support” and “measures.”

Mr. Dijsselbloem’s testimony, which lasted nearly two hours, appeared crafted to avoid irritating voters in countries like Germany, which faces a general election this month and where there is weariness at the prospect of bailing out other euro zone countries after three years of debt crises.

According to official European Union data, the euro zone grew at an annualized rate of 1.2 percent in the second quarter of 2013, marking the end of a recession that began in mid-2011.

James Kanter contributed reporting from Brussels.

Article source: http://www.nytimes.com/2013/09/06/business/global/european-central-bank-holds-rate-steady-at-0-5.html?partner=rss&emc=rss

Fed, More Optimistic About Economy, Maintains Bond-Buying

WASHINGTON — Federal Reserve policy makers, more confident about the economic recovery, on Wednesday maintained their current pace of monetary stimulus.

Fed officials also predicted in their latest economic forecast, released Wednesday, that the unemployment rate will decline more quickly than they had previously expected, sitting between 6.5 percent and 6.8 percent at the end of 2014. They had predicted in March that the rate would sit between 6.7 percent and 7 percent.

Officials predicted that the annual pace of inflation would rebound next year, rising closer to the 2 percent rate that the Fed considers healthy.

The improved outlook helps to explain why Fed officials have increasingly suggested that they may seek to reduce the pace of asset purchases in the coming months. The Fed has said that it will stop buying bonds well before it begins to raise interest rates. While the vast majority of the 19 Fed officials who participate in policy continue to expect a first rate increase in 2015, 13 said they expected the Fed to raise its benchmark short-term rate at least to 1 percent by the end of 2015, implying that increases would begin relatively early in the year. In March, only 10 officials forecast that rates would hit 1 percent by the end of 2015.

The Fed’s forecasts have consistently overestimated the strength of the economic recovery since the end of the recession. The central bank has suspended its stimulus efforts twice in recent years, only to find that it needed to do more. Officials have said that they are eager to avoid repeating those mistakes. But there is growing optimism inside the central bank that the Fed is finally doing enough.

The Fed is trying to encourage job creation through a very loose monetary policy, holding short-term interest rates near zero and by purchasing $85 billion a month in mortgage-backed securities and Treasury securities.

Economic conditions have improved modestly since the Fed began this latest round of asset purchases last September. The economy has added about 197,000 jobs a month, on average, and the unemployment rate has fallen slightly to 7.6 percent in May from 7.8 percent in September. The impact of federal spending cuts so far has been smaller than many forecasters, including the Fed, had expected.

But the economic damage of the recession remains largely unrepaired. Job growth is basically just keeping pace with population growth. The share of American adults with jobs has not increased in three years. At the same time, the Fed’s preferred measure of inflation has sagged to an annual pace 1.05 percent, the lowest level in more than 50 years, as the economy continues to operate below capacity.

Despite high unemployment and low inflation, the Fed has shown no sign of interest in expanding the pace of its stimulus campaign. Officials say that they are doing as much as they can. The debate instead has focused on how soon the Fed can afford to start buying fewer bonds.

Such a deceleration is not likely before September, at the earliest, but officials have sought to prepare investors for the change. In particular, the Fed wants to underscore that a smaller monthly volume of bond purchases still means that the Fed’s portfolio would be growing larger with each passing month. Indeed, the Fed argues that such a change would not amount to a tightening of monetary policy because the size of the portfolio is the source of the stimulus.

The Fed’s chairman, Ben S. Bernanke, also has been at pains to remind investors that a change in the pace of bond purchases does not indicate a change in the duration of the Fed’s plans to keep short-term rates near zero, which it has said it intends to do at least until the unemployment rate falls below 6.5 percent.

Investors, however, have responded skeptically. After all, the Fed needs to slow down first before it begins to retreat. Interest rates on 10-year Treasuries, a benchmark for the Fed’s efforts to reduce borrowing costs, rose to 2.20 percent on Tuesday from a low of 1.66 percent at the start of May.

“Fed officials have been trying to convince everyone that QE is a flexible instrument and that the onset of tapering does not convey information about the date of the first fed funds rate hike,” Vincent Reinhart, chief United States economist at Morgan Stanley, wrote Wednesday. “We believe such a conclusion is false.”

Moreover, some economists regard the volume of monthly purchases as more important than the total amount of the Fed’s holdings, meaning that a reduction in monthly purchases would indeed tend to tighten financial conditions.

The Fed also finds itself warring against psychology.

The Fed has established $85 billion as a baseline in the minds of investors. That might not matter if the benefits of the program were purely mechanical. But buying bonds is also a way for the Fed to signal its determination to keep interest rates low for years to come.

The program, in other words, is an effort to instill confidence in investors. And any reduction in the pace of purchases tends to undermine that message.

Article source: http://www.nytimes.com/2013/06/20/business/economy/fed-more-optimistic-about-economy-maintains-bond-buying.html?partner=rss&emc=rss

DealBook: Shares in Bank of America Fall as Earnings Miss Forecasts

A Bank of America branch in Manhattan.Andrew Gombert/European Pressphoto AgencyA Bank of America branch in Manhattan.

10:22 a.m. | Updated

Bank of America reported first-quarter earnings on Wednesday that fell well short of Wall Street’s expectations but were substantially higher than in the period a year earlier.

The bank made 20 cents a share in the first quarter, compared with 3 cents in the year-ago period. Analysts were expecting a profit of 23 cents a share. Bank of America, the nation’s second-largest lender when measured by assets, had revenue of $23.5 billion in the first quarter.

The company’s shares fell nearly 4 percent in morning trading, to $11.80.

Since the financial crisis, Bank of America’s performance has been hurt by large mortgage-related losses, but in recent months investors have been betting the bank would regain its footing. Its shares have risen nearly 40 percent in the last 12 months. Earlier this year, regulators approved the bank’s plan to buy back stock, a clear sign they felt the lender was on firmer ground.

In a statement, Brian T. Moynihan, Bank of America’s chief executive, said, “Our strategy of connecting our customers to all we can do for them is working.”

The question now is how the latest earnings will affect the recent optimism surrounding the bank, which lends to individuals and companies and has a large Wall Street presence through its Merrill Lynch unit.

Other large banks have reported earnings that exceeded analysts’ estimates this quarter, so Bank of America’s failure to do so may unnerve some investors. The debate will be over whether the bank fell short because of deeper issues that will be hard to resolve, or because of items that will have less of a negative effect as time passes.

Much uncertainty surrounds the cost of litigation relating to bad mortgages. Most of these troubled loans were made by Countrywide Financial, which Bank of America acquired in 2008. Bank of America has settled several big mortgage lawsuits, including one on Wednesday for $500 million, which was led by the Iowa Public Employees’ Retirement System. In the first quarter, Bank of America had litigation expenses of $881 million.

Some analysts wonder whether the bank has set aside enough money to cover future settlements. In particular, they say that litigation expenses could be far higher if a pending settlement with Bank of New York Mellon does not gain court approval.

“We have established significant reserves for settlements with various counterparties, including 22 of the world’s largest investors, Fannie Mae, Freddie Mac and others,” said Jerome F. Dubrowski, a spokesman for Bank of America. “We believe we are appropriately reserved for the exposures we face, and we have provided investors with a range of possible loss estimates that could go beyond those reserves.”

The first-quarter results also revealed a mixed performance in Bank of America’s current mortgage business. Initially, the bank did not participate in the mortgage refinancing boom as strongly as rivals like Wells Fargo. But in recent months it has jumped back in.

In the first quarter, Bank of America originated $23.9 billion of mortgages, well up from $15.2 billion a year earlier. But revenue from writing new mortgages actually fell to $815 million from $928 million in the period a year earlier. This shows that profit margins in the new mortgage business have fallen as Bank of America has stepped up activity.

The quarter contained bright spots for shareholders. The bank said it made headway in cutting expenses, something investors are watching closely. As banks struggle to increase revenue, they can improve earnings by reducing costs.

“There were many examples of progress this quarter,” Bruce R. Thompson, Bank of America’s chief financial officer, said in a statement. “We reduced noninterest expense by nearly $1 billion year-over-year.”

In addition, Bank of America set aside significantly less money for its reserve against bad loans, which gave earnings a big boost.

Bank of America’s Wall Street operations were also mixed. Trading revenue was $4.5 billion, excluding accounting adjustments related to the bank’s own debt. The bank reported trading revenue of $5.2 billion in the first quarter of 2012.

Investment banking fees were up, however, and the wealth management unit, which includes the Merrill Lynch brokerage, had a strong quarter. Revenue in the unit rose to $4.4 billion from $4.1 billion in the period a year earlier.

One of the criticisms of banks since the financial crisis is that, as they work through their difficulties, they have failed to lend enough. Bank of America had on its books a smaller amount of loans to individuals in the first quarter. The figure was down to $551 billion from $599 billion. But the bank’s loans to companies rose to $355 billion from $315 billion in the year-earlier period.

While Bank of America’s earnings per share increased a lot when measured using generally accepted accounting principles, it was actually down on a measure that investors often look at. This nonstandard metric excludes arcane accounting charges. Absent those charges in the first quarter of 2012, the bank made 31 cents a share.

This year’s first quarter contained very little effect from such charges, so the 20 cents a share the bank reported Wednesday should be compared with the 31 cents a share from the period a year earlier. In effect, under this approach, Bank of America’s earnings fell by more than a third.

Article source: http://dealbook.nytimes.com/2013/04/17/bank-of-america-earnings-rise-but-fall-short-of-forecasts/?partner=rss&emc=rss

DealBook: Earnings Rise at Bank of America but Fall Short of Forecasts

A Bank of America branch in Manhattan.Andrew Gombert/European Pressphoto AgencyA Bank of America branch in Manhattan.

Bank of America reported first-quarter earnings on Wednesday that fell well short of Wall Street’s expectations but were substantially higher than in the period a year earlier.

The bank made 20 cents a share in the first quarter, compared with 3 cents in the year-ago period. Analysts were expecting a profit of 23 cents a share. Bank of America, the nation’s second-largest bank when measured by assets, had revenue of $23.5 billion in the first quarter.

Since the financial crisis, Bank of America’s performance has been hurt by large mortgage-related losses, but in recent months investors have been betting the bank would regain its footing. Its shares have risen nearly 40 percent in the last 12 months. And earlier this year, regulators approved the bank’s plan to buy back stock, a clear sign they felt the lender was on firmer ground.

In a statement, Brian T. Moynihan, Bank of America’s chief executive, said, “Our strategy of connecting our customers to all we can do for them is working.”

The question is whether the latest earnings will add to the recent optimism surrounding the bank, which lends to individuals and companies and has a large Wall Street presence through its Merrill Lynch unit.

Other large banks have reported earnings that exceeded analysts’ estimates this quarter, so Bank of America’s failure to do so may unnerve some investors. That said, some of the weakness in the quarter resulted from the types of losses that could cause less pain in the future, like litigation expenses relating to bad mortgages.

The bank said it had made headway in cutting expenses, something investors are watching closely. As banks struggle to increase revenue, they can improve earnings by reducing costs.

“There were many examples of progress this quarter,” said its chief financial officer, Bruce R. Thompson. “We reduced noninterest expense by nearly $1 billion year-over-year, and credit costs continued to decline.”

Notably, the bank’s earnings were lower in this year’s first quarter, after excluding accounting charges related to the bank’s own debt, a measure investors often ignore. Absent those charges in the first quarter of 2012, the bank made 31 cents a share.

This year’s first quarter contained very little effect from such charges, so the 20 cents a share the bank reported Wednesday should be compared with the 31 cents a share from the period a year earlier.

Article source: http://dealbook.nytimes.com/2013/04/17/bank-of-america-earnings-rise-but-fall-short-of-forecasts/?partner=rss&emc=rss

California to Hold Auction of Greenhouse Gas Emissions

More than six years in the making, the state’s so-called cap-and-trade program sets limits on carbon dioxide emissions for virtually all sectors of California’s economy, the ninth-largest in the world. Emissions allowances are allotted to polluters, and companies whose emissions exceed their allocations must either obtain extra allowances or buy credits from projects that cut greenhouse gas emissions.

Almost all of the 23.1 million allowances that California has given out to utilities and industry for complying with the program in 2013 have been free; the auction will measure how they are actually valued by the market. Some 39.5 million allowances covering emissions in 2015 will also be on sale Wednesday.

Sealed bids can be submitted over the Internet in the three-hour auction, with the results to be announced on Monday.

Depending on who is talking, the auction is a historic threshold in slowing climate change, or economic self-immolation that will cause refiners, cement makers or other companies to flee.

At one time, California’s cap-and-trade system, mandated by a 2006 state law, seemed a likely blueprint for a national system.

That possibility receded when federal cap-and-trade legislation died in Congress in 2010. Still, Northeastern and mid-Atlantic states are experimenting with a far more modest system that they cast as a success, even though its allowances are trading at or below minimum price.

The world’s biggest cap-and-trade program for greenhouse gases, pioneered by the European Union, has struggled with a chronic oversupply of carbon allowances and sagging prices. Backers of California’s experiment — like Gary Gero, the president of the state’s Climate Action Reserve, a nonprofit group that tracks greenhouse gas emissions — express optimism about its prospects. “We’re not creating a market for a market’s sake,” he said. “We’re creating a market for addressing the serious threat of global climate change.”

The total carbon allowances distributed in California will gradually decline over the years, forcing more emissions cuts.

As California’s market gears up, each business must decide whether it is more cost-efficient to reduce its emissions or buy excess allowances from other companies that do not need them.

Gino DiCaro, a spokesman for the AB32 Implementation Group, an industry alliance whose name refers to the climate change law, warned that the auction would “extract billions of dollars from the industrial sector and our high-wage employers.”

Also, the California Chamber of Commerce filed an 11th-hour suit Tuesday to stop the auction.

Article source: http://www.nytimes.com/2012/11/14/business/energy-environment/california-to-hold-auction-of-greenhouse-gas-emissions.html?partner=rss&emc=rss

Bucks Blog: Some Tips for Unemployed Older Americans

Though the latest jobs report provided some reason for tempered optimism, older Americans who find themselves unemployed are typically out of work much longer than their younger peers. And that can make the road to retirement much more challenging.

So in this week’s Your Money column, I took a look at some of the tricks that older Americans might use to tide them over financially until they find work or manage to eke their way to retirement.

Did you lose your job in your 50s or 60s? If so, what did you do to make up for that lost income? Please share your tips and stories in the comment section below.

Article source: http://feeds.nytimes.com/click.phdo?i=becb1be1455975bb2877a33f5371ea08

Stocks & Bonds: daily-stock-market-activity

Stocks rose on Monday, although they lost some of their gains after a media report said Standard Poor’s was about to warn Germany and other euro zone nations that their credit ratings were being assessed for a possible downgrade.

The markets were generally higher earlier in the day when an agreement between leaders of France and Germany raised optimism that European leaders would reach a credible solution to their debt crisis.

S. P. confirmed after the closing bell that it might downgrade the credit ratings of 15 euro zone countries. S. P. placed the ratings of euro zone countries, including top-rated Germany and France, on credit watch negative. The euro last traded at $1.339, down 0.1 percent for the day, near a session low of $1.337.

“We know Europe is facing a dire situation here and this action seems appropriate,” said Brian Dolan, chief strategist at Forex.com in Bedminster, N.J. “If they are trying to send a message, now is a good time.”

The rating agency’s move came as the leaders of France and Germany agreed to a master plan for imposing budget discipline across the region ahead of a meeting on Friday.

The proposal from President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany included automatic penalties for governments that fail to keep their deficits under control.

Wall Street ended off the day’s highs, though it was still near 1 percent higher.

The Dow Jones industrial average gained 78.41 points, or 0.65 percent, to 12,097.83. The Standard Poor’s 500-stock index rose 12.80 points, or 1.03 percent, to 1,257.08. The Nasdaq climbed 28.83 points, or 1.10 percent, to 2,655.76.

European stocks hit a five-week closing high, though analysts were wary the optimism could prove overdone.

“We are far from an easy consensus that it’s a done deal,” said Marc Pado, United States market strategist at Cantor Fitzgerald in San Francisco. “But we are further along in the negotiations than we’ve been and we are focused on the right things now.”

While the American economy is still expected to avoid another recession, data released Monday was also downbeat.

Growth in the service sector in the United States eased last month, and new orders for factory goods fell in October, tempering recent optimism that the economy might be poised for a more vigorous rebound.

The Institute for Supply Management said Monday that its services index fell unexpectedly to 52.0 last month from 52.9 the month before, dragged lower by a decline in employment. Although that figure was at its weakest since January 2010, business activity and new orders both improved, showing the mixed nature of expansion that also was evident in the upbeat jobs report for November.

A reading above 50 indicates expansion.

“This is the first disappointing indicator we’ve seen in the last couple of weeks,” said Cary Leahey, managing director at Decision Economics in New York. “The economy has improved, it is still not growing very quickly.”

Pointing to growth in services, the I.S.M.’s gauge of new orders rose to 53.0 from 52.4.

In a separate report on Monday from the Commerce Department, new orders for factory goods fell in October for the second consecutive month, suggesting a possible softening in manufacturing. That area of the economy has been a crucial support for the recovery. The agency said that orders for manufactured goods decreased 0.4 percent.

Economists had forecast orders would fall 0.3 percent after a previously reported 0.3 percent increase in September.

Article source: http://feeds.nytimes.com/click.phdo?i=e34698b77c217c55154ada0bc650968c

Troubled Poker Site May Be Bought by French Entrepreneur

Full Tilt Poker players may yet be able to cash out.

The embattled poker site said Friday that it had signed an agreement to be acquired by the investment company of George Tapie, a prominent French entrepreneur.

Under the agreement, Groupe Bernard Tapie would repay Full Tilt Poker players the hundreds of millions of dollars they have been unable to collect since the company was indicted in April by the Justice Department.

At the time, federal prosecutors accused the site, and two other offshore poker houses, of fraud and money laundering. Prosecutors shut down access to the sites for Americans.

Then, earlier this month, prosecutors separately filed civil charges against Full Tilt, asserting that the site’s owners and managers had siphoned off hundreds of millions of dollars that were supposed to be held in the accounts of individual players.

Under the terms of the agreement between Groupe Bernard Tapie and the management of Full Tilt, the acquisition deal would not go through unless there is a resolution to the civil suit.

Barry Boss, a lawyer for the corporate entities behind Full Tilt, stressed that the agreement announced Friday was merely a prelude to a formal acquisition, pending resolution of the civil suit.

Nevertheless, he said, “It’s a significant development and one that definitely gives a renewed since of optimism that the players will get paid.”

The Justice Department declined comment, and a representative of Groupe Bernard Tapie could not be reached for comment. Mr. Tapie’s son Laurent said in an interview with the Web site iGamingFrance that the company would be talking to the Justice Department next week. He said that there were no plans to change the site’s name, but that a change of management would be in store if the deal goes through.

Bernard Tapie is a flamboyant French businessman and a friend of President Nicolas Sarkozy. Previously a socialist minister, Mr. Tapie changed party loyalties in 2007 to support Mr. Sarkozy. He has made his fortune by purchasing distressed and bankrupt entities.

The involvement of a French businessman adds yet another geographic front to the complicated international saga of Full Tilt, which has been pursued by American prosecutors and is based in Ireland.

Earlier this week, Full Tilt had its operating license revoked by the Alderney Gambling Control Commission, which is based on the Irish Channel island of Alderney, where Full Tilt is registered.

Mr. Boss said the commission ruled that Full Tilt had not been up front with gaming authorities about the amount of cash it had on hand to pay back players. According to prosecutors in the United States, Full Tilt told players that it kept their funds in secure accounts, even as management was lining its pockets with those funds.

The prosecutors say Full Tilt owners and managers paid themselves $440 million since April 2007 but, as of March of this year, owed players $390 million.

In revoking the license, the Alderney Gambling Control Commission left room for a new owner to come in and re-establish a license, according to Mr. Boss.

Article source: http://feeds.nytimes.com/click.phdo?i=3c2f74f7577b4e76ead31dd1690fe383

Medtronic’s New Leader Outlines Growth Strategy

The new chief executive of Medtronic, the world’s largest medical device maker, vowed on Tuesday to revive the company’s growth by further expanding it internationally and improving its returns from research spending.

Omar Ishrak, who took over the company in June, said Medtronic remained committed to returning cash to shareholders and to exploring smaller acquisitions.

He also said he planned no major changes to the company’s diversified portfolio of medical devices except for the planned sale or spinoff of its external defibrillator business.

Mr. Ishrak’s comments, made on the company’s fiscal first-quarter conference call, gave the first glimpse of his strategy since he took over.

The company reported quarterly results that met analysts’ estimates. Net income in its fiscal first quarter, which ended July 29, was $821 million, compared with $830 million during the same period a year ago. Revenue in the quarter rose to $4.05 billion, 7.3 percent higher than the same period a year earlier. Analysts had expected $3.98 billion.

Medtronic shares rose 6.2 percent to close at $33.10, reflecting relief the results were better than some had feared and optimism that Mr. Ishrak, a former executive at General Electric, had struck the right note on Tuesday.

“From the point of view of setting the stage, I think he did a pretty good job,” said Jan Wald, an analyst at Morgan Keegan Company.

“He came across as sort of a tough guy, one who is going to be relentless in his pursuit of data and execution,” he said.

Medtronic is struggling with weak demand and pricing in its important markets for heart defibrillators and spine products.

In part, the slow demand is the result of a weak economy. But a study suggesting that heart devices are improperly used in patients who are too sick for them, and accusations in a medical journal that researchers hid serious complications with the company’s Infuse bone growth product, have also slowed sales.

Mr. Ishrak said the fallout from those problems would persist.

Article source: http://feeds.nytimes.com/click.phdo?i=a9681b1b3cfd09c9737b1c9f291b4cc6

Economix Blog: Washington, Capital of Economic Optimism

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

In case you’re wondering why Congress spent so much time twisting itself in knots over the long-term deficit, instead of over the current jobs crisis, this might help explain things: Washington, D.C., is the most economically optimistic area in the nation, according to Gallup.

Every day Gallup polls Americans across the country about whether they think current economic conditions are good (or “excellent,” “only fair” or “poor”), and whether the economy is getting better or worse. For each question, Gallup subtracts the percentage of people answering negatively from the percentage of people answering positively. Then the two results are averaged to come up with a value that Gallup calls the Economic Confidence Index.

If the index value is above zero, that means that people are generally confident about the economy. If the index value is below zero, then people are more pessimistic about the economy.

And guess what? Not only does Washington have the highest index value of any state or district in the country, it’s also the only place where the index value is positive.

Here are the top 10 states in terms of overall economic confidence:

Source: Gallup

These results are based on telephone interviews with 87,634 employed adults, 18 or older, conducted from January to June 2011 as part of Gallup Daily tracking. For each state, the margin of sampling error ranges from plus or minus 1 percentage point (for large states such as California), to plus or minus 8 percentage points (for the District of Columbia).

The biggest gap between the District of Columbia and the rest of the country is created by the second question used to create the Economic Confidence Index, on whether the economy is getting better or worse.

In every state, a majority of residents think the economy is getting worse. In the nation’s capital, however, a full 60 percent of people think the economy is getting better.

This may be good evidence for those arguing that Washington exists in its own disconnected bubble. At the very least, Gallup’s results show that the District of Columbia thinks very differently about the state of the economy than the rest of the country does.

Article source: http://feeds.nytimes.com/click.phdo?i=ad03bb7fa93fb1f8c3eefe806c2e6388