Your daily briefing for all the top news in Energy, Technology, Finance, and Politics.
Energy
Oil’s Comeback Gives U.S. Global Leverage
NEW YORK TIMES
David Wallis
It has become fashionable to note a decline of American global power and influence, but don’t tell that to the energy experts. Many see increased domestic production of oil and gas as driving more muscular United States energy diplomacy, power that exists in curious tandem with the Obama administration’s efforts to wean the world off fossil fuels.
Reversing the Flow of Oil
NEW YORK TIMES
Clifford Krauss
The Singapore-flagged tanker BW Zambesi set sail with little fanfare from the port of Galveston, Tex., on July 30, loaded with crude oil destined for South Korea. … The 400,000 barrels the tanker carried represented the first unrestricted export of American oil to a country outside of North America in nearly four decades. The Obama administration insisted there was no change in energy trade policy, perhaps concerned about the reaction from environmentalists and liberal members of Congress with midterm elections coming. But many energy experts viewed the launch as the curtain raiser for the United States’ inevitable emergence as a major world oil exporter, an improbable return to a status that helped make the country a great power in the first half of the 20th century.
One Key to Exports: Liquid Gas
NEW YORK TIMES
Conrad de Aenlle
New methods of producing natural gas are expected to turn the United States from an importer into a large exporter in less than a decade, assuming that the gas can be exported in sufficient quantities cheaply enough to compete on world markets.
California Finally to Reap Fracking’s Riches
WALL STREET JOURNAL
Alison Sider and Cassandra Sweet
For the past decade, the U.S. shale boom has mostly passed by California, forcing oil refiners in the state to import expensive crude. Now that’s changing as energy companies overcome opposition to forge ahead with rail depots that will get oil from North Dakota’s Bakken Shale.
Oil prices are plummeting. Here’s why that’s a big deal.
VOX
Brad Plumer
If oil prices keep falling, that could have lots of far-reaching effects. OPEC is already fighting bitterly over how to respond. Russia, a major oil producer, could see its economy kneecapped if prices decline. Some shale oil producers in North Dakota and Texas may find it unprofitable to keep drilling. And lower gas prices could bolster the US economy (though it would also curtail the recent drive for energy-efficient vehicles).
Technology
In Net Neutrality Discussion, Lawsuits Loom Large
NEW YORK TIMES
Edward Wyatt
After discussion and debate at six Federal Communications Commission roundtables stretching over 24 hours, a consensus has finally emerged on net neutrality: Whatever rules the F.C.C. adopts, someone will take it to court. … “There will be blood,” said Tim Wu, a Columbia University law professor who coined the term network neutrality in a 2003 academic paper. Which is to say, he added, “there will be litigation.”
Twitter sues agencies to make surveillance requests public
USA TODAY
Mark Snider
Twitter is suing the Federal Bureau of Investigation and the Justice Department because it wants to make public more information about the U.S. government’s surveillance of its users.
Mobile revolution shakes up Silicon Valley
ASSOCIATED PRESS
Michael Liedtke
Smartphones, tablets and other gadgets aren’t just changing the way we live and work. They are shaking up Silicon Valley’s balance of power and splitting up businesses. Long-established companies such as Hewlett-Packard Co. and eBay Inc. are scrambling to regain their footing to better compete against mobile-savvy trendsetters like Apple and Google, as well as rising technology stars that have built businesses around “cloud computing.”
Long arm of the law reaches for cyber crooks
POLITICO
Tal Kopan
“We have made great strides, but the criminals have as well,” CCIPS Chief John Lynch said. “They’re continuing to get more sophisticated, they can route things through a number of different countries just to confuse the investigation, so to some extent as proud as I am of what we’ve done to improve things, it’s as much to keep up as anything.”
Finance
Banks rewrite derivatives rules to cope with future crisis
FINANCIAL TIMES (Subscribe)
Tom Braithwaite and Tracy Alloway
People familiar with the matter said 18 bank “dealers”, ranging from Credit Suisse to Goldman Sachs, have agreed to give up the right to pull the plug on derivatives contracts with a crisis-stricken institution.
The Fed’s Mortgage Favoritism
WALL STREET JOURNAL
Jeffrey M. Lacker and John A. Weinberg
We were skeptical of the need for the purchase of mortgage assets, even in 2009, believing that the Fed could achieve its goals through the purchase of Treasury securities alone. Now, as the Fed looks to raise the federal-funds rate and other short-term interest rates to more normal levels, that normalization should include a plan to sell these assets at a predictable pace, so that we can minimize our distortion of credit markets. The Federal Open Market Committee’s recent statement of normalization principles did not include such a plan.
Profit at Goldman Less Easy to Find
NEW YORK TIMES
Nathaniel Popper
Now the company is facing questions about whether it will be able to maintain its place atop the financial industry in a new era of regulations that hit hardest the very businesses in which Goldman makes the most money. … Analysts and some investors say they are concerned that lawmakers may continue to come down harder on the company than on its competitors, most of which are not as reliant on Wall Street activities as Goldman. In September, for instance, an influential Federal Reserve official, Daniel K. Tarullo, announced plans to rein in a type of financing that Goldman particularly depends on.
A.I.G. Trial Puts Book, and Author, on Hot Seat
NEW YORK TIMES
Aaron M. Kessler
So often did parts of his book, “Stress Test,” come up during Mr. Geithner’s testimony at the trial of a lawsuit against the government over its bailout of the American International Group, that at one point Justice Department lawyers suggested the entire book should be submitted as evidence. And it was.
AIG trial focuses on ‘harsh’ bailout
POLITICO
Zachary Warmbrodt and MJ Lee
Paulson and other officials in testimony have had no problem conceding the terms of AIG’s bailout were tougher than those received by other failing financial firms — even if it’s the story the shareholders’ lawyers are trying to tell. They argue it was better than bankruptcy, was needed to save the financial system and was the result of the chaotic atmosphere in which they had to operate.
AIG lawsuit should be laughed out of court
USA TODAY
Editorial
Suppose a death-row inmate gets a last-minute reprieve. You’d think he’d be grateful. But if this prisoner were Maurice Greenberg, former CEO of insurance giant AIG, he’d sue for being served pasta instead of steak for what was to be his last meal.
Our case is strong and based on fact
USA TODAY
Robert Silver
The Fed had no authorization from Congress to demand equity, and no authorization to use its enormous powers to pick winners (individuals and firms it knew and liked) and losers (AIG and Main Street). Important as plaintiffs’ rights are, the constitutional question is even more important: Can a government agency unilaterally, without congressional authorization, require citizens to give up their property in order to obtain a service that Congress has entrusted the agency to grant? If it can, if there are no limits to what it can demand, we are no longer a government of laws, and every company and citizen is at risk.
Warren Buffett says time is right to revamp corporate tax rules
POLITICO
Kelsey Snell
Billionaire investor Warren Buffett said Monday that the White House action to limit companies shifting their tax address outside the United States provides a good “time out” to work on revamping corporate tax rules.
Politics
Turkish Inaction on ISIS Advance Dismays the U.S.
NEW YORK TIMES
Mark Landler, Anne Barnard and Eric Schmitt
As fighters with the Islamic State bore down Tuesday on the Syrian town of Kobani on the Turkish border, President Obama’s plan to fight the militant group without being drawn deeper into the Syrian civil war was coming under acute strain. While Turkish troops watched the fighting in Kobani through a chicken-wire fence, Turkey’s president, Recep Tayyip Erdogan, said that the town was about to fall and Kurdish fighters warned of an impending blood bath if they were not reinforced — fears the United States shares
U.S. air campaign against Islamic State isn’t achieving its aims
WASHINGTON POST
Editorial
Why can’t the U.S.-led coalition prevent a ragtag insurgent army from overrunning large towns? The answers speak to the limitations imposed on the military campaign by President Obama as well as the continuing political complications of fighting the Islamic State. Military analysts point out that U.S. strikes on Islamic State forces around Kobane have come late and in small handfuls — not enough, as of Tuesday, to turn back thousands of fighters armed with tanks and artillery. In contrast with the successful 2002 air campaign against the Taliban in Afghanistan, U.S. pilots cannot rely on Special Forces spotters to identify targets. Mr. Obama has ruled out such ground personnel despite requests from military commanders.
ISIS Marches to a Massacre
WALL STREET JOURNAL
Editorial
This early crisis in the Obama campaign exposes flaws in his strategy that will continue to undermine the military effort and the anti-ISIS regional alliance. No successful war plan is static, and Mr. Obama needs to adjust his now if he wants to stop a massacre in Kobani and the continuing march of ISIS.
Secretly Buying Access to a Governor
NEW YORK TIMES
Editorial
There’s absolutely no legal justification for any political party to have a social welfare group, which exists solely as a vehicle for nervous donors who want to stay in the shadows. But whether the money is secret or disclosed, both parties are routinely selling access to the nation’s governors and their staffs to those with the most resources. Those without a checkbook can stay in the back of the line.
In This Election, Obama’s Party Benches Him
NEW YORK TIMES
Jonathan Martin
As November nears, Mr. Obama and his loyalists are being forced to reconcile that it is not only Democrats in conservative-leaning states, like Senator Mark Pryor of Arkansas, who are avoiding him. The president who became the first Democrat since Franklin D. Roosevelt to twice win a majority of the vote is flying in politically restricted airspace. Democratic senators in Colorado, North Carolina and Virginia — states that were pivotal to his success and whose demographics reflect his winning coalition of young, minority and female voters — do not want him. Nor does his party’s Senate nominee in Iowa, where Mr. Obama won twice and whose youth-filled 2008 Democratic caucuses vaulted him toward the nomination.
Why Aid for College Is Missing the Mark
NEW YORK TIMES
Eduardo Porter
In 1987, when he was Ronald Reagan’s education secretary, the conservative culture warrior William J. Bennett wrote a famous essay denouncing federal aid for higher education because it allowed colleges “blithely to raise their tuitions,” at little benefit to students. Nearly two decades later, it seems, he was broadly right. Indeed, he didn’t know the half of it.
Obama may be looking to shake-up his White House team
WASHINGTON POST
David Ignatius
Presidents often need new energy and talent to refurbish their second terms. George W. Bush opted for such a shake-up in 2006, and it arguably saved his presidency. Barack Obama is now facing a similar moment, and there are signs he’s looking to make some personnel changes after the November congressional elections.
President Obama’s executive action plan falls short
POLITICO
Carrie Budoff Brown and Jennifer Epstein
A POLITICO analysis of the more than 60 executive actions announced since January found that not even the president’s vaunted “pen and phone” can deliver quick or sweeping results. Many of the major initiatives launched as part of the policy and messaging offensive will take years to implement and touch only a fraction of Americans. A higher minimum wage and anti-discrimination protections for gay workers won’t reach all federal contractors until at least 2019. That new retirement savings plan unveiled at the State of the Union? Not ready yet. A new program to ease student loan debt is still more than a year away. And a slate of ambitious pro-labor workplace reforms won’t phase in until just before the next administration takes over.
Everyday Low Benefits
WALL STREET JOURNAL
Editorial
Wal-Mart endorsed ObamaCare in 2009 and helped drag the bill through Congress, and so far it hasn’t recanted. By holding back economic growth and incomes, perhaps the law is expanding the retailer’s customer base. Another plus—at least for management—is that Wal-Mart can jettison its employees into the ObamaCare insurance exchanges.
