Top of the News: If Boeing didn’t have bad news, it wouldn’t have any at all. Today’s earnings announcement, showing a $1.56 billion loss, underscores that the defense business isn’t acting as a counterweight to commercial aircraft.
The Dreamliner and 747-8 delays are at the heart of the earnings trouble, and Morgan Stanley analyst Heidi Wood still isn’t convinced we’ve seen the end of Dreamliner delays. That carries weight with investors. So does Boeing’s scaling back of guidance for earnings-per-share this year.
CEO Jim McNerney added to the uncertainty by saying the company’s core businesses remain strong, but commercial airplanes and defense face challenges. Well, which is it? The more sobering thought is that much of Boeing’s troubles so far have been self-inflicted. What happens when the consequences of the world recession really hit home? The result: Continued uncertainty in the Puget Sound region.
The Midweek Briefing: Twenty-three states posted unemployment increases in September, including Washington (9.3 percent, up 3.8 percentage points). The largest epicenters of September job losses: New York, Texas and California. Michigan again led the nation with 15.3 unemployment.
–Harvard economist Jeff Frankel comments on the rise of the Euro as an alternative to the dollar (the EU currency hit $1.50 today) and notes that central bank holdings of dollars are continuing their decline. There are other alternatives as well: the Swiss franc, yen and pound among them.
–Executive Director Timothy Farrell is leaving the Port of Tacoma, which he has led since 2004. He’ll work full-time through the end of the year and then help with the transition through next May. Deputy Director John Wolfe will fill the job on an interim basis. In a port press release, Farrell is quoted about wanting to “pursue opportunities” and “spend more time with my family.” Commission President Clare Petrich said, “We want to assure our staff, our customers, and our community that the Port is dedicated to their continued success…” Hmmm. The News Tribune says he is “leaving under a cloud.”
–The Center for American Progress has released its economic snapshot for October and it’s not pretty. Despite stabilization on Wall Street, average Americans continue to feel pressure. Among the data: family incomes are down sharply and the unemployed are facing long periods of joblessness.
–McClatchy Newspapers has a devastating investigation of how Moody’s failed in its duty to investors in the run up to the crash. Among the findings, the rating agency “punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.”
Today’s Econ Haiku:
They’re back in the black
At Morgan Stanley. Know why?
Making risky bets