Reuters (1/8, Lynch) reports two judges on the US Court of Appeals for the District of Columbia Circuit voiced skepticism about a Securities and Exchange Commission rule requiring certain manufacturers to disclose whether their goods contain certain minerals from war-torn regions of Africa. The National Association of Manufacturers, the US Chamber of Commerce and the Business Roundtable filed to block the SEC’s “conflict minerals” rule law in October 2012. NAM and the other business groups contend the current SEC rule imposes too many costs and goes beyond the intent of Congress. They also argue that the rule violates First Amendment freedoms by forcing manufacturers to condemn their own products.
The Wall Street Journal (1/7, Dipietro) “Risk & Compliance Journal” blog reported NAM and the other business groups said in a statement following the proceedings, “We understand the seriousness of the humanitarian situation in the Democratic Republic of Congo (DRC) and abhor the violence in that country. We believe, however, that the SEC’s corporate disclosure rule is not an effective approach to solving this serious humanitarian challenge.” The business groups also said, “In issuing its final rule, the SEC made several regulatory choices that place unprecedented and extreme compliance burdens on America’s job creators without ending violence in the DRC. We believe we have strong arguments and look forward to the D.C. Circuit’s decision.”
The Wall Street Journal (1/8, Ackerman, Subscription Publication) reports Judges David Sentelle and A. Raymond Randolph expressed concerns with the regulation. Judge Sentelle said he thought the rule was written more broadly than required by 2010 Dodd-Frank law. Also, Judges Sentelle and Randolph appeared to agree with at least some of the free-speech concerns raised by NAM and the other groups.
EPA Releases RCRA “e-Manifests” Rule
The U.S. EPA issued a rule on January 15 formally authorizing the use of “e-Manifests”, which Congress created in 2012 to track hazardous waste. The new system replaces the paper manifest system tracking waste under the Resource Conservation and Recovery Act (RCRA). The rule covers all federal and state-regulated waste requiring manifests, which track shipments of hazardous waste from its origin to the disposal site. The Hazardous Waste Electronic Manifest Establishment Act requires that a system be up and running by October 2015. The rule paves the way for e-Manifests which the EPA estimates will save over 300,000 labor hours. This is part of broader government-wide initiative to move to electronic reporting systems where much of the information will become public.
As Recovery Gains Steam, Employment Could Exceed Pre-Recession Peak In 2014
The Wall Street Journal (12/30, Cronin, Subscription Publication) reports that indicators including recent strength in GDP, industrial production and construction indicate suggest that by mid-2014, total jobs could surpass their pre-recession peak. Economists in the Journal’s most recent survey were optimistic, predicting on average the in 2014, the US will add 198,000 a month. That rate would put the nation on pace to reach pre-recession job levels before July.
The Wall Street Journal (12/30, A1, Timiraos, Subscription Publication) reports that home prices have climbed back to all-time highs in 10 of the 50 largest US cities, according to a Journal analysis of price data from Zillow. The Journal notes, however, that these cities are generally exceptions and prices in many parts of the nation remain below peak. According to the Journal in 1,500 cities, values remain at least 25% below previous highs.
In his column for the Washington Post (12/30, Samuelson), Robert Samuelson that with many “economic ‘fundamentals’ improving simultaneously,” including a strengthening job market, declining household debt, a continuing housing recovery, and corporations “awash in cash,” the “case for a healthier recovery now seems the most plausible since the recession’s nadir in mid-2009.” Samuelson notes, however, that a stronger recovery “presumes that consumers and companies respond to good news as in the past” which they may not do.
Reuters (12/30, Bruce) reports that the world economy should break a three year run of declining growth in 2014, but the upswing will likely be incremental. While investors and analysts are confident going into 2014, structural problems and imbalances remain and many economists believe the world economy will continue to see modest growth. Reuters notes that much of the optimism in financial markets is a result of an improving outlook for the US, which appears to be on pace for faster growth in 2014.
Focus On “Inexpensive” Stocks Seen As A Sign Rally Could Continue Into 2014. The Wall Street Journal (12/30, Scaggs, Subscription Publication) reports that with investors focusing on “inexpensive” stocks this year’s stock rally could continue into 2014. Some money managers see the better-than-average gains posted by these stocks as a sign of the market’s health. Their strong performance this year is an indication that investors are willing to take more risks but continue to be cautious about their portfolios.