What's Important in the Financial World (3/2/2012) AT&T Data Plan, Spain’s Unemployment

Brent crude rose above $125 on news of the explosion of a Saudi pipeline. The news turned out to be a rumor, and the price dropped several dollars. There is a lesson in the price movement. Oil traders have gone from an orderly buying and selling of crude to one driven moment-by-moment based on a rapidly streaming information, some of it true and some not. Until global factors like the Iranian oil embargo and OPEC plans are resolved, the quick swings will continue.

Bridgewater Pay Day

No hedge fund ever made more money for its investors than Bridgewater Associates did last year. And success in the industry continues to result in tremendous compensation. Forbes estimates that Bridgewater founder Ray Dalio made $3 billion last year. His Bridgewater Pure Alpha fund returned investors $13.8 billion in 2011. Based on that, his payout seems modest.

Unemployment in Spain

EU research arm Eurostat reports that unemployment in Spain rose to an astonishing 23.3% in January. If the counting process is like that in the U.S. and does not include the partially employed, the number could actually be higher. The data will trigger a more violent disagreement between the proponents of stimulus and those of austerity. It is almost impossible to make the case that Spain’s unemployment can drop if government spending is sharply curtailed.

AT&T’s Data Plan

The age of unlimited data use based on one set fee for wireless subscribers is coming to end. AT&T (NYSE: T) announced that it would begin to charge penalties for some customers. 4G LTE customers will be affected the most. Their data download levels per month will be limited to 5 GB. For 3G customers, that number will be 3 GB. AT&T will obviously make more money from heavy-use customers who go over these limits, or cost-conscious subscribers will burden AT&T’s network less. Either way, the phone company wins. It is too early to see if the action will prompt any AT&T subscribers to defect to other service providers.

Douglas A. McIntyre