A Little Less Talk, a Little More Action

Whether the government's stimulus is taking effect and whether it has been enough is a topic that remains front-and-center in the pages of the business press. The New York Times leads its business section with a look at the rapidity with which France has meted out funds earmarked for stimulus spending. "America is six months behind; it has wasted a lot of time," Patrick Devedjian, the minister in charge of the French stimulus, recently said. "By the time Washington gets around to doling out most of its money, Mr. Devedjian sniffed, ‘the crisis could be over,' " the Times relays. CNNMoney chimes in, saying that "with August quickly approaching, $56.3 billion, or 10 percent of stimulus funds have been paid out, and the unemployment rate has already risen to 9.5 percent"—higher than the Obama administration had expected. The largest portion of the stimulus, $22 billion, has been spent by states for Medicare and Medicaid payments.

Reuters, meanwhile, reports that Laura D'Andrea Tyson, a member of the panel advising President Barack Obama on tackling the economic crisis, is calling for the government to plan for a possible second round of fiscal stimulus spending. Speaking at a seminar in Singapore, Tyson said that "the stimulus is performing close to expectations but not in timing," and that a second round of financing should be directed at infrastructure. She dispelled the largest criticism of increased stimulus spending: inflation and the prospect of a weakened dollar. "The Federal Reserve is not going to allow the U.S. to inflate away its debt," she said, adding that, "it is almost in no one's interest to have a sharply spiraling downward dollar."

The administration has said it is on track to have 70 percent of the stimulus out the door by September 2010, but that, ultimately, the pace will depend on whether or not the economy shows sustained improvement. "Part of the reason stimulus has been slow-going so far is the number of hurdles projects need to clear before money gets out the door. Projects need to meet certain guidelines, as the government seeks to ensure that the money is spent wisely," CNN Money says. Indeed, France has been particularly successful in doling out the funds that have put millions of French to work on projects ranging from beatification to infrastructure because of its "centralized, state-directed economy."

Bloomberg leads with news that prosecutors say Goldman Sachs (GS) may wind up losing millions of dollars if computer software allegedly stolen by Sergey Aleynikov, an ex-Goldman computer programmer, gets into the wrong hands. A record of a hearing held on July 4, one day after Aleynikov was arrested after arriving at an airport in Newark, N.J., and made public yesterday shows Assistant U.S. Attorney Joseph Facciponti telling a federal judge that Aleynikov's alleged theft poses a risk to U.S. markets. Facciponti accused Aleynikov of transferring a proprietary code, "which is worth millions of dollars," to a computer server in Germany, where others may have had access to it. The code allows the firm to do "sophisticated, high- speed and high-volume trades on various stock and commodities markets" that generate "many millions of dollars" each year, according to the court papers reviewed by Bloomberg. Adds the Wall Street Journal: The specific program that Aleynikov worked on "was used primarily by Goldman's principal traders, who take risks with the New York company's capital because they buy securities from clients that may end up on the Goldman balance sheet."

Aleynikov's attorney said the government's allegations are "preposterous," and that Aleynikov was simply downloading programs to his personal computer to do work at home, which Goldman was aware of. The information hadn't been disseminated, the lawyer said. Aleynikov, who lives in Little Falls, N.J., posted a $750,000 bail yesterday. The programmer made $400,000 a year at Goldman and on July 2 started a job at Teza Technologies, a Chicago-based firm co-founded by a former Citadel Investment Group trader, where he was to earn $1.2 million annually for conducting high-volume automated trading. He has been suspended from his new job. According to the WSJ, sources at Goldman say there was no financial impact on the firm. "The company's surveillance systems caught the alleged breach, and Goldman notified the FBI. But the arrest shines a spotlight on the inner workings of Goldman's computer-programming department, which helps traders generate returns that contribute to the firm's reputation as one of the savviest buyers and sellers on Wall Street," the paper writes.

Keeping with the courts, the WSJ leads with word that the Department of Justice has begun examining whether large U.S. telecommunications companies, including AT&T (T) and Verizon Communications (VZ), have violated antitrust laws. In fact, the paper says, "the telecom industry is among several sectors now coming under scrutiny." Others include health care and agriculture. The informal investigation into the telecom industry, a process expected to cover all areas from land-line voice and broadband service to wireless to restrictions on outside services such as Skype, is in the early stages and may never advance into a formal process.

More than the incident itself, the increased scrutiny indicates "the Obama administration's aggressive stance on antitrust enforcement," the WSJ says. However, according to experts, the government could have a tough time proving their case. "What you'll probably see is a lot of investigations opened, but they'll bring cases where they have the best shot of succeeding in litigation and clarifying the law," Ketan Jhaveri, an attorney who once worked on the Justice Department's telecom antitrust task force told the paper. "He noted that antimonopoly litigation consumes a lot of resources: and that the "scrutiny itself might help deter anticompetitive behavior, even if suits aren't filed."