The News Radar

Timely links to external news and articles, usually valuation related, with occasional commentary. Most recent items shown below - for more, check the archive in the sidebar.

Friday, 30 September 2022
The Democratic Stock Trading Ban

After months of moral panic, House Democrats this week released a bill to ban federal officials from owning individual stocks, but its sheer breadth is a reason for second thoughts. The evidence is thin that this addresses any real problem, while it will deter successful people from seeking or accepting public office.

The bill would forbid federal officials from holding individual investments unless they’re in a qualified blind trust. There are some exemptions, such as for “a diversified mutual fund” or “a diversified exchange-traded fund,” as well as for “an interest in a small business concern or family-owned business that does not present a conflict of interest.” But no trading shares in companies famous or obscure.

These stringent terms would apply to Members of Congress, their spouses and dependent children, and some senior aides on Capitol Hill. They’d also cover the President and Vice President, plus any Senate-confirmed “political appointee,” which is a category that potentially reaches something like 1,200 roles.

If voters don’t trust their Senator or Representative not to profit from their office, the answer is to throw the bum out.

This is absolutly unhinged. Did a junior high school student crack the passwords to WSJ's CMS system?

Monday, 26 September 2022
Everything-Selloff on Wall Street Deepens on 98% Recession Odds

A global recession probability model by Ned Davis Research recently rose above 98%, triggering a “severe” recession signal. The only other times the model’s been that high was during previous acute downturns, such as in 2020 and 2008-2009, according to the firm’s Alejandra Grindal and Patrick Ayres.

“This indicates that the risk of severe global recession is rising for some time in 2023, which would create more downside risk for global equities,” they wrote in a note.

Sunday, 25 September 2022
Buying the Stock-Market Dip Is Backfiring, Investors Keep Piling In Anyway

Instead of rebounding after a tumble, stocks have continued to fall, burning investors who stepped in to buy shares on sale. The S&P 500 has dropped 1.2% on average this year in the week after a one-day loss of at least 1%, according to Dow Jones Market Data. That is the biggest such decline since 1931.

The extended downturn is putting a dent in the popular buy-the-dip trade, a strategy in which many investors found great success after the last financial crisis and particularly during the lightning-fast pandemic recovery.

Absolutly stunning that a timing strategy that has worked really well during *checks notes* the greatest bull market in history hasn't been doing too well during a down year...

Wednesday, 21 September 2022
Powell Signals More Pain to Come With Fed Sending Rates Higher

Federal Reserve Chair Jerome Powell vowed officials would crush inflation after they raised interest rates by 75 basis points for a third straight time and signaled even more aggressive hikes ahead than investors had expected.

“We have got to get inflation behind us. I wish there were a painless way to do that. There isn’t,” Powell told a press conference in Washington on Wednesday after officials lifted the target for the benchmark federal funds rate to a range of 3% to 3.25%.

Sounds like the ol' yield curve is going upside down soon...

Tuesday, 20 September 2022
Fed Set to Reveal ‘Pain’ Coming in Next Stage of Inflation Fight

Federal Reserve officials are about to put numbers on the “pain” they’ve been warning of in recent weeks when they publish new projections for the economy, which could show a substantial rise in interest rates and unemployment ahead as the estimated price tag for reducing inflation.

The US central bank will release its latest quarterly projections Wednesday following a two-day policy meeting in Washington, where officials are expected to raise their benchmark rate by three-quarters of a percentage point for the third time in a row.

Thursday, 15 September 2022
Mortgage Rates Top 6% for the First Time Since the 2008 Financial Crisis

The average rate on a 30-year fixed mortgage climbed to 6.02% this week, up from 5.89% last week and 2.86% a year ago, according to a survey of lenders released Thursday by mortgage giant Freddie Mac. The last time rates were this high was in the heart of the financial crisis almost 14 years ago, when the U.S. was deep in recession.

Tuesday, 13 September 2022
Schools Are Back and Confronting Severe Learning Losses

National data show that children who were learning to read earlier in the pandemic have the lowest reading proficiency rates in about 20 years.

The U.S. Department of Education last Thursday released data showing that from 2020 to 2022, average reading scores for 9-year-olds slid 5 points—to 215 out of a possible 500—in the sharpest decline since 1990. Average math scores fell 7 points to 234, the first statistically significant decline in math scores since the long-term trend assessments began in the 1970s.

Learning loss generally is worse in districts that kept classes remote longer, with the effects most pronounced in high-poverty districts, researchers say.

Covid's most lasting impact in the USA will be a terrible acceleration of wealth inequality for generations to come.

US Inflation Tops Forecasts, Cementing Odds of Big Fed Hike

The consumer price index increased 0.1% from July, after no change in the prior month, Labor Department data showed Tuesday. From a year earlier, prices climbed 8.3%, a slight deceleration, largely due to recent declines in gasoline prices.

Particularly ugly to see inflation once again rising on a month-over-month basis.

Monday, 12 September 2022
NY Fed Says Consumers Saw in August Steep Declines in Future Inflation

The bank said in its August Survey of Consumer Expectations that one year from now, households see inflation at 5.7%, down from the 6.2% they predicted in the July survey.

How much of a predictive indicator is consumer sentiment on inflation? I'd like to know if this same survey saw the current levels of inflation coming.... That said, inflation expectations are self-fulfilling once they begin to ramp up, so very good news to see this tempered a bit.

Kanye West Is Done With Corporate America

Ye intends to open his own Donda campuses, named after his late mother, across the country, which will house shopping, schools, farms and dorms all together. Products sold there will be unique to Yeezy’s physical and online shops and designed by existing Yeezy staff.

Somehow incorporate blockchain and it sounds like something Adam Nuemann would be interested in.