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☆ What I Learned About ‘Woke’ Capital and Milton Friedman at the University of Chicago
▼ + stars: | 2023-06-09 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Saieh Hall for Economics at the University of Chicago. Photo: Beata Zawrzel/Getty ImagesAhead of three months studying in Chicago, the home of Milton Friedman, I expected to be surrounded by anti-ESG, pro-capitalist supporters of the status quo in American finance. The University of Chicago has such a reputation as the bastion of free markets that the pure capitalism it espoused was dubbed “freshwater economics” for the lakeside location.

Persons: Saieh, Beata Zawrzel, Milton Friedman Organizations: for Economics, University of Chicago, The University of Chicago Locations: Chicago

☆ To Get Politics Out of Business, Get Business Out of Politics
▼ + stars: | 2023-06-09 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Persons: Saieh, Beata Zawrzel, Milton Friedman Organizations: for Economics, University of Chicago, The University of Chicago Locations: Chicago

☆ Eight Megacap Stocks Make for a Funny Sort of Bull Market
▼ + stars: | 2023-06-07 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Investors are facing a new market narrative. Photo: Spencer Platt/Getty ImagesInvestors need a new acronym. The FANGs and various remixes worked for a while, but 2023 has expanded the market leadership to seven, or perhaps eight, stocks that now dominate the market and seem to move to a different tune to the rest.

Persons: Spencer Platt Organizations: Getty

☆ Nowhere for Investors to Hide From AI Hype
▼ + stars: | 2023-06-02 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

New AI voice and video tools can look and sound like you. But can they fool your family—or bank? WSJ’s Joanna Stern replaced herself with her AI twin for the day to find out. Photo illustration: Elena ScottiInvestors thinking of putting money into artificial intelligence need to apply a little real intelligence first. The gold rush begun by chatbot ChatGPT is quickly turning into a mini-bubble—and there’s no need to look far back in history to see how quickly bets on hot new themes can put your portfolio into the deep freeze.

Persons: Joanna Stern, Elena Scotti, chatbot ChatGPT Organizations: Elena Scotti Investors

☆ The Taliban promised to provide security to Afghans. New data shows threat from ISIS is growing
▼ + stars: | 2023-05-19 | by ( Eliza Mackintosh Ehsan Popalzai Antonio Jarne Lou Robinson | Eliza Mackintosh | Ehsan Popalzai | ) edition.cnn.com time to read: +19 min

“Currently we don’t have security in Afghanistan at all, whenever we go out we don’t know if we will come home alive or not,” he added. Taliban security forces guard a checkpoint near the foreign ministry in Kabul on March 27, after an ISIS-K suicide bomber struck the site. The data, which is available in a live map, includes 367 pieces of open-source evidence — largely videos and images shared on social media — about 70 ISIS-K attacks since August 2021. As the Taliban try to minimize the threat ISIS-K poses, attacks on civilians continue. Taliban security forces have been waging ongoing operations and night raids against ISIS-K.

CNN —The violence that has exploded in Sudan as the country’s two top generals grapple for power has unfolded at a terrifying, breakneck speed. Hemedti uses this discourse as a bloody shirt to maintain his influence and military forces for future use,” Fareid said. Marwan Ali/APFrom a subclan of the Mahariya Rizeigat tribe, nomadic people that herded camels in Darfur, Hemedti got his start as a commander of the Janjaweed. Unlike Sudan’s former dictator, Hemedti has not faced charges from the International Criminal Court. The general’s shared sense of impunity was underlined in October 2021, when they staged a coup, arresting Hamdok and his cabinet.

☆ There Is a Cost to Moral Hazard
▼ + stars: | 2023-03-16 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Usually, bailouts of banks lead to widespread concerns about moral hazard, the idea that if you save someone from the consequences of their actions, they take even bigger risks. This time a popular view being expressed by many commentators is that bank depositors, even big sophisticated businesses with large uninsured deposits at risk, can’t be expected to police how their banks behave. The view is both right and horribly wrong. And it matters for how we as a society decide the banking system should look in the wake of the failures of Silicon Valley Bank and smaller Signature Bank.

☆ Fed’s Magical Accounting Might Save Banks but Doom Rate Increases
▼ + stars: | 2023-03-14 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

A trader on the floor of the New York Stock Exchange. Bank shares were down Monday in the aftermath of the collapse of Silicon Valley Bank. Just two days before the 15th anniversary of the Federal Reserve-backed rescue of Bear Stearns, the central bank is offering easy money to banks to stop an incipient run on the sector. The immediate question is whether it will succeed. The secondary questions for investors are whether this marks the end of the rapid rate rises that trashed markets last year, and what lessons can be learned.

☆ Fed’s Magical Accounting Might Save Banks But Doom Rate Increases
▼ + stars: | 2023-03-13 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

☆ Markets Are Telling Investors Two Things at Once
▼ + stars: | 2023-03-09 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

There is a big puzzle in today’s market: Treasurys appear to be anticipating a recession, while stocks and corporate bonds aren’t, despite recent falls. How can such big markets be sending such different signals? There are several decent answers—and none of them suggest an easy time for investors.

☆ How to Invest in These Very Confusing Times
▼ + stars: | 2023-03-04 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

For investors, the danger isn’t so much day-to-day volatility but the danger of extreme outcomes in the longer run. Economists have rarely been so divided about the future aside from during recession, and sensible investors shouldn’t have much confidence in their own forecasts, either. It’s a hard time to put money to work. There are always good reasons for being uncertain about the future, but right now the uncertainty is worse because directly opposite outcomes—“no landing” with superlow unemployment forever or a hard landing and recession—are both plausible.

☆ Markets History 101: It’s Time to Buy Bonds
▼ + stars: | 2023-02-27 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Even after their big falls, stocks still look very expensive compared to bonds. The market narrative is obvious after a twin inflation and interest-rate shock crushed asset prices: nothing else much matters. The parallels from history are equally obvious. In 1973, the Arab oil embargo trashed the economy and led to sharp interest-rate rises, while in 1980 rampant inflation worsened by another oil shock was accompanied by then-Federal Reserve Chairman Paul Volcker’s aggressive rate increases. Russia’s invasion of Ukraine was followed by the Fed’s fastest rate rises since Mr. Volcker was in charge.

☆ This Bear Market (Probably) Isn’t Over Yet
▼ + stars: | 2023-02-22 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Stocks, notwithstanding Tuesday’s swoon, have surged this year. Is yet another bear-market rally coming to an ignominious end, or has the stock market entered a new and more forgiving paradigm? Investors grappling with the confusing signals from the economy and markets can be forgiven for struggling to explain the switch in behavior by stocks this year.

☆ Burberry's Lee stages an ode to British heritage in debut runway show
▼ + stars: | 2023-02-21 | by ( Suban Abdulla | ) www.reuters.com time to read: +2 min

LONDON, Feb 20 (Reuters) - Faux fur, oversized coats and hot water bottles dominated Burberry’s (BRBY.L) runway as Daniel Lee presented his vision for the British heritage label at London Fashion Week on Monday. Burberry's mackintosh-style trench coat was re-imagined in a muted khaki with green faux fur lapels. English rose patterned tailoring sat alongside chunky rubber boots with an equestrian twist and cosy square toed shearling and faux fur shoes in the Autumn Winter 2023 collection. Monday's show follows the unveiling of Burberry's new logo: a sleeker elongated typeface and a campaign steeped in "Britishness". Lee previously created a buzz at Italy's Bottega Veneta with pillowy leather clutch handbags and slip-on heels.

☆ Goldilocks Economy Is a Fairy Tale Too Good to Be True
▼ + stars: | 2023-02-08 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

What investors really liked in the 1990s was a Goldilocks economy—not too hot, not too cold, just like the porridge she eats in the fairy tale. To the delight of investors, Goldilocks seems to be back, in spite of full employment that ought to push up wages fast. Perhaps the Federal Reserve has it all wrong, and investors are right to be pricing in both lower rates later this year and a decent economy, as wage growth moderates and inflation falls. At the very least, those of us who worried that the market was ahead of itself in preparing for a soft landing need to revisit our assumptions.

☆ The Best Investment Idea Is Also the Most Obvious
▼ + stars: | 2023-02-02 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Investing is all about risk and reward, but at the moment it’s mostly about risk and not very much reward. Some risks aren’t just badly rewarded, but are more expensive than holding the very safest forms of money. The extra yield that can be earned above cash by buying risky junk bonds is the lowest outside the credit bubble of 2007, in data that go back to 1986. A standard, albeit flawed, Wall Street valuation measure shows the smallest extra reward for the risk of holding stocks over cash since the dot-com bubble burst two decades ago.

☆ For Markets, Good News Is Good News Again
▼ + stars: | 2023-02-01 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

A pattern of stocks and bond yields rising and falling in parallel held for most of this century, until last year. It’s early days, but in the past couple of weeks investors have begun moving away from their obsession with inflation, shifting markets into a new regime where good news on the economy is again good news for stocks. This is a big change from the rally that lifted the S&P 500 from just after Christmas until mid-January, which was accompanied by falling bond yields as inflation fears receded. Since then stocks have switched from rising when bond yields fall, to rising when bond yields rise—a return to what counted as normal for most of this century.

☆ The Ultimate Contrarian Indicator to Start the Year
▼ + stars: | 2023-01-21 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The mood among the world’s financial elite as they gathered in the mountain resort of Davos, Switzerland, is typically a useful investment indicator: However they feel, do the opposite. Not so much this year. The bankers, executives and politicians were more optimistic, but only relative to how pessimistic they were feeling a few months ago. Just like the markets, they have had a bit of a rally, but are still down in the dumps compared with this time a year ago. They are also puzzled by the same uncertainties that trouble investors.

LONDON/ZURICH, Jan 18 (Reuters) - Luxury retailers Richemont (CFR.S) and Burberry (BRBY.L) said they were optimistic that consumers in China would start spending again, helping offset three years of upheaval from the government's strict COVID-19 lockdowns and soaring infections. Richemont (CFR.S), whose brands include Cartier jewellery and Swiss watches IWC and Jaeger-LeCoultre, also said it expected a strong rebound in China. The European luxury sector is among the largest expected winners as China loosens COVID-19 restrictions that kept shoppers out of stores for months. Richemont missed market estimates after sales in China plunged by a quarter, as customer traffic dwindled and staff were not available, leading to a reduction of boutique hours, or temporary closures of sales points, the company said. Mainland China is currently 25% of Burberry sales, down from about 40% pre-pandemic.

☆ BlackRock vs. Goldman in the Fight Over 60/40
▼ + stars: | 2023-01-15 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

The best-known names in asset management and investment banking are taking opposite sides in the debate over the classic way of building a portfolio—60% stocks and 40% bonds—after a disastrous performance for the 60/40 model last year. BlackRock says the losses—the worst in nominal terms for a 60/40 portfolio since the financial crisis of 2008-9 and the worst in real terms in a calendar year since the Great Depression—show that the structure is outdated. Goldman demurs, arguing that the odd big loss is inevitable in any strategy and that 60/40 remains a valid basic approach. Strategists and fund managers at other large money managers and banks have been piling in on both sides.

☆ Investors Should Keep an Eye on Japan’s Kinky Yield Curve
▼ + stars: | 2023-01-12 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Sometimes central banks trade on their credibility, as when Mario Draghi ‘s promise to do “whatever it takes” to save the euro was so widely believed that the European Central Bank ended up having to spend nothing. Sometimes, though, central banks trade directly against their credibility. The Bank of Japan set out in December to try to fix the distortions it had created in its government bond market through its policy of “yield-curve control.” It lifted the cap it has in place on the 10-year yield, allowing it to rise. Instead of solving the problem, it made it worse in some areas, spending large amounts of money along the way and ending up with tighter monetary policy that it says it doesn’t want.

In doing so they should deploy the financial innovation which helped to halt the Latin American debt crisis of the 1980s: Brady bonds. It requires a 21st-century Marshall Plan led by America and joined by European allies. For example, the European Bank for Reconstruction and Development has 520 projects in Ukraine and will play an important ongoing role. Specifically, the government in Kyiv should investigate an equivalent to the Brady bonds. For Ukraine to benefit from similar relief, the U.S. Treasury and other key finance ministries should back new Brady bonds.

☆ Last Year Investing Seemed Easy. Not Anymore.
▼ + stars: | 2023-01-09 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Sometimes investing seems easy. But there are times when the market makes it easy to have a strong view and decide where to put money. Stocks started 2022 overvalued thanks to the overconfidence of the bulls, providing the simplest of signals to the bears. Bonds started last year having willfully ignored runaway inflation and the necessity of the Federal Reserve’s belated reaction. Good news on the economy was bad news for stocks and bonds, because it meant more inflation and higher interest rates.

☆ Blackstone’s Hefty Concession Is a Warning to Investors
▼ + stars: | 2023-01-04 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Blackstone will use up to $1 billion to pay UC Investments if it fails to earn 11.25% a year after fees. If you are trying to get your money out of Blackstone’s giant private property fund, the new year brought some bad news, and some potentially very good news. The bad news was that no, you can’t have all your money back right now. So many other people tried to withdraw in December that the 5% quarterly cap will limit the amount that comes out until March, assuming everyone renews their withdrawal requests.

☆ Wall Street Nailed Earnings but Missed the Bear Market
▼ + stars: | 2022-12-25 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Accurate predictions of company earnings turned out to be of little use in this year’s turbulent trading environment. If I told you that a group of really smart people on Wall Street were able to predict exactly how much money America’s biggest companies would make a year from now, you might think they could tell us where the stock market would go. Not so much.

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