What we’re reading (11/13)
“Investors Dump Tech Shares As Shutdown Relief Evaporates” (Wall Street Journal). “Wall Street’s relief at the end of the government shutdown gave way on Thursday to new fears about a flood of delayed economic data, the prospect of slowing interest-rate cuts and the extreme valuations of tech giants. U.S. stocks posted their worst day in a month, unwinding a rally that began with news of a deal to end the federal government’s longest closure. Declines were broad, with tech stocks sliding alongside the Dow Jones Industrial Average, which lost almost 800 points. Shares of smaller companies dropped, with the Russell 2000 index losing 2.8%. Bitcoin extended a recent fall, slipping back below $100,000 to its lowest 4 p.m. level since May.”
“Hedge Funds Are Still Dumping Stocks While Retail Investors Keep The Bull Market Alive” (CNBC). “Professional investors have been using the market’s record-setting run as an opportunity to take profits, while retail investors have been doing much of the heavy lifting in the latest run of the three-year-old bull market. Hedge funds and other institutional clients have been the biggest net sellers of single stocks and exchange-traded funds this year, unloading more than $67 billion worth of equities in 2025, according to the latest client-flow data from Bank of America.”
“Foreclosures Surge 20% As Americans Struggle To Pay Mortgages — And Fears Of 2008-Style Crash Soar” (Daily Mail). “The rise is stirring uncomfortable memories of 2008, when a wave of foreclosures triggered the worst housing crash in modern US history. Back then, millions of Americans had adjustable-rate subprime mortgages that borrowers could not afford to pay. The fallout wiped out trillions in household wealth and pushed major banks to the brink, tipping the global economy into recession. Today's homeowners have safer loans, but experts warn that high borrowing costs, soaring insurance premiums, and dwindling savings could again push struggling families into default.”
“You Can Now Invest In A Hedge Fund Dedicated To Hermès Bags” (Forbes). “Stocks, bonds and commodities are the name of the game for most hedge funds. But Luxus has a unique investment: Hermès bags. The venture-backed wealth-tech company focused on luxury investments, which was founded by ex-Blackstone exec Dana Auslander, just unveiled two Hermès-only funds dedicated to Birkin and Kelly bags, treating them as investment-grade assets…Backed by Christie’s, as the world's first Hermès-dedicated investment fund strategy, the initial fund raised $1 million in May and realized a 34% net ROI, with a 43-day average resale timeline.”
“Causation Does not Imply Variation” (John Cochrane). “Tyler Muir suggested this lovely catchphrase, which should stand next to ‘Correlation does not imply causation’ in our menagerie of econometric sayings. ‘Do changes in x cause changes in y?’ does not answer the question ‘what are the most important causes of variation in y?’ Many identified causal effects explain very little variation, and we know there are many other sources of variation. People often jump from one to the other without stopping to think.”
