What we’re reading (10/18)
“Joseph Sullivan III Helped Create Chicago Options Exchange” (Wall Street Journal). “Mr. Sullivan, who was a Wall Street Journal reporter before moving to the Chicago exchange, was assigned to look into the feasibility of plywood futures. That idea flopped, but he embarked on a much more promising project: creating a new exchange to trade stock options, then an obscure corner of the financial markets. It took more than four years for Mr. Sullivan and colleagues to overcome skepticism and resolve all the technicalities. In 1972, he became president of the new Chicago Board Options Exchange. Trading began April 26, 1973, in what had been a smoking lounge next to the vast commodity trading floor…Mr. Sullivan, who had respiratory ailments and had apparently recovered from a bout with Covid-19 in August, died Oct. 2 at his home in Knoxville, Tenn. He was 82.
“Few People Are Flying. What Is An Airline To Do? Lots Of Fine-Tuning.” (New York Times). “Every airline is struggling, but each struggles in its own way…[w]hen the virus devastated travel in March and April, United took hundreds of planes out of circulation. Since July, it has brought back more than 150, including those flown by regional carriers, but about 450 are still stashed away.”
“Inflation Is Totally Out Of The Control Of Central Banks” (The Market). An interview with Nobel Laureate and the “father of modern finance” Eugene Fama. One quote getting a lot of attention: “[e]very day we hear a story about the movement of stock prices. But the story is different each day. So basically, these stories are made up after the fact. But when we look at it systematically, we don’t see a big effect of Fed actions on real activity or on stock prices or on anything else. That’s why I use to say that the business of central banks is like pornography: In essence, it’s just entertainment and it doesn’t have any real effects.”
“Warren Buffett Plowed $5 Billion Into Bank of America During The Debt Crisis. Here's The Story Of How The Investor Helped The Bank And Made A Fortune In The Process” (Business Insider). Funny introduction to this story: “Buffett was taking a bath in late August 2011, reflecting on his investments in American Express and Geico during difficult periods for both companies, when he had the idea to bet on Bank of America, Fortune reported. The investor tried to get through to the bank's CEO, Brian Moynihan, but was initially blocked by a call-center worker. ‘Warren asked to speak to me and of course they don't transfer everybody who calls the call centers to the CEO's line,’ Moynihan told David Rubenstein in a Bloomberg interview last year.”
“China’s Gulags” (The Economist). “‘IS THERE A God?’ Answer yes, and you will get a beating. As we report this week, that is just one of the humiliations inflicted on Uyghurs, a disaffected, mostly Muslim ethnic minority of 12m people in the far west of China. A handful have carried out terrorist attacks, but none since 2017. The Chinese state has in effect locked them all in a vast open-air prison. Many are in detention centres. Even those outside must attend indoctrination sessions. Evidence suggests that hundreds of thousands of children have been separated from their parents. Women have been forcibly sterilised. This persecution is a crime against humanity.”
