What we’re reading (10/25)
“Psychoanalyzing The Housing Frenzy With Redfin’s CEO” (Curbed). “[C]onstruction of new housing [after the Great Financial Crisis] slowed to a crawl and inventory continues to drop. By this time in 2019, Redfin had 1.1 million active listings; now it has little more than half that. This shortage is what primed the real-estate market for its current boom, but what touched things off was the Federal Reserve’s decision to stimulate the U.S. economy with near-zero interest rates last spring. ‘The beneficiaries of that were exclusively wealthy people,’ Kelman told me. ‘When you’re shoveling several hundred billion dollars into mortgage-backed securities, you have to keep interest rates below 3 percent[.]”
“Tesla Surpasses $1 Trillion In Market Value As Hertz Orders 100,000 Vehicles” (Wall Street Journal). “Tesla Inc. crossed $1 trillion in market value Monday…[i]nvestors pushed the electric-vehicle maker over the line after Hertz Global Holdings Inc. ordered 100,000 autos to be delivered to the rental-car company by the end of next year, a bulk purchase that promises to expose more mainstream drivers to Tesla’s technology…‘Wild $T1mes!’ Tesla Chief Executive Elon Musk tweeted Monday afternoon. He added, of the Hertz order: ‘Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem.’”
“A Boston Beer Exec Explained That ‘Millions of Cases' Of Truly Will Be Destroyed Because Discounting Is ‘Just Not What We Do’” (Insider). “Jim Koch, the chairman of Boston Beer Company — which produces Truly, along with Samuel Adams, Dogfish Head, and Twisted Tea — told CNBC on Friday that the company overestimated the popularity of hard seltzers. Boston Beer got "aggressive" about buying raw materials like flavors and cans and adding extra capacity to produce Truly, Koch said during an interview on ‘Closing Bell.’”
“The New Billionaire Tax In Democrats’ Sights” (DealBook). “Billionaires could be taxed on unrealized capital gains on their liquid assets, Democratic officials said yesterday. It would affect people with $1 billion in assets or those who have reported at least $100 million in income for three consecutive years, according to news reports. That would ensnare perhaps 700 taxpayers — or the wealthiest 0.0002 percent — but Democrats hope it would generate at least $200 billion in revenue over a decade. It would cover not only stocks, but also other assets like real estate. (Individuals could claim deductions for annual losses in the value of their assets.)”
“PayPal Says It’s Not Looking To Buy Pinterest Right Now, Shares Jump 6%” (CNBC). “U.S. payments giant PayPal said it is not currently interested in buying social media platform Pinterest. Responding to what it called ‘market rumors,’ the financial technology company said Sunday in an update on its website that it is ‘not pursuing an acquisition of Pinterest at this time.’”
