What we’re reading (11/11)
“If Trump Tries To Fire Powell, Fed Chair Is Ready For A Legal Fight” (Wall Street Journal). “Alvarez, the Fed’s former general counsel, said he thinks Powell would win a legal challenge on the matter, in part because lawmakers who drafted and amended the law that created the Fed repeatedly debated and decided against including provisions that would allow the chair to be removed at will by the president. The Fed’s seven governors are appointed by the president to 14-year terms. They must be confirmed by the Senate. The law says they can only be removed for cause, which courts have interpreted to mean malfeasance or dereliction of duty. A separate law allows the president to designate one of the seven governors as Fed chair for a four-year term, also subject to Senate confirmation. The law is silent on whether the same dismissal standard applies.”
“BlackRock Plows $2 Billion Into Momentum Stocks After Election” (Bloomberg). “More than $1.9 billion flooded into the $13 billion iShares MSCI USA Momentum Factor ETF (ticker MTUM) on Friday, the biggest one-day flow since the fund’s 2013 launch, data compiled by Bloomberg show. At the same time, a record $1 billion exited from the $32.5 billion iShares Core Total USD Bond Market ETF (IUSB). A BlackRock spokesperson confirmed that the firm adjusted its model portfolio allocations last week.”
“What Science Reveals About Our Tendency Toward Corruption” (El Pais). “A year-long experiment was conducted at the self-service checkouts of a supermarket chain in Modena and Ferrara in Italy to test whether there was any link between corruption scandals and how honest consumers were with their shopping. Analyzing data from random checks on the supermarket carts, the researchers found that the probability of not declaring all the purchases increased by 16% to 30% after a local corruption scandal made headlines.”
“Icahn’s Private Hedge Fund Posts A Quarterly Gain — But Is Still In The Red” (Institutional Investor). “The octogenarian’s publicly traded investment firm, Icahn Enterprises, reported a 7.6 percent gain in its investments segment in the September three-month period. Even so, it remains down 1.9 percent for the year. This means Icahn lagged the S&P 500 by about 23 percentage points in the first nine months of 2024. Last year, the investments segment lost 16.9 percent, compared with a 26.3 percent jump for the S&P 500, including dividends reinvested — a lag of 40 percentage points.”
“Does Warren Buffett Know Something That We Don’t?” (Wall Street Journal). “When the world’s most-followed investor doesn’t feel comfortable investing, should the rest of us be worried? Warren Buffett, who has quipped that his favorite holding period for a stock is ‘forever,’ continues to have substantial money at work in American companies. But he has never taken this much off the table either—a whopping $325 billion in cash and equivalents, mostly in the form of Treasury bills.”
