What we’re reading (11/13)
“The Classic 60-40 Investment Strategy Falls Apart. ‘There’s No Place To Hide.’” (Wall Street Journal). “Despite a powerful rally last week after cooler-than-expected inflation data, the S&P 500 is down in 2022 about 15%, including dividends, while bonds are in their first bear market in decades. A portfolio with 60% of its money invested in U.S. stocks and 40% invested in the 10-year U.S. Treasury note has lost 15% this year. That puts the 60-40 investment mix on track for its worst year since 1937, according to an analysis by investment research and asset management firm Leuthold Group.”
“Tech’s Talent Wars Have Come Back To Bite It” (New York Times). “Silicon Valley tech companies have long seen hiring as more than just filling openings. The industry’s fierce talent wars showed that companies like Google and Meta were gaining the best and brightest. Ballooning staffs and a long reign atop lists of the most-desired jobs for college graduates were emblems of growth, deep pockets and prestige. And to employees, the work became something larger — it was an identity.”
“Getting Over Overdraft” (Brookings). “$30 billion is real money even for a banking system as large as America’s: The biggest banks were making over $1 billion a year on overdraft fees, while overdraft income grew to an astonishing 20% or more of earnings for smaller ones. Overdraft fees, effectively interest on loans, are extremely high cost given the small amount of money loaned via an overdraft, the short term of the loan, and the minimal chance of default. As a result, overdraft fees result in nearly pure profit for the bank (or credit union). No wonder one bank CEO named his yacht ‘Overdraft.’”
“Everyone’s Been Wrong About Inflation, And It’s Costing Workers In Salary Negotiations” (Insider). “While American workers are experiencing the strongest wage growth in many years, fueled by strong demand for labor, inflation has continued to overpower pay gains for most workers. Average hourly earnings, for instance, rose 4.7% in October, continuing to trail even the slower inflation rate.”
“All Eyes On The Consumer Ahead Of Black Friday And The Holidays” (CNN Business). “There is a LOT of data coming out in the next few days that will give important clues about the health of the economy. Beyond a slew of retail earnings reports, the government will report retail sales figures for October on Wednesday. Economists are forecasting a monthly jump of 0.9%. Sales were unchanged in September, a possible sign that inflation was taking its toll on consumers.”
