What we’re reading (11/3)
“Fed Dials Back Bond Purchases, Plots End To Stimulus By June” (Wall Street Journal). “The Federal Reserve closed a chapter on its aggressive, pandemic-driven stimulus when it approved plans Wednesday to begin scaling back its bond-buying program this month amid concerns that inflationary pressures could last longer than officials expected earlier this year. Fed officials agreed to wind down their $120-billion-a-month asset-purchase program by $15 billion each in November and December, a pace that could phase out the purchases entirely by next June.”
“Wall Street Hits Highs Again After Fed Confirms Tapering Plans” (Financial Times). “The S&P 500, which had slipped slightly earlier in the day, swung to a gain after the Fed’s announcement and extended its gains as chair Jay Powell spoke to reporters. Powell said the Fed could adjust the pace of its tapering but stressed that ‘we wouldn’t want to surprise markets’ and would provide ample warning ahead of any change. He added that the central bank would not rush to raise interest rates.”
“Zillow Thought It Could Rule The Housing Market. It Was Very Wrong.” (MarketWatch). “Zillow Group had a wealth of data, access to millions of dollars in capital and executives with the hubris to believe they could use these tools to outsmart both a volatile housing market and startups specializing in buying and selling houses. They failed, and lost more than half a billion dollars in the process.”
“On Elon Musk And The Dangerous Power Of Insecure Billionaires” (Paul Krugman, New York Times). “Elon Musk doesn’t think visionaries like him should pay taxes the way little people do. After all, why hand over his money to dull bureaucrats? They’ll just squander it on pedestrian schemes like … bailing out Tesla at a crucial point in its development. Musk has his sights set on more important things, like getting humanity to Mars to ‘preserve the light of consciousness.’ Billionaires, you see, tend to be surrounded by people who tell them how wonderful they are and would never, ever suggest that they’re making fools of themselves.”
“The Uses And Abuses Of Green Finance” (The Economist). “In principle, [Green finance] has a huge role to play in slowing climate change. Shifting the economy from fossil fuels to clean sources of energy requires a vast reallocation of capital. By 2030, around $4trn of investment in clean energy will be needed each year, a tripling of current levels. And spending on fossil fuels must decline. In an ideal world the profit incentive of institutional investors would be aligned with reducing emissions, and these owners and financiers would control the global assets that create emissions. If so, asset owners would have both the motive and the means to reinvent the economy. But the reality of green investing falls short of this ideal.”
