What we’re reading (11/3)
“Layoffs Hit Tech Sector With Force As Amazon, Lyft Warn Of Economic Downturn” (Wall Street Journal). “The stream of grim news for the industry came as the Federal Reserve has moved again to raise interest rates to combat inflation, signaling greater risk that the U.S. economy is sliding into a recession. Faced with that possibility, tech company executives are warning of tougher times ahead.”
“Coinbase Reports Better-Than-Expected User Numbers Even As Third-Quarter Revenue Plunges” (CNBC). “Coinbase reported user numbers that topped analysts’ estimates even as third-quarter revenue missed estimates and the cryptocurrency exchange had a wider-than-expected loss. The stock popped in extended trading.”
“Ray Dalio On The Downturn: ‘There’s A Lot More To Come’” (Institutional Investor). “‘When interest rates go up, asset prices go down,’ Dalio said Thursday. ‘The assets have gone down reflecting the interest rate adjustment but not down reflecting the contraction. There’s a lot more to come.’ Dalio shared his views on the market and politics at the Forbes Iconoclast Summit held Thursday in New York City.”
“BlackRock Sees A ‘Revolution’ Coming In Corporate Governance” (DealBook). “As investors push for a bigger say in how companies tackle a variety of issues — including supporting or opposing environmentally and socially minded goals — Larry Fink wants to give them even more of a voice in the boardroom. In a letter to clients of BlackRock, the $8 trillion money manager that he runs, Fink wrote that a ‘revolution in shareholder democracy’ was growing. For its part, BlackRock will expand a program that lets investors in its funds choose how they vote in corporate elections, in a recognition that shareholders ‘don’t want to sit on the sidelines.’”
“A Big And Embarrassing Challenge To DSGE Models” (Marginal Revolution). “Dynamic stochastic general equilibrium (DSGE) models are the leading models in macroeconomics…most new work today is done using a variant of this type of model by macroeconomists of all political stripes and schools. Now along comes two statisticians, Daniel J. McDonald and the acerbic Cosma Rohilla Shalizi. McDonald and Shalizi subject the now standard Smet-Wouters DSGE model to some very basic statistical tests. First, they simulate the model and then ask how well can the model predict its own simulation? That is, when we know the true model of the economy how well can the DSGE discover the true parameters? […] Not well at all.”
