What we’re reading (11/8)
“Biden's Fed Calculus” (Axios). “President Biden has more than economics on his mind as he weighs his choice to lead the Federal Reserve: His pick will impact inflation, face the cruel judgment of financial markets and somehow need to find 50 votes in deeply divided Washington…[t]he case for Powell: [m]arkets know, like and trust the former private equity executive….[S]ome Republicans are vowing to block Brainard, calling her too liberal, and hinting at an ugly confirmation fight. The case for Brainard: She’s an actual economist and actual Democrat, and is more aligned with Biden on a range of fiscal, monetary and regulatory issues.”
“Investors Are Betting That Pfizer’s ‘Game-Changing’ Antiviral Pill Will Reduce Demand For COVID Vaccines” (Fortune). “On Monday, stocks of vaccine makers in Asia fell in the wake of U.S. pharmaceutical giant Pfizer’s announcement that its new antiviral pill called Paxlovid is 89% effective in reducing risk of hospitalization or death from COVID-19…Investors appear to believe that the introduction of highly-effective treatment options may reduce some global demand for COVID-19 vaccines, which are currently the main proven tools on the market to prevent hospitalizations and deaths related to the virus.”
“Rich Millennials to Financial Advisers: Thanks For the Golf Invite, But You Can’t Invest My Money” (Wall Street Journal). “More rich young investors are opting to go without a traditional financial adviser. Instead, they are betting they can get good-enough investment options from do-it-yourself digital platforms that are cheap and easy to use. Many also want to invest in riskier assets, like cryptocurrencies and tech startups, that mainstream advisers often don’t offer.”
“Elon Musk’s ‘Ticking Tax Time Bomb’” (DealBook). “Elon Musk appears to have used an impending stock option deadline to make a political point. Over the weekend, the Tesla C.E.O. surveyed his millions of Twitter followers about whether he should sell a chunk of his shares in the electric car company. “Much is made lately of unrealized gains being a means of tax avoidance, so I propose selling 10% of my Tesla stock,” he tweeted, committing to abide by the results of the poll.”
“The 2000s Housing Bubble Was Greatly Exaggerated” (Full Stack Economics). “[Mecatus Center Scholar Kevin] Erdmann argues that policymakers misdiagnosed the causes of the housing boom, and that led to catastrophic policy errors. In particular, because the Federal Reserve thought housing was overvalued in 2007, it didn’t cut rates fast enough in response to the housing crash. That helped turn what might have been only a mild, industry-specific downturn into a severe, economy-wide recession. And that recession, in turn, made the housing crisis bigger than it needed to be, since many previously solvent homeowners lost their jobs or saw their mortgages go under water.”
