What we’re reading (1/20)
“Fed Opens Debate Over Possible Digital Currency” (Financial Times). “The Federal Reserve has for the first time launched a period of debate and public comment on the introduction of a central bank digital currency, as it seeks to keep pace with global financial innovation and maintain the supremacy of the dollar. After months of anticipation, the Fed on Thursday released a lengthy discussion paper that will serve as the basis of what is expected to be a heated and consequential debate at the heart of the central bank in the coming months — though it made clear it did not ‘favour any policy outcome’ at this point.”
“Why Isn't The Fed Doing Its Job?” (John Cochrane, Project Syndicate). “No wonder America is awash in debt. Everyone assumes that taxpayers will take on losses in the next downturn. Student loans, government pensions, and mortgages have piled up, all waiting their turn for Uncle Sam’s bailout. But each crisis requires larger and larger transfusions. Bond investors eventually will refuse to hand over more wealth for bailouts, and people will not want to hold trillions in newly printed cash. When the bailout that everyone expects fails to materialize, we will wake up in a town on fire – and the firehouse has burned down.”
“Stocks Fall After Giving Up Early Gains” (Wall Street Journal). “U.S. stocks fell on Thursday, as a late-afternoon selloff erased what had been an early rally, showing that investors are still concerned about the prospects of tightening monetary policy and slowing growth. The Nasdaq Composite Index dropped 186.23 points, or 1.3%, to 14154.02, a day after a tech selloff dragged down indexes. The index fell more than 3% from its intraday high to its low. It is now down nearly 12% from its November high.”
“Netflix Quietly Admits Streaming Competition Is Eating Into Growth” (CNBC). “The latest Netflix shareholder letter included a line heard around the world: ‘While this added competition may be affecting our marginal growth some...’ That clause doesn’t sound like much, but it’s Netflix’s strongest admission so far that streaming competition is affecting its subscriber growth.”
“John Deere Is Facing A Farmer Revolt” (Bloomberg). “Farm equipment giant John Deere boasted record profits in 2021 as the global pandemic made consumers and countries more reliant than ever on a functioning agricultural sector. Also last year, unionized workers demanded a piece of the company’s growing pie, and after a strike forced John Deere to provide better compensation to the men and women who make its products. But now the company has another, potentially bigger problem: farmers.”
