What we’re reading (12/18)
“Dow Tanks By 1,100 points, Posts First 10-Day Losing Streak Since 1974” (CNBC). “The Dow lost 1,123.03 points, or 2.58%, to 42,326.87, for its worst losing streak since an 11-day slide in 1974. The Wednesday decline was its worst since August and only the second time it lost 1,000 points this year in one session. The S&P 500 lost 2.95% to 5,872.16 and the Nasdaq Composite shed 3.56% to 19,392.69 with losses intensifying into the close of trading.”
“Fed Signals Plan To Slow Rate Cuts, Sending Stocks Lower” (Wall Street Journal). “The Federal Reserve signaled greater doubt over how much it would continue to cut interest rates after agreeing to a reduction on Wednesday that Chair Jerome Powell conceded had been a close call. Stocks went into a nosedive, with the major indexes all logging their worst day in months. The declines accelerated throughout the afternoon as investors digested central-bank forecasts and comments from Powell that spurred concerns that rates might not go down again soon. That was a notable shift after the Fed initiated rate reductions with a larger than usual half-point cut in September in the midst of expectations that a steady sequence of cuts could follow.”
“Bank Of England Expected To Hold Interest Rates” (BBC Business). “The Bank of England is expected to hold interest rates at a meeting later today. Most analysts predict the benchmark rate will stay at its current level of 4.75% when the decision is announced at 12:00 GMT. It comes as inflation rose for the second month in a row to 2.6% in the year to November - pushing it further above the Bank's target of 2%. In November, the Bank's governor Andrew Bailey said the path for rates would likely be "downward from here" but cautioned that the process would be gradual.”
“The 8 Worst Technology Failures Of 2024” (MIT Technology Review). “Some of the foul-ups were funny, like the ‘woke’ AI which got Google in trouble after it drew Black Nazis. Some caused lawsuits, like a computer error by CrowdStrike that left thousands of Delta passengers stranded. We also reaped failures among startups that raced to expand from 2020 to 2022, a period of ultra-low interest rates. But then the economic winds shifted. Money wasn’t free anymore. The result? Bankruptcy and dissolution for companies whose ambitious technological projects, from vertical farms to carbon credits, hadn’t yet turned a profit and might never do so.”
“Our Zestimate Obsession” (Business Insider). “The median error rate for on-market homes is just 2.4%, per the company's website, while the median error rate for off-market homes is 7.49%. Not bad, you might think. But that's where things get sticky. By definition, half of homes sell within the median error rate, e.g., within 2.4% of the Zestimate in either direction for on-market homes. But the other half don't, and Zillow doesn't offer many details on how bad those misses are…When somebody lists their house for sale, the Zestimate will adjust to include all the new seller-provided info: new photos, details on recent renovations, and, most importantly, the list price…But Zillow also keeps a second Zestimate humming in the background, one that never sees the light of day. This version doesn't factor in the list price — it's carrying on as if the house never went up for sale at all. Instead, it's used to calculate the "off-market" error rate. When the house sells, the difference between the final price and this shadow algorithm reveals an error rate that’s much less satisfactory[.]”
