What we’re reading (1/24)
“When The Superbubble Bursts” (Protocol). “So what do we call what we have now? “Economist Jeremy Grantham says it’s a ‘superbubble’” which he defined as ‘simultaneous bubbles across all major asset classes’ in a report his investment firm, GMO, issued Thursday. Investors could lose $35 trillion if valuations retreated to historic norms, Grantham calculated.”
“Bold Policy Response Needed To Restore Fed Credibility On Inflation” (Mohamed El-Erian, Financial Times). “[T]he Fed needs immediately to stop its asset-purchase programme, guide markets towards expecting three and possibly more interest rises this year and bring forward to March the announcement of plans to reduce its balance sheet. It also needs to explain how it has managed to get its inflation call so wrong and why it is so late in reacting properly. Without that, it will struggle to regain the policy narrative and restore its credibility.”
“Activist Investors Assemble” (DealBook). “Unilever has faced pressure on multiple fronts for weeks, including pushback from shareholders over its now-abandoned pursuit of GlaxoSmithKline’s consumer business. Now the consumer goods giant must deal with a potentially bigger headache: Trian Partners, the activist investment firm run by Nelson Peltz. Trian has amassed a significant stake in Unilever, DealBook’s Michael de la Merced reports. It isn’t clear how big the firm’s holdings are, though Trian began buying shares before Unilever’s pursuit of the Glaxo business became public, according to a source.”
“How Will Europe Cope If Russia Cuts Off Its gas?” (The Economist). “Europe…has a secret weapon. Mr [Massimo] Di Odoardo [of Wood Mackenzie, a consultancy] points to its massive but little-discussed stores of “cushion gas”. For technical and safety reasons, regulators insist that storage units like salt caverns and aquifers maintain a huge amount of gas that is not normally available to put on the market. The analysts at Wood Mackenzie reckon that up to a tenth of this cushion can be used without problems. If regulators gave permission, as they might in a war-induced crisis, it would amount to well over a month’s worth of Russian imports.”
“Leon Black Blames Guy Who Didn’t Maintain Decades-Long Relationship With Notorious Sex Criminal For Trashing His Reputation” (Dealbreaker). “You might think that Apollo Global Management founder Leon Black’s downfall had something to do with his doggedly sticking by his convicted sex offender buddy, Jeffrey Epstein. You might think, whether you believe her to be telling the truth or not, that his alleged sexual abuse of his former mistress might be at fault. Black, as only a billionaire can, knows better. After all, as he and his ilk well know, no one ever enjoys his level of success is actually capable of wrongdoing.”
