What we’re reading (2/11)
“Stocks Slide And Oil Surges On Renewed Fears Of Russia Invasion Of Ukraine” (CNN Business). “Stocks fell sharply Friday after the White House said Americans should leave Ukraine "immediately" due to worries about an imminent invasion by Russia. The Dow Jones Industrial Average fell a little more than 500 points, or 1.4%, after the Biden administration said it would be ready to respond if Russia invades. The S&P 500 and Nasdaq ended the day down 1.9% and 2.8%, respectively.”
“Fed Should Hold Immediate Meeting To End Asset Purchases, Summers Says” (Bloomberg). “‘The Fed should have a special meeting, right now, to end QE,’ Summers told Bloomberg Television’s ‘Wall Street Week’ with David Westin. ‘It is nothing short of preposterous that in an economy with 7.5% inflation, that in an economy with the tightest labor market we’ve seen in two generations, that the central bank is still as we speak growing its balance sheet.’”
“The Trouble With A Stock-Market Bubble” (Wall Street Journal). “We don’t have as much of the past as it seems. Prof. Shiller’s 10-year averages begin in 1881, providing only 14 nonoverlapping 10-year periods (1881 to 1890, 1891 to 1900, 1901 to 1910, and so on). What feels like such a long historical vista, then, is a small sample, full of noise. Yes, on average, stocks have delivered low future returns for 10-year stretches after their CAPE valuation was high, and superior performance after periods of low valuation—but not always.”
“Elizabeth Holmes Is the Exception: More Women On Boards Lead To Less Corporate Wrongdoing” (ProMarket). “Our forthcoming study…provides empirical evidence of the positive effects on corporate behavior of gender balancing in the boardroom. We examined 660 public corporations listed on the Tel Aviv Stock Exchange (TASE) between 2005 and 2017. During that period, the corporations or their top executives were involved in a total of 149 criminal or administrative violations of the law. Our analysis shows that corporations with a higher representation of women on the board were significantly less likely to be involved in corporate wrongdoing.”
“What Happens If A Cryptocurrency Exchange Files For Bankruptcy?” (Credit Slips). “[W]hat happens to a customer if an exchange files for bankruptcy? I think it ends very badly for the customers…I do not think customers understand the legal nature of the custodial relationships, and exchanges have no incentive to make the legal treatment clear to customers. In fact, the exchanges are lulling the consumers with language claiming that the consumer ‘owns’ the coins, when in fact the legal treatment is quite likely to be different in bankruptcy. In bankruptcy, it is likely to be treated as a debtor-creditor relationship, not a custodial (bailment) relationship. That means that customers are taking on real credit risk with the exchanges, which is a particular problem because of the opacity of the exchanges and their lack of regulation.”
