What we’re reading (2/26)
“ESG And Alpha: Sales Or Substance?” (Institutional Investor). “Trillions of dollars are now invested in light-green ESG funds, and there is little evidence that they will deliver planetary impact or the promised higher returns. What harm will this do?”
“The Case For Bitcoin As ‘Digital Gold’ Is Falling Apart” (CNBC). “With inflation at historic highs, you’d expect this would be bitcoin’s time to shine — U.S. consumer prices last month rose the most since February 1982, according to Labor Department figures. Instead, the cryptocurrency has lost almost half of its value since reaching an all-time high of nearly $69,000 in November. That’s led analysts to question whether its status as a form of ‘digital gold’ still rings true.”
“What Would Paul Volcker Do?” (The Hill). “Volcker would quickly surmise that inflation is undesirably high, similar to the inflation of the late 1960s but less severe than the late 1970s. The Fed would be required to tighten monetary policy — raising rates and unwinding a portion of the Fed’s balance sheet — but by how much? Volcker would keep his eye on the Fed’s longer-run objective of low inflation as the foundation for sustained economic expansion and maximum employment. He would apply lessons learned from the past, in both policies and communications.”
“Russia's War And The Global Economy” (Nouriel Roubini, Project Syndicate). “A major risk now is that markets and political analysts will underestimate the implications of this geopolitical regime shift. By the close of the market on February 24 – the day of the invasion – US stock markets had risen in the hope that this conflict will slow down the willingness of the US Federal Reserve and other central banks to raise policy rates. But the Ukraine war is not just another minor, economically and financially inconsequential conflict of the kind seen elsewhere in recent decades. Analysts and investors must not make the same mistake they did on the eve of World War I, when almost no one saw a major global conflict coming. Today’s crisis represents a geopolitical quantum leap. Its long-term implications and significance can hardly be overstated.”
“Ukraine Could Turn Boomflation Into Stagflation” (Axios). “Russia's invasion of Ukraine creates a new wrench in the gears of the global economy that will simultaneously worsen inflation pressures and damage growth prospects. That makes it a stagflationary shock, essentially making things worse on all economic fronts at once.”
