What we’re reading (3/18)
“UBS Nears Deal To Take Over Credit Suisse” (Wall Street Journal). “The deal could come together Sunday if not sooner, the people said. Regulators have offered to waive a requirement for customary shareholder votes to expedite the sale, one of the people said. The discussions were fast-moving and a remaining sticking point was the status of who will own Credit Suisse’s substantial Swiss retail arm, the people said.”
“After A Wild Week, What Are Markets Saying About the World?” (New York Times). “The good news for most investors is that the S&P 500 was resilient to worries that centered on the banking industry, and after a big rally on Thursday, the index ended the week with a gain of 1.4 percent. It shows that, to stock investors at least, the crisis in the banking sector appears mostly contained…But investors in other markets are worried about the economy.”
“Bailouts Of Insolvent Banks Don’t Lead To Hyperinflation” (Marginal Revolution). “Let’s say there is a big hole in the solvency of a banking system. Left unaddressed, that is radically deflationary. Demand (and other) deposits will disappear, crushing aggregate demand. Cascading financial failures will occur elsewhere, again with negative demand effects. If a government ‘prints money,’ or more likely creates new electronic bookkeeping entries, that offsets the deflationary pressures. These bailouts may have other negative effects, such as on future moral hazard and rent-seeking, but they won’t bring hyperinflation. If you wanted to create hyperinflation, the bailout would have to look something like ‘for every dollar you used to have in your bank account, the Fed says you now have five!’ But that is not on the agenda.”
“Wealthy Executives Make Millions Trading Competitors’ Stock With Remarkable Timing” (ProPublica). “These transactions are captured in a vast IRS dataset of stock trades made by the country’s wealthiest people, part of a trove of tax data leaked to ProPublica. ProPublica analyzed millions of those trades, isolated those by corporate executives trading in companies related to their own, then identified transactions that were anomalous — either because of the size of the bets or because individuals were trading a particular stock for the first time or using high-risk, high-return options for the first time.”
“The Mystery Millionaire Of Gage Park” (Chicago Magazine). “When Joseph Stancak died, he left behind a secret: He was worth $11 million. How did a reclusive electrician living in a modest bungalow amass the largest unclaimed estate in American history?
