What we’re reading (3/7)
“Time for Supply” (John Cochrane and Jon Hartley, Project Syndicate). “Nothing matters more for human flourishing than long-term economic growth. So, no economic trend is more worrisome than growth falling by half, especially for the well-being of the less fortunate. The eruption of inflation settles a long debate. Sclerotic growth is not the result of demand-side ‘secular stagnation,’ fixable only with massive fiscal and monetary stimulus. Sclerotic growth is a supply problem. We need policies to increase the economy’s productive capacity – either directly or by reducing costs.”
“Gasoline Prices Surge Above $4 A Gallon, With No End In Sight” (Wall Street Journal). “Prices at the gas pump are soaring to near record levels across the U.S., threatening to further pressure consumers and an economy already struggling with sky-high inflation. On Monday, the national average price for regular gasoline hit $4.065 a gallon, the highest price since July 2008 and approaching the record of $4.114 reached that same month, according to AAA.”
“Nickel Prices Soar 90% To New Record High On Worries About Shortages From Major Supplier Russia” (Insider). “Nickel prices in London logged a record surge on Monday amid escalating concerns that production in Russia will be disrupted in the wake of Moscow's invasion of Ukraine. The three-month nickel contract leapt 90% to trade above $55,000 a metric ton on the London Metal Exchange, according to pricing from Bloomberg. That marks a new all-time high, and the jump of more than $26,000 marked the biggest single-day dollar gain ever.”
“Investors Are Terrible At Forecasting Wars” (The Economist). “[M]ost investors lose money during wars, because they fail to see them coming…One problem faced by investors is that they are poorly equipped to assess risks associated with “black-swan” events, which have very low probabilities but which can be extremely costly…Philip Tetlock, a Canadian scholar, notes that building predictive abilities requires repeated feedback so that participants can hone their accuracy over time. Once-in-a-career events do not offer that.”
“The Man Behind GameStop Mania Is Coming For Bed Bath & Beyond” (CNN Business). “[Ryan] Cohen's company RC Ventures bought a nearly 10% stake in Bed Bath & Beyond (BBBY), making the investment firm a top-5 shareholder, Cohen said in a letter to the retail chain's board of directors Sunday…Cohen, who took a stake in GameStop (GME) in 2020 and became chairman of the company's board last year, clearly wants to shake things up. In his letter to the board, he criticized Bed Bath & Beyond's current strategy and urged the company to make changes.”
