What we’re reading (4/12)
“Fed Expects Banking Crisis To Cause A Recession This Year, Minutes Show” (CNBC). “Projections following the meeting indicated that Fed officials expect gross domestic product growth of just 0.4% for all of 2023. With the Atlanta Fed tracking a first-quarter gain around 2.2%, that would indicate a pullback later in the year.”
“The Next Financial Crisis Will Get Ugly” (UnHerd). “Only yesterday, a spooked IMF correctly interpreted SVB and Credit Suisse’s fate as the sign of things to come: the edge of a coming economic storm whipped up by a decade of geopolitical fragmentation and cheap money. Now, the overdue attempt to reverse this course has slowed the global economy, possibly to the point of recession.”
“EY Breakup Plan Doomed By Miscalculations And Powerful Opponents” (Wall Street Journal). “For months, Ernst & Young’s top leaders characterized their planned breakup of the firm as almost inevitable. All that was left were some adjustments around the edges and votes by partners in dozens of countries. They missed a brewing revolt at the firm’s biggest operation, where EY’s top leader and the architect of the breakup had deep ties. A handful of U.S. partners, prodded by a vocal group of EY retirees, scuttled the deal.”
“California Economy Is On Edge After Tech Layoffs And Studio Cutbacks” (New York Times). “A recent survey from the nonpartisan Public Policy Institute of California found widespread pessimism about the economy. Two-thirds of respondents said they expected bad economic times for the state in the next year, and a solid majority — 62 percent — said they felt the state was already in a recession.”
“Hedge Funds Signal Tough Times Ahead” (Institutional Investor). “Hedge funds have rarely been so bearish about the market. Funds’ net short position in S&P 500 futures contracts is now at the second-highest level since October 2015, according to a report from NDR, a sister company of Institutional Investor. And according to data from PivotalPath, managed futures, which are the most active trader of S&P 500 futures, now have the lowest exposure to the index since June 2017.”
