What we’re reading (5/15)
“Fed’s Waller Says Inflation Jump Likely Temporary, Urges Patience” (Wall Street Journal). “The U.S. economy is “going gangbusters,” but the Federal Reserve needs to see several more months of data on jobs and inflation before determining when to begin scaling back its easy-money policies, a central banker said.”
“Nobel Winner Daniel Kahneman’s New Book On Bad Decisions Has A Lot To Say About Market Overconfidence And Money Mistakes” (CNBC). “[H]erd instinct is good when you are in a primitive society. If everyone is running from a lion, you should too…[W]hile it helped us survive throughout all of prehistory, the herd instinct is bad when you are making modern financial decisions. When everyone is getting into cryptocurrency, we are hard-wired to believe that we should join them. On a deep psychological level, it feels like a threat to our survival to not jump in. So we have to keep second guessing and combatting our natural instincts. Always second guess yourself, avoid overconfidence, and stay open-minded.”
“How Two Brothers Went From Nearly Jobless To Multi-Millionaires With A Bizarre Crypto Bet” (CNN Business). “Tommy, 38, and James, 42, who have asked CNN not to publish their last names to protect their anonymity, had put a few hundred bucks into an odd digital asset called shiba inu coin — a spinoff of dogecoin, so basically a parody of a parody. One coin was worth a fraction of a cent, but a friend, who happened to be a crypto expert, told them he believed it could be a big moneymaker.”
“Colonial Shutdown Shows How Americans Pay The Price Of Efficiency” (Washington Post). “The market-driven energy sector has spent a decade or more cutting costs, streamlining and digitizing. Four big oil refineries have shut down in Pennsylvania and New Jersey since 2010 because it’s cheaper to bring in gasoline by pipeline from the Gulf Coast, 1,500 miles away — as long as that pipeline stays in operation. Texas and California have driven the price of electricity down by throwing out the old regulatory structure — the structure that made sure utilities earned enough to invest in backup resources.”
“The Economics Of Non-Alcoholic Spirits, Explained” (InsideHook). “At first glance, non-alcoholic spirits seem like they should be relatively low-cost since they’re comprised of water instead of alcohol. Water-based distillates have a tax advantage, too: alcohol is subjected to state and federal excise taxes that distillers of non-alcoholic spirits don’t have to pay. And liquor is almost always sold through the three-tier system in which distributors take a substantial cut, whereas non-alcoholic spirit producers have the option of selling direct to consumers online. Nonetheless, non-alcoholic spirits often cost in excess of thirty dollars a bottle.”
