What we’re reading (6/1)
“Where To Look For The Next Wall Street Blowup” (Wall Street Journal). “There are two new risks that history doesn’t help with. The first is the unprecedented amount of liquidity that has been pumped into finance by central banks buying bonds. A lack of liquidity is what usually creates financial problems, as it prevents debts being rolled over. As the Fed and other central banks drain liquidity, problems might reveal themselves. The second is that there’s a massive, and unknown, amount of private debt issued by lightly regulated shadow banks.”
“Fed’s Bullard Sees 3.5% Rates Setting Up Cuts In 2023 Or ‘24” (Bloomberg). “Federal Reserve Bank of St. Louis President James Bullard urged policy makers to raise interest rates to 3.5% this year to bring inflation down from near a four-decade high, adding that some of those hikes could be reversed late next year or in 2024.”
“Jamie Dimon Says U.S. Consumers Still Have Six To Nine Months Of Spending Power” (Wall Street Journal). “The head of the nation’s biggest bank said the recent drop in Americans’ savings rate hadn’t altered his view that the government’s pandemic stimulus is still padding consumers’ wallets. He estimated that some $2 trillion in extra funds are still waiting to be spent.”
“About 200 Years Ago, The World Started Getting Rich. Why?” (Vox). “The simplest answer is that economic growth occurred only after the rate of technological innovation became highly sustained. Without sustained technological innovation, any one-off economic improvement will not lead to sustained growth.”
“Jeez, If You Didn’t Know Any Better, You’d Almost Say Deutsche Bank Looks Like A Criminal Organization” (Dealbreaker). “Last time, four years had passed between police raids of Deutsche Bank’s headquarters in Frankfurt’s financial district. This time, it only took four weeks.”
