What we’re reading (6/25)
“Key Inflation Indicator Posts Biggest Year-Over-Year Gain In Nearly Three Decades” (CNBC). “A key inflation indicator that the Federal Reserve uses to set policy rose 3.4% in May, the fastest increase since the early 1990s, the Commerce Department reported Friday. Though the gain was the biggest since April 1992, it met the Dow Jones estimate and markets reacted little to the news. The stock market posted mostly solid gains, while government bond yields were moderately higher.”
“Hotels’ and Restaurants’ Rebound Summer Held Back By Shortages Of Everything” (Wall Street Journal). “Summer looked like the on-ramp to a big recovery for the leisure and hospitality industry, hard hit by the pandemic and its lockdowns and propped up with billions in government aid. Instead, restaurants, theme parks, hotels and tourist attractions are finding themselves squeezed from multiple sides: rising costs, worker shortages, unpredictable supplies of some foods and, in some cases, demand so overwhelming it’s difficult to avoid leaving customers dissatisfied.”
“Why Washington Can’t Quit Listening to Larry Summers” (New York Times). “Many people who have served in top government jobs do stick around, commenting favorably on how their former team is doing. Others, like the former Treasury secretaries Timothy F. Geithner and Steven Mnuchin, fade out of the limelight. Few remain as front and center as Mr. Summers, or as apolitical and provocative. ‘He’s driven toward trying to find out what’s true rather than to give the politically correct answers,’ said Ray Dalio, founder of Bridgewater Associates, the world’s largest hedge fund. ‘That’s caused him a lot of trouble, but I like it.’”
“US Banks Get All-Clear On Resuming Limit-Free Share Buybacks After Passing Fed Stress Tests” (Business Insider). “Major US banks no longer have to deal with pandemic-related restrictions on stock buybacks and dividend payments after the US Fed gave them the greenlight to return to normalcy on Thursday. The central bank released results of its latest stress test showing that 23 of the largest banks could withstand more than $470 billion in losses under hypothetical doomsday scenarios, but they would still be left with twice as much capital as required by Fed rules.”
“How Peter Thiel turned $2,000 In A Roth IRA Into $5,000,000,000” (MarketWatch). “Thiel and other entrepreneurs have used their Roth IRAs slightly differently from the manner in which the average investor would, ProPublica found. For example, Thiel bought 1.7 million shares of PayPal in 1999 for $0.001 per share, or $1,700, ProPublica reported. With this strategy, investors are able to buy a large number of shares in a startup at fractions of a penny per share. When those investments garner large gains, investors can use the proceeds from these investments still inside the Roth IRA to make other investments. Substantial gains could be derived if the company goes public and its share price skyrockets.”
