What we’re reading (7/18)
“John Lewis, U.S. Congressman And Civil Rights Icon, Dies” (Wall Street Journal). “John Lewis, the champion of civil rights for Black Americans whose activism brought him from the bloodied streets of Selma, Ala., to the marble halls of Congress, died Friday. He was 80 years old.”
“The Wealthy Loaded Up On Stocks In March—Now They’re Selling, Warns ‘Fortress Bank For Billionaires’” (MarketWatch). UBS’s head of global family offices says a number of its high-net worth clients, including a group of families with an average net worth of about $1.6 billion, bought the dip in March and are now moving the gains out of public markets to illiquid private assets (real estate and private equity).
“These Companies Plan To Make Working From Home The New Normal. As In Forever” (CNN). Facebook, Twitter, Square, Shopify, Box, Slack—big west coast/tech “tilt” on this list. And it makes sense: Zuckerberg built FB from his dorm room, so it’s not shocking he doesn’t see a strong productivity case for making employees show up in person. What will be interesting to see is whether or not the rest of the labor market moves in this direction. Huge cost savings in the form of foregone leasing expenditures to be had if so.
“What Banks Tell Us About Covid-Era Business: ‘Everybody Is, Bluntly, Struggling’” (Wall Street Journal). The Journal rightly points out that banks have “unrivaled visibility” into the health of U.S. consumers and businesses. And the accounting decisions the big banks are making now—setting aside an absolute truckload of cash as provisions for possible loan losses—signal banking executives think trouble could be ahead.
“The Radical Truth Is Bridgewater’s Not Responsible For Its 20.6% Loss” (Dealbreaker). New study (here) finds that unconventional monetary policy (“UMP”) (e.g., central banks buying securities in the open market instead of just moving benchmark rates up and down) is a priced risk factor for the hedge fund industry as a whole and at least 10 common hedge fund strategies in particular. Specifically, the authors’ study of announcements of new UMP actions calls into question “the claim about [hedge funds’] ability to perform ‘through thick and thin’[.]”
