What we’re reading (7/28)
“Fed’s Powell Talks Tough After Rate Hike, But A Pause Seen Likely From Here” (Morningstar). “We believe more positive news about inflation will come in upcoming reports. Thus, despite the Fed’s latest projections showing one more rate rise in 2023, we think it’s done with hiking. Federal-funds futures markets agree with this assessment.”
“What Happened To Japan?” (Paul Krugman, New York Times). “Here’s the story you may have heard: In the late 1980s Japan experienced a monstrous stock and real estate bubble, which eventually burst. Even now, the Nikkei stock average is significantly below the peak it reached in 1989. When the bubble burst, it left behind troubled banks and an overhang of corporate debt, which led to a generation of economic stagnation. There’s some truth to aspects of this story, but it misses the most important factor in Japan’s relative decline: demography. Thanks to low fertility and unwillingness to accept immigrants, Japan’s working-age population has been declining quite rapidly since the mid-1990s. The only way Japan could have avoided a relative decline in the size of its economy would have been to achieve much faster growth in output per worker than other major economies, which it didn’t.”
“Bernanke Tapped To Find Out Why U.K. Central Bank Misjudged Inflation” (Wall Street Journal). “The Bank of England has named Ben Bernanke, a former chair of the Federal Reserve, to review its economic forecasting record, one of the first steps taken by a leading central bank to understand why they underestimated a surge in prices that began more than two years ago and dented living standards.”
“Barclays Can’t Count On Underpaying Customers To Keep Itself Afloat Forever” (Dealbreaker). “For a while, soaring interest rates were just the tonic C.S. Venkatakrishnan needed to hide Barclays’ many, many ills while he tried to figure out a longer-term cure. They helped paper over the misery at its investment bank while also offering a nice fillip to its retail bank. Venkat’s still working on a treatment plan, but the central bank snake oil is wearing off: Not only has the benefit for the benighted I-bank peaked, but those fat net interest margins are starting to slim down.”
“The Man Suing Buffalo Wild Wings Over Their Boneless Wings Really Being Chicken Nuggets Asked A Judge Not To Throw Out The Case And Reward The Company’s ‘Hubris’” (Insider). “Buffalo Wings Wings doesn't ‘give a s---’ that people say its boneless wings aren't really wings. The man suing the restaurant — because he thinks its boneless wings are basically chicken nuggets — says that's enough reason for a judge to hear him out. Aimen Halim filed a class-action lawsuit against Buffalo Wild Wings in March, saying the company’s marketing of boneless wings is misleading because they are ‘more akin in composition to a chicken nugget rather than a chicken wing.’”
