What we’re reading (8/18)
“‘If You F--k Up In The Biggest Ways, You Can Be Redeemed’: Silicon Valley Just Handed $350 Million To The Guy Who Crashed WeWork” (Insider). “The economic optimists on Monday got a big point in the "not a recession" column. You see, when the economy is in a recession, Silicon Valley venture-capital firms generally do not hand $350 million to ousted founders to reproduce their same failed idea in a slightly different market. Yet that is what happened when Marc Andreessen, a cofounder of the vaunted VC fund Andreessen Horowitz, announced a massive investment in Flow, a new real-estate company from Adam Neumann.”
“Wall Street Bets The Fed Is Bluffing In High-Stakes Inflation Game” (Wall Street Journal). “Markets pummeled by the Fed’s rate increases in the first half of the year are racing upward. The S&P 500 is up 17% from its mid-June low. The yield on the 10-year U.S. Treasury note, which is used to help set rates on debt such as mortgages and student loans is down more than half a percentage point from its June peak. Even battered cryptocurrencies have jumped. For many investors, the rebound reflects a belief that inflation has peaked, and expectation that the Fed will shift from raising rates to lowering them sometime next year.”
“The Fed Sees Housing Trouble Ahead” (DealBook). “Federal Reserve officials are predicting a slowdown in the housing market. There have been conflicting signals: Home sales have slowed, while housing prices remain high. But a mere slowdown is unlikely to stop the Fed in its crusade to crush inflation, which has led to an increase in interest rates, putting pressure on mortgage rates.”
“Turkey Shocks Markets With Rate Cut Despite Inflation Near 80%” (CNBC). “Turkey’s central bank shocked markets Thursday with a cut to its benchmark policy rate, despite inflation in the country sitting near 80%. The lira, Turkey’s currency, slid 0.9% against the dollar, trading at more than 18.1 to the greenback after the news — near a record low.”
“Bed Bath & Be Owned” (Dealbreaker). “For the three weeks since it put out a truly ghastly set of quarterlies, Bed Bath & Beyond shares have been steadily rising. A lot. From about $5 to as high as $28, much to the benefit of one college student and his family. Why? Why not! What does a question like “why” even mean when you’re dealing with a meme stock? What are you, one of those old-fashioned losers who still believe in ‘fundamentals’ and ‘results’ and ‘making money’? Pshaw. Encrust your hands in diamonds and enjoy the rocket ride moon-bound.”
