What we’re reading (8/2)
“The Odd Logic To Fitch’s U.S. Debt Downgrade” (Axios). “The U.S. government does face tough fiscal tradeoffs in the decade ahead, with interest costs poised to eat up a growing share of the economy, deficits crowding out private investment and Social Security facing steep automatic cuts in 2033. But the issue isn't so much one of creditworthiness, as implied by the Fitch downgrade. It's when, and on what terms, those adjustments happen.”
“Can ChatGPT Help Investors Process Financial Information?” (Marginal Revolution). “Surprise, surprise, disclosures are bloated past the point of being informally useful: [quoting from the study] ‘Generative AI tools such as ChatGPT can fundamentally change the way investors process information. We probe the economic usefulness of these tools in summarizing complex corporate disclosures using the stock market as a laboratory. The unconstrained summaries are dramatically shorter, often by more than 70% compared to the originals, whereas their information content is amplified. When a document has a positive (negative) sentiment, its summary becomes more positive (negative). More importantly, the summaries are more effective at explaining stock market reactions to the disclosed information.’”
“Hedge Fund Certainly Doesn’t Seem To Think Yellow Has Run Out Of Road” (Dealbreaker). “Trucking giant Yellow—and the $700 million in taxpayer money that kept it afloat during the pandemic—are a total loss, we are told. Told by the union representing many of its employees. Told by the analysts watching its customer base dwindle after watching its leaders mismanage it and make bad deals for decades. Told by the company itself, which has ceased operations and is preparing for a bankruptcy filing, followed by probable liquidation. The private equity and hedge funds, however, are telling a different story.”
“‘How Do I Do That?’ The New Hires Of 2023 Are Unprepared For Work” (Wall Street Journal). “The knock-on effect of years of remote learning during the pandemic is gumming up workplaces around the country. It is one reason professional service jobs are going unfilled and goods aren’t making it to market. It also helps explain why national productivity has fallen for the past five quarters, the longest contraction since at least 1948, according to the U.S. Labor Department.”
“There Are Way Too Many Real-Estate Agents” (Insider). “The issue, [Denver broker Bret] Weinstein said, is that it's way too easy to become an agent. In most states, getting a license to help people buy or sell a home requires only a few hundred dollars, several weeks of coursework, and a passing grade on a multiple-choice test. The low barrier to entry and fat commission checks lure many to the industry, especially when home prices rise. In the decade-plus since the housing market started to rebound from its financial-crisis lows, the ranks of agents have swelled with part-timers and career switchers looking to capitalize on the boom. At the end of June, there were roughly 1.6 million registered Realtors in the US — or about 2 ½ Realtors for every available home on the market.”
