What we’re reading (8/26)
“Why Is The Supply Chain Still So Snarled? We Explain, With A Hot Tub” (Wall Street Journal). “The global supply chain is an intricate ballet of container ships, airplanes, trucks and trains. The coronavirus pandemic threw it out of whack. This is why you often can’t buy the goods you want…Covid-19 infections caused by the Delta variant are adding fresh uncertainty. Supply bottlenecks, especially at ports, continue to delay products of all kinds.”
“Skin in the Game: FOMC Style” (Jupiter Asset Management). “We find it noteworthy that around 60% of Powell’s net investable worth is in (primarily US) equities, a share which is likely higher today given the stellar performance of said equities since the filing (+39% for the S&P 500). Equally noteworthy is what is absent from the portfolio. In particular, we find it interesting that Powell owns no Treasuries. True, there’s an exposure to a more tax-efficient version – municipal bonds –, but if Powell’s portfolio is a variant on the classic 60-40, there’s a very clear underweighting of nominal assets relative to that framework.”
“Inflation Could Stay High Next Year, And That’s OK” (New York Times). “[Adam] Posen [of the Peterson Institute for International Economics] expects inflation to be above 3 percent next year — nevertheless, he thinks that the Fed should keep short-term rates near zero. That’s because he thinks the burst of inflation will recede after 2022. And he doesn’t think another year of 3-plus percent inflation would be enough to embed expectations of high inflation in the minds of consumers and businesses.”
“Is There A Link Between Vaccination Rates And Opening Up International Air Travel?” (OAG). “For a while I imagine many of us assumed this would be so: The more people were vaccinated the more we’d be able to fly where we want. However, the data seems to show that it isn’t quite that simple. At OAG we’ve been looking at the correlation between vaccination rates by country and international air capacity for each country relative to where capacity was two years ago. What we see is that vaccination rates in and of themselves are not a guide to how easy international air travel is. It’s clear that government policy (or lack of it) is a much more important determinant of airline recovery.”
“There’s A Battle Brewing Over Salaries For Remote Workers — And It Could Change The Way Everyone Gets Paid” (Business Insider). “The fight over remote compensation — whether employees can take their big-city wages with them wherever they choose to live — is the next big battle in the war over working from home. Some companies have rejected the hardline stance, telling employees who relocate that they can keep their coastal salaries. Others, including Reddit and Spotify, are going even further: In a radical departure from traditional compensation policies, they plan to eliminate all geographic differences in US salaries, paying every employee as if they lived and work in San Francisco. It's hard to overstate how consequential this shift in compensation could be, not just for those of us who work from home but for cities and states all across the US.”
