What we’re reading (9/1)
“Benchmarking A Fed Pivot” (Deutsche Bank). “[A]t some point, slower growth will take its toll on inflation and the outlook will justify a Fed pivot. The quit rate could be useful in that context. It is well documented that the quit rate is the most reliable predictor of real wages. The quit rate peaked at 3.4% a few months ago and has recently been stable around 3.1%. Prior to covid, the quit rate never exceeded 2.7% (on a 3m moving average basis). Thus, allowing for the fact that the labour market lags and the downward momentum, a quit rate at 2.7% could open the door to a Fed pivot.”
“Microsoft Activision Deal Could Lessen Competition, UK Watchdog Finds” (BBC). “[T]he UK's Competition and Markets Authority (CMA) says its concerns mean it may now carry out an in-depth probe. Microsoft said it was ready to work with the CMA on the ‘next steps’. If the deal goes through it will be the Xbox maker's largest ever acquisition. The games Activision Blizzard make are some of the most popular in the world. But it has previously faced accusations of permitting a toxic and sexist work-place culture.”
“Firm Selling Hot Pre-IPO Shares Didn’t Actually Own Those Pre-IPO Shares, Per Se” (Dealbreaker). “Remember StraightPath Venture Partners? The “boutique private equity firm” accused of overselling the extremely hot and hotly-desired pre-IPO shares it flogged to its 2,200 investors, thereby necessitating—according to the Securities and Exchange Commission, anyway—a bit of fund commingling and Ponzi schemery? Well, a court-appointed receiver has had a bit of a look around. It turns out that saying StraightPath sometimes sold more of those shares than it actually had in its possession—a fact that StraightPath itself acknowledges—may have been a rather generous interpretation.”
“As The U.S. Dollar Surges, American Buyers Splurge On European Homes” (Wall Street Journal). “Laetitia Laurent, a South Florida interior designer, has long had her heart set on a Parisian pied-à-terre. This summer, with the dollar soaring and Parisian real-estate prices holding steady, she took the leap. The 42-year-old, who lives in Boca Raton, paid 758,000 euros, or $758,606, for a 460-square-foot, one-bedroom in the Golden Triangle—the prime residential and commercial area between the Seine and the Champs-Élysées, in the French capital’s pricey 8th arrondissement.”
“British Pound Could Near Parity With The US Dollar Next Year As Energy Crisis Sends Economy Into Recession, Analyst Says” (Insider). “Europe’s energy crisis will push the both the eurozone and UK into recession while the US experiences a milder slowdown, Capital Economics chief UK economist Paul Dales wrote in a report Wednesday. That sets up the euro and British pound to weaken further against the dollar, he added. The euro has already fallen below parity against the dollar, with one euro trading at $0.9938 on Thursday. And by next year, the pound could get close to parity too.”
