What we’re reading (9/19)
“Don’t Lose Sight Of The Inflation Monster” (Washington Post). “Americans are sitting on trillions of dollars of savings they accrued during the pandemic…[i]t’s been so long since the United States has suffered from endemic inflation that most adults are unprepared for what it will do. Annual 5 percent inflation may seem low, but it’s not. Because each price rise is built on the previous one, a 5 percent annual rate means that prices would double every 14 years.”
“Inflation Challenges Stock-Market Underpinnings As Investors Look Ahead To Fed Meeting” (MarketWatch). “Investors worry inflationary pressures will spill into company earnings, possibly as soon as the third quarter, challenging the underpinnings of the “phenomenal” stock-market performance in the pandemic, explained [Jensen Investment Management CIO Eric] Schoenstein. He sees Jensen clients seeking to tilt toward higher quality stocks, as they want exposure to ‘resilient’ companies that can handle the risks of a rising cost environment.”
“Banks Strike Back, But Returns Remain Strong With Fintech” (Wall Street Journal). “Down the road, banks might have some tailwinds. Deposits will likely stay cheap for some time, even as interest rates start to tick higher and perhaps gum up capital markets. As credit costs creep back up to normal levels, losses might eat into net yields on loans, making it less attractive to share any economics with an outside partner. Yet at the same time, any technology partner that is able to demonstrate an ability to keep credit losses minimized could be even more valuable to banks and investors. And banks might stay hungry enough for loan growth that the costs of partnerships are justified.”
“U.S. Banking Lobby Groups Oppose Proposed Tax Reporting Law” (Reuters). “The largest U.S. banking lobby groups banded together on Friday to make another push to kill a proposed bank account reporting law being drawn up as part of the congressional reconciliation package.”
“Geriatric Millennials Have The Most Power In The Workforce Right Now” (Insider). “According to a recent analysis by the Harvard Business Review that looked at 9 million employee records from more than 4,000 companies, midcareer employees are driving the [Great Resignation]. Resignation rates are highest among 30- to 45-year-old employees, increasing on average by more than 20% over the past year…[t]he reasons for the resignations are plenty, per the HBR: Employers may be less inclined to hire less experienced workers, creating more demand for mid-level workers; this cohort may have postponed switching jobs until some of the dust settled from the pandemic's economic effects; and the pandemic has caused some to reevaluate what they want in both their job and in life.”
