What we’re reading (9/23)
“Fed’s Powell Sees ‘No Risk-Free Path’ For Interest Rates After Central Bank’s Cut Last Week” (Yahoo! Finance). “Federal Reserve Chair Jerome Powell said there is ‘no risk-free path’ for the central bank's next policy move as inflation remains elevated and the job market weakens. It's ‘a challenging situation,’ Powell said during a speech in Rhode Island on Tuesday, reiterating that the Fed must balance its dual goals of maximum employment and price stability.”
“Wall Street Is Poaching Bankers In A Red-Hot Job Market” (Wall Street Journal). “A pickup in dealmaking and initial public offerings is helping fuel a hot job market on Wall Street. Big banks had been adding staff over the past year in strategic expansions, but now sudden jumps in activity have them seeking to hire even more and slowing layoffs they might have otherwise executed.”
“Private Equity Is Getting Boring” (Matt Levine, Bloomberg). “A simple gloomy model you could have of private equity is: (1) Once upon a time, companies were mispriced. Lots of companies were available cheaply […] (2) A few ambitious risk-seeking entrepreneurs noticed this systematic mispricing and set out to fix it. They raised money from friends and family and patient investors who were willing to take risk, they bought companies at low prices, levered them up, fixed their operations and resold them after a few years at higher prices. (3) It helped, in doing this business, that interest rates were declining for decades and valuation multiples were rising […] (4) The people who started this business — private equity — made great returns for their investors and became billionaires themselves. [5] This attracted many, many more people to the business. […] (6) So now private equity is the default career path for smart ambitious people entering the financial industry, and private equity firms are now giant alternative asset managers with hundreds of billions of dollars under management. [7] Why would companies be mispriced?”
“World’s Largest Private Rembrandt Collection May Be Fractionalised, Owner Reveals” (The Art Newspaper). “Plans are underway for the Leiden Collection of Dutch Golden Age painting, amassed by billionaire investor Thomas S. Kaplan, to be offered as shares on a public stock exchange.”
“Boring Is Good” (Scott Jenson). “I want to answer the question: why should we still care? The tech is problematic, and signs point to the bubble bursting. When we hit the ‘Trough of Disillusionment,’ what rises from the ashes? Two lessons from my career help me navigate uncertainty: 1. technology flows downhill, and 2. we usually start on the wrong path.”
