What we’re reading (9/7)
“World Shares At Record High As Investors Count On Fed Largesse” (Reuters). “Global stocks inched higher on Tuesday to a record high for the eight straight session as investors wagered the U.S. Federal Reserve is likely to delay the start of tapering its asset purchases after the soft U.S. jobs data…[t]he latest rally, which started after Federal Reserve Chair Jerome Powell's dovish speech at Jackson Hole Symposium late last month, received a further boost from a surprisingly soft U.S. payrolls report on Friday.”
“Traders Return To London Metal Exchange’s 144-Year-Old Ring” (Wall Street Journal). “Staff from the exchange’s eight dealing firms arrived early for work Monday, 18 months after Covid-19 swept through London and the 144-year-old LME closed the open-outcry ring for the first time since World War II. Dealers checked if equipment that matches trades and ‘squawks’ orders back to their head offices was working before commencing trading that would determine prices used in metal contracts world-wide.”
“Inside Instacart's Frenzied Summer Of Unsuccessful Dealmaking With Uber And DoorDash” (Business Insider). “Instacart's frenzied summer of unsuccessful dealmaking raises new questions about its business. While the grocery delivery service quadrupled in size last year due to the pandemic lockdown, it's now dealing with the reality of what its business will look like in less extraordinary times—and a more competitive landscape.”
“David Autor's Mix Of Insight, Error, And Confusion” (The Library of Economics and Liberty). A retort to the NYT op-ed from MIT economist David Autor that was featured in ‘What we’re reading’ yesterday. “It’s true that those who plan to work the fry station at White Castle shouldn’t plan on doing well in the labor market if they want that job long term. But surely Autor knows that the vast majority of people who take those jobs while young are not in those jobs 10 or even 5 years later. Those jobs are a stepping stone to better jobs and can teach young people some basic labor market skills: being punctual, taking responsibility, taking direction, and organizing their time, to name four important ones. That means that there actually is a lot of future in working the fry station at White Castle. Imagine that Autor had said: ‘There’s no future in going to middle school, grades 6 to 8.’ Everyone would see the problem with that reasoning. You won’t do well if you plan to be, and succeed in being, in middle school for the next 10 years. But everyone understands that middle school is a step on the way to better things.”
“Opportunity Unraveled: Private Information And The Missing Markets For Financing Human Capital” (Daniel Herbst and Nathaniel Hendren, working paper). “Investing in college carries high returns, but comes with considerable risk. Financial products like equity contracts can mitigate this risk, yet college is typically financed through non-dischargeable, government-backed student loans. This paper argues that adverse selection has unraveled private markets for college-financing contracts that mitigate risk.”
