What we’re reading (9/7)
“Jobs Slowdown Frustrates Investors Who Wanted Certainty On The Fed” (Wall Street Journal). “The August jobs report was just good enough to keep markets guessing what the Federal Reserve will do this fall. That could be a problem. The Labor Department said Friday that the U.S. economy added 142,000 jobs last month, below expectations for 161,000 but up from the prior month. The unemployment rate ticked down to 4.2% from 4.3%. But beneath the surface there were more worrying signs.”
“Wall Street Is Worried About Carl Icahn” (New York Times). “Shares in Mr. Icahn’s company started tumbling in May 2023 when Hindenburg Research, the short-selling firm run by Nate Anderson, published a report questioning Icahn Enterprises’ financials. Among other things, Hindenburg accused Icahn Enterprises of having a ‘Ponzi-like economic structure’ and paying a dividend it couldn’t afford. (It has since cut its dividend.) He also questioned Mr. Icahn’s use of personal loans backed by the stock.”
“The Less-Efficient Market Hypothesis” (Cliff Asness, Forthcoming in the Journal of Portfolio Management). “Market efficiency is a central issue in asset pricing and investment management, but while the level of efficiency is often debated, changes in that level are relatively absent from the discussion. I argue that over the past 30+ years markets have become less informationally efficient in the relative pricing of common stocks, particularly over medium horizons. I offer three hypotheses for why this has occurred, arguing that technologies such as social media are likely the biggest culprit. Looking ahead, investors willing to take the other side of these inefficiencies should rationally be rewarded with higher expected returns, but also greater risks. I conclude with some ideas to make rational, diversifying strategies easier to stick with amid a less-efficient market.”
“There Are Limits To Investor Appetite For Pod Shops” (Dealbreaker). “We were very eager for the launch of former Point72 Asset Management President Doug Haynes’ new hedge fund. And not simply because Haynes has never actually managed money: He went from [consulting] to lead Steve Cohen babysitter, for as long as the authorities required Cohen to have a babysitter, anyway, and then back to consulting. No, it’s because we couldn’t wait to see how this self-professed expert on the use of language would deploy it on Norias Research Group’s whiteboards (irreproachably, if the arbitrator is to be believed) and with the firm’s female employees, if in fact it had any. Alas, in spite of an appetite for multi-strategy hedge funds so insatiable that pensions and endowments began starting their own in-house to fill their demand, no one else was nearly as eager as we were.”
“Viral Videos Of People Stealing Money From Chase ATMs Were Just Plain Check Fraud” (CNN Business). “A number of viral TikTok videos had some people believing they could get “free” cash from Chase ATMs. But it was just a glitch – and those customers were actually committing fraud, according to the bank. Over the weekend, videos appeared on the app showing people depositing checks for large sums of money at Chase ATMs and then making a withdrawal for a smaller yet substantial amount, leading them to believe they had discovered a bug and were hitting the jackpot. The problem is that this is just a form of check fraud, a criminal offense. Chase said in a statement to CNN that the issue has “been addressed” and warned people not to try it.”
