What we’re reading (3/9)
“Dow, S&P 500, Nasdaq Futures Fall Following S&P’s Worst Week Since September” (Yahoo! Finance). “US stock futures fell solidly Sunday evening as investors took the weekend to process the February jobs report and prepared for a busy week of economic data, headlined by a report on inflation amid concerns over its resurgence under President Trump's unpredictable trade policy.”
“Mark Carney To Be Canada’s Next Prime Minister” (NPR). “Mark Carney, the former central banker-turned-centrist politician, triumphed over Chrystia Freeland in Sunday's Liberal Party leadership race, paving the way for him to succeed Justin Trudeau as Canada's next prime minister. He is expected to be sworn in early this week.”
“Markets Finally Woke Up To Tariff Reality. Is This A Buying Opportunity?” (Wall Street Journal). “The case for thinking the selloff is overdone is that markets have broadly dropped back to where they were at the election. Some falls are extraordinary: Tesla is down 45% from its high in mid-December. Since its IPO Tesla has fallen more in such a short period only in 2022, when the Federal Reserve was aggressively raising rates.”
“Zuckerberg’s Meta Considered Sharing User Data With China, Whistleblower Alleges” (Washington Post). “Meta was willing to go to extreme lengths to censor content and shut down political dissent in a failed attempt to win the approval of the Chinese Communist Party and bring Facebook to millions of internet users in China, according to a new whistleblower complaint from a former global policy director at the company.”
“US Measles Cases Jump 35% In A Week; Now Found In 12 States” (Bloomberg). “US measles cases jumped by a third over the past week, according to Centers for Disease Control and Prevention data, a worrying sign in the outbreak that’s already linked to two deaths.”
What we’re reading (3/6)
“Trade Stress Slams U.S. Stocks” (Wall Street Journal). “Declines were broad-based, with financial and tech stocks notching some of the largest losses. The dollar weakened, heading for its lowest close since election day and its worst four-day stretch since 2022. Investors continued their flight from some of the artificial intelligence shares that only two months ago were market favorites.”
“Stock Market Today: Nasdaq Enters Correction, S&P 500 Sinks To Lowest Since November As Stocks Get Clobbered On Trump Tariff Whiplash” (Yahoo! Finance). “Trade-war uncertainty has persisted as investors weighed how far President Donald Trump would be willing to negotiate on tariffs. On Thursday, Trump said he would pause tariffs on some Mexican goods, and the White House later said the delay also includes goods from Canada.”
“Walmart Asks Chinese Suppliers For Major Price Cuts On Trump Tariffs” (Bloomberg). “Walmart Inc. has asked some Chinese suppliers for major price reductions, with the US retail giant’s efforts to shift the burden of President Donald Trump’s tariffs facing strong pushback from firms in the Asian nation, according to people familiar with the matter.”
“More Americans Tapping 401(k)s To Pay For Financial Emergencies” (The Hill). “Hardship withdrawals let savers tap their retirement funds early for an “immediate and heavy financial need” but are widely seen as a last resort. The most common reasons for taking them are preventing foreclosure or eviction and covering medical bills. Before the pandemic, about 2 percent of account holders took hardship withdrawals annually — less than half the latest share, according to Vanguard data.”
“Country Club No More: Inside Microsoft’s Move To Cull Staff On Performance” (Business Insider). “In 2023, a Microsoft employee asked to take on a lighter workload when his wife was found to have terminal cancer. His managers were supportive, and they appeared happy with his performance during his wife's illness as recently as late 2024, when they told him to expect 120% of his bonus. Then, on January 22, the employee said, an HR representative unexpectedly joined his weekly manager meeting. The employee was fired without severance and was told his health insurance would expire that night. The employee’s wife had to skip chemotherapy treatments for a month after.”
What we’re reading (3/5)
“Tariff Twitches Causing Wild Stock Market Swings” (Axios). “The market's nerves were on full display Wednesday, as stocks whipsawed with every change in the narrative on the Trump administration's tariffs on Mexico and Canada.”
“Hiring Slowed In February As Economic Uncertainty Created ‘Hesitancy’ To Add Jobs Last Month, ADP Data Shows” (Yahoo! Finance). “New data revealed that private sector hiring slowed significantly in February and fell short of Wall Street's expectations, adding to concerns that the US economy is losing steam.”
“The Two-Headed Monster Stalking The Economy Has A Name: Stagflation” (Wall Street Journal). “Fed officials thought they might have engineered a soft landing over the past 18 months. A few are publicly warning of a stagflationary scenario.”
“Chatbots Are Cheating On Their Benchmark Tests” (The Atlantic). “[O]ver the past two years, researchers have published studies and experiments showing that ChatGPT, DeepSeek, Llama, Mistral, Google’s Gemma (the ‘open-access’ cousin of its Gemini product), Microsoft’s Phi, and Alibaba’s Qwen have been trained on the text of popular benchmark tests, tainting the legitimacy of their scores. Think of it like a human student who steals and memorizes a math test, fooling his teacher into thinking he’s learned how to do long division.”
“Discord in Early Talks With Bankers For Potential I.P.O.” (New York Times). “Discord, the social chat app popular with the video game community, has met with investment bankers in recent weeks to discuss preparations for an initial public offering as soon as this year, two people familiar with the talks said.”
What we’re reading (3/4)
“Trump’s Tariffs Plunge Global Markets Into A Sea of Red” (New York Times). “Global markets plunged on Tuesday after U.S. tariffs went into effect on roughly $1.5 trillion worth of imports from Canada, Mexico and China, with another, and even broader, wave set to kick in as soon as next week. China and Canada have already responded, with Beijing targeting the American heartland with sweeping levies on imported food and halting log and soybean shipments from select U.S. companies. Mexico is expected to retaliate, too.”
“Trump Could Scale Back Canada, Mexico Tariffs Wednesday, Lutnick Says” (CNBC). “President Donald Trump will “probably” announce tariff compromise deals with Canada and Mexico soon, Commerce Secretary Howard Lutnick said Tuesday…Lutnick’s comments came minutes after the U.S. stock market limped to a close for a second day of sharp declines, spurred at least in part by investors’ fears that Trump’s aggressive policies will ignite a crippling trade war.”
“American Farmers Brace For Harm From Retaliatory Tariffs” (New York Times). “Agricultural producers of all sizes, from part-time farmers and small family farms to large ones, could take a hit as prices fall and some costs go up. Soybeans accounted for about half of U.S. agricultural exports to China last year, according to the Agriculture Department, but American soybean exporters to China compete with companies from Brazil. U.S. soybean futures fell about 1 percent on Tuesday. Futures on U.S. corn and wheat also fell.”
“Hong Kong-Based Company To Sell Panama Canal Ports” (BBC). “A Hong Kong-based company has agreed to sell most of its stake in two key ports on the Panama Canal to a group led by US investment company BlackRock…[t]hrough a subsidiary, CK Hutchison Holding operates ports at the Atlantic Ocean and Pacific Ocean entrances to the canal. It said Tuesday that it would sell its interests as part of a deal worth $22.8bn (£17.8bn). CK Hutchison is not owned by the Chinese government but its base in Hong Kong means it operates under Chinese financial laws. It has operated the ports since 1997.”
“This Scientist Left OpenAI Last Year. His Startup Is Already Worth $30 Billion.” (Wall Street Journal). “Silicon Valley’s hottest investment isn’t a new app or hardware product. It’s one man. AI researcher Ilya Sutskever is the primary reason venture capitalists are putting some $2 billion into his secretive company Safe Superintelligence, according to people familiar with the matter. The new funding round values SSI at $30 billion, making it one of the most valuable AI startups in the world.”
What we’re reading (3/3)
“Trump Says Canada-Mexico Tariffs Will Take Effect, ‘No Room Left’ For Talks” (Wall Street Journal). “President Trump said the U.S. would go ahead with 25% tariffs on goods from Canada and Mexico effective Tuesday, declaring there was ‘no room left’ for negotiations with America’s neighbors…U.S. stocks fell in afternoon trading after Trump said the tariffs would move forward.”
“Hedge funds’ Growing Divide” (Business Insider). “For the first time, scale benefits both the manager and the LP, and the result is four managers with overwhelming clout. Business Insider talked to more than a dozen fund founders, allocators, and industry experts, such as top prime brokers and recruiters, to understand how smaller platforms plan to survive the unprecedented concentration of capital and talent and where allocators are turning in this new reality.”
“A Stock Market Rotation Is Underway. Will It Last?” (Morningstar). “The big rally in the stock market may have stalled, but there’s been lots of churn under the surface. The Morningstar US Market Index has slipped into the red this year, falling 0.25% since the beginning of January. Technology stocks, which were far and away the largest contributor to the big bull market in 2023 and 2024, have been the biggest drag on stock returns in 2025. Meanwhile, sectors like financial services, basic materials, and healthcare are seeing new investor interest. Non-US markets such as China, the United Kingdom, and Germany have also staged significant rallies. ‘Overall, there’s this subtle transition in leadership,’ says Michael Arone, chief investment strategist at State Street Global Advisors.”
“How Big Is The Stock Market’s America Bubble?” (Financial Times). “US stocks’ huge surge since the global financial crisis means they account for almost two-thirds of the world’s investable market, raising concerns about whether such dominance creates too much risk for investors’ portfolios. Wall Street has raced ahead of international rivals over the past decade and a half, driven largely by a rally in the tech sector — and particularly companies linked to artificial intelligence — which is now worth almost as much as all the stocks in Europe combined. But a recent pullback in tech shares has underlined the growing nervousness around soaring valuations in a market that has swallowed an ever larger share of global investors’ allocations.”
“BridgeBio Oncology To Go Public In SPAC Deal Bringing $450 Million-Plus For Trio Of Cancer Drugs” (Dealbreaker). “BridgeBio Oncology Therapeutics, a company working to advance the field of therapies addressing a validated but elusive group of cancer targets, has reached a deal to go public in a SPAC merger that brings more than $450 million to support clinical testing of three drug candidates. The merger agreement announced Friday is with Helix Acquisition Corp. II, a SPAC sponsored by affiliates of Cormorant Asset Management. When the deal closes, the combined company will take the BridgeBio Oncology Therapeutics name and is expected to trade on the Nasdaq under the stock symbol ‘BBOT.’”
What we’re reading (3/2)
"How Wall Street Pros Are Looking At Fears Over A US Economy Slowdown” (Yahoo! Finance). “‘The fear here among a lot of investors now [has] become that the economy could be slowing down faster than the Fed is willing to react, which is a tough situation,’ Steve Sosnick, chief strategist at Interactive Brokers, told Yahoo Finance an interview on Friday.”
“Why This Spot-On Consumer-Confidence Measure Should Concern Stock-Market Bulls” (MarketWatch). “…[A] far bigger cause for concern is the gap between the Conference Board’s and the University of Michigan’s sentiment measures. Historically, this spread has widened considerably in the months prior to recessions. Not surprisingly, given this historical tendency, the S&P 500 has performed worse in the wake of higher spread levels than lower ones.”
“Big Consulting Bosses Meet With Trump Officials To Save Contracts” (Wall Street Journal). “In recent days, top executives at professional services firms including Ernst & Young and Guidehouse have met with officials including Josh Gruenbaum, the Federal Acquisition Service commissioner within the General Services Administration, according to people familiar with the discussions. A Booz Allen executive has also been in touch with Gruenbaum, who is a former director at the private-equity firm KKR…[i]n the meetings with consultants, Gruenbaum has emphasized to executives that the government sees value in consulting—particularly in rolling out advanced technology and modernizing government agencies.”
“Justice Department, FTC Antitrust Enforcement May Merge” (Dealbreaker). “One factoid that should be in every antitrust outline is that both the FTC and the DOJ can bust up monopolies. The DOJ tends to handle the criminal side of antitrust while the FTC handles civil, but there is some undeniable overlap in the work that they do. So why keep both? Musk can’t seem to find a persuasive enough answer to maintain the apparent redundancy.”
“AI Will Upend A Basic Assumption About How Companies Are Organized” (Bloomberg). “For most of history, hiring a dozen PhDs meant a massive budget and months of lead time. Today, a few keystrokes in a chatbot summon that brainpower in seconds. As intelligence becomes cheaper and faster, the basic assumption underpinning our institutions — that human insight is scarce and expensive — no longer holds. When you can effectively consult a dozen experts anytime you like, it changes how companies organize, how we innovate and how each of us approaches learning and decision-making. The question facing individuals and organizations alike is: What will you do when intelligence itself is suddenly ubiquitous and practically free?”
February performance review
Prime: +3.96%
Select: +3.77%
SPY ETF: +0.25%
Bogleheads portfolio (80% VTI + 20% BND): +0.30%
March picks available now
The new Prime and Select picks for March are available starting now, based on a model run put through Today (March 1). As a note, I will be measuring the performance on these picks from the first trading day of the month, Monday, March 3, 2025 (at the mid-spread open price) through the last trading day of the month, Monday, March 31, 2025 (at the mid-spread closing price).
March picks available soon
I’ll be publishing the Prime and Select picks for the month of March before Monday, March 3 (the first trading day of the month). As always, SPC’s performance measurement for the month of February, as well as SPC’s cumulative performance, will assume the sale of the February picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Friday, February 28). Performance tracking for the month of March will assume the March picks are bought at the open price (at the mid-point of the opening bid and ask prices) on the first trading day of the month (Monday, March 3).
What we’re reading (2/24)
“Amazon’s ‘James Bond' Deal Could Mean A New Future For 007” (The Week). “This is one transaction that is shaken, not stirred. It was announced on Feb. 20 that a deal had been reached to give control of the ‘James Bond’ film series to Amazon-MGM, likely opening the doors to a whole new future for Hollywood's most legendary spy. The agreement relinquishes control of the ‘Bond’ IP from the longtime stewards of the franchise.”
“The Cryptocurrency Scam That Turned A Small Town Against Itself” (New York Times). “Tucker’s first inkling that something was wrong came from a friend, an investor in the bank who was close to Hanes. A few days before the board meeting, he confided to Tucker that Hanes had messed up: A wire transfer went out, supposedly to help a struggling customer, and now the bank was $30 million in the hole.”
“Unemployment By Degrees” (Business Insider). “[Ron] Sliter is part of a sudden spike in the number of highly educated professionals who are struggling to find a job — any job. According to government data analyzed by the economist Aaron Terrazas, professionals with advanced degrees who are looking for work find themselves stranded on the unemployment line for a median of 18 weeks — a jobless spell that has more than quadrupled over the past two years. And in a strange twist, job searches are now taking more than twice as long for educated elites than they are for workers who never went to college. At the moment, the higher your degree, the longer it will take for you to find a job.”
“Elizabeth Holmes Fails To Overturn Her Theranos Fraud Conviction” (Associated Press). “Elizabeth Holmes, the disgraced founder of Theranos, will remain in prison after losing a bid Monday to overturn her fraud conviction, with a federal appeals court saying she hadn’t proved there were legal missteps during her trial for defrauding investors with false claims of what her blood-testing startup could achieve.”
“The Long Nights And Drug Addiction That Drove A Banker To Insider Trading” (Wall Street Journal). “[John] Femenia was a 28-year-old investment banker working for Wells Fargo WFC -0.28%decrease; red down pointing triangle when he tipped off his friends about confidential deals that the bank was working on. His friends would buy shares of companies that were in line to be acquired, reap the profits when the deals were announced and then kick back some of the gains to Femenia. In two years, Femenia and his friends made more than $11 million trading off of confidential information, prosecutors said. He spent about three years in prison. He says he came up with the scheme while he was abusing Adderall, which he started taking to deal with his long hours at Wells Fargo. The Wall Street Journal reported in December on the widespread use of ADHD medications on Wall Street and the psychological changes it causes in abusers.”
What we’re reading (2/22)
“Physicists Question Microsoft’s Quantum Claim” (Wall Street Journal). “Microsoft’s announcement of a quantum-computing breakthrough generated a wave of excitement this week—but physicists who have reviewed the work say they aren’t convinced of the finding. The company claims to have created an elusive particle called a Majorana particle that one day could power a quantum computer, enabling it to crunch data exponentially faster than is currently possible. The announcement, made Wednesday in a blog post on Microsoft’s website, coincided with research the company published in Nature on the same day. But that paper doesn’t provide conclusive evidence of the breakthrough, according to scientists who reviewed the work.”
“Fed-Favored Inflation Gauge Is Set To Ease To Seven-Month Low” (Bloomberg). “The Federal Reserve’s preferred inflation metric is expected to cool to the slowest pace since June, but glacial progress on taming price pressures overall will keep policymakers cautious about lowering interest rates further.”
“AI Bosses Are Feeling The High-Stakes Pressure” (Business Insider). “‘Almost every decision that I make feels like it's kind of balanced on the edge of a knife — like, you know, if we don't build fast enough, then the authoritarian countries could win,’ Amodei said. ‘If we build too fast, then the kinds of risks that Demis is talking about and that we've written about a lot, you know, could prevail.’”
“Warren Buffett Amasses More Cash And Sells More Stock, But Doesn’t Explain Why In Annual Letter” (CNBC). “Berkshire’s monstrous ownership of cash has raised questions among shareholders and observers especially as interest rates are expected to fall from their multi-year highs. The Berkshire CEO and chairman in recent years has expressed frustration about an expensive market and few buying opportunities. Some investors and analysts have grown impatient with the lack of action and have sought an explanation why.”
“Sunshine, Beaches, And Lower Costs: How South Carolina Became A Relocation Destination” (Yahoo! Finance). “Last year, South Carolina was the top destination by a U-Haul measure of one-way moving equipment rentals, unseating Texas for the first time in three years. The state saw a net 68,000 domestic movers in 2024, according to Census Bureau data.”
What we’re reading (2/21)
“Why AI Spending Isn’t Slowing Down” (Wall Street Journal). “Over the next couple of years, new innovations and more AI-specific microchips could mean systems that deliver AI to end customers become a thousand times more efficient than they are today, says Tomasz Tunguz, a venture capitalist and founder of Theory Ventures. The bet that investors and big tech companies are making, he adds, is that over the course of the coming decade, the amount of demand for AI models could go up by a factor of a trillion or more, thanks to reasoning models and rapid adoption.”
“Steve Cohen Says Tariffs And DOGE’s Cuts Are Negative For Economy, Market Correction Could Be Soon” (CNBC). “‘Tariffs cannot be positive, okay? I mean, it’s a tax,’ Cohen said Friday at the FII Priority Summit in Miami Beach, Florida. ‘On top of that, we have slowing immigration, which means the labor force will not grow as rapidly as … the last five years and so.’”
“What Does Jack Ma’s Return To The Spotlight Mean?” (BBC). “A meeting between Chinese president Xi Jinping and some of the country's foremost business leaders this week has fuelled excitement and speculation, after Alibaba founder Jack Ma was pictured at the event. The charismatic and colourful Mr Ma, who was one of China's most prominent businessmen, had withdrawn from public life after criticising China's financial sector in 2020.”
“Why Is Warren Buffett Hoarding So Much Cash?” (Wall Street Journal). “Holding lots of cash is standard practice for Berkshire, but the scale of the recent buildup has raised eyebrows among some observers of the Omaha, Neb., conglomerate.”
“Home Sales Drop Sharply As Prices Hit An All-Time High For January” (CNBC). “The U.S. housing market continues to weaken, as potential buyers face stubbornly high mortgage rates, elevated prices and limited supply of listings. Sales of previously owned homes fell 4.9% in January from the prior month to 4.08 million units on a seasonally adjusted, annualized basis, according to the National Association of Realtors. Analysts were expecting a 2.6% decline. Sales were 2% higher than January 2024, but are still running at a roughly 15-year low.”
What we’re reading (2/20)
“Why Home Construction Has Slumped for Decades” (William Kerr, Harvard Business Review). “The modern home that we build today is more advanced, larger and has more amenities than the home we built in the 1970s. If you look at any measure of the number of houses built per construction employee, that fact does bear some responsibility for the sector not producing as many units. But even after we account for these quality differences, we still find the industry is dominated by very small employers. Often 40 percent of the industry is comprised of firms that have fewer than five employees. In the auto industry, that fraction is about 2 percent.”
“Dollar Hits Year-To-Date Lows As Bulls Get Nervous” (Reuters). “The yen shot to a 2-1/2 month high on Friday on the back of a jump in Japanese inflation, while the dollar was set for a third weekly drop in a row as traders calculated the start of Donald Trump's second term has been mostly bluster on the tariff front.”
“From Japan, A Hard Lesson About A Weak Currency” (New York Times). “For decades in Japan, it was accepted as gospel: A weak currency makes companies more competitive and bolsters the economy. Part of that promise came true last year: As the yen tumbled to a 37-year low against the dollar, big brands like Toyota Motor reported the highest profits in Japanese history. Stocks soared to record highs. Yet for the majority of Japanese households, the weakened yen has done little more than drive up the costs of basic living expenses, such as food and electricity. Figures released Monday showed that while Japan’s economy picked up pace in the second half of 2024, its inflation-adjusted growth rate for the full year slowed to 0.1 percent. That was down from 1.5 percent the prior year.”
“A Crypto Fairy Tale” (Owen Lamont). “Crypto raced up the spiral stairs to the top of the tower. Throwing open the door, he discovered … nothing. The room was empty. There was no Princess Use Case. There never had been. He put his head in his hands and wept.”
“Might We End Up With A Modest Stagflation?” (Marginal Revolution). “If you accept the notion that inflation is more likely to rise than fall, and that the labor market is more likely to worsen than improve, then the chances for a modest stagflation are reasonably high.”
What we’re reading (2/19)
“Consumers Are ‘Tapped Out' On Further Price Hikes: Fed’s Bostic” (Yahoo! Finance). “‘So in our surveys and in our conversations with leaders, we've asked them ‘What are they likely to do?’ And, what they've all said is that our first best choice would be to pass on this to the final price,’ Bostic says, while also citing how there's already been a period of intense inflation. ‘Consumers may not have an appetite to do that.’”
“Microsoft Claims Quantum Computing Breakthrough By Creating New State Of Matter” (Wall Street Journal). “Microsoft researchers say they created a chip that leverages a new state of matter that could underpin quantum computers more powerful than the world has ever seen. The chip employs a so-called topological superconductor—a material that isn’t a solid, liquid or gas—to produce building blocks that can be scaled up into a powerful quantum computer, Microsoft said.”
“Elon Musk Debuts Grok 3, An AI Model That He Says Outperforms ChatGPT And DeepSeek” (CNN Business). “In an event livestreamed on Musk’s X, leaders at the startup claimed Grok 3 performs better across math, science and coding benchmarks than Google’s Gemini, OpenAI’s GPT-4o, Anthropic’s Claude 3.5 and DeepSeek’s V3 model, although it’s not clear how it compares to other top reasoning models such as OpenAI o3-mini and DeepSeek R1. The company also described the tool’s new features, such as advanced web searching with ‘deep search,’ the ability to code online games and a ‘big brain’ mode to reason through more complex problems.”
“Concierge Medicine Is Booming — And Some New Yorkers Are Willing To Pay Almost Anything For The Privilege” (New York Post). “The doctor will see you — whenever you want. More and more wealthy New Yorkers are spending big for concierge medical care that goes way above and beyond annual check-ups. ‘I’m 70% doctor, 15% psychologist, 10% rabbi, 4% hairdresser and 1% friend,’ Dr. Jordan Shlain told NYNext. His team is also on call pretty much 24/7, with clients able to reach them via email, text or phone at all hours.”
“America Is About To Enter An Apartment Crunch” (Business Insider). “Renters have quietly enjoyed a nice run over the past two years. A historic wave of apartment construction has tamped down rents from their pandemic-era peak — last year developers finished the most units nationwide since 1974. With so many shiny high-rises hitting the market, landlords are fighting to fill their spaces, offering major discounts and perks to lure tenants. One housing economist even declared 2025 ‘the year of the resident.’ But as the cost of building has increased, the number of cranes on the horizon has dwindled. Formerly eager developers are cutting back on fresh construction plans, laying the groundwork for another apartment squeeze. In other words, the good times for renters are running out.”
What we’re reading (2/18)
“The Unicorn Boom Is Over, And Startups Are Getting Desperate” (Bloomberg). “A reckoning that has been looming for years is becoming painfully tangible. In 2021 more than 354 companies received billion-dollar valuations, thus achieving unicorn status. Only six of them have since held IPOs, says Ilya Strebulaev, a professor at Stanford Graduate School of Business. Four others have gone public through SPACs, and another 10 have been acquired, several for less than $1 billion…There are a record 1,200 venture-backed unicorns that have yet to go public or get acquired, according to CB Insights, a researcher that tracks the venture capital industry. Startups that raised large sums of money are beginning to take desperate measures. Startups in later stages are in a particularly difficult position, because they generally need more money to operate—and the investors who’d write checks at billion-dollar-plus valuations have gotten more selective. For some, accepting unfavorable fundraising terms or selling at a steep discount are the only ways to avoid collapsing completely, leaving behind nothing but a unicorpse.”
“Who’s Paying For The US Tariffs? A Longer-Term Perspective” (Mary Amiti, et al.). “Using another year of data including significant escalations in the trade war, we find that the costs of the US tariffs continue to be almost entirely borne by US firms and consumers. We show that the response of import values to the tariffs increases in absolute magnitude over time, consistent with the idea that it takes time for firms to reorganize supply chains. We find heterogeneity in the responses of some sectors, such as steel, where tariffs have caused foreign exporters to drop their prices substantially, enabling them to export relatively more than in sectors where tariff pass-through was complete.”
“At The ‘Wall Street Of Eggs,’ Demand Is Surging” (Wall Street Journal). “The nation’s biggest egg marketplace doesn’t own hens, farms or processing plants. From an office building in New Hampshire, roughly a dozen people facilitate the trading of billions of eggs a year, a task that shapes what Americans pay per dozen at the supermarket or for omelets at diners. The Egg Clearinghouse, or ECI, is little known outside the industry: It operates an online marketplace that allows participants to place bids on eggs listed for sale and see the results of trades. Only ECI members—farmers and egg buyers—are allowed to trade. Lately, there are a lot more buyers than sellers using the ‘Wall Street of Eggs’ with bird flu roiling the poultry market. And that is after last year marked the company’s busiest, trading over 2.6 billion shell eggs and 39 million pounds of egg product valued at more than $600 million. ECI represents a sliver of the broader egg market—less than 5%—but plays a crucial role in providing eggs for those in need or having trouble getting them, and how they are priced.”
“KFC Moves U.S. Headquarters From Kentucky To Texas” (CNBC). “KFC is leaving Kentucky. The fried chicken chain’s U.S. headquarters will move from Louisville, Kentucky, to Plano, Texas, owner Yum Brands said Tuesday. About 100 KFC U.S. employees will be required to relocate over the next six months.”
“Homebuilder Confidence Falls To Lowest Level In Five Months Amid Tariff Concerns, High Mortgage Rates” (Yahoo! Finance). “Homebuilders are feeling less optimistic about the housing market as they navigate concerns over tariffs, elevated mortgage rates, and high housing costs. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index was 42 in February, a five-point drop from January and the lowest level in five months. Economists were expecting a reading of 46, per Bloomberg data.”
What we’re reading (2/17)
“Investors Haven’t Been This Pessimistic About Stocks Since 2023” (Wall Street Journal). “Bearishness among individual investors—measured by the percentage who expect stock prices to fall over the next six months—reached 47.3% for the week ended Feb. 12, according to the latest survey from the American Association of Individual Investors. That is the highest level since November 2023.”
“Delaware Bill Would Limit Investor Lawsuits As Companies Threaten To Leave The State” (Reuters). “Delaware lawmakers on Monday proposed changes to the U.S. state's widely used corporate law that would limit shareholder lawsuits after several high-profile companies said they might move their legal home to another state. The bill sets out steps that corporate boards could take to insulate directors and controlling shareholders from litigation over alleged conflicts. The bill would also limit the kinds of internal records that shareholders can access, which they need to build their cases. The bill is sponsored by leaders of both parties in both houses of Delaware's state assembly.”
“Forget The US — Europe Has Successfully Put Tariffs On Itself” (Mario Draghi). “Recent weeks have provided a stark reminder of Europe’s vulnerabilities. The eurozone barely grew at the end of last year, underlining the fragility of the domestic recovery. And the US began imposing tariffs on its major trading partners, with the EU next in its sights. This prospect casts further uncertainty over European growth given the economy’s dependence on foreign demand. Two major factors have led Europe into this predicament — but they can also lead it out again if it is prepared to undergo radical change. The first is the EU’s long-standing inability to tackle its supply constraints, especially its high internal barriers and regulatory hurdles. These are far more damaging for growth than any tariffs the US might impose — and their harmful effects are increasing over time…The second factor holding Europe back is its tolerance of persistently weak demand, at least since the global financial crisis of 2008. This has exacerbated all the issues caused by supply constraints.”
“Musk’s DOGE Expected To Arrive At SEC In Coming Days” (Politico). “Elon Musk has repeatedly clashed with the Securities and Exchange Commission over the last decade. Now, his cost-cutting crusade is about to hit the regulator. The Musk-led Department of Government Efficiency is expected to arrive at the SEC in the coming days, according to two people briefed on the matter.”
“Chilling New Telescope Pic Of 30,000mph ‘City-Killer’ Asteroid With 1-In-48 Chance Of Smashing Into Earth” (The U.S. Sun). “The chance of the space rock smashing into Earth when it loops around in 7 years' time is estimated at a 1-in-48 chance - or just over two per cent.”
What we’re reading (2/16)
“Investors Spot Signs Of Market Froth During Long Bull Market” (Wall Street Journal). “One source of concern: Ordinary investors are really bullish about a handful of popular companies. Shares of Palantir Technologies, a highly popular stock among individual investors, surged 24% on Feb. 4 after the data-analytics company reported strong sales growth and robust demand for its artificial-intelligence products. Palantir’s stock has jumped roughly 58% this year and was last year’s best performer in the S&P 500. Traders are also bidding up shares of Strategy, formerly MicroStrategy, the software company turned bitcoin-buying machine. The company’s market capitalization was recently about $87 billion, nearly twice the value of the bitcoins it holds. Meme stocks have also jumped. Shares of GameStop, BlackBerry and online pet-products retailer Chewy have all soared more than 90% over the past 12 months, according to FactSet.”
“Fears Of Massive Crash On Wall Street After America’s Top 50 Companies See Record Levels Of ‘Fragility’” (The Daily Mail). “According to Bank of America strategists, ‘stock fragility’ is on track to reach its highest level in more than three decades among the largest 50 stocks in the S&P 500 index. That includes tech stocks such as Apple, Amazon, Microsoft and Nvidia, bank stocks such as JPMorgan Chase and Wells Fargo, and retail stocks like Costco and Walmart. Stock fragility is a measure of how much a share price moves a day relative to its usual volatility, Bloomberg reported.”
“Japan Perfected 7-Eleven. Why Can’t The US Get It Right?” (Bloomberg). “In Japan, which is much smaller, the chain relies on a robust supplier network, where inventory and food preparation take place at more than 150 factories churning out breakfast, lunch and dinner. Product lineups and displays change quickly based on consumer tastes, with each store responsible for analyzing the sales of every product and adjusting orders to reduce waste and control inventory. It’s a management method known as tanpin kanri, which was even taken up as a Harvard Business School case study. ‘Japan’s convenience stores’ food preparation central kitchens and logistics infrastructure would be more challenging to establish and operate efficiently over vast areas in the US,’ Boston says.”
“The Dot-Com Bubble Burst 25 Years Ago. AI Could Be Next.” (Barron’s). “The early internet bubble and bust isn’t the only tech antecedent to today’s tech industry. Radio Corp. of America was the pre-eminent tech stock of the first Roaring 20s. ‘All you had to do was include ‘radio’ in the name of your company and the price of your stock would shoot up, even if there was very little behind the company,’ Bryan Taylor, chief economist at data provider Finaeon, wrote in a 2023 essay. RCA stock rose 200-fold during the 1920s, only to plunge 98% from its 1929 peak to 1932.”
“Why Total Shareholder Yield Matters More Than Dividends” (Morningstar). “[T]here is nothing special about dividends, except that they are a tax-inefficient way to return capital to shareholders, and they are certainly not income (except from a tax perspective); they are just a return of investor capital—by definition, income increases wealth while dividends do not. Second, investors are better served by focusing on investing in strategies that provide exposure to the factors they want to invest in. A focus on dividends, whether dividend growth or high-dividend yield, is not likely to add value.”
What we’re reading (2/14)
“Bonds Rally As Weak Retail Sales Bolster Fed Bets: Markets Wrap” (Bloomberg). “The bond market ended the week with solid gains as a soft reading on retail sales revived bets on Federal Reserve rate cuts. A rally in Treasuries pushed the 10-year yield below 4.5%, with the bond notching its fifth straight week of gains — the longest run since 2021. Money markets are back to fully pricing in a first Fed reduction by September. The S&P 500 hovered near its all-time highs. The dollar hit a fresh low for 2025.”
“Cheap Blood Test Detects Pancreatic Cancer Before It Spreads” (Nature). “Researchers have developed a simple blood test to detect pancreatic cancer before it spreads to other sites in the body. The test could be used for routine screening to improve the disease’s low survival rate. ‘It’s a very pragmatic, really translatable solution’ that builds on many advances in the field, says Simone Schürle-Finke, a biomedical engineer at Swiss Federal Institute of Technology (ETH) in Zurich, Switzerland. The results are described in Science Translational Medicine today.”
“How Zoning Ruined The Housing Market In Blue-State America” (Wall Street Journal). “In January, the devastating wildfires in Los Angeles spurred California Gov. Gavin Newsom to do something extraordinary for a progressive politician: take aim at regulations. In an executive order designed to help residents rebuild, Newsom suspended environmental reviews, told state agencies to identify rules that might impede construction and instructed bureaucrats to rush any necessary permits through the process. The measures, Newsom explained, were made necessary by the loss of thousands of homes in a city already suffering a housing crisis. All of which seemed perfectly reasonable. So reasonable, in fact, that it raised a troubling question: If the only way to rebuild was to suspend the regular rules, why were those rules there in the first place? The answer is that the rules were intended to make it all but impossible to build, not just in California but in much of blue-state America.”
“Meta Platforms Stock Just Closed Higher For The 20th Straight Day” (Yahoo! Finance). “Year to date, Meta stock is now up 25.8%, far outpacing its Magnificent Seven peers. Amazon (AMZN) is the next best-performing stock among this group of Big Tech stalwarts, having risen 4.2% this year through Friday's close. Tesla has been the laggard of the group, falling 11.9% in 2025.”
“READ: Prosecutors’ Resignation Letters After Refusing To Drop Eric Adams Case” (Axios). “There is a tradition in public service of resigning in a last-ditch effort to head off a serious mistake. Some will view the mistake you are committing here in the light of their generally negative views of the new Administration. I do not share those views. I can even understand how a Chief Executive whose background is in business and politics might see the contemplated dismissal-with-leverage as a good, if distasteful deal. But any assistant U.S. attorney would know that our laws and traditions do not allow using the prosecutorial power to influence other citizens, much less elected officials, in this way. If no lawyer within earshot of the President is willing to give him that advice, then I expect you will eventually find someone who is enough of a fool, or enough of a coward, to file your motion. But it was never going to be me.”
What we’re reading (2/13)
“Ackman’s Pershing Square Suffers From The ‘Passive’ Phenomenon” (Institutional Investor). “A number of Pershing Square’s dozen stock holdings aren’t in the index, which helps put his hedge fund’s performance in perspective. Last year, the net gain of 10.2 percent for Ackman’s Pershing Square Holdings, his publicly traded hedge fund, was less than half of the 25 percent gain for the S&P 500. The 2024 showing also dragged down the vehicle’s annualized performance below the S&P 500, according to the investor presentation. Pershing Square has far outdone the S&P 500 since it was launched in 2004, but most of those gains were in the earlier years — before the passive trend took hold. Ackman’s publicly traded fund, which was launched on Dec. 31, 2012, has an annualized net performance of 13.5 percent, compared with 14.8 percent for the S&P 500.”
“The Emperor’s New Tariffs: Small, Ugly And Stupid” (Paul Krugman). “Finally, the stupid part: Steel and aluminum aren’t consumer goods. They’re ‘intermediate inputs,’ used in the production of other things, notably cars and aircraft. Imposing taxes that raise the prices of these goods might encourage more U.S. production of metals (although that didn’t happen to any large degree the last time Trump imposed tariffs), but it will raise costs throughout the rest of U.S. manufacturing, making it less competitive and reducing employment. Even if we ignore indirect effects via interest rates, the dollar and so on, these tariffs are almost certain to reduce, not increase, manufacturing employment.”
“The Scientific Literature Can’t Save You Now” (The Atlantic). “Profit motive can sometimes trump quality control even at the world’s largest publishers, which earn billions annually. It also fuels a ravenous pack of ‘paper mills’ that publish scientific work with barely any standards whatsoever, including those that might be used to screen out AI-generated scientific slop. An empiricist might say that the sum total of these articles simply adds to human knowledge. If only. Many, or even most, published papers serve no purpose whatsoever. They simply appear and … that’s it. No one ever cites them in subsequent work; they leave virtually no trace of their existence. Until, of course, someone convinces a gullible public—or a U.S. senator—that all research currency, new and old, is created equal.”
“Why Dealers Are Flying Gold Bars By Plane From London To New York” (Wall Street Journal). “Gold is, for the moment, worth substantially more in Manhattan than in the U.K. capital, sparking the biggest trans-Atlantic movement of physical bars in years. Traders at major banks are racing to yank gold from vaults deep below London’s medieval streets and from Swiss gold refineries and ferry them across the ocean. The cheapest way to transport such a valuable commodity safely: the cargo hold of commercial planes.”
“The Prison Routine Of Theranos founder Elizabeth Holmes: Clerking For 31 cents An Hour, Teaching French, And Reading ‘Harry Potter’” (Business Insider). “An inmate handbook for the federal minimum-security women's prison in Bryan, Texas, where she is incarcerated, says all medically cleared inmates are required to have a regular job for at least 90 days. Holmes has several jobs in the prison, including one as a reentry clerk, for which she makes 31 cents an hour helping prisoners expected to be released soon...She's also a law clerk and teaches French classes, the magazine said.”
What we’re reading (2/12)
“Health Insurers Deny 850 Million Claims a Year. The Few Who Appeal Often Win.” (Wall Street Journal). “Health insurers process more than five billion payment claims annually, federal figures show. About 850 million are denied, according to health-policy nonprofit KFF. Less than 1% of patients appeal. Few people realize how worthwhile those labors can be: Up to three-quarters of claim appeals are granted, studies show…Edward Stratton underwent four years of surgeries, radiation and chemotherapy after he was diagnosed with colorectal cancer in 2019. Doctors declared he had no evidence of cancer in July 2023. But the treatments had destroyed his liver. Doctors recommended a transplant. His insurer, Elevance Health, rejected the claim and three appeals in letters referencing research showing a new liver didn’t improve outcomes for people with colorectal cancer. Elevance didn’t respond to messages from Stratton’s doctors demonstrating he didn’t have cancer anymore. Stratton, with help from his daughter, appealed again in July 2024 and copied regulators, Elevance board members and journalists on his email. The appeal cited a similar case in which Elevance overturned its denial, and noted two other insurers used updated guidance with more nuanced views of transplantation. Stratton also said denying him a transplant would kill him. Elevance overturned the denial.”
“Fed Rate Cuts Bets Trimmed As Powell Says ‘Close But Not There’ On Inflation” (Yahoo! Finance). “A hotter-than-expected inflation reading at the start of 2025 makes it much more likely that the Federal Reserve will keep rates on hold for the foreseeable future, reinforcing a cautionary stance from Fed Chair Jerome Powell.”
“What Is Living Intelligence, The New Frontier In AI?” (The Week). “Artificial intelligence has been at the center of the tech world, but it's not the only technology businesses need to prepare for. In the future, AI will combine with other advancing technologies to create a new wave of personalized AI capable of anticipating users' actions and evolving independently, said Amy Webb, a futurist and professor at the NYU Stern School of Business, at the Harvard Business Review. This phenomenon, called living intelligence, could be the next big thing.”
“Joann, The Bankrupt Fabrics Retailer, Is Closing 500 Of Its 800 Stores” (CNN Business). “Joann, the fabrics and crafts retailer, is closing more than half of its 800 stores in the coming months as it continues to navigate the bankruptcy process. Approximately 500 stores across the United States are closing, the retailer said in a statement to CNN, saying that ‘right-sizing our store footprint is a critical part of our efforts to ensure the best path forward.’”