Tag: Markets

Wall Street Journal deputy editorial features editor Matthew Hennessey joins Brian Anderson to discuss economics for non-economists and the enduring wisdom of Adam Smith. His new book, Visible Hand: A Wealth of Notions on the Miracle of the Market, will be released April 12.

Find the transcript of this conversation and more at City Journal.

GameStop and the ‘Meme Stock’ Phenomenon


Over the last couple of days, a group of cheap stocks has been pushed to the moon and back by speculative investment. Collectively known as “meme stocks,” GameStop et al., or all those short stocks, or anything else the internet thinks is clever. Here’s a brief history of the phenomenon.

About a week ago, a few hedge-fund guys were galivanting around the internet bragging about all the short positions they had on Gamestop stock. Gamestop is a brick-and-mortar video game store that sells game consoles, new releases, and resells used games. Gamestop has seen better days; they’re getting murdered by direct shipping and direct downloads through Steam.

A short bet seemed to be a sure bet, but other day traders, commoners, and people with a bit of stimulus money took exception to these rich fellows trying to drive a business they have some fondness for into the ground. They decided to run the stock price up, forcing the short sellers to cover for significant losses. The genesis for this was apparently a subreddit called r/wallstreetbets.

Getting Around in Thailand on Pedals


Thirty-five years ago, before helmets were ubiquitous and when bicycle passengers were the norm, a summons from my mother to ride with her to the market brought my own agenda to an end. I could be languishing in the shade, in my cool summer togs laying brick pathways in the dirt behind the flower beds. Or, we were entertaining friends, racing around the cement slab out back and trying not to stub our toes on a harsh metal pipe emerging from the middle of the patio. I might be reading when the call came, lying on my stomach on a wooden bench, sheltered from the sun by the overhanging roof, and re-living a Narnia volume or one of the many cheap Scholastic books we owned.

But I would drop everything when I heard the call. I’d trot into the garage, where my petite mom steadied the bike so I could clamber up onto the cushioned bench behind the seat. Then a couple of steadying pushoffs with her foot, a moment of balancing, and we’d sail out of the garage and down our driveway, navigating an unpaved road flanked by cinder block walls.

There’s not a lot of good news Monday, so let’s just tackle the bad stuff on Three Martini Lunch.  Join Jim and Greg as they react to the massive Wall Street sell-off as investors are spooked by coronavirus, oil prices, and the bond market, and once again they call out irresponsible figures either whipping up panic or openly cheering for the virus to spell Donald Trump’s political doom.  They also wince a bit as Montana Democratic Gov. Steve Bullock launches a challenge to GOP Sen. Steve Daines, adding another race where Republicans will have to work hard to keep a seat.  And they react to the news that a CPAC attendee has tested positive for coronavirus, prompting Sen. Ted Cruz and Rep. Paul Gosar to self-quarantine themselves after interacting with that person.

Join Jim and Greg as they tackle a wide variety of martinis today.  First, they are gratified to see a sexual predator like Harvey Weinstein headed to prison for rape and sexual assault although they’re disappointed to see him acquitted on the most serious charges.  They also cringe as the spread of coronavirus in South Korea, China, and Italy send global markets sharply lower.  And they shake their heads as they walk through all the massive tax hikes Bernie Sanders wants to inflict in order to pay for has laundry list of new entitlement programs. And they preview what should be a feisty debate among the Democrats in South Carolina tonight.

Rob Long’s Data-Driven Utopian Dream


In the first 15 minutes of the latest Ricochet podcast (Episode #483), Rob said a couple of things that caught my attention. At one point, when talking about our communication- and data-centric technical culture, he suggested that the answers to all our big problems were probably in the wealth of data we’ve collected.

What came to my mind when he said that was the movie WarGames (1983), in which a wayward defense computer is discouraged from initiating Armageddon when it crunches the numbers and concludes that there’s no way to win a nuclear war. Setting aside the question of whether or not that’s a correct conclusion (and I recently re-re-re-watched Dr. Strangelove, in which Buck Turgidson makes a compelling contrary argument, so I’m really not so sure), what the computer in WarGames did was reach a kind of meta-conclusion. A thorough examination of the available information suggested that no good answers could be found.

Farmland USA


Markets Find a Way

Stopped by a local farm this past Saturday. My family and I walked around, looked at some of the animals, then went and bought a few things at the farm stand. They were selling flowers, pumpkins, numerous varieties of apples, and lots of healthy fresh vegetables. I picked up some apple cider donuts (Hey, it has apple in it . . . don’t judge).

Providing a Service People Want Isn’t “Exploitation”


A Harvard survey last month found that a slim majority of millennials reject capitalism, and with the quality of media reporting about business and the economy, it’s not hard to guess why. (Not to mention the pitiful state of economics education in public high schools.) The Washington Post published a story today that perfectly illustrates the extent of the problem in a single sentence.

The story is about single women in China who have passed their early 20s without a husband, which they say brings shame to their families and have turned to “love markets” as a last resort. Turns out that some entrepreneurs have started companies to help these women find husbands. These are more than dating websites. The companies train the women in man-finding techniques and search cities to help them locate eligible men.

Occupational Licensing Is a Whole Quilt of Crazy


Here’s a bit of trivia: New Hampshire’s tallest building was erected by a general contractor unlicensed by the state. Before you decide to avoid forever Manchester’s 20-story City Hall Plaza, you should know no building in the state, including every house, was built by a state-licensed general contractor — because New Hampshire doesn’t license general contractors. I’ll be focusing on New Hampshire here, but the crazy quilt of occupational licenses smothers opportunity in every state.

The state doesn’t license carpenters, auto mechanics, welders or asphalt layers either. Yet your home does not fall apart, commercial buildings don’t tumble down, roads don’t dissolve in the rain.

YouTube and PragerU’s Lawsuit: The Case for Prager


I didn’t want to duplicate anything that had been was written already. It took a while but I read all the comments on Should Conservatives Sue Private Media Companies.

I think people are looking at this the wrong way. Yes, YouTube is a private company, but that isn’t the only consideration at play. Like everyone else, I don’t buy the public forum argument against viewpoint discrimination, unless there’s relevant state law in California on the matter (which was alluded to) or unless there’s evidence that YouTube is using its near monopoly in a way that unfairly stifles competition and violates antitrust law. However, the question isn’t, “did YouTube violate the First Amendment?” The First Amendment case is just one argument PragerU makes in their brief (and the question is about suing).

Then the Gods of the Markets Tumbled


Early on in one of my harder math courses at the university, the professor stood up in front of the room, writing on a chalkboard. He proved that all possible problems of the class we were studying had a solution. He was quick to point out though, that no one was guaranteeing that you could find it. I spent the rest of that semester increasingly frantic as I couldn’t find those solutions.

All too often, when presented with a problem, conservatives will wave our hands and say “the market will provide a solution.” The certainty of our inevitable triumph absolves us of any need to bother with anything in the meantime. And make no mistake; I believe in the inevitable triumph of market forces as much as anyone. But we should spend a little time thinking about what all that implies.

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After the Brexit vote, the markets crashed. I know it’s true, cuz the media told me so. In fact, they didn’t just crash. It was the werst crash evah! Ferget about retiring any time soon. Brexit wiped out yer investments.  Just look at how far the UK stock market (FTSE 100) dropped in the 48 hours after […]

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This week normally would be relatively benign from a financial market perspective. However, recent conduct and contradictions by Federal Reserve Open Market Committee (FOMC) members and Federal Reserve Bank Presidents and CEO’s makes any week with economic announcements treacherous so we approach this week long cash and caution. Monday February 4th Preview Open

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The title of this post comes from David Zetland, as quoted in Ron Bailey’s recent book The End of Doom. It came to mind when I was thinking about this analysis of the minimal hit to California’s economy resulting from the drought: Second, within agriculture, roughly 80-90 percent of employment and revenues are from higher-valued crops […]

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How Teachers Can Earn Millions


Last year, the comedy duo Key & Peele’s TeachingCenter sketch imagined what it would be like if teachers were treated like pro-athletes, earning millions, being drafted in widely televised events, and starring in car commercials. We’re not likely to see the latter two anytime soon, but some teachers are already earning seven figures.

Look at the Markets. Look at the Economy. Are Income Inequality and Immigration Our Two Biggest Issues?


RTX216VP_clinton-e1452185958451In my new The Week column, I highlight the weakness of three key policies — tax increases, raising the minimum wage, and universal preschool — in Hillary Clinton’s anti-inequality agenda. But the bigger point is that Clinton should focus more intently on policies to boost economic growth, rather than redistribute it. After all, it looks like the US economy (again) didn’t grow much more than 2 percent last year, according to official stats — with 2016 looking like more of the same. Even worse, right now it looks like a recession is more likely than a growth spurt.

William Galston makes a similar point in the WSJ, arguing that early in the Clinton campaign, “she delivered a well-crafted speech outlining her strategy for creating strong, sustained and inclusive growth. … Since then, however, she has been busy immunizing herself against attacks from the left, pursuing transactional politics with the Democratic Party base.” In short, blame Bernie.

But things aren’t much better on the GOP side. The Republican presidential contest has been dominated by immigration — but not, unfortunately, on how to increase immigration to boost growth. What mostly passes for pro-growth policies are unaffordable. across-the-board tax cuts. Indeed, many plans lose the most revenue on the bits that would theoretically produce the least amount of GDP growth.

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Writing in The Globe and Mail, Margaret Wente describes the cap-and-trade system that Ontario joined with California and Québec:  If you want to put a tax on greenhouse gas emissions, there’s an easy way to do it. You implement a carbon tax, like British Columbia did, and add it to the price of gasoline and […]

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For the Fed, One-Eighth of a Point and Done


One-EighthAs stocks endure their worst correction since 2011, and the battle between Fed doves and hawks rages on over a quarter-of-a-percentage-point rate liftoff, the much-anticipated August employment numbers made for a surprisingly mediocre report.

Nonfarm payrolls came in below consensus at 173,000. But private payrolls increased only 140,000, the smallest gain in five months. Compared with the average post-1960 recoveries, private-sector jobs are nearly 6 million below that long-run trend line.

The unemployment rate fell to 5.1 percent. But the labor-force participation rate remained low at 62.6 percent, as did the 59.4 percent employment-to-population ratio.

Could Charlie Hebdo Have Published in Your Country?


13610541.jpgThe website spiked-online.com has an interesting thought experiment: could Charlie Hebdo have published in Great Britain, that ancient bastion of free speech and an independent press?

They come to answer in the negative, because complaints from all sorts of left-wing groups would pressure organizations to refrain from carrying the magazine, and it would have gone under from lack of revenue.

Now, I think that’s a fair prediction as far as it goes, but so what? Shouldn’t individual citizens be free to organize and express their displeasure about a magazine? As long as violent coercion and/or the power of the state are not brought to bear, are these not the methods societies should use to moderate themselves?