Companies created to help buyers purchase homes are now stuck holding the bag on loads of inventory. Will Parker and Nicole Friedman report in The Wall Street Journal: Ribbon Home Inc. had a fast-growing business during the housing boom. The New York City-based startup purchased homes with cash on behalf of buyers. Then it sold the homes to the buyers at the same price, plus a fee, once the buyers got a mortgage. This approach made their clients’ offers more appealing, since sellers often prefer all-cash transactions that can close quickly and are considered more reliable. Ribbon has been … [Read more...]
AI SEARCH WAR BEGINS: Google and Microsoft Join AI Battle
The battle for AI-powered internet search has begun. ChatGPT's success has ignited a hostile response from the current search powerhouse, Google, and Microsoft, which owns the Bing search engine. Richard Waters reports for the Financial Times: The internet search wars are back. The emergence of AI systems capable of generating direct textual answers to questions — most notably the ChatGPT chatbot created by San Francisco-based OpenAI — has opened the first new front in the battle for search dominance since Google fended off a concerted challenge from Microsoft’s Bing more than a decade … [Read more...]
UK Takes Aim at the Cryptocurrency Industry
The United Kingdom has unveiled sweeping new regulations for the cryptocurrency industry. Scott Chipolina reports in the Financial Times: The UK has set out a sweeping new regulatory regime for the cryptocurrency industry that aims to bring the rules governing the issuance, trading and lending of crypto tokens closely into line with those for traditional financial assets such as stocks and bonds. The proposals to “robustly” regulate the sector, which are subject to a consultation, are the clearest sign yet that the government is determined to transform the UK into a hub for the crypto … [Read more...]
Do You Trust This Rally?
In the Financial Times, Robin Wigglesworth calls the recent market rally "trashy." He writes: Markets have started the year where they ended 2021, rallying on hopes that inflation has peaked, central banks are about to pivot and the global economy is doing a lot better than feared. This has lifted most boats, both in equities and fixed income. The MSCI All-Country World Index climbed 7 per cent in January, while the Bloomberg Global Aggregate bond index is up 3.3 per cent. In terms of breadth, this is the best start to a year since 2019, according to Deutsche Bank. And this is a proper … [Read more...]
What Happens if the “Fed Put” Is Over for Good?
In the Financial Times, Richard Bernstein examines the possibility that the "Fed put" might be over for good. He writes: Investors have been acting as though the central bank is ready, willing and able to supply the easy money protection of the Fed put. The growing notion that inflation has peaked and the central bank will soon “pivot” to lower interest rates has fuelled a rally so far during 2023 in the riskiest, most speculative assets. Meme stocks are up more than 25 per cent, bitcoin is up more than 40 per cent and the Ark Innovation Fund that invests in speculative tech prospects is up … [Read more...]
Are the Realists Winning the Debate over the Future of EVs?
Is it realistic to assume that electric vehicles (EVs) are going to dominate the automobile market in the near future? Can they even? Those are the questions automobile companies are constantly looking for answers to. At Toyota, the power resides with the realists. River Davis reports: Toyota’s TM -0.99%decrease; red down pointing triangle chief executive always said he wasn’t a skeptic about electric vehicles—he was a realist. Longtime CEO Akio Toyoda called himself a spokesman for “a silent majority” of people in the auto industry who questioned a single-minded focus on EVs. He argued … [Read more...]
Suddenly, Holding Cash Looks Good Again to Many
In The Wall Street Journal, Hardika Singh explains that investors are finding new interest in cash. She writes: The dash for cash on Wall Street is back on. Investors have added about $135 billion to global money-market funds over the past four weeks, according to EPFR data through Jan. 18. That is the best stretch since the four-week period ended May 2020, when those funds logged roughly $175 billion in net inflows. A money-market fund is a form of mutual fund that invests in short-term debt securities including Treasury bills and commercial paper. Companies and consumers often use … [Read more...]
Is Passive Investing Already Passé?
In the Financial Times, Mohamed El-Erian suggests that for now at least, passive investing's time in the sun is over. He writes: Should the vehicles that investors choose to place their money be a function of the investing environment? This question is not asked often enough by investment committees, which tend to focus on asset allocation issues, model portfolios and manager selection. Yet it is a question that has become a lot more important for generating high risk-adjusted returns, particularly given the massive shift of money from active to passive investment strategies in recent … [Read more...]
Can Banks Compete with Apple Pay and PayPal?
Banks are tired of sharing their customer experience with Apple and PayPal. Now, they want to develop their own digital wallets to compete. AnnaMaria Andriotis reports in The Wall Street Journal: Big banks are teaming up to launch a digital wallet that people can use to shop online. Wells Fargo, Bank of America Corp., JPMorgan Chase & Co. and four other banks are working on a new product that will allow shoppers to pay at merchants’ online checkout with a wallet that will be linked to their debit and credit cards. The digital wallet will be managed by Early Warning Services LLC, the … [Read more...]
Markets Are Calling the Fed’s Bluff
Market participants don't believe Fed officials' assertions that the central bank will maintain its course and continue raising rates. Kate Duguid and Colby Smith report in the Financial Times: Investors and Federal Reserve officials are at odds over the path of US interest rates this year, widening a gap between the forecasts of policymakers and market expectations. Markets suggest the central bank will back off and reverse its months-long campaign to raise interest rates, the most aggressive since the 1980s. Senior Fed officials insist it will hold firm. The divergence reflects … [Read more...]
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