The latest parlor game in economics has become guessing how far the Fed will go reach its goal of 2% inflation. Is it worth upending the entire economy and markets to simply boost inflation by a couple dozen basis points? One would imagine that monkeying around with the foundation of a $19 trillion economy in order to boost the reading on a somewhat unreliable measure of price inflation would be a bad way to set policy. That hasn't seemed to occur to many of the PhDs at the Federal Reserve though. Bloomberg's Craig Torres reports on the Fed's decision making: Economists expect the Fed … [Read more...]
The Only Useful Purpose of a Central Bank
From its origins as a lender of last resort to prevent unnecessary banking panics, the Fed has morphed into a beast of an institution, with far too much influence over the economy, financial markets, and the distribution of wealth. Look no further than the Trump administration's recent focus on the Fed’s interest rate policy. The Fed was setup to be an independent institution to keep it above the fray of politics. But with ever expanding influence and power, it is inevitable that the Fed will always be lobbied to accommodate the political class. The problem with the Fed is not that the … [Read more...]
IBM and Project Owl Preparing Tech for the Apocalypse
How useful are your cellphones and devices if the grid goes down, taking the internet and cellular networks with it? About as useful as a paper weight. IBM and Project Owl are looking to change that. First responders and victims of disasters like floods and hurricanes are the people most in need of rapid communication. They need to coordinate rescue operations, and a communication can save lives. To fulfill a request IBM made for technology that could accomplish this, Project Owl has created little Wi-fi devices known as DuckLinks. Bloomberg reports on what these devices do: The five … [Read more...]
Which One of These Tech Companies Will Survive?
Big tech companies are under fire from many sides. Uproars over privacy fears, sluggish earnings, and regulation imminent, Silicon Valley is looking for a way forward. These tech companies have been trying to diversify their income streams in order to stay alive. The question is, can they succeed? So far it hasn't gone well. Jason Dean reports for The Wall Street Journal: Google, Facebook Inc. FB -0.79% and other tech giants have long tinkered with ways to grow outside the core businesses they dominate. Now those efforts are becoming urgent. Facebook Chief Executive Mark Zuckerberg, beset … [Read more...]
Is Lithium Stable Enough to Lead the Battery Revolution?
Lithium based batteries are the best mass-production batteries in the world today, but they have a nasty habit of exploding. Can engineers solve the batteries' problems or is a new approach needed? Bloomberg's Brian Eckhouse and mark Chediak report: Another lithium-ion battery has exploded, this time at an energy-storage complex in the U.S. At least 21 fires had already occurred at battery projects in South Korea, according to BloombergNEF. But this latest one, erupting on Friday at a facility owned by a Pinnacle West Capital Corp. utility in Surprise, Arizona, marked the first time it has … [Read more...]
Lumber Prices Chopped Down by Bad Weather
Bad weather in some key housing markets had tempered demand for lumber, as builders are slowed down. Some big mill owners have even trimmed their output in the face of lower product prices. Ryan Dezember reports for The Wall Street Journal: Lumber prices typically rise in the spring as builders stock up for construction season. But this year, they are being hit hard by bad weather and a decline in home building. The slump comes a year after lumber prices reached record levels and were climbing higher amid a resurgent U.S. housing market, a boom in spending on home renovations and … [Read more...]
Does Private Equity Race for the Exit Spell Trouble?
Stephen Gandel, writing for Bloomberg, explains that private equity companies have shortened the amount of time they spend invested in American companies in 2018. He writes: Private equity firms appear to be signaling “Last one out is a rotten egg.” If those powerhouse investment firms smell something fishy, other investors should take notice. Holding periods — the amount of time between when a buyout firm makes an acquisition until it flips the company back into the public markets or to another buyer — have been drifting down for the past few years around the world. Last year, though, … [Read more...]
Can Marriott Beat AirBNB at its Own Game?
AirBNB has completely upended the way people around the world choose vacation accommodations. Now Marriott, the world's largest hotel company is fighting back by developing expanding its own home-sharing business to the U.S. Bloomberg reports: Marriott International Inc. is expanding its home-sharing business to the United States, becoming the latest hotel operator to challenge Airbnb at its own game and blurring the distinction between home sharing and the traditional hospitality companies. Marriott, the world’s largest hotel company, plans to expand the home-sharing pilot it launched in … [Read more...]
Will the Stock Market Break Your Heart?
Stock market legend Jeremy Grantham has predicted that over the next 20 years, the stock market will break a lot of hearts. Mark Decambre of MarketWatch writes: Jeremy Grantham, an investor credited with predicting the 2000 and 2008 downturns, told CNBC on Thursday that investors should get inured to lackluster returns in the stock market for the next two decades, after a century of handsome gains. “In the last 100 years, we’re used to delivering perhaps 6%,” but the U.S. market will be delivering real returns of about 2% or 3% on average over next 20 years, the value investor and … [Read more...]
Is Amazon’s Alexa Service Private Enough?
After it was revealed that teams of Amazon reviewers listen to bits of actual audio captured by Alexa enabled devices to help train the systems voice recognition, some owners were scared. Now it has been revealed that not only do Amazon's teams listen to users' conversations, but they also have access to their home addresses in some cases. The revelation brings about new and even more concerning privacy issues that must be addressed. Bloomberg reports on the finding: An Amazon.com Inc. team auditing Alexa users’ commands has access to location data and can, in some cases, easily find a … [Read more...]
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