Finance

Why the Fed Raised Rates - The New York Times

The Federal Reserve is ready to party like it’s 1988.

The rest of us are eying a labor-force participation rate that is lower than it has ever been through the 80s and the 90s (a period that included 3 recessions). The share of part-time employment is still higher than before the Great Recession. Even full-time employment now rarely includes such economic stabilizers as defined-benefit pensions or comprehensive healthcare coverage. This might be why all those jobs Yellen is celebrating don’t seem to be doing a thing to inflation, which has remained well below the Fed’s own target of 2% for most of the last 10 years. But wow, 4.3% unemployment! It’s enough to make us all feel young again!…

How Stories Drive the Stock Market - The New York Times

As the saying goes, the stock market has helpfully predicted nine of the last five recessions.

In January of 2016, broad measures of US stocks dipped about 8% in two weeks. Yet in those two weeks, 8% of taxis did not disappear, 8% of iPhones were not destroyed, 8% of TV shows were not cancelled, and 8% of houses did not burn down . Even 8% of stock traders did not quit, though we might have wished they had.…

Is There Life After Work? - The New York Times

“All those years ignoring my husband and the toxic assets accumulating on Lehman’s balance sheet just didn’t work out how I would have liked,” wrote former Lehman CFO Erin Callan in Sunday’s New York Times.…

Tilting the playing field - The Economist

Finance Minister George Osborne and his London colleagues argued, unsuccessfully, that the EU’s cap on bankers’ bonuses would drive up base salaries, reducing the money that could be clawed back and leaving total compensation unchanged. This is incorrect. Bankers’ bonuses should be capped, and not for the schadenfreude of seeing it done.…

Wealth Inequality in America - YouTube

People think linearly, though income and wealth accrue geometrically. The differences are enormous, especially over time.

Those who spend all that they earn (or more) are not accumulating the wealth needed to buffer themselves from the vicissitudes of a capital economy. As a result, they accept increasingly poorer deals (can’t afford to be without a job due to the need for health insurance, can’t afford to retrain, relocate, or just relax…). This decreased bargaining power further diminishes their (and their children’s) ability to build wealth, and the cycle continues.…