Just as the punditocracy hardly expected Donald Trump to win the presidency in 2016 and erred in predicting that stocks would plunge if he won, we were told to expect a red wave for midway through the year.
Photo illustration of staff; Dreamstime
There was no red tide except in Florida, where Governor Rick DeSantis was cruising to re-election, and in Russia, where waves of men are fleeing the country as waves of attacks descend on Ukrainian cities.
With the votes still being counted, much is unclear about the congressional results and their potential impact on the markets. In a guest column by Larry Hatheway and Alex Friedman, the co-founders of Jackson Hole Economics, and the former chief economist and chief investment officer, respectively, of
UBS
,
the authors present five important takeaways. Readers also had their say:
Alejandro M. “1) Have the pollsters got it wrong? 2) Did elephant party voters trust the polls too much and assume the red tide was coming and forget to go out and vote in droves like they did in Florida? Or 3) Have too many elephant party voters moved to Florida in the last two years, thus changing red/purple states to blue? 4) Will it be more of the same or will POTUS 46 and the donkey party make changes for the 2024 presidential election? Follow the data points.”
Dan Laramie: “We were having a down day so we needed an insufferable article and Bearon delivered. It’s a bit weak though, as everyone knows gridlock is great.”
Gary Leonard: “The red wave … proves once again that everyone knows nothing.”
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Binance will not save rival exchange FTX in another blow to crypto stability. Within 24 hours, Binance announced it would bail out ailing crypto exchange FTX and then canceled the deal, adding further distress and uncertainty to cratering crypto prices.
Jack Wu: “We need a few big traditional firms to fail before we see the bottom. We’re nowhere near capitulation yet. In 2008-2009, Washington Mutual, Lehman Brothers and Bear Stearns failed. Right now it’s still pretty quiet.”
Jack Master: “FTX must fail. This will be best for the crypto market as a whole. Without rules and consequences, no market can survive.”
Anthony Malivanek: “The words ‘crypto’ and ‘stable’ will never be seen together. Crypto is a massive con and will not last.”
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Bitcoin prices fall to a yearly low. What happens afterwards. From June to October, the price of Bitcoin was remarkably stable, trading near $20,000. This was especially notable given that stocks were volatile during this period. However, just after Halloween, the crypto complex turned downright scary as the impact of the on-again/off-again dance between Binance and FTX unnerved markets. Prices of several coins fell, including Bitcoin, which fell about 20% in the past week to $16,250 before rallying on Thursday to $17,500.
Ray Noack: “It’s hard to see how any of this affects KO PG or JNJ. As mentioned, it may further dampen the enthusiasm of the Robinhood crowd. It’s hard to believe that some of the Reddit warriors and the buy dip crowd haven’t already blown themselves up.”
Warren “Drone” Bitcoins: “FTX has the disadvantage of being under US jurisdiction. Binance is located in Hong Kong where due diligence is at the lowest lowest level.”
RP Coltrane: “The only business basis for these ‘investments’ has been to launder funds that have been obtained illegally or that the owner wants to avoid tax on. As more governments move to track virtual currencies, the business case is quickly disappearing. These will asymptotically approach zero value over the next few years.”
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Why higher interest rates won’t solve the inflation problem. In the end, almost 200 Barron’s readers expressed their deepest gratitude to Lisa Beilfuss, who announced her departure Barron’s in her latest column covering the economy. Before you join Barron’s in 2019, Beilfuss was a reporter on The Wall Street Journal for four years. Her article offers a sobering conclusion: insufficient quantitative easing and structural labor market problems threaten to undermine the effectiveness of the Fed’s rate hikes.
HP Gates: “This article is a must for all investors. Over the years, Barron’s has been blessed with some amazing financial journalists. Unfortunately, one of the best, Lisa Beilfuss, is moving on. She will be sorely missed – always writing wonderfully, informing readers of a significant marketing force that others were either unaware of or simply missed. Good luck LB in your future endeavors!”
John McGinty: “Lisa Beilfuss is a rock star. I will miss her weekly pieces which have always been interesting and enlightening.”
Albert Peche: “Lisa Beilfuss will be missed by many Barron’s readers. She was insightful and was good at looking at underlying causes of problems, not just reporting problems. Two articles come to mind that brought Lisa to my attention specifically as a writer: 1) The Q&A with Larry Summers on 17.06.22 and 2) Car repos are exploding – that’s a bad sign on 7/8/22.”
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