Week In Review 06/18/2017

Fed Raises Rates

  • From 1.00 percent to 1.25 percent: The Fed also gave a first clear outline on its plan to reduce its $4.2 trillion portfolio of Treasury bonds and mortgage-backed securities, most of which were purchased in the wake of the 2007-2009 financial crisis and recession.”
  • Neel Kashkari continues to dissent: “In short, the economy is sending mixed signals: a tight labor market and weakening inflation.”

Amazon Buys Wholefoods

  • For $13.7 billion: “Shares of other supermarket chains took a beating. The industry has already seen significant consolidation, with smaller players wiped out.”
  • Greenwood on the looming grocery war: “Thanks to a giant installation of new grocery square footage over the last decade, grocers are precariously close to the brink. Many of them couldn’t withstand even a 2% same-store-sales deceleration with a concurrent 1% shrinkage of gross margins.”

French Parliamentary Election

  • French voters are lining up at the polls today: “Mr. Macron’s party, La République en Marche (The Republic on the Move), is on track to win an outright majority of seats, which would put the 39-year-old president in a strong position to enact his pro-business agenda.”
  • The Economist on the challenges facing Emmanuel Marcon: “Efforts to reform the labour market have defeated many. Most attempts at introducing flexibility are regarded as an assault on rights, and an unpardonable gift to capitalist bosses.”

Miscellaneous

  • Shooting on Capitol Hill: “A top lawmaker, House Majority Whip Steve Scalise (R-La.) had been shot and left in critical condition. The others were Zach Barth, a congressional aide, Capitol Police Special Agents David Bailey and Crystal Griner, and Matt Mika, an employee of Tyson Foods, a sponsor of the game.”
  • 13D Research on passive investing: “At the heart of passive “dysfunction” are two key algorithmic biases: the marginalization of price discovery and the herd effect.”
  • Ben Carlson on what will end the bull market: “Interest rates could rise substantially. One of the other forgotten aspects of the 1987 crash is that borrowing costs shot higher in a relatively quick fashion.”
  • Harvard’s State of the Nation’s Housing report: “Despite a slight improvement from 2014, fully one-third of U.S. households paid more than 30% of their incomes for housing in 2015.”
  • Travis Kalanick steps down at Uber: “The proposed changes include starting performance reviews for senior leaders, reviewing the firm’s pay practices, strengthening its HR department and seeking an independent chair for the board.”
  • Jeff Immelt steps down at GE: “Immelt spent the second half of his time as CEO returning the company to its less-risky industrial roots. In 2007, GE’s finance arm accounted for about 55% of its profits, but its large exposure to commercial real estate left it vulnerable during the financial crisis.”

 

 

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Author: David Shahrestani

"I have the strength of a bear, that has the strength of TWO bears."

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