Tag: WSJ

As World Runs Short of Workers, a Boost for Wages—and Inflation

Mary Pat Campbell

Link: https://www.wsj.com/articles/as-world-runs-short-of-workers-a-boost-for-wagesand-inflation-11620824675

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Excerpt:

The U.S. population grew 7% between 2010 and 2020, according to census results. The age breakdown isn’t yet available, but a smaller sample by the Census Bureau and the Bureau of Labor Statistics shows that the working-age population — those 16 to 64 — grew just 3.3%. Because the share of those people working or looking for work has shrunk, the working-age labor force grew only 2%, and actually shrank last year. Some of those missing workers will return when the virus recedes. But many won’t: Baby boomer retirements have soared.

Reversing this move would require either a dramatic increase in births, which has eluded countries with more-family-friendly policies, or immigration, which is politically hard.

The demographic squeeze is far more severe in China, which admits almost no immigrants and for years limited families to one child. Tuesday, authorities said the population in China had grown just 5.4% in the past decade. The working-age population — those 15 to 59 — shrank 5%, or roughly 45 million people. When worker shortages began emerging over a decade ago, factories began moving to poorer inland provinces and then cheaper countries including Vietnam. In recent years some indicators suggest jobs are getting harder to fill, though the data might not be nationally representative.

Author(s): Greg Ip

Publication Date: 12 May 2021

Publication Site: Wall Street Journal

GameStop Frenzy, Archegos Meltdown May Prompt New SEC Rules, Chairman Says

Mary Pat Campbell

Link: https://www.wsj.com/articles/sec-studying-whether-new-rules-are-needed-for-apps-that-gamify-trading-chairman-says-11620239971

Excerpt:

In testimony prepared for the House Financial Services Committee, Securities and Exchange Commission Chairman Gary Gensler says brokerages that “gamify” trading — by using appealing visual graphics to reward a user’s decision to trade, for instance — may encourage frequent trading that results in worse outcomes for investors. Some Democratic lawmakers have blamed gamification for the boom in individual trading that helped drive the rise in GameStop shares.

Mr. Gensler, who will appear before lawmakers on Thursday, also said the SEC would study regulatory changes in response to the March blowup of Archegos Capital Management, an unregulated family-investment vehicle of hedge-fund veteran Bill Hwang whose leverage-fueled bets led to more than $10 billion in losses at major global banks.

Author(s): Dave Michaels, Alexander Osipovich

Publication Date: 5 May 2021

Publication Site: Wall Street Journal

Berkshire Hathaway’s Stock Price Is Too Much for Computers

Mary Pat Campbell

Link: https://www.wsj.com/articles/berkshire-hathaways-stock-price-is-too-much-for-computers-11620168548

Excerpt:

Berkshire Hathaway Inc. is trading at more than $421,000 per Class A share, and the market is optimistic. That’s a problem.

The price has grown so high, it has nearly hit the maximum number that can be stored in one common way exchange computers handle digits.

…..

Nasdaq’s computers can only count so high because of the compact digital format they use for communicating prices. The biggest number they can handle is $429,496.7295. Nasdaq is rushing to finish an upgrade later this month that would fix the problem.

It isn’t just Nasdaq. Another exchange operator, IEX Group Inc., said in March that it would stop accepting investors’ orders in Class A shares of Berkshire Hathaway “due to an internal price limitation within the trading system.”

Author(s): Alexander Osipovich

Publication Date: 4 May 2021

Publication Site: Wall Street Journal

Covid-19 Vaccinations Are Slowing, So Officials Target Markets, Schools

Mary Pat Campbell

Link: https://www.wsj.com/articles/covid-19-vaccinations-are-slowing-so-officials-target-markets-schools-11620044791

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Excerpt:

As demand wanes, states, municipalities and healthcare providers are trying everything from one-on-one education in nontraditional locations to incentives including a free drink and cash.

West Virginia Gov. Jim Justice said recently the state would offer a $100 savings bond to residents aged 16 to 35 who receive a vaccination. The state had been an early leader in vaccinations.

In Detroit, $50 prepaid debit cards are being offered to drivers who take a city resident for a shot. In Connecticut, Gov. Ned Lamont rolled out a campaign where some restaurants will give a free drink to anyone who shows a vaccination card.

Author(s): Melanie Grayce West, Talal Ansari

Publication Date: 3 May 2021

Publication Site: Wall Street Journal

‘The Premonition’ Review: A Pandemic of Experts

Mary Pat Campbell

Link: https://www.wsj.com/articles/the-premonition-review-a-pandemic-of-experts-11620078624

Excerpt:

The article, in any case, doesn’t claim that 180,000 people could have been saved by more robust public-health interventions in early 2020 but that those deaths are mostly the result of Americans’ poor health. That the U.S. death rate, even so, is lower than that of the U.K. and Italy and nearly equal to that of France — all G7 nations — rather complicates Mr. Lewis’s breezy thesis.

It is amazing to me that intelligent people in 2021 can survey the past year and conclude that some alternative set of non-pharmaceutical interventions would have made an appreciable difference in the spread of this magnificently resilient virus. But many such people do believe that, including the author of this book and its ostensible heroes. One of those heroes, an accomplished hospital administrator named Carter Mecher, drew up a national pandemic response plan for the George W. Bush administration. The key to stopping dangerous pathogens, he came to believe as he studied pandemic modeling, was closing schools.

….

Here is a point that Mr. Lewis’s heroes show no awareness of grasping: that the United States is a big unruly country in which people are accustomed to going where they please and don’t care for government authorities telling them what to do based on poorly understood “data.” One of the Wolverines, a public-health official in Santa Barbara County named Charity Dean, appears to believe that any sign of a dangerous contagion permits health authorities to assume dictatorial powers. She tells Mr. Lewis that in early 2020 California should have closed its borders “until it figured out exactly how much virus was circulating, and where” and that the U.S. should follow Thailand’s example and require “anyone entering the country to wear a GPS wristband” and so enable the authorities to know who’s disobeying quarantine rules.

Author(s): Barton Swaim

Publication Date: 3 May 2021

Publication Site: Wall Street Journal

Book Link: https://amzn.to/3xLQZzS

U.S. Household Income Surged by Record 21.1% in March

Mary Pat Campbell

Link: https://www.wsj.com/articles/consumer-spending-personal-income-march-2021-11619732790

Excerpt:

Household income rose at a record pace of 21.1% in March as federal stimulus checks helped fuel an economic revival.

The March surge in income was the largest monthly increase for government records tracing back to 1959, largely reflecting $1,400 stimulus checks included in President Biden’s fiscal relief package signed into law in March. The stimulus payments accounted for $3.948 trillion of the overall seasonally adjusted $4.213 trillion rise in March personal income.

Spending was also up sharply, increasing 4.2%, the Commerce Department said, the steepest month-over-month increase since last summer.

Consumers shelled out more on goods, particularly big-ticket items such as autos and furniture, compared with services in March. Economists expect that to change in the coming months due to widespread vaccinations and broader reopening of the economy.

Author(s): Sarah Chaney Cambon

Publication Date: 30 April 2021

Publication Site: Wall Street Journal

The Music City Meltdown

Mary Pat Campbell

Link: https://www.wsj.com/articles/the-music-city-meltdown-11619649990

Excerpt:

Like many cities, Nashville is also in hock to pensioners, with $4.3 billion in unfunded promises for retiree healthcare. And though Nashville’s pension system is well-funded, it is also expensive to maintain because employees contribute almost nothing, leaving taxpayers on the hook for about $110 million in annual contributions—and potentially more when investments tank. Despite the burden, the city resisted adopting reforms the state enacted in 2013, when Tennessee switched to a pension plan that requires employees to contribute 5% of their wages.

Nashville’s balance sheet wasn’t in any shape to endure a massive pandemic hit. Led by a 50% decline in tourism, the city’s economy slumped last spring, and unemployment soared above 15%. That punched a $332 million hole in the fiscal 2021 budget, prompting then-Tennessee Comptroller Justin Wilson to warn in September of a state takeover. The city could become “kind of like a teenager coming to their parent asking for $20 to go to the movies,” he said.

Author(s): Steven Malanga

Publication Date: 28 April 2021

Publication Site: Wall Street Journal

Warren Buffett Defends Berkshire’s Moves Over Pandemic Year

Mary Pat Campbell

Link: https://www.wsj.com/articles/warren-buffett-set-to-discuss-pandemic-markets-at-berkshires-annual-meeting-11619887342?reflink=desktopwebshare_twitter

Excerpt:

Warren Buffett defended Berkshire Hathaway Inc.’s investments over the past year, while saving his harshest comments for some of the hottest investment vehicles at the company’s annual meeting.

Speaking onstage from Los Angeles, Mr. Buffett, Berkshire’s chairman and chief executive, and his business partner, Charlie Munger, took questions for roughly four hours. The two men said some special-purpose acquisition companies, day traders and private-equity funds that have driven valuations in both private and public companies to record levels were more gamblers than investors.

“I don’t mind the poor fish that gamble,” Mr. Munger said Saturday. “I don’t like the professionals that take the suckers.”

“It’s a moral failing. It’s not just stupid, it’s shameful,” he said of SPACs.

Author(s): Jenna Telesca, Geoffrey Rogow

Publication Date: 1 May 2021

Publication Site: Wall Street Journal

Nearly 1.5 Million Mothers Are Still Missing From the Workforce

Mary Pat Campbell

Link: https://www.wsj.com/articles/nearly-1-5-million-mothers-are-still-missing-from-the-workforce-11619472229

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Excerpt:

Black and Hispanic women disproportionately work in industries — such as leisure and hospitality — that were most negatively affected by the pandemic, said Valerie Wilson, director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy.

Since February of last year, participation rates for white women, including mothers, haven’t dropped more than 3.2 percentage points. Rates for women of color — especially Black and Hispanic mothers with children under 5 — have at times fallen more.

Large numbers of Black and Hispanic women work in essential sectors — most notably healthcare — that have seen increased demand in the past year. But in those industries, according to Dr. Wilson, they tend to hold jobs that offer comparatively low pay and flexibility.

The average number of hours men and women work per week has varied more widely since the start of the pandemic than in recent years. People have worked fewer hours overall, with men’s time dropping more significantly. That has narrowed — but not closed — the gap between hours worked by men and women.

Author(s): Katherine Riley, Stephanie Stamm |

Publication Date: 27 April 2021

Publication Site: Wall Street Journal

Pfizer Identifies Fake Covid-19 Shots Abroad as Criminals Exploit Vaccine Demand

Mary Pat Campbell

Link: https://www.wsj.com/articles/pfizer-identifies-fake-covid-19-shots-abroad-as-criminals-exploit-vaccine-demand-11619006403

Excerpt:

Fake shots for the pandemic can be easy to distinguish from real ones, experts said, because legitimate ones can be found for now sold only to governments, making any shots for sale on the internet counterfeit and potentially harmful.

Police in China and South Africa last month seized thousands of doses of counterfeit Covid-19 vaccines in warehouses and manufacturing plants, arresting dozens of people, according to the international police agency Interpol. Mexico also is investigating a shipment of some 6,000 doses of purported Sputnik vaccine from Russia, which were seized from a private plane headed to Honduras in March.

The Russia Direct Investment Fund, which leads efforts to market the vaccine internationally, said an analysis of photographs of the seized batch “suggests that it is a fake.” The Mexican Attorney General’s Office said it was investigating the matter and declined to comment further. Authorities haven’t determined whether the vaccines are genuine.

For months, agents from the National Intellectual Property Rights Coordination Center, an investigative arm of the U.S. Department of Homeland Security, have been investigating fraud related to the Covid-19 pandemic globally, recovering $48 million of phony masks, personal protective equipment and other products. Last fall, investigators shifted their focus to include Covid-19 vaccines that were nearing potential clearance by regulators, beginning with online scams. They have removed 30 websites and seized 74 web domains, according to IPR Center officials.

Author(s): Jared S. Hopkins, José de Córdoba

Publication Date: 21 April 2021

Publication Site: Wall Street Journal

First Dose of Chinese Covid-19 Vaccine Offers Little Protection, Chile Learns

Mary Pat Campbell

Link: https://www.wsj.com/articles/first-dose-of-chinese-covid-19-vaccine-offers-little-protection-chile-learns-11618775502

Excerpt:

Across Chile — which has mounted one of the world’s most rapid vaccination campaigns using the vaccine made by Chinese drugmaker Sinovac Biotech Ltd. — health authorities are scrambling to deal with a surge in new infections and deaths.

More than 7.6 million people, half of Chile’s adult population, have received at least one vaccine dose, most made by the Chinese drugmaker, making the country a testing ground for a vaccine Beijing is supplying to countries across the developing world.

The problem, public-health officials say, was that people in general overestimated the effectiveness of the vaccine after only one of the two recommended doses and moved to ease up on pandemic-control restrictions too soon.

“With one dose, we know the protection is very weak,” said Claudia Cortes, an infectious-disease expert at the Santa Maria Clinic in Santiago, where about 10% of the Covid-19 patients at her hospital have received one shot. “It was not clearly explained that you need two doses — that you need to wait.”

Author(s): Ryan Dube

Publication Date: 18 April 2021

Publication Site: Wall Street Journal

Behind the Mysterious Demise of a $1.7 Billion Mutual Fund

Mary Pat Campbell

Link: https://www.wsj.com/articles/behind-the-mysterious-demise-of-a-1-7-billion-mutual-fund-11618911000

Excerpt:

A U.S. mutual fund that suffered nearly $500 million of losses appears to have misvalued its large derivatives portfolio, according to an analysis of the fund’s disclosures by The Wall Street Journal, academics and traders.

The Infinity Q Diversified Alpha Fund disclosed in filings with the Securities and Exchange Commission valuations of investments that in at least three instances were incorrect or inconsistent with market conditions, said traders and academics. One valuation was mathematically impossible, said a former Morgan Stanley managing director who reviewed the disclosures.

In one instance, the disclosures show, Infinity entered two nearly identical swaps contracts referencing the same index over the same period, yet booked a gain on one that was more than three times as large as the other—an outcome analysts said defied logic. Swaps are bilateral contracts, brokered by banks, that traders use to bet on asset prices, interest rates or other financial trends.

Author(s): Gunjan Banerji

Publication Date: 20 April 2021

Publication Site: Wall Street Journal