Reading List for September 17-19
- This long but worthwhile article from the Atlantic expertly explains just how severe the shutdown and subsequent market responses were in March of 2020.
“The function of shares as risk‑bearing capital is to act as a shock absorber in hard times. Far more worrying than equity markets was what was happening in the market for bonds, and above all, U.S. Treasuries—the safe assets that promise a counterbalance to volatile equities.”
The article gives perspective on the actors involved, and explains the role of the Federal Reserve in averting a total financial crisis as the US Treasury Market basically stopped functioning. Comparisons are made to the 2008 financial crisis.
"In effect, the Fed was assuming the role of a central bank to the world, dispensing dollars to every part of the credit system that was tight."
- Who turns to robots, and who to humans for investment advice? (USA Today)
- Harvard will drop fossil fuels from its endowment. (NPR)
- While the title of this is “How the Pandemic Helped Us Recover from the Great Recession,” it includes a really good description of supply chains and their role in the economy. (Slate)
- Consumer prices increase at a much slower pace in August. (Reuters)
- Census data show that poverty decreased with pandemic-related government aid. (NPR)
- Changes at Fannie Mae should help renters get a mortgage in the future. (Ron Lieber, NYT)
- Neil Irwin breaks down the upcoming decision on whether to reappoint or replace Jerome Powell as Fed Chair in January. (NYT-Upshot)
- For economics teachers and history buffs, if you are looking for an interesting and accessible series on economic history, specifically bank panics, check out Investor Amnesia. Here is the first post on the Panic of 1792.
- Wells Fargo is fined again, and Senator Warren calls on the Fed to break it up. (Yahoo Finance)
- Student loans states as the main reason millennials can’t buy a house. (CNBC)
- This Inside Higher Education article breaks down the findings of two different studies on which programs return the educational investment (make debt repayment possible), and which ones don’t.
- This Humble Dollar article discusses an academic paper that frames the decision on when to start drawing Social Security as “buying an annuity.” It is clearly explained, and if you like to play with numbers, this will make you happy.
- There is a lesson here on incentives/behavioral finance. It appears that Delta’s plan to increase the cost of health insurance for non-vaccinated employees was more successful than mandates at getting employees vaccinated. (Yahoo Finance)