This issue marks the centenary of Barron’s, and it shocks me to realize that my time in financial journalism covers a majority of that span, if only barely.
A week after I was hired—I was still a freshman in college—the Penn Central Railroad filed for bankruptcy, the first of a long string of financial crackups that would mark, and in a sense make, my career.
Before the crash that interview would help precipitate, we left on a long-deferred European vacation, which meant we both missed the market event of the decade .
Then chaired by Alan Greenspan, the central bank cut interest rates and pumped money into the financial system.
And following the 1998 Russian debt and Long-Term Capital Markets tailspin, the de facto “Greenspan put” to support markets was established, even though the real economy didn’t need help, as I wrote at the time.
That begat the fin de siecle dot-com bubble, which burst after Barron’s seminal analysis in March 2000 of the internet wunderkinders’ furious cash burn.
Throughout this period, MacroMavens’ Stephanie Pomboy was the Cassandra who warned about the pumping up of the housing bubble and the danger it posed to the financial system.
AllianceBernstein’s former chief economist, Joseph Carson, alerted this column’s readers to the danger posed by the pandemic, ahead of his then-compatriots on Wall Street.
central bank can do that in large part because the dollars it creates are used globally as a store of value and a medium of exchange.
This confers on America an “exorbitant privilege,” in the words of a former French finance minister.
While Donald Trump railed against supposed Chinese manipulation of its currency to cheapen it to gain an export advantage, the facts have argued otherwise.
Beijing’s new tolerance of a strong yuan might represent a tectonic shift in the monetary regime that has prevailed for the past half-century, Pomboy observes.
And while not a fan of cryptocurrencies, Pomboy says their rise triggers her “spidey sense” that a shift from dollars is under way.
Does America face similar prospects, challenged by China, economically and geopolitically? The West won the Cold War against the Soviet Union, which was a military superpower.
It has coped by printing more money and taking on more debt, made possible because our liabilities are the world’s best assets.
And in what has been a recurring theme over the past half-century, bad news on the economy is good news for the financial markets.
The good news for the markets was that the punk jobs report essentially vindicated Fed chief Jerome Powell’s insistence that the central bank isn’t even thinking about thinking about slowing its $120 billion-per-month securities purchases.
Suggestions about reduced Fed accommodation also came from a curious source, Powell’s predecessor, Janet Yellen, now the Treasury Secretary.
Yellen and her boss, President Joe Biden, on Friday pushed back at the suggestion that a factor in the payrolls shortfall was their policies, especially the extra $300 in unemployment payments under the American Rescue Plan passed in early March.
The latest government payments don’t appear to have been funneled into the stock market, as much of the previous ones were, according to J.P.
As the previously roaring price action in the favorite stocks of individual traders subsided starting around March, their trading also slowed.
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