Weekend news drop
An ESG Reckoning Is Coming The push in recent years for companies to commit to ESG efforts is commendable. But so far, those efforts have yielded scarce results. For companies to be held accountable to these efforts, the authors suggest three accountability mechanisms: 1) Companies should be required to publicly report on their social and environmental impact with clear, standardized, and easy-to-understand metrics; 2) Consumers, employees, and investors all have a role to play in holding companies accountable; and 3) Companies who are serious about becoming more sustainable, inclusive, and socially responsible should consider becoming certified as benefit corporations. (Harvard Business Review)
The First 'Global Inflationary Depression' Is Very Possible The money flowing from the central banks and governments has created the so-called "pent-up demand" and predictions of 5% or more GDP growth next year. But capacity utilization is down even while trillions of new dollars pour into the system. Inflation expectations are continuing to grow, and the law of diminishing returns is wreaking havoc with the efforts of central banks to control the economy. We are now seeing that large sectors of the economy are broken. (Seeking Alpha)
Inflation: The Good, The Bad, and The Transitory The Fed’s framework review and forward guidance from this past fall showed an encouraging willingness to focus on labor market outcomes rather than inflation alone. Rather than previous efforts at forward guidance which guaranteed low rates until either inflation or employment rose, the most recent guidance ensures low rates until both inflation and employment rise sufficiently. (Medium)
The Big Long We’re in year 12 of this phenomenon – 0% interest rates + no cost of capital, save for a short-lived game of chicken between the Fed and the S&P 500. Now we have trillions of dollars, owed with no interest, all chasing investments with the potential for massive capital appreciation – the cost of this money being so low as to render the need for current cash flows completely irrelevant to the global players of this game: Sovereign wealth funds, hedge funds, asset managers, index ETFs, mutual and closed-end funds, retirement savers, family offices, day traders, corporate treasuries and teenagers on TikTok. (Reformed Broker)
100 Women Making Their Mark in the World of Finance Women have made enormous strides in the past year in the public sector. America elected its first female vice president, Kamala Harris, in November. Janet Yellen now serves as the nation’s first female secretary of the Treasury, and the 117th U.S. Congress includes a record 143 women, or 27% of its total membership. (Barron’s)
Do Workers Fleeing House Price Growth Take the Boom with Them as They Go? Systematic differences in the degree to which geographic housing markets are affected by common economic shocks can be explained by patterns of migration between US metros. When an economic boom starts in one region and benefits a particular group of workers, it often ends up driving up local house prices. This increase in housing costs then causes other workers to leave that region in pursuit of more affordable housing elsewhere. (Harvard Joint Center for Housing Studies / PDF)
