Will Bunch
Q&A with author via Inside Higher Ed
In his new book, After the Ivory Tower Falls: How College Broke the American Dream and Blew Up Our Politics—and How to Fix It (William Morrow), Pulitzer Prize–winning journalist Will Bunch, national opinion columnist for The Philadelphia Inquirer, traces the evolution of American higher education since World War II, exploring how it fueled—and was fueled by—the country’s deep political and cultural divides. In a phone interview with Inside Higher Ed, Bunch attributed many of this country’s current travails—from climate change denial to the Jan. 6 insurrection—to “a failure of education.” Excerpts of the conversation follow, edited for length and clarity.
He largely absolves the Fed of blame for this (though I would have noted that the Greenspan Fed was reluctant to use the regulatory muscle it did have).
Monthly Archives: August 2022
Research Review | 5 August 2022 | Multi-Factor Strategies
Combining Factors
Christoph Reschenhofer (Vienna University of Economics and Business)
July 2022
While the academic literature primarily investigates factor exposures based on covariances (i.e. beta exposure), most practitioners apply characteristics-based scorings to obtain factor portfolios. It hereby remains largely unexplored how firm-level characteristics can be combined to obtain optimal factor portfolios. This paper derives multi-factor portfolios that are formed via a combination of stock characteristic scores. Portfolios that are formed on multiple characteristics are less volatile, and exhibit higher after cost returns compared to the market and single factor portfolios. In addition, return, risk and turnover preferences are very sensitive to buy- and sell-thresholds. We further identify optimal weights for individual factor characteristics, but have to recognize the 1/N factor portfolio as a tough benchmark.
Macro Briefing: 5 August 2022
* China continues to conduct provocative military drills around Taiwan
* China imposes sanctions on US House Speaker Pelosi after her trip to Taiwan
* Sharp decline in longer-term bond yields is a key factor in the rebound in stocks
* Americans may be gloomy but remain upbeat about labor market, poll finds
* Bank of England warns that UK will fall into recession this year
* US jobless claims resume upward trend, near 8-month high:
High Dividend Yield And Value Are 2022’s Top US Equity Factors
The stock market is showing some bounce lately, but on a year-to-date basis red ink still dominates. Looking at equities through a factor lens, however, continues to show a wide variety of losses in 2022. Notably, the softest setbacks are (still) in high dividend and value strategies, based on a set of proxy ETFs through yesterday’s close (Aug. 3).
Macro Briefing: 4 August 2022
* China conducts live-fire military drills around Taiwan
* US Senate approves adding Finland and Sweden into NATO
* US factory orders post solid growth for June
* Global economic growth slows to 2-year low in July via PMI survey data
* OPEC agrees to small increase in oil output
* S&P US Services PMI shows contraction in July, but…
* ISM Services Index indicates slightly stronger growth in July:
US Personal Income Barely Recovered In The Economic Expansion
US economic growth is slipping and a new recession may be near. If the current expansion ends at some point in the near future (assuming it’s still alive), the “recovery” in personal income will be the weakest by far among business cycles since 1970.
Macro Briefing: 3 August 2022
* House Speaker Pelosi’s visit to Taiwan raises U.S.-China tensions
* China’s planned war games appear to be defacto military blockade of Taiwan
* China Composite PMI, a GDP proxy, eased in July but still shows solid growth
* Eurozone survey data show currency bloc slipped into recession in July
* Turmoil looms for global semiconductor market as US eyes new China chip curbs
* Household debt rose above $16 trillion in Q2 for the first time
* US gasoline prices continue to ease, nearing $4 a gallon
* US job openings fell to nine-month low in June:
Total Return Forecasts: Major Asset Classes | 2 August 2022
The long-term expected return for the Global Market Index (GMI) remains moderately below the index’s trailing realized 10-year performance through July, based on the average of three forecasting models (defined below). The key takeaway: it’s still prudent to manage expectations down for multi-asset-class strategies, relative to the past decade.
Macro Briefing: 2 August 2022
* US House Speaker Nancy Pelosi expected to visit Taiwan despite China warnings
* China warplanes fly close to dividing line in Taiwan Strait ahead of Pelosi visit
* US construction spending tumbled in June amid sharp decline in homebuilding
* Global Mfg PMI falls to 2-year low but still indicates growth
* US Manufacturing PMI at lowest for two years but still above neutral level
* US ISM Mfg Index ticks lower in July but continues to indicate growth:
Major Asset Classes | July 2022 | Performance Review
The majority of the major asset classes rebounded in July, providing relief from an extended run of red ink, based on a set of proxy ETFs. The challenges that triggered widespread selling in global markets this year remain in force – the war in Ukraine, high inflation, rising interest rates and stumbling economic activity. This toxic mix will continue to create headwinds for markets, but for one month, at least, gloomy sentiment took a holiday.