My off-to-Maine morning reads:
• Trump Claims the Jobs Report Was Rigged. Was It? He does himself and his party no favors by waving away economic reality—as Biden did with inflation. (WSJ) see also What to Do When the President Acts Like a 5-Year-Old? For over a century, the integrity of U.S. economic data has rested on a fragile but vital precept: independence. Agencies like the Bureau of Labor Statistics, the Census Bureau and the Bureau of Economic Analysis operate under the executive branch, but their mandates are to serve the truth, not the administration. Their job is to report what is, not what the White House wishes were true. (NYT)
• What’s Driving the Surge in U.S. Corporate Profits? U.S. corporate profits have risen markedly to near all-time highs since the start of the COVID-19 pandemic, both in nominal terms and as a share of national income. We examine the factors and industries that have driven this surge. (Federal Reserve Bank of St. Louis)
• The Tech Industry Is Huge—and Europe’s Share of It Is Very Small: A risk-averse business culture and complex regulations have stifled innovation on the continent, weighing on its future. (Wall Street Journal)
• That time people freaked out about the CAPE ratio 10 years ago: Whenever there’s talk about decades in the stock market, my brain automatically goes to the cyclically adjusted price-earnings (CAPE) ratio, the metric popularized by Nobel Prize-winning economist Robert Shiller. (TKer)
• After a Lag, Consumers Begin to Feel the Pinch of Tariffs: There are growing signs that President Trump’s levies are filtering through to consumer prices, as companies exhaust options for keeping them stable. (New York Times) but see Might Tariffs Get “Overturned”? “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general.” (The Big Picture)
• The Country Where 76% of Cars Sold Are Electric: Subsidies, hydroelectricity and a manufacturing powerhouse neighbor are moving the cars into Nepal faster than almost anywhere else. (New York Times) but see Chinese graphite is crucial to electric car batteries. Trump just put a 93.5% tariff on it. The Trump administration is imposing a substantial tariff on a raw material that is critical for electric vehicle batteries, which could significantly raise the cost of building EVs in the United States. (CNN)
• The Pollster Who Sensed Democracy Was Faltering: What does the road map to restore American democracy look like? (The Atlantic)
• Competing Conspiracy Theories Consume Trump’s Washington: President Trump is trying to divert attention from the Epstein conspiracy theory with a new-and-improved one about Barack Obama and treason. (New York Times) see also Conspiracy Theorists Found a New Boogeyman: Payroll Data: Efforts to improve the accuracy of employment statistics have stoked claims they are being manipulated. (Bloomberg)
• Against Self-Optimization: The wellness industry sells you a version of yourself it can’t deliver. Hope lies elsewhere. (Plough)
• Lionel Messi’s superhuman form paces Inter Miami: “He is the one” Movie theaters around the country may be showing “Superman,” but the real Man of Steel was doing his own hero work in Fort Lauderdale. (MLS Soccer)
Be sure to check out our Masters in Business interview this weekend with Erik Hirsch, Co-CEO Hamiliton Lane, which manages or advises on $958 billion in client assets. Previously, he was an M&A banker at Brown Brothers Harriman, and a municipal financial consultant with Public Financial Management, specializing in asset securitization, strategic consulting and sport stadium financings.
Inflation-Adjusted House Prices 2.0% Below 2022 Peak
Source: Calculated Risk
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