J EREMIADS HAVE long argued that if some of the $6trn-odd of assets underpinning exchange-traded funds (etfs) are illiquid, then the funds must be too, posing a big risk to their investors. But so far there are signs of strain but not panic. During the current turmoil, some etfs are trading at a discount to their net asset value, often those that have invested in debt.
This article appeared in the Finance and economics section of the print edition under the headline "Exchange-traded fundamentals"
In case you are keeping track:
The economics behind why toilet paper is sold out - Marketplace
This is part of our "Econ Extra Credit" project, where we read an introductory economics textbook provided by the nonprofit Core Econ together with our listeners.
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"If we see a sale; if we see coupons; if the price is different for seniors or students at a movie theater than it is for adults — all of that counts as price discrimination," said Homa Zarghamee, an economics professor at Barnard College who advises Core Econ , the publisher of the open-source economics textbook Marketplace's David Brancaccio is reading with listeners .
Free exchange - Economies can rebound quickly from massive GDP slumps—but not always | Finance
I T WILL BE some time—years most likely—before the full extent of the economic blow from covid-19 can be estimated with any confidence. As ever more of the global economy enters a prolonged shutdown, it seems increasingly clear that the world is facing a drop in output unprecedented in its breadth and intensity. Some analysts see in the growing economic disruptions and market panic the first stirrings of an economic collapse more serious than the global financial crisis of 2007-09.
Some economies, perhaps those of Singapore or even South Korea, could find a footing by the second half of the year, sufficient to offset some of the production lost during the first half. But the probability that others could experience extreme declines in GDP in 2020—perhaps as large as 10%—grows by the day. Falls of that magnitude are not especially unusual in developing economies, where growth is highly volatile.
Coronavirus & Free-Market Economics: Q&A with Russ Roberts | National Review
R ussell Roberts is an economist and research fellow at the Hoover Institution. He hosts the popular economics podcast EconTalk . In his latest book, Gambling with Other People's Money , Roberts argues that bank bailouts cause excessive risk-taking. He spoke with National Review ‘s Daniel Tenreiro about the economic consequences of the coronavirus.
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Russ Roberts: We’re in uncharted territory here. There's a real challenge in both underreacting and overreacting, because we don’t know what’s going to happen.
Many things are taking place:
Subscribe to read | Financial Times
The cash crisis - Why America's financial plumbing has seized up | Finance and economics | The
H OUSEHOLDS ARE frantically stocking up on essentials such as loo roll. But in financial markets, the staple that no one can do without in times of stress is cash—the flushing mechanism of the world economy. In theory, it should never dry up; money can be printed. But when firms are desperate for cash it puts a potentially devastating strain on the plumbing of the global financial system. That is why in the past week America's Federal Reserve has unleashed a huge amount of liquidity.
Some are better equipped than others (see left-hand chart). The operating expenses (opex), like wages and rent, of all nonbank S & P 500 companies in 2019 amounted to $2.6trn. The same firms held $1.7trn in cash and liquid securities at the end of that year. On average, that was about seven months of opex. But this cash is unevenly distributed. Apple could pay for six years of opex with its $200bn war chest.
Your Money: Coronavirus fears shake Yale economist Robert Shiller - Reuters
NEW YORK (Reuters) - In scary times like these, it is comforting to talk to someone who has seen and studied a lot of things – booms, busts, and everything in between.
Enter Robert Shiller. The Yale University economics professor and Nobel Prize winner recently came out with an uncannily prescient book for the current moment, “Narrative Economics: How Stories Go Viral and Drive Major Economic Events.”
Economist: Next week jobless claims could hit 2 million on coronavirus
Next Thursday's look at weekly new jobless claims may show a tenfold spike to 2 million as the full force of the coronavirus halt in the U.S. economy slams the labor market, economist Ian Shepherdson told CNBC.
Shepherdson's comments came ahead of this Thursday's release of the Labor Department's weekly report on jobless claims. The report showed claims rose to 281,000 last week , a significant rise from last week's 211,000.
"Looking at the states' unemployment claims numbers that have been coming out over the last few days, it looks to me like the order of magnitude in most states seems to be about 10 times higher than the normal weekly numbers before the crisis," the chief economist at Pantheon Macroeconomics said on " Squawk Box ." "That means next week's jobless claims number could jump 200,000-something this week to 2 million next week."
Happening on Twitter
There are two different versions of this alt flip-flop https://t.co/VCaMgGdjKI techinsider (from New York, USA) Thu Mar 19 14:22:10 +0000 2020
My biggest joy on #TheMagicians has been the blessing to play two different versions of the same character. A true thrill! ArjunGuptaBK (from somewhere.) Thu Mar 12 02:59:23 +0000 2020
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