mandates — “the economic goals of maximum employment and price stability”— as new information arrived.

Donald Kohn, a senior fellow at the Brookings Institution in Washington, was a Fed insider for 40 years, and retired as vice chair in 2010. With his inestimable guidance, I plunged into Fed history during the Volcker era.

I found an astonishing wealth of material, providing far more information than reporters had access to back then. In fact, while the current Fed provides vast reams of data, what goes on behind closed doors is better documented, in some respects, for the Volcker Fed.

That’s because transcripts of Fed meetings from that period were reconstructed from recordings that, Mr. Kohn said, “nobody was thinking about as they were talking because nobody knew about them or expected that this would ever be published, except, I guess Volcker.” By the 1990s, when the Fed began to produce transcripts available on a five-year time delay, Mr. Kohn said, participants in the meetings “were aware they were being recorded for history, so we became more restrained in what we said.”

So reading the Volcker transcripts is like being a fly on the wall. Some names of foreign officials have been scrubbed, but most of the material is there.

In a phone conversation, Mr. Kohn identified two critical “Volcker moments,” which he discussed at a Dallas Federal Reserve conference in June. “In both cases, the Fed moved in subtle ways and surprised people by changing its focus and its approach,” he said.

Congress, financial circles and academic institutions. Economics students may remember Milton Friedman saying: “Inflation is always and everywhere a monetary phenomenon.”

For Fed watchers, the change in the central bank’s emphasis had practical implications. Richard Bernstein, a former chief investment strategist at Merrill Lynch who now runs his own firm, said that back then: “You needed a calculator to figure out the numbers being released by the Fed. By comparison, now, there are practically no numbers. You just need to look at the words of Fed statements.”

The Fed’s methods of dealing with inflation are abstruse stuff. But its conversations about the problem in 1982 were pithy, and its decisions appeared to be based as much on psychology as on traditional macroeconomics.

As Mr. Volcker put it at a Federal Open Market Meeting on Oct. 6, 1979, “I have described the state of the markets as in some sense as nervous as I have ever seen them.” He added: “We are not dealing with a stable psychological or stable expectational situation by any means. And on the inflation front, we‘re probably losing ground.”

17 percent by March 1980. The Fed plunged the economy into one recession and then, when the first one failed to curb inflation sufficiently, into a second.

unemployment rate stood at 10.8 percent, a postwar high that was not exceeded until the coronavirus recession of 2020. But in 1982, even people at the Fed were wondering when the economy would begin to recover from the damage that had been done.

The fall of 1982 was the second “Volcker moment” discerned by Mr. Kohn, who was in the room during meetings. The Fed decided that inflation was coming down — although in September 1982, it was still in the 6 to 7 percent range. The economy was contracting sharply, and the extraordinarily high interest rates in the United States had ricocheted around the world, worsening a debt crisis in Mexico, Argentina and, soon, the rest of Latin America.

Fed meeting that October, when one official said, “There have certainly been some other problem situations” in Latin America, Mr. Volcker responded, “That’s the understatement of the day, if I must say so.”

Penn Square Bank in Oklahoma had collapsed, a precursor of other failures to come.

“We are in a worldwide recession,” Mr. Volcker said. “I don’t think there’s any doubt about that.” He added: “I don’t know of any country of any consequence in the world that has an expansion going on. And I can think of lots of them that have a real downturn going on. Obviously, unemployment is at record levels. It is rising virtually everyplace. In fact, I can’t think of a major country that is an exception to that.”

It was time, he and others agreed, to provide relief.

The Fed needed to make sure that interest rates moved downward, but the method of targeting the monetary supply wasn’t working properly. It could not be calibrated precisely enough to guarantee that interest rates would fall. In fact, interest rates rose in September 1982, when the Fed had wanted them to drop. “I am totally dissatisfied,” Mr. Volcker said.

It was, therefore, time, to shift the Fed’s focus back to interest rates, and to resolutely lower them.

This wasn’t an easy move, Mr. Kohn said, but it was the right one. “It took confidence and some subtle judgment to know when it was time to loosen conditions,” he said. “We’re not there yet today — inflation is high and it’s time to tighten now — but at some point, the Fed will have to do that again.”

The Fed pivot in 1982 had a startling payoff in financial markets.

As early as August 1982, policymakers at the central bank were discussing whether it was time to loosen financial conditions. Word trickled to traders, interest rates fell and the previously lackluster S&P 500 started to rise. It gained nearly 15 percent for the year and kept going. That was the start of a bull market that continued for 40 years.

In 1982, the conditions that set off rampant optimism in the stock market didn’t happen overnight. The Volcker-led Fed had to correct itself repeatedly while responding to major crises at home and abroad. It took years of pain to reach the point at which it made sense to pivot, and for businesses to start rehiring workers and for traders to go all-in on risky assets.

Today, the Fed is again engaging in a grand experiment, even as Russia’s war in Ukraine, the lingering pandemic and political crises in the United States and around the globe are endangering millions of people.

When will the big pivot happen this time? I wish I knew.

The best I can say is that it would be wise to prepare for bad times but to plan and invest for prosperity over the long haul.

I’ll come back with more detail on how to do that.

But I would try to stay invested in both the stock and bond markets permanently. The Volcker era demonstrates that when the moment has at last come, sea changes in financial markets can occur in the blink of an eye.

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Railroads’ Strategy Thrilled Wall Street, but Not Customers and Workers

America’s first commercial railroads were built almost two centuries ago. Freight rail has been a symbol of the nation’s economic might and ingenuity ever since.

In recent years, some of the biggest names on Wall Street have made significant investments in railroads, reaping big stock gains as railroads reported higher profits. But the underlying strategies that strengthened railroads’ bottom lines have caused friction with customers, regulators and particularly workers — giving rise to a contract dispute that threatened a nationwide shutdown of the railway system.

After losing ground to trucking in the mid-20th century, the rail industry managed to recover through decades of consolidation and a push for efficiency. Critics say those same dynamics created a system with thin staffing and minimal competition, making it particularly vulnerable to shocks like the coronavirus pandemic.

Those complaints were at the center of the contract impasse that left tens of thousands of workers prepared to walk off the job last week. A strike could have been economically devastating, paralyzing shipments of grain, chemicals and other cargo.

It was averted with less than a day to go when the Biden administration helped to broker a tentative agreement that addresses some of those issues and will be put to a vote of the rail unions’ members in the coming weeks.

The freight rail industry says it has worked hard to adapt to rapid changes — including the pandemic and, before that, a decline in demand for coal, a critical source of business.

“The industry has had to continually evolve to grow its other services,” said Ian Jefferies, the president of the Association of American Railroads, an industry group. To make up for the decline in coal, freight shippers have tried to transport more grain, truck trailers, shipping containers and other goods, he said.

according to the Surface Transportation Board, which monitors and regulates rates.

Prices started to increase in the early 2000s, driven by rising costs for labor, fuel, materials and supplies as well as a growing focus on profitability. From 2002 to 2019, long-distance trucking rates increased by 40 percent, according to a Transportation Department report published this year, while rail rates grew by 96 percent, though they are still well below historical levels, adjusted for inflation.

won a proxy battle for Canadian Pacific in 2012 and installed Mr. Harrison to lead the company.

Mr. Harrison brought his approach to Canadian Pacific, then to CSX in 2017, before his death that year. Other freight carriers and Wall Street increasingly took notice, and the practice has spread throughout the industry.

Many freight rail experts say P.S.R. brought necessary reforms to the industry, but they also say some practices, which can differ greatly among carriers, went too far or were poorly executed. Unions say the system has created miserable working conditions.

letter to shareholders.

“I’ll venture a rare prediction,” he wrote in February. “BNSF will be a key asset for Berkshire and our country a century from now.”

Peter S. Goodman and Clifford Krauss contributed reporting.

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Elon Musk Moves to End $44 Billion Deal to Buy Twitter

Owning Twitter is tricky because the platform faces regulatory scrutiny and is embroiled in a debate over free speech online. Its business has also faced difficulties, especially in a competitive market for digital advertising. After Mr. Musk struck the acquisition agreement, Twitter reported 16 percent growth in revenue for the first quarter, below the 20 percent it had predicted.

Within weeks, Mr. Musk tweeted that the deal was on hold, saying he wanted more details about the volume of spam and fake accounts. At one point, he said striking a deal for Twitter at a lower price was “not out of the question.” He also responded to tweets from Parag Agrawal, Twitter’s chief executive, who posted details of how the company detects and fights spam, with a poop emoji.

Behind the scenes, Twitter continued giving Mr. Musk and his team access to information about its platform, people with knowledge of the situation have said. Last month, the company agreed to allow Mr. Musk direct access to its “firehose,” the daily stream of millions of tweets that flow through the company’s network. Twitter, which has said roughly 5 percent of its accounts are spam since it went public in 2013, has also said the number is an estimate.

Even so, the number of fake accounts remained a concern for Mr. Musk. For years before proposing the acquisition, he complained about spam on Twitter and said the company should do more to authenticate its users. In 2020, he appeared at a Twitter employee event and said the company should do more to prevent spam.

Last month, in a six-paragraph letter, Mr. Musk’s lawyers demanded more information from Twitter about its methods for counting fake accounts and claimed the firm was “actively resisting and thwarting” his rights. The company was “refusing Mr. Musk’s data requests” to disclose the number of fake accounts on its platform, they said. That amounted to a “clear material breach” of the deal, the lawyers continued, saying it gave Mr. Musk the right to break off the agreement.

Twitter said on Thursday that it had heightened efforts to detect and block spam after Russia used fake accounts to influence the 2016 U.S. presidential election. The company has added new requirements to its sign-up process and said it used human auditors to vet its tally of spam accounts. It also said it removed one million spam accounts each day, and locked millions more per week until the operators of the accounts passed anti-spam tests.

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When Stocks Become Bear Markets

The S&P 500 on Monday dropped into its second bear market of the pandemic, crossing a symbolic and worrisome threshold as stocks plunge following a meteoric rise over the last two years.

Bear markets — when stocks decline at least 20 percent from their recent peaks — are relatively rare, and they frequently precede a recession. This sell-off, dragging the S&P down from a peak on Jan. 3 (which reflects the new bear market’s starting point), comes as concerns mount over high inflation, the war in Ukraine, Covid and the Federal Reserve’s attempts to rein in the economy.

just above a bear market in May before recovering, but stocks fell sharply again on Friday following the latest release of government data showing that inflation had accelerated again.

The worry among stock traders is that the Fed could be forced to constrict the economy’s growth in order to bring inflation under control, leading to a recession. While recessions have often followed bear markets, one does not necessarily cause the other.

“It is not that consumer demand is weak yet — spending has held up,” said Paul Ashworth, who is the chief North American economist at Capital Economics. “The fear is that the Fed is going to go very hard, and that leaves us in a recession at some point.”

800,000 of the 22 million jobs lost at the height of coronavirus-related lockdowns. While rising mortgage rates have begun to dampen activity, housing — generally one of the biggest sources of wealth for Americans — remains strong.

target-date funds, which automatically move 401(k) money into bonds and other safer investments as their retirement age approaches. But 401(k) plans can still take a significant hit in market downturns. In 2008, for instance, as the S&P 500 dropped 37 percent, the average 401(k) account balance for those who were in their 50s fell 24 percent.

People with retirement accounts are keeping more of their assets in stocks now, as opposed to bonds or a mix of other investments. “There has been a growing complacency of people keeping most of their nest eggs in stocks,” said Monique Morrissey, who specializes in retirement at the left-leaning think tank Economic Policy Institute. “There has been a fundamental misunderstanding — returns do not always average out.”

The bigger issue, according to Ms. Morrissey, is that many people have gotten used to the stock market going up. That’s not a guarantee — especially in the near term.

“It’s not just the loss from January; it’s what happens going forward,” she said. “If you were counting on the amount that you have in your 401(k) to continually grow, well, then you may never get to what you had planned for.”

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Stocks Rally Out of Bear Market Territory, but End Lower for a 7th Week

Janet L. Yellen, the Treasury secretary, said high food and energy prices were creating “stagflationary effects” — the combination of high inflation and a stagnating economy. China’s economy, the world’s second-largest after that of the United States, is laboring under the government’s strict pandemic lockdowns. Before the war in Ukraine and Covid’s resurgence in China, the International Monetary Fund was projecting global growth of 4.4 percent this year. Now its forecast is 3.6 percent.

Wall Street had been expecting that torrid consumer demand would have to slow at some point. Government stimulus checks that provided Americans with billions in spending money during the pandemic stopped long ago. The hope of both the Trump and Biden administrations was that the economy could eventually be weaned off the stimulus and that consumer demand would stay relatively strong.

But inflation, which has risen faster and remained more persistent than many investors and even the Fed initially expected, has thrown the recovery into doubt.

Unemployment is approaching the lowest rate in decades, and the economy has regained nearly 95 percent of the 22 million jobs lost at the height of coronavirus lockdowns. Average hourly earnings in the U.S. rose 5.5 percent in the year through April, but many of those gains are being eroded by inflation. Over that same period, prices rose 8.3 percent.

“The government just turbocharged the economy, and we were partying on buying goods,” said Scott Mushkin, the founder of R5 Capital, a retail-focused consulting and financial research firm. “People wondered what the hangover would be like. We have never seen anything like this.”

To be sure, some retailers said that not every consumer was pulling back or shifting spending. Walmart said better-off shoppers continued to spend freely on bigger-ticket items like patio furniture, and Target said it was not seeing a broad retreat in spending, either. Home Depot, which has benefited from a pandemic remodeling boom, said it was seeing no big slowdown in business.

But Mr. Sole of UBS worries that if prices continue to climb, higher-income consumers will eventually shift their spending, too.

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Amateur Investors Rode the Bull Up. Now the Bear Looms.

Millions of amateur investors got into the stock market during the pandemic — some gingerly, some aggressively, some determined to teach Wall Street bigwigs a lesson — and almost couldn’t help but make money, riding a bull market for the better part of two years.

Now they may have to wrestle with a bear.

“It definitely isn’t as easy to trade in this market,” said Shelley Hellmann, a 47-year-old former optometrist in Texas who began actively investing in April 2020 while isolating from her family.

Tracking stock movements on an iPad Mini in her bedroom, she banked big gains as the market soared. Within a couple of months, she was considering making day trading a full-time gig. But since the S&P 500 peaked on Jan. 3, profits have been harder to come by.

“Sometimes I am glad to not be red for the year,” she said.

Five months of bumpy declines have put the S&P 500 on the precipice of a bear market — a drop of 20 percent or more from its most recent high, which is considered a psychological marker of investors’ dimmed view of the economy. Including a tumble of 4 percent on Wednesday, the index is down more than 18 percent from its peak on Jan. 3.

bored sports bettors or meme-stock aficionados who piled into GameStop — have tapped the brakes, or scrambled to shuffle their portfolios into more defensive positions.

grim reaper slaying low interest rates and stock market bulls.

bid-ask spread — the small difference between the highest price a buyer is willing to pay and the lowest a seller is willing to accept — kept costing him fractions that added up.

By January, some of his classes had resumed in person, and with them his onerous commute from the Bronx. Instead of trading for an hour every morning, he cut back to twice a week. The market was also becoming a lot choppier, and it was increasingly difficult to hold his positions. He had always used stop-loss orders — instructions to sell when a stock dropped to a certain price — to prevent disastrous declines. But with constant drops, he kept getting pushed out of his trades.

which measures retail investors’ behavior and sentiment, based on a sample of accounts that completed trades in the past month. Their interests have been shifting toward less volatile names and more stable holdings like shorter-term bonds, the firm said.

Ms. Hellmann, who started actively trading in the early days of the pandemic, said she was sticking with it, learning more and refining her approach as she goes along.

She often rises at 3 a.m. and turns on CNBC to begin plotting her strategy for the day, which involves studying stocks’ price movements, a process she compared to learning to catch a softball — watching its arc, then trying to figure out the physics of where it will land. “That is what I’m doing with price and volume,” she said.

Long a buy-and-hold investor, she began with roughly $50,000 — money that came from shares of ConocoPhillips that she inherited in 2014 after the death of her grandfather, who had been a propane salesman. Her approach has grown increasingly complex over the past two years: Last fall, she took a large position in an exchange-traded fund that bets against the price of natural gas — which has gone up as Russia’s invasion of Ukraine roiled energy markets.

“The war causing natural gas to spike up at a time when it seasonally comes down did not help me much,” she said.

Even so, she’s more than quintupled her money since early 2020, riding the strength of a rally that has the S&P 500 up nearly 80 percent since it bottomed out in March 2020, even with its recent fall.

Experiencing losses after a period of gains can be instructive, said Dan Egan, vice president of behavioral finance and investing at Betterment, which builds and manages diversified portfolios of low-cost funds and provides financial planning services.

“If you have a good initial experience with investing, you see this is part of it, it will be OK,” he said. “We get bumps and bruises that you need to learn what pain feels like,” he said.

Eric Lipchus, 40, has felt plenty of pain in his nearly two decades of full-time day trading — he owned options on Lehman Brothers, the investment bank that imploded during the financial crisis of 2008-9. Before that, he had watched his older brother and father dabble in the markets during the dot-com boom and bust.

“I have been on a roller coaster,” he said. “I am making OK money this year but it’s been up and it’s been down. It seems like it could be a tough year — not as much upside as in previous years.”

Challenging conditions like investors are now facing can get stressful in a hurry, Mr. Lipchus said. Right now, he’s keeping half his portfolio in cash — and is taking a fishing trip to the Thousand Islands in a couple of weeks to clear his head.

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Bitcoin Is Increasingly Acting Like Just Another Tech Stock

SAN FRANCISCO — Bitcoin was conceived more than a decade ago as “digital gold,” a long-term store of value that would resist broader economic trends and provide a hedge against inflation.

But Bitcoin’s crashing price over the last month shows that vision is a long way from reality. Instead, traders are increasingly treating the cryptocurrency like just another speculative tech investment.

Since the start of this year, Bitcoin’s price movement has closely mirrored that of the Nasdaq, a benchmark that’s heavily weighted toward technology stocks, according to an analysis by the data firm Arcane Research. That means that as Bitcoin’s price dropped more than 25 percent over the last month, to under $30,000 on Wednesday — less than half its November peak — the plunge came in near lock step with a broader collapse of tech stocks as investors grappled with higher interest rates and the war in Ukraine.

The growing correlation helps explain why those who bought the cryptocurrency last year, hoping it would grow more valuable, have seen their investment crater. And while Bitcoin has always been volatile, its increasing resemblance to risky tech stocks starkly shows that its promise as a transformative asset remains unfulfilled.

institutional investors like hedge funds, endowments and family offices that have poured money into the cryptocurrency market.

declining revenue and a loss of $430 million in the first quarter. The company’s stock has fallen more than 75 percent overall this year.

The Nasdaq is already in bear-market territory, having ended Wednesday down 29 percent from its mid-November record. November was also when Bitcoin’s price hit a peak of nearly $70,000. The crash has been a reality check for Bitcoin evangelists.

Ukrainian counteroffensive near Kharkiv appears to have contributed to sharply reduced Russian shelling in the eastern city. But Moscow’s forces are making advances along other parts of the front line.

Bitcoin has rebounded from major losses before, and its long-term growth remains impressive. Before the pandemic boom in crypto prices, its value hovered well below $10,000. True believers, who call themselves Bitcoin maximalists, remain adamant that the cryptocurrency will eventually break from its correlation with risk assets.

Michael Saylor, the chief executive of the business-intelligence company MicroStrategy, has spent billions of his firm’s money on Bitcoin, building up a stockpile of more than 125,000 coins. As the price of Bitcoin has cratered, the company’s stock has dropped roughly 75 percent since November.

In an email, Mr. Saylor blamed the crash on “traders and technocrats” who don’t appreciate Bitcoin’s long-term potential to transform the global financial system.

“In the near term, the market will be dominated by those with less appreciation of the virtues of Bitcoin,” he said. “Over the long term, the maximalists will be proven correct, because billions of people need this solution, and awareness is spreading to millions more each month.”

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The Stock and Bond Markets Don’t Yet Know How to Cope With the Fed

On Wednesday, the S&P 500 stock index jumped 3 percent, as though all was right with the world. On Thursday, stocks collapsed, with the tech-heavy Nasdaq index plunging 5 percent as though the end of times was in sight.

Things on Friday were only slightly better. The S&P fell again, but only by 0.6 percent, and the Nasdaq lost a mere 1.4 percent. It was the fifth consecutive weekly decline in the S&P 500, its longest streak of losses since June 2011.

If you are looking for patterns in the market’s wild swings, the answer is simple: The financial markets are coming to grips with a stunning policy change by the Federal Reserve.

Over the last two decades, financial markets may have become so accustomed to encouragement from the Fed that they just don’t know how to react, now that the central bank is doing its best to slow down the economy.

news conference on Wednesday that the central bank was really and truly committed to driving down inflation. A transcript of Mr. Powell’s words is available on the Fed site. So is the text of the Fed’s latest policy statement. Check for yourself.

The Fed is willing to increase unemployment in the United States if that is what’s required to get the job done. And while they would much prefer that the United States doesn’t fall into a recession, Fed policymakers are willing to take the heat if the economy falters.

This may be hard to accept, and for a good reason.

millions of casualties worldwide, and it’s not over. From the narrow viewpoint of economics, the pandemic threw supply and demand for a vast variety of goods and services out of whack, and that has baffled policymakers. How much of the current bout of inflation has been caused by Covid, and what can the Fed possibly do about it?

Then there are the continuing lockdowns in China, which have reduced the supply of Chinese exports and dampened Chinese demand for imports, both of which are altering global economic patterns. On top of all that is the oil price shock caused by Russia’s war in Ukraine and by the sanctions against Russia.

Until late last year, the Fed said the inflation problem was “transitory.” Its response to an array of global challenges was to flood the U.S. economy and the world with money. It helped to reduce the impact of the 2020 recession in the United States — and it contributed to great wealth-creating rallies in the stock and bond markets.

But now, the Fed has recognized that inflation has gotten out of control and must be significantly slowed.

This is how Mr. Powell put it on Wednesday. “Inflation is much too high and we understand the hardship it is causing, and we’re moving expeditiously to bring it back down,” he said. “We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”

But its tools for reducing the rate of inflation without causing undue harm to the economy are actually quite crude and limited, he later acknowledged, in response to a reporter’s question. “We have essentially interest rates, the balance sheet and forward guidance, and they’re famously blunt tools,” he said. “They’re not capable of surgical precision.”

As if that were not scary enough, for an operation as delicate as the Fed is attempting, he added: “No one thinks this will be easy. No one thinks it’s straightforward, but there is certainly a plausible path to this, and I do think there, we’ve got a good chance to do that. And, you know, our job is not to rate the chances, it is to try to achieve it. So that’s what we’re doing.”

Well, fine. The Fed needs to make the attempt, but given the precariousness of the situation, the high volatility in financial markets is exactly what I’d expect to see.

The Federal Reserve is committed to continuing to raise the short-term interest rate it controls, the Fed funds rate, to somewhere well above 2.25 percent. Only a few months ago, that rate stood close to zero, and on Wednesday, the Fed raised it to the 0.75 to 1 percent range. The Fed also said it would begin reducing its $9 trillion balance sheet in June by about $1 trillion over the next year, and it continues to issue cautionary “forward guidance” — warnings of the kind that Mr. Powell made on Wednesday.

Watch out, he was essentially saying. Financial conditions are going to get much tougher — as tough as needed to stop inflation from becoming entrenched and deeply destructive. The Fed will be using blunt instruments on the American economy. There will be damage, inevitably. People will lose their jobs when the economy slows. There will be pain, even if it isn’t intended.

In the financial markets, short-term traders are unable to make sense of all this. The day-to-day shifts in the markets are about as informative as the meandering of a squirrel. But for those with long horizons, the outlook is straightforward enough.

A period of wrenching volatility is inescapable. This happens periodically in financial markets, yet those very markets tend to produce wealth for people who are able to ride out this turbulence.

It is important, as always, to make sure you have enough money put aside for an emergency. Then, assess your ability to withstand the impact of nasty headlines and unpleasant financial statements documenting market losses.

Cheap, broadly diversified index funds that track the overall market are being hit hard right now, but I’m still putting money into them. Over the long run, that approach has led to prosperity.

Count on more market craziness until the Fed’s struggle to beat inflation has been resolved. But if history is a guide, the odds are that you will do well if you can get through it.

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Can Elon Musk Make Twitter’s Numbers Work?

Still, the interest rates on the loans reflect the risk that they might not get paid back. The banks don’t hold on to the loans but sell them to other investors in the market, so if Twitter can’t pay its debts, Mr. Musk will either have to pay those investors, perhaps by selling more Tesla stock, or he could cede some part of his ownership of Twitter, diluting his stake.

Tesla had a market value of $902 billion as of Friday, but its shares have fallen by nearly 20 percent since Mr. Musk first revealed, in early April, that he had bought a big stake in Twitter. If Twitter’s finances go south, forcing Mr. Musk to sell more Tesla stock to pay Twitter’s debts or pledge more shares as collateral for his personal loans, it could put further pressure on Tesla’s stock price. Mr. Musk doesn’t take a salary from Tesla but is paid in stock that is released based on performance milestones that include the company’s share price.

Since Mr. Musk first disclosed his stake, the tech-heavy Nasdaq index has fallen more than 10 percent, making his offer appear even more generous. “It’s a high price and your shareholders will love it,” Mr. Musk said in a letter to Twitter’s board. Although the social media company’s stock had traded higher than Mr. Musk’s offer just six months ago, it slumped far below that price early this year and looked unlikely to return to those highs any time soon.

Mr. Musk has considered teaming up with investment firms in his bid to buy Twitter, which would reduce the amount of money he would personally have to invest. He could still partner with a firm or other investors like family offices to help raise cash, according to two people with knowledge of the discussions.

Thoma Bravo, a technology-focused buyout firm, has expressed willingness to provide some financing, but nothing has been decided yet. Apollo, an alternative asset manager, also looked at a possible deal where it would extend a loan on preferred terms.

If the deal math becomes unpalatable for Mr. Musk, he has an out: a breakup fee of $1 billion. For a man with an estimated fortune well over $200 billion, that’s a small price to pay.

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As Stocks Fall, Economic Fears Rise, Along With Inflation

Broadly speaking, earnings reports have shown that profit growth continues, and results from some big firms, like Microsoft and Facebook’s parent, Meta Platforms, did briefly ease the panic on Wall Street. About 80 percent of companies in the S&P 500 to report results through Thursday did better than analysts had expected, data from FactSet shows.

But other companies have only added to the downdraft. Netflix plunged after it said last week that it expected to lose subscribers — 200,000 in the first three months of the year, and an additional two million in the current quarter. The stock dropped more than 49 percent for the month.

On Friday, Amazon slid 14.1 percent after it reported its first quarterly loss since 2015, citing rising fuel and labor costs and warning that sales would slow. Its shares fell 23.8 percent in April.

General Electric warned on Tuesday that the economic fallout from Russia’s invasion of Ukraine would weigh on its results. Its shares fell 10 percent that day and about 18.5 percent for the month.

The war, which began in February, brought a new risk to the fragile global supply chain: Western countries’ sanctions on Russia, including a ban on oil imports from the country by the United States, and European promises to limit purchases of Russian oil and gas.

Now, executives are also assessing how the Covid-19 lockdowns in China, which has the world’s second-largest economy, could affect profit margins. Multiple Chinese cities are on lockdown, and although factories remain open, the country’s draconian “zero Covid” policy has led to interruptions in shipments and delays in delivery times.

Texas Instruments Inc. and the machinery maker Caterpillar cautioned investors this week that the lockdowns in China were affecting the company’s manufacturing operations. On Thursday, Apple also warned that the outbreak there would hamper demand and production of iPhones and other products. The company’s shares fell 3.7 percent on Friday, and ended April with a loss of 9.7 percent.

The outlook for the economy, the effects of the Ukraine invasion, the lockdowns in China and exactly how fast the Fed will raise interest rates are still not clear. Markets are likely to stay volatile until they are.

“There are definitely a lot of open-ended and unquantified risks looming,” said Victoria Greene, the chief investment officer at G Squared Private Wealth, an advisory firm. “The U.S. economy lives and dies for the consumer, and as soon as this consumer starts to slow down, I think that will hit the economy hard.”

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