A Journal of Independent Research, Analysis,
 Opinion and Insight

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09 23 2022 WOWS Listening In - Ignore Fashion
Ariel's Rupal Bhansali On Yielding To The Attraction Of Dividends
While Ariel Investment’s corporate motto, “Slow and Steady Wins the Race,” has proven its worth for patient investors for decades now, Rupal Bhansali, who has run the firm’s international and global equities strategies from New York City since 2011, is not one to beat around the bush when it comes to market analysis. Or what she thinks about most anything else.

Which is not to say that Rupal, Ariel’s CIO and PM, Global Equities, in any sense contravenes the corporate ethos. Rather, her patient, research-intensive and non-consensus approach to international investing embraces the same sort of fundamental values Ariel Founder John Rogers has long championed in domestic markets. [More]

Value In Disguise
Finding Beleaguered Companies Primed To Recover “Bigly”
9/23/22 8:00 AM
By Causeway Capital Management
In the liminal space between “value” and “growth” hide underearning companies we believe have some of the greatest return potential in today’s challenging global equity markets.

Causeway focuses on valuation.

Inflation: How Bad Is It?
Plenty, Once Oil’s Slowing Inflation Is Out Of The Picture
9/23/22 7:00 AM
By Robert Eisenbeis
Markets did not like the August CPI increase over the number from July, which remained essentially unchanged, though a significant decline had been predicted. The Bureau of Labor Statistics just published the CPI for August and provided along with it a detailed breakdown of the CPI into over 300 categories and subcategories of price increases and decreases for all items and separately for food and energy.

Walking The Talk
The 1980s This Isn’t; Watch For Stress In Markets’ Soft Underbelly
9/23/22 6:00 AM
By Dimitri N Balatsos
Yesterday, making good on Chair Jerome Powell’s Jackson Hole comment that “We will keep at it” beating inflation down, the FOMC raised the fed funds rate by 75bps to 3.00-3.50%. In the Fed’s view, the rate was justified in the face of ongoing growth (albeit modest), robust job gains, and low unemployment.

Rate Hikes’ Impact
More Joblessness In Rural America May Be Fueled
9/23/22 5:00 AM
By Anastasia Burya, Rui C. Mano, Yannick Timmer and Anke Weber
Some employers can attract a large pool of job applicants without having to offer higher wages.

Untargeted Grants?
Student Loan Relief Laudable Goal, But Consequences Steep
9/23/22 4:00 AM
By Adam Looney
The sleeper news in President Biden’s announcement to forgive roughly half a trillion dollars in student loans is his proposed changes to Income-Driven Repayment (IDR) plans that are to take effect in January 2023. The changes mean that most undergraduate borrowers will expect to only repay a fraction of the amount they borrow, turning student loans partially into grants.

Housing Woes Begin
And Look To Be Worsening Rapidly
9/23/22 8:20 AM
David R Kotok
Housing starts data notwithstanding, here’s why we think the US housing market deterioration will have a downside acceleration following what has been a surge in valuations. The two charts show the spread of 15-year and 30-year mortgage rates to the benchmark 10-year US Treasury note. [More]

CPI Projects Higher
Employment Costs Heading Upward
9/23/22 7:20 AM
By Andrew Addison
Last week’s release of the CONSUMER PRICE Index provided no relief. On a year-over-year basis the CPI rose to 6.3%. [More]

U.S.’s Sustainability: D-, Maybe
The Good News: Plenty Of Room For Improvement In Policies
9/23/22 6:20 AM
By Philippa Dunne & Doug Henwood
This summer the United Nations Office of Sustainable Development released their 2022 report that ranks countries based on seventeen metrics covering education, pollution & health, and inequality. They lead with a stark statement: the pandemic wiped out four years of progress on eradicating poverty, sending an additional 93 million people into extreme poverty in 2020. [More]

Not As Dismal...
Stock Market Slide, Higher Rates Enhance Future Prospects A Bit
9/23/22 5:20 AM
This year’s sharp decline in stock prices and rise in interest rates (and credit spreads) improved the outlook for stock and bonds. The second quarter selloff made it a more attractive time to take risk though July’s strong equity performance, particularly in US Growth, tempered our forecasts.

Despite valuation compression across all countries, U.S. [More]

Slowdown Coming
In Long-Run Corporate Profit Growth And Stock Returns
9/23/22 8:00 AM
By Michael Smolyansky
Over the past two decades, the corporate profits of stock market listed firms have been substantially boosted by declining interest rate expenses and lower corporate tax rates. [More]

Consumer Complaints
The Rise Of Nonbanks Improving Quality Of Financial Services
9/23/22 7:00 AM
By Ahmet Degerli and Jing Wang
We show that as nonbanks' market share increases in a local residential mortgage market, the quality of mortgage services in the market improves. [More]

Credit Card Profitability
The Credit Function vs. The Transaction Function Breakdown
9/23/22 6:00 AM
By Robert Adams, Vitaly M Bord, and Bradley Katcher
Credit cards are one of the most ubiquitous consumer financial products in the United States, with more than 75 percent of households owning at least one general purpose credit card in 2019. [More]

Pharmaceutical Spending
Identifying Reforms To Cut Inefficiencies, Improve Healthcare
9/23/22 5:00 AM
By Manuel García-Goñi
Pharmaceutical spending accounts for a large share of health spending worldwide. [More]

Acute Observations, September 23, 2022
Perceptive Commentary from September 1-23, 2022
9/23/22 8:00 AM
Jay Powell
“We have got to get inflation behind us. “I wish there were a painless way to do that; there isn’t.”
The Fed Intensifies Its Battle Against Inflation
The New York Times
September 21, 2022

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