#25 Daily Financial News Round Up - Nov 25,2021
What news caught my attention?
Fannie Mae and Freddie Mac will now back mortgages up to $1 million. Democrat-backed FHA is known to promote affordable housing policies, which eventually trickle down to loosening the requirements of lending loans. Like achieving a fair electoral voting system's goals are impossible to achieve (Arrow's Impossibility Theorem), achieving affordable housing goals is impossible while maintaining the financial stability of the economy. (This is a political science paper I started working on, which I currently put on hold. I hope to get back to it sometime in the future).
More Americans have died of Covid in 2021 than in 2020. Will the media blame Biden with the same intensity they blamed 2020 deaths on Trump?
4.4 million workers resigned in September 2021. Montana, Hawaii, Oregon, Nevada, Utah, Colorado, Louisiana, Rhode Island, and D.C. have significant shares in the resignations. The industries experiencing this phenomenon are arts, entertainment and recreation, education (public and private) and nondurable goods industries. A significant portion of workers resigned and moved to more attractive opportunities, possibly with pay bumps.
Traditional approaches to financial services are rejected with increasing technological innovation and a rapid rise in distrust of conventional financial systems. Executing trading in stock markets does not seem to be an exception. In high inflation situations, it is considered risky and advised to stay away from growth stocks. Yet, many small investors are continuing to invest in growth stocks.
Arrow's Impossibility Theorem states that aggregating community-wide preference to get a final outcome by converting individuals' preferences while also meeting all the conditions of a fair voting system is impossible. The requirements for a reasonably fair voting electoral system include 1. non-dictatorship, 2. unrestricted domain, 3. independence of irrelevant alternatives, 4. social ordering, and 5. Pareto efficiency. (This is a pretty neat Theorem. It blew my mind when I first heard of it.)
My Takeaways:
Retail investors are putting their money in growth stocks despite high uncertainty made worse by high inflation. Retail investors continue to stump academic researchers.