NEW YORK (Reuters Breakingviews) - The GameStop saga is high drama, but is it an invitation to regulation? Securities sheriffs will soon decide. Newly minted U.S. Treasury Secretary Janet Yellen is meeting with heads of regulatory bodies, like the Securities and Exchange Commission, to discuss the recent frenzy in so-called meme stocks. There’s a case for modest action, but too narrow a focus could obscure the big picture.
NEW YORK (Reuters Breakingviews) - Bitcoin is an economics lesson masquerading as an asset. The value of the cryptocurrency took over a decade to top $20,000, yet it then eclipsed $30,000 roughly two weeks later in the early days of 2021. It's a textbook case of speculative demand meeting scarce supply.
LONDON/NEW YORK (Reuters Breakingviews) - Central bankers will spend 2021 trying to tame the debt monsters they made in 2020. The pandemic-induced market meltdown forced Federal Reserve Chair Jay Powell to buy corporate debt for the first time, while European Central Bank President Christine Lagarde unveiled plans to spend an unprecedented 1.85 trillion euros propping up markets. Yet in helping resolve the crisis, rate-setters sowed the seeds of the next one.
NEW YORK (Reuters Breakingviews) - The pandemic pet boom has some bark left in it. Locked-down humans adopted four-legged friends at a rapid pace during the lockdowns. This pushed global pet product sales up to $125 billion, according to Packaged Facts. But Fido will require food, treats and medicine after the vaccine arrives, and spending on services like grooming could rise. Companies that have lapped up sales still have room to run.
NEW YORK (Reuters Breakingviews) - Latin America’s luck will change. Pandemic lockdowns caused more regional corporations to default between early May and June. But yield-starved investors will ignore some of these risks.
NEW YORK (Reuters Breakingviews) - Money, like law, is a useful bit of fiction. In “Money: the true story of a made-up thing”, Jacob Goldstein, the co-host of the “Planet Money” podcast, traces the journey from Mesopotamian clay tokens to bitcoin, exploring currency’s fraught relationship with shiny metals. He shows that, at heart, money is founded on trust, and, as such, is closely connected with political freedom. While governments play a necessary role in controlling money, limiting their power may be what allows the system to work.
NEW YORK (Reuters Breakingviews) - Just as every dog has its day, every business model has its SPAC. Barkbox, best known for subscription boxes filled with toys and treats for the family pooch, is going public through a so-called special-purpose acquisition company at a $1.6 billion valuation. It’s smart to pounce on the opportunity created by the petcare boom, and by blank-check companies that create an alternative to traditional initial public offerings. But another company, Chewy, already guards Barkbox’s market like an 800-pound Great Dane.
NEW YORK (Reuters Breakingviews) - A merger between two Canadian weed providers may not smell great, but it should provide just enough of a high. Aphria, a Canadian cannabis firm with a market capitalization of $2 billion at Tuesday’s close, will combine with the $1 billion Tilray to form the world’s biggest pot company by sales, with $685 million combined over the last 12 months. By the numbers, this doesn’t look like a great deal for the larger firm. Yet as companies position themselves for a post-legalization world, such tie-ups may be necessary.
NEW YORK (Reuters Breakingviews) - A hard rain may be falling on many musicians during the pandemic, but not on Bob Dylan. Universal Music said on Monday that its publishing division bought the 79-year-old songwriting legend’s entire 600-plus catalog. The deal could be worth hundreds of millions of dollars. Selling now makes sense for the aging Nobel laureate, but his deal with an established industry player is unique. Greener artists getting offers for their work should think twice.
NEW YORK (Reuters Breakingviews) - Jay Powell remains the adult in the room. The Federal Reserve chair testified in the U.S. Senate on Tuesday alongside Treasury Secretary Steven Mnuchin in a hearing on Covid-19 relief measures. He stuck to his technocratic script. Remaining above the political fray is a tough but worthwhile goal.