I’ve followed Tyler Cowen’s blog at Marginal Revolution for many years (highly recommended), and recently saw his post “Why I write for Bloomberg View“. I hadn’t previously realized he contributed there, and he explains that one of his main motivations is that they have “assembled the most talented and diverse group of opinion contributors out there, bar none,” and that “Bloomberg View tends to hire reading-loving, eclectic polymaths, with both academic knowledge and real world experience, and whose views cannot always be predicted from their other, previous writings.”
I was intrigued, and found that contributors include writers I have followed over the years — such as Cass Sunstein, Justin Fox, Michael Lewis, Barry Ritholtz — and many many more I have not. So I added Bloomberg View to my feed, and have been really enjoying it over the past week.
Here’s one example, “Markets Are Less Stable Than They Seem” by Satyajit Das that I found insightful:
Since 2009, as policy makers have sought to return the global economy to normal, “stability” has usually been their byword. Unfortunately, their actions have only created a false calm — a “stable instability,” to coin a paradoxical phrase. Although a repeat of the financial crisis has so far been avoided, this relative tranquility has had the effect of derailing normal market mechanisms, thereby masking a worrisome accumulation of risks.
Higher asset values are neither permanent nor sustainable. Unfortunately, once asset prices become the focus and instrument of policy, they also can’t be allowed to freely adjust to their true level, because that might threaten the too-big-to-fail banking system, insurers, and pension funds.
Stable instability also distorts capital allocation. Low interest rates allow zombie companies to survive, delaying bankruptcy and preventing capital from being redeployed. Fundamental principles of value — future cash flows, price volatility and inter-asset correlations — are subverted, encouraging the mispricing of risk and distorting investment economics. In functioning markets, investors sell overvalued assets and buy undervalued ones. This strategy fails when interference with the market mechanism means that all assets become artificially overvalued. Investments become premised on momentum — that is, on what other buyers, especially state institutions, are doing.
If you’re looking for new sources of content, check out out Bloomberg View as an opinion source.