SPACs are a 2007 fad we didn't need revived

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Today's Agenda

SPACs Are Back and Potentially Wack

Back when I was running the markets desk for WSJ.com, 7,000 years ago, we tracked the rise of this fad called special purpose acquisition companies, or blank-check companies. They went public, took investors' money and then went looking for other companies to buy, ostensibly making everybody involved rich. It seemed weird and dangerous. But then some other weird and dangerous stuff blew up, and SPACs mostly disappeared while we sifted through the more-spectacular wreckage of CDOs and whatnot.

But now SPACs are back, baby! And they're still weird and dangerous! And just like in 2007, but only more so, investors can't get enough of them:

The trouble is these are often-expensive mystery boxes into which people throw money, along with a mandate to buy some other mystery box, writes Nir Kaissar. Often these targets are juicy private companies regular investors can't access, and sometimes these bets pay off spectacularly. But quite often they don't, Nir warns. Either the SPAC never makes a deal or the company it buys disappoints. SPACs probably won't blow up the world like those CDOs, but if you lose a bunch of money in them, it may be hard to tell the difference. Read the whole thing.

Big Oil, Big Changes

Also back in those halcyon days of 2007, Exxon Mobil was the world's biggest company by market value. That particular investing fad may be not be making a comeback; Exxon was recently kicked out of the Dow Industrials. The company seemed invincible back then, when the term "Peak Oil" meant the end of oil supply. Now we use it to mean the end of demand. Oil majors must adapt or die, a process accelerated by Covid-19, writes Julian Lee. Some, such as BP, seem to be figuring it out. Exxon, not so much.

It seems oil companies are just like us: They can't shake old habits. For example, many oil execs are pulling for President Donald Trump's re-election in the belief he'll protect them more than Joe Biden will, notes Liam Denning. But this is more of the industry's infamous shortsightedness. For one thing, Trump hasn't been able to protect coal or steel, as Joe Nocera notes, because those industries are in secular decline. And coddling fossil fuels risks a Green New Deal-type backlash that could be far worse for the industry than anything Biden would impose, Liam writes. Big Oil's options are a graceful transition to a new age or a forced one.

Pandemics and Politics: Two Terrible Tastes That Taste Terrible Together

Forget rescuing dying industries; Trump can't even bend his own Food and Drug Administration to his will. The agency recently went around his back to get drugmakers to set standards for Covid-19 vaccines that would just happen to delay their arrival until after Election Day. It was right to do so, writes Bloomberg's editorial board; moving more quickly might have helped Trump's campaign, but would probably have been disastrous for public health. He just keeps pushing government scientists to say and do things that benefit him; he even misused an Anthony Fauci quote in a campaign ad. So far, fortunately, the scientists keep pushing back.

To be fair, even most Democrats would take a working coronavirus vaccine in the next two weeks, even if it helped Trump a bit at the polls. The trouble is that rushing one to market now creates an array of risks, which Sam Fazeli helpfully details, including making it harder for other, potentially better vaccine candidates to succeed.

Further Pandemic Reading:

Grin and Barrett

We won't get a Covid vaccine before the election, but we might get a new Supreme Court justice. Amy Coney Barrett's confirmation hearings began today, over the objections of Democrats, who point out many people have already voted to possibly elect a Democratic president and Senate that wouldn't want the ultra-conservative Barrett anywhere near the court. The hearings themselves have become just the kind of political circus Biden once warned an election-year confirmation would be, writes Jonathan Bernstein. Republicans cited Biden's warning when blocking President Barack Obama's court pick in 2016. They're ignoring it now.

Some commentators have tried to reassure anxious liberals Barrett's appointment won't be the end of the world. Noah Feldman, for example, writes there are five SCOTUS votes on the record defending LGBTQ rights. Barrett probably won't change that. And former federal judge Thomas B. Griffith writes Barrett won't let her deeply held religious beliefs affect her decisions on the court. In her brief judicial record are some rulings that seem to contradict her Catholicism. She may soon have a lifetime appointment to keep making such choices.

Telltale Charts

Vaccine or no, some working from home is just a fact of life now, and that's good thing for society, the economy and the environment, writes Noah Smith — as long as we make some adjustments to keep people happy and productive.

Further Reading

Conservatism has lost touch with competence and ideas and must reinvent itself for a new era. — John Micklethwait and Adrian Wooldridge

I found racial reconciliation in western Pennsylvania. — Frank Barry

The Fed's next policy trick could be hinting more at MMT. — Brian Chappatta

Sometimes the invisible hand needs guidance, and Paul Milgrom and Robert Wilson did Nobel-worthy work helping it. — Scott Duke Kominers

How to manage your frequent flier miles when you're not flying any time soon. — Farnoosh Torabi

ICYMI

Trump is back on the campaign trail.

Stimulus talks are still deadlocked.

The Covid-19 virus can survive for weeks on money, touch screens and other surfaces.

Kickers

Humans are evolving an extra artery in their arms.

Scientists find a half-male, half-female songbird. (h/t Ellen Kominers for the first two kickers)

A new device may help stop the robbery of turtles' nests. (h/t Alistair Lowe)

President John Tyler's grandson died 175 years after his presidency.

Note: Please send flier miles and complaints to Mark Gongloff at mgongloff1@bloomberg.net.

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