“But most investors do capitulate eventually. They simply run out of the resolve needed to hold out. Once the asset has doubled or tripled in price on the way up — or halved on the way down — many people feel so stupid and wrong, and are so envious of those who’ve profited from the fad or side-stepped the decline, that they lose the will to resist further. My favorite quote on this subject is from Charles Kindleberger: “There is nothing as disturbing to one’s well-being and judgment as to see a friend get rich” (Manias, Panics, and Crashes: A History of Financial Crises, 1989). Market participants are pained by the money that others have made and they’ve missed out on, and they’re afraid the trend (and the pain) will continue further. They conclude that joining the herd will stop the pain, so they surrender. Eventually they buy the asset well into its rise or sell after it has fallen a great deal. In other words, after failing to do the right thing in stage one, they compound the error by taking that action in stage three, when it has become the wrong thing to do. That’s capitulation. It’s a highly destructive aspect of investor behavior during cycles, and a great example of psychology-induced error at its worst.” ― Howard Marks

1. SEC Chief Says the U.S. Won’t Ban Cryptocurrencies — Securities and Exchange Commission Chair Gary Gensler said last week that the government’s focus is on ensuring that the industry adheres to investor and consumer protection rules, anti-money laundering regulations and tax laws. He made the comments at a House hearing after a Republican lawmaker asked if a China-like prohibition was on the table in the U.S. He added that any ban would probably have to be legislated by Congress.
China issued its sweeping ultimatum against crypto trading last month, saying all transactions were off limits and that it would move aggressively to root out token mining. The announcement followed months of escalating Chinese warnings about virtual currencies.
2. McConnell Offers Democrats a Short-Term Debt Ceiling Increase — McConnell’s proposal would increase the limit on federal borrowing by a fixed dollar amount that would be sufficient to tide the Treasury over until December, when Congress would have to vote again to avoid a default. That vote could come at about the same time that Democrats are attempting to move a massive tax and spending package. That’s also when Congress will have to act again to fund the government as part of regular fiscal-year spending, and avert a shutdown. McConnell is putting his offer out as a compromise, but it also would tie Democrats to raising a specific level of debt — rather than a suspension as done under the Trump administration — and that number can then be used in political attack ads in congressional election campaigns.
3. Pfizer Asks FDA to Authorize Covid-19 Vaccine in Young Children — Pfizer Inc. and BioNTech have asked U.S. health regulators to green light their Covid-19 vaccine for children 5 to 11 years old, setting up the shot to potentially be available to millions of youngsters in a matter of weeks. The FDA may clear the shot for use in the youths before November, which would mean pediatrician offices, schools and other locations could get doses to give as early as Halloween. There are more than 28 million children ages 5 to 11 in the U.S., according to the American Academy of Pediatrics.
The FDA has already scheduled for a panel of outside experts to review the data Oct. 26. The agency doesn’t have to follow the panel’s recommendation, but normally does.
4. U.S. Job Growth Falls to Slowest Pace of Year — The economy created 194,000 jobs in September, the smallest gain since December 2020 and down from 366,000 jobs added in August, the Labor Department said Friday. Many workers gave up a job search and exited the labor force last month. The smaller pool of labor meant that despite the slowdown in hiring, the unemployment rate fell to 4.8% last month from 5.2% in August. The figures add to evidence that fears about the coronavirus and global supply constraints continue to hold back the economic recovery. The biggest factor behind last month’s weak payroll gain was a decline in public-sector jobs, mainly at schools.