PrefBlog

Todays Canada jobs report brought mixed signals:

The 88,000 job decrease fell well short of economists’ forecasts for a gain of 10,000 and was the biggest decline since January 2009 when the economy was dealing with the global financial crisis, Statistics Canada said on Friday.

The drop was driven by a 137,000 decline in part-time work, the biggest on record, which eclipsed a 49,000 increase in full-time positions. The unemployment rate rose to 5.9 per cent from December’s revised 5.8 per cent.

Average hourly wages jumped 3.3 per cent from last January, the strongest since March 2016. Ontario, Canada’s most populous province, raised the minimum wage to C$14 ($11.11) an hour at the start of 2018, making it the highest in the country.
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The Canadian dollar weakened against the greenback following the report before reversing to trade modestly firmer.

Market bets that the bank will hold in March edged up to 92.1 per cent after the data, though odds of a hike by May were at nearly 80 per cent. The central bank has raised rates three times since last July.

[Update: This is very strange; the linked Globe story is now re-routed to a different story focussing on the effect of the Ontario Minimum Wage hike; the statistics regarding market odds can still be found on-line, though, in a Reuters story titled UPDATE 2-Canada sheds most jobs since 2009, leaving room for central bank to pause]

Overall, though, it was a good day for US equities:

U.S. equities ended their worst week in two years on a positive note, but rate-hike fears that pushed markets into a correction remain as investors await American inflation figures on Feb. 14.

The S&P 500 tumbled 5.2 percent in the week, its steepest slide since January 2016, jolting equity markets from an unprecedented stretch of calm. At one point, stocks fell 12 percent from the latest highs, before a furious rally Friday left the equity benchmark 1.5 percent higher on the day. Still, the selloff has wiped out gains for the year.

Signs mounted that jitters spread to other assets, with measures of market unrest pushing higher in junk bonds, emerging-market equities and Treasuries. The Cboe Volatility Index ended at 29, almost three times higher than its level Jan. 26. . The VIX’s bond-market cousin reached its highest since April during the week, and a measure of currency volatility spiked to levels last seen almost a year ago.
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•The S&P 500 Index rose 1.5 percent as of 4 p.m. in New York.
•The Dow Jones Industrial Average climbed 1.4 percent and the Nasdaq 100 added 1.7 percent.
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•The yield on 10-year Treasuries rose two basis points to 2.85 percent.

Junk bonds? What was that about junk bonds:

The U.S. junk-bond market just finished its worst week in two years as stock market turmoil intensified.

The bonds lost 1.5 percent on the week, the worst performance since February 2016, when oil prices cratered toward multi-decade lows, Bloomberg Barclays index data show. The average spread on high-yield bonds on Friday — or the premium investors seek to hold such notes instead of safer government debt — surged 0.23 percentage point on the Bloomberg Barclays high-yield index, climbing to 3.69 percentage points. That’s the biggest move since the Brexit vote roiled global markets in June 2016.

The Bank of Canada has released a working paper by Marie Chen and Corey Garriott titled High-Frequency Trading and Institutional Trading Costs, which I think is very good because it confirms my prejudices:

Using bond futures data, we test whether high-frequency trading (HFT) is engaging in back running, a trading strategy that can create costs for financial institutions. We reject the hypothesis of back running and find instead that HFT mildly improves trading costs for institutions. After a rapid increase in the number of HFTs, trading costs as measured by implementation shortfall decrease by 27 basis points for smaller-sized positions ($2–$10 million notional). For larger-sized positions there is no significant effect. We explain the improvement as being the consequence of HFT reducing effective spreads and per-trade price impacts.

The paper begins with an overview:

High-frequency trading (HFT) is a computerized trading strategy that derives revenue from trading a security for a short period of time, often holding a long or short position in a security for mere moments before exiting the position. This new style of trading has been a source of controversy because it is unclear how its short-termism can be of any value to society. A large literature has grown to address the question: see “The Economics of High-Frequency Trading: Taking Stock” (Menkveld 2016, Annual Review of Financial Economics). The general result is that HFT is automating (for good or for ill) a set of trading activities that have historically been performed by human beings. This research paper supports the literature using the case of Canadian bond futures.

… and an explanation of what “back-running” is, and (perhaps inadvertently) a condemnation of the gross incompetence that is the hallmark of institutional money management (emphasis added):

One cause for concern is that HFT might use its technology to detect when large financial institutions are trading and then trade to move prices against them. This strategy would be profitable because it would exploit a need at a financial institution to trade, either because the institution must fill an order from a client or because it must act on new information. HFT could exploit this need by “back running”: buying when the institution buys, causing the price to rise more than it would have, and then selling at the aggravated high price. This would create costs for the institution as it pays a higher price. The cost matters to society, as institutions manage most of our savings. While the strategy is nothing new, HFT is arguably going to be better at it than humans were.

You see those emphasized phrases? “need … must … must”? That’s what the problem is, nothing to do with HFT. The problem is with the structure and attitudes of the institutional money management business. When you go to market with a vertical demand curve or a horizontal supply curve, you’re going to get taken to the cleaners one way or another and quite right too.

Somewhere along the line between the ultimate client and the guy pushing the button on the trading desk is somebody who said “need … must … must” and thereby costs the ultimate client a lot of money. Just because a trade might have been good at 3:00pm prices doesn’t mean a trade executed at 3:01pm prices will be good … hell, the 3:00:00.0030pm prices might not be any good. If you can’t walk away from a trade, you’re no damn good to anybody and you should be cleaning restrooms for a living.

What we have in the whole HFT debate, as I have pointed out until the Assiduous Readers are sick and tired of hearing me say it, is the fact that a pack of prep-school boys working for daddy’s friends as portfolio managers are having their lunch eaten by scruffy computer geeks who didn’t go to the right schools and don’t know the right people, they don’t like it and they don’t have what it takes to figure out how to compete.

I should also point out, with respect to the concern about the cost mattering to society, that the purpose of public markets is not to provide investors with nice returns; investment returns are a mere means to an end. The purpose of public markets is to transfer capital from savers to operating companies and all questions regarding market structure must be examined with respect to this question.

However, the authors go on to summarize their results:

In this paper, we investigate whether HFT is indeed loading costs on institutions in this manner. We find no evidence that it is trading in the same direction as institutions when they are building large positions in Canadian bond futures. In fact, HFT trades in the other direction, absorbing the institutional trading. This is consistent with HFT’s usual role in automating the services provided by a human financial intermediary. To drive home the point, we show that trading costs for institutions improve after more HFTs begin trading the bond futures. The reason for this is that HFT, in competing to trade with institutions, diminishes effective spreads and price impacts—a result that has been found in a variety of studies.

And, as far as the Canadian preferred share market is concerned …

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So equities got crushed today and the media are breathlessly telling us it’s a correction:

•The S&P 500 Index fell 3.8 percent at the close in New York.
•The Dow Jones Industrial Average lost 4.1 percent and the Nasdaq 100 Index fell 4.2 percent.
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•The yield on 10-year Treasuries fell less than one basis point to 2.83 percent.

It takes me back! I remember early in my career, in late October 1987, I was asked whether I thought “it” was a crash or a correction. I thought that was the stupidest question I’d ever heard. The market’s down 22%+ – stick that in your thesaurus, buddy. But I was young then and foolish and the guy was influential in the company, so I pretended that classifying things was very important and meaningful, particularly if they’re classed by multiples of ten.

The technical wizards at Canada’s leading financial oligarch showed off their prowess again today:

Royal Bank of Canada is once again in the hot seat with investors after its online brokerage platform – RBC Direct Investing – experienced technical difficulties that prevented clients from making trades just as markets were plummeting and the Dow headed towards a loss of more than 1,000 points.

RBC clients took to social media this afternoon to express their frustration with the rolling outages the bank has recently been experiencing since early January.

Thursday’s outage appeared to spike at 1 p.m. (ET) and remained through the market close.
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“Our initial investigation indicates that this is related to a fibre optic cable, not to volumes. We have implemented a temporary solution and clients can now place orders online,” an RBC spokesperson said in an email to the Globe and Mail.

Regrettably, the journalist did not ask any questions about redundancy and fail-overs; but let us simply be grateful the regulators have placed the entire industry, just about, in such reliable and competent hands.

In a speech important enough to be reported in the Globe, Bank of Canada Senior Deputy Governor Carolyn A. Wilkins delivered an address at the G7 Symposium on Innovation and Inclusive Growth titled At the Crossroads: Innovation and Inclusive Growth:

It is perhaps only in the last decade or so that mainstream macroeconomists have sharpened their focus on how income distribution may affect long-term growth and macro dynamics. There is compelling evidence that innovation has been an important reason behind rising income inequality in advanced economies in recent decades.2 Research also finds that rising inequality can result in weaker and less-stable macroeconomic outcomes. This places us, as policy-makers, at a crossroads. Do we choose to stay on the same road and repeat the past? Or do we apply fresh thinking to policy and choose a new road where innovation delivers even stronger and more-inclusive growth?
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There’s a lot of good research, including by people in this room, pointing to many possible forces at play. I think three stand out:
•Technology has benefited skilled workers more than other workers because it has made them more productive. People in more-routine jobs have tended to be replaced entirely. Digitalization will likely reinforce this dynamic. Machine learning and other technologies mean that tasks requiring routine cognitive skills, such as reading medical scans or preparing legal and investment advice, can now be automated too. That said, I do not share the dystopian view of a world without workers. People will still have an absolute advantage in tasks that require common sense and a human touch. And they will also find employment in areas where they have a comparative advantage. The question is not so much whether there will be jobs for people, but, rather, how well they will pay, and what the working arrangements will be.8

•Some types of technology lead to market concentration and the rise of “superstar” firms. These firms tend to have fewer employees than conventional companies and can earn impressive monopoly profits.9 Market concentration happens quite naturally in industries with prominent network effects and other scale economies. There is nothing new in that. Phone companies are traditional examples, and social media companies and online marketplaces are more-modern examples. What is new is that the “winner-takes-all” effect is magnified in the digital economy because user data have become another source of monopoly power. Data from a large network create a formidable barrier to entry. Another barrier to entry can come from firms using their position as gatekeepers to crucial online services to impede their competitors. And, it’s easier to avoid taxes when production is not tied to a large factory with a fixed physical location.10

•Technology has helped to separate work into discrete tasks, allowing businesses to make more use of short-term, temporary jobs to maintain flexibility or respond to changing needs. Workers in these types of jobs tend to have less bargaining power than regular employees. They usually earn lower incomes, get fewer benefits and have less job security.11 This may be one reason why we have seen relatively weak wage growth in Canada and other G7 countries despite improving labour market conditions. With the current wave of innovation, the “gig economy” is likely to keep growing.12

I suggest that a major factor is simply the pace of innovation. It has long been known (except to regulators) that the lion’s share of the profit from innovation goes to the innovators. Nowadays, the pace of innovation is frenetic … while I would not want to state flatly that we have reached a maximum, we’re far removed from the medieval peasant ploughing his fields the same way his great-grandfather did, while secure in the knowledge that his great-grandson would be ploughing the same way. So, sure, more innovators, more disruption, more concentration of wealth among the lucky winners. And, what’s more, with every increase in our ever-increasing productivity, there is more time and funding available for a few more guys to sit quietly in a corner and wonder if maybe such-and-such might work. I don’t know when we’ll see the end of it … it’s a wild ride!

Continued uncertainty in the Treasury market continues to feed into equities:

U.S. stocks remained on unsteady footing as the bout of volatility that’s gripped global financial markets persisted amid signs that the rise in Treasury yields has yet to run its course.

Pressure Wednesday came from a weak 10-year note auction, sending the rate toward the four-year high that days ago sparked the biggest equity selloff in seven years. Stocks swung between gains and losses throughout the session before ending lower after heavy selling in the final 15 minutes of trading. Volume on U.S. exchanges topped 9 billion shares for a fourth straight day after surpassing that total just once in the past seven months.

The S&P 500 erased a gain that reached 1.2 percent at its highest and closed lower by 0.5 percent in the biggest reversal since 2015. The Dow Jones Industrial Average swung 500 points from peak to trough, and heavy selling in megacap technology shares pushed the Nasdaq indexes to losses of at least 0.9 percent. While the Cboe Volatility Index eased back from levels last seen in August 2015, at 26.84 it remains about 40 percent above its average since 1990.

Luke Kawa and Tracy Alloway of Bloomberg provided a bit more colour regarding the relationship between VIX products and equity prices:

Products such as XIV and its close relation, the ProShares Short VIX Short-Term Futures ETF (SVXY), aim to offer investors exposure to the inverse of the daily moves at the front portion of the VIX futures curve, and typically benefit from market tranquility.

The VIX futures curve is linked to the Cboe Volatility Index, often called the market’s “fear gauge,” which in turn is a measure of the implied volatility in the S&P 500 Index over the next month. (The VIX tends to move in the opposite direction of U.S. stocks.) Such products typically buy VIX futures as the index rises and sell them as it falls as they seek to maintain a constant degree of exposure to the underlying index.
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It was a theory echoed by Barclays Plc analysts in a research note published after Monday’s sharp spike in the VIX. As volatility-related products scrambled to buy VIX futures in order to rebalance ahead of their 4:15 p.m. daily deadline to calculate the value of their underlying assets — they effectively pushed up the price of the contracts and eventually the index.

Demand from leveraged VIX exchanged-traded products was “the major driver for the move post the cash close,” Barclays analysts led by Maneesh Deshpande said.

The NYT ran a piece on VIX daytrading last summer and there’s a suddenly woeful subreddit devoted to the topic.

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PerpetualDiscounts now yield 5.35%, equivalent to 6.96% interest at the standard equivalency factor of 1.3x. Long corporates now yield a little over 3.95%, so the pre-tax interest-equivalent spread is now about 300bp, unchanged from January 31.

Equities caught a break today:

U.S. stocks rebounded from a violent selloff to post the biggest rally in 15 months as investors poured back into some of the most beaten-down sectors.

Technology, materials and consumer shares paced a 1.7 percent gain in the S&P 500 Index, while DowDuPont and Home Depot led a 567 point surge in the Dow Jones Industrial Average, the biggest gain in two years. The ride wasn’t straight up, though. The Dow plunged more than 500 points at the open, adding to anxiety after Monday’s rout — the worst in almost seven years. Stocks swung between gains and losses no fewer than a dozen times before a late-session rally.
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The yield on 10-year Treasuries climbed nine basis points to 2.80 percent.

The carnage has consumed some of the more esoteric bets:

Credit Suisse said it will buy back the VelocityShares Daily Inverse VIX Short-Term ETN, which it issued and is known by its trading symbol XIV. The fund’s market value topped $2 billion in late January; it was down 93 percent as of 4 p.m. Tuesday after being halted for most of the morning. The bank said it’s redeeming early because the indicative value on Feb. 5 was equal to or less than 20 percent of the prior day’s closing indicative value.

The ProShares Short VIX Short-Term Futures ETF, a similar short-vol product, opened just before noon after a prolonged halt. It plunged 83 percent, wiping out more than $1 billion in market value. Another dozen exchange-traded products tied to the VIX triggered limit up/limit down rules that stopped trading as the volatility gauge spiked above 50 only to then tumble to 30 as the S&P 500 capped its best day since November 2016.

Horizons ETFs Management Canada Inc. halted trading and temporarily suspended redemptions of its ETF that bets against VIX futures earlier Tuesday. The fund fell 84 percent after it resumed trading and redemptions. Nomura Europe Finance meanwhile announced the early redemption of its Next Notes S&P 500 VIX Short-Term Futures Inverse Daily Excess Return Index ETN, which had 32.4 billion yen ($297 million) in assets.

And, the article continues, there may be knock-on effects:

But Barclays Plc says the turmoil will spur a wave of deleveraging among volatility-targeting funds that’s set to unleash $225 billion of equity sales in the coming days. Some $500 billion of assets are tied to funds that target a given level of volatility — two-thirds of which are traded by algorithms that look poised to divest after Monday’s eruption of turbulence, according to the British bank.

Bloomberg has a good article by Matthew Campbell regarding the German attitude towards cash:

For Germans, more than for the citizens of virtually any other Western economy, “money” still means, above all, physical cash. The average German wallet contains 103 physical euros, the European Central Bank estimated in November, more than three times the figure in France. Cash is still the means of payment in some 80 percent of point-of-sale transactions, compared with only 45 percent—and falling fast—next door in the Netherlands. Using cash is a habit deeply resistant to regulatory intervention; mild suggestions in 2016 that it might be restricted in certain circumstances in Germany ignited passionate protest from almost every point on the political spectrum.
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Yet for many Germans, the convenience of electronic payment is beside the point. Rather, the use of cash has, to a surprising extent, become a proxy for profound concerns about trust, privacy, and the role of the state. Whereas in most countries the choice of how to organize purchases is basically a question of utility, in Germany it’s freighted with much deeper connotations. “Cash, to me, is an important public good by which you measure the transparency and legal order of a society, and also the respect for the individual and the private sphere,” says Max Otte, an economist in Cologne who leads Save Our Cash, a national campaign that opposes measures to restrict the use of physical currency. “ ‘Why do Germans like cash?’ is the wrong question,” he adds. Instead, Otte asks, “Why have others shifted to a cashless society so quickly?”
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[Former ECB Chief Economist Otmar] Issing … accounts for this demand by making reference to an oft-repeated German maxim: “Cash is printed freedom”—offering the ability to transact with autonomy and anonymity in a country with good historical reasons to value both.

I’ve been highly amused of late by the huffing and puffing about Turquoise Hill:

Between 2010 and 2016, Turquoise Hill ran the finances for its massive Oyu Tolgoi mine in Mongolia through shell companies in Netherlands and Luxembourg, The arrangement allowed it to avoid paying $559 million (U.S.) in Canadian corporate income tax, worth $694 million Canadian at current exchange rates, according to a report put out by the Dutch NGO SOMO this week.

“There does seem to be a contradiction there,” said Karyn Keenan, director of Above Ground, an Ottawa-based NGO that advocates for corporate accountability.

“Should EDC be providing over a billion dollars of financing to a company that’s engaging in tax avoidance?” she asked. “EDC is a public institution. It’s an arm of the state. It should operate in a way that’s coherent with the policies and the stated aims of the government.”

So all of you unpatriotic – perhaps even treacherous – readers out there who employ sophisticated tax avoidance strategies such as TFSAs, RRSPs and pensions, watch out! Karyn Keenan will soon be around to protest your leaching of government programmes intended to benefit red-blooded and Karyn Keenan-supporting Canadians, such as municipal water supplies!

She should, of course, be lobbying the politicians to change the tax-law, but then her group would be considered political and would almost certainly lose its non-taxable funding from Tides Canada. I’m not sure how much that is … oddly, I can’t seem to find Above Ground’s financial statements on their website.

It was a highly unpleasant day for preferreds … my suspicion is that a few, or perhaps even just one, big players are selling indiscriminately in order to invest the proceeds into all the common stock that’s currently on sale … but that’s just a guess!

It was an exciting day for equities:

U.S. stocks plunged the most in 6 1/2 years, with the Dow Jones Industrial Average sinking more than 1,100 points, as the equity selloff reached a fever pitch amid rising concern that inflation will force interest rates higher. Treasuries rallied and gold rose on haven demand.
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Selling accelerated shortly after 3 p.m. in New York, with the Dow sinking more than 800 points in a matter of 15 minutes only to snap back. The blue-chip index ended lower by 4.6 percent — its steepest drop since August 2011, and is also lower for the year. The Cboe Volatility Index more than doubled to its highest level in 2 1/2 years.

The plunge just after 3pm has some talking about a flash crash:

“We can officially call the last 20ish minutes a flash crash,” said Dennis Debusschere, head of portfolio strategy at Evercore ISI. Loosely defined, the term “flash crash” denotes a phenomenon in electronic markets in which the withdrawal of stock orders rapidly exacerbates price declines.

I don’t know how a flash crash becomes official. I suppose there’s some foundation somewhere, stuffed with money and wiser heads than mine, who solemnly deliberate for years (well, seconds, anyway) before awarding the designation.

In another example of the incompetent complacency that afflicts the industry, some US retail sites went down:

The web sites of two of the country’s biggest robo-advisers — Wealthfront Inc. and Betterment LLC — crashed as the S&P 500 Index sank 4.1 percent.
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Outages were also reported at incumbent online brokerages Vanguard Group and Charles Schwab Corp.
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At Vanguard, “some clients may have experienced sporadic difficulty accessing their accounts” online and by phone, spokeswoman Emily Farrell said in an email. Increased demand delayed logons for some clients at Schwab “for a few minutes,” said spokeswoman Mayura Hooper.

Still, I won’t excoriate them too severely for troubles on one day. The test will be whether or not they address the problem quickly.

To my astonishment, some of the sleepyheads in Ottawa have noticed that effective marginal tax rates are important:

Conservative finance critic Pierre Poilievre introduced the Opportunities for Workers with Disabilities Act Monday, a private members’ bill that has the support of several advocacy groups representing social workers and people with disabilities.
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Research by the Library of Parliament has shown that in some provinces, low-income Canadians on social assistance actually give up more income than they earn by returning to work. This is primarily because many provincial social-assistance programs are geared to income, meaning they are clawed back as work income rises.

Mr. Poilievre’s bill proposes that Finance Canada should calculate how much people with disabilities would lose in taxes and benefit clawbacks for each additional $1,000 of working income up to $30,000.

If Ottawa finds situations where clawbacks exceed the amount of new employment income, the bill calls on the finance minister to “identify and consider” changes that could be made to federal taxation and benefits in order to reduce that amount.

It also calls for a new clause in the Canada Social Transfer to ensure that the amount lost in benefits by disabled Canadians does not exceed the amount gained in employment income up to $30,000.

I’m not sure what research is being referred to in the story. Probably not Scaling the Welfare Wall from 2006, as that found an effective rate at the bottom of the pile of a mere 78%, which clearly gives huge incentive for picking up that extra shift; however, it was used to justify additional complexity in the tax system as noted in the 2006 Budget Plan.

I’m not sure just what makes those with formally recognized disabilities more deserving of a moment’s thought than anybody else and I’m equally unsure of what makes an effective marginal tax rate of 99.9% a perfectly good and completely appropriate thing to have, but I suppose that this bill represents a start, of sorts.

Jobs, jobs, jobs! And pay, too!

U.S. hiring picked up in January and wages rose at the fastest annual pace since the recession ended, as the economy’s steady move toward full employment extended into 2018.

Nonfarm payrolls rose 200,000 — compared with the median estimate of economists for a 180,000 increase — after an upwardly revised 160,000 advance, Labor Department figures showed Friday. The jobless rate held at 4.1 percent, matching the lowest since 2000, while average hourly earnings rose a more-than-expected 2.9 percent from a year earlier, the most since June 2009.

Naturally, the bond market reacted … and then stocks reacted to bonds:

The Dow Jones Industrial Average tumbled 666 points in the biggest plunge since June 2016, as the worsening bond rout stirred angst that the Federal Reserve will accelerate its rate-hike schedule.
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•The yield on 10-year Treasuries rose five basis points to 2.834 percent. It touched 2.8525 earlier.

I believe that this is the worst week containing a super blue blood moon for equities for over one hundred and fifty years, which is probably pretty significant. Worst of all, some investors had their mellow harshed:

Marijuana stocks tumbled Friday amid a wave of “panic-selling” and concern that companies that had seen ballooning share prices recently are now overvalued. The BI Canada Cannabis Index plunged as much as 19 percent, its biggest intraday drop on record, while the nation’s largest producers including Canopy Growth Corp. and Aurora Cannabis Inc. tumbled more than 40 percent from their January highs.

However, five-year Canadas finished the day at 2.13%, up 5bp, which should be good news for FixedResets unless it isn’t.

Huffing and puffing over NAFTA continues:

Canadian Prime Minister Justin Trudeau made some of his most aggressive comments to date on dealing with U.S. demands to rework the North American Free Trade Agreement, adding he still thinks he can get the right deal for his country.

“We aren’t going to take any old deal,” Trudeau said Friday at a town hall in Nanaimo, British Columbia. “Canada is willing to walk away from Nafta if the United States proposes a bad deal. We won’t be pushed around.”

His comments come days after U.S. President Donald Trump threatened to get tough on trade, though he didn’t single out Nafta, in his State of the Union address. The latest round of Nafta talks wrapped up in Montreal on Monday, with all sides saying there had been progress, while acknowledging significant gaps remain on some issues.

I have decided that I’m a big Taylor Swift fan. She’s awesome. Just consider her latest achievement:

As she prepared to hit the road to support her latest album, Reputation, Swift and Ticketmaster Entertainment Inc. concocted a strategy to neuter the scalpers. They used Ticketmaster’s Verified Fan program, which utilizes in-house technology to identify actual fans and determine which of them should have access to fan-only presale tickets, based on their devotion to Swift as measured by their willingness to buy albums, sign up for a newsletter, and watch her music videos. While prices in the presale were fairly low for most people, Swift and promoter AEG Presents raised the cost of all the tickets in the later general sale to make them less attractive to scalpers.

Imagine that! The problem was scalpers taking too big a slice of the pie … so she raised prices for her shows to capture the increment for herself. It’s incredible! Conventional wisdom, of course, is to whine that the gubmint oughtta do sumpin, with ‘run crying to mommy’ running a close second … but my heroine Taylor Swift thinks way, way, way out of the box. I think she should get at least two Nobel Prizes in Economics for this breakthrough.