The world economy is booming, which is good for corporate earnings. Equity valuations should be able to handle a modicum of higher interest rates. But capacity constraints and labor shortages start emerging, the adjustment could be more brutal. It is especially important where this happens first, as this will impinge on currency and bond markets, […]
Entries Tagged as 'Economy'
January 9th, 2018 · Comments Off on Booming World Economy Is Facing Constraints
January 2nd, 2018 · Comments Off on The Amazon Economy
Amazon undoubtedly brings efficiency to the shopping process, but there is a considerable price to pay for this. By monopolizing online market access, it forces most other online sellers to either join Amazon or become irrelevant. Amazon increasingly owns the underlying infrastructure of commerce, and this gives it ample opportunity to tilt the playing field […]
December 21st, 2017 · Comments Off on A Bitcoin Economy?
While we are in the midst of a speculative frenzy, the value of Bitcoin will ultimately be determined by its usefulness. Even if we think the speculative frenzy is likely to continue for some time to come. With respect to the usefulness of Bitcoin, could you run an economy on it? We’ll investigate. Source: A […]
December 11th, 2017 · Comments Off on Why Trickle Down Doesn’t Work
Tax cuts for the wealthy doesn’t trickle down, at least not in the US, the evidence is clear. Tax cuts for corporations might fare a little better through increased investments by small private companies and self-fulfilling optimism. The idea that tax cuts will pay for themselves hasn’t played out in the past and is even […]
November 29th, 2017 · Comments Off on The Consequences Of Permanently Low Interest Rates
It is possible that, in the absence of rising inflation, interest rates remain extremely low for much longer. This has several important consequences for asset prices and the dollar, for instance. Add large tax cuts and financial deregulation in the mix and the cocktail becomes risky. Source: The Consequences Of Permanently Low Interest Rates | […]
October 20th, 2017 · Comments Off on The Uber Economy
Here is one reason why wages are not rising – the uberfication of the economy, which has actually preceded Uber for decades; outsourcing is very similar in its effects. Structural changes like these have profound impacts on the prospect of wages, prices and hence monetary policy, bond yields and equity valuations. But these effects are […]
October 17th, 2017 · Comments Off on A Tax Cut For Shareholders
The proposed tax cuts aren’t likely to do much for the economy or the middle class. But they are an important factor in keeping the markets up and are likely to give the stock market another fillip. One could have too much of a good thing though, tax cuts could very well put upward pressure […]
October 4th, 2017 · Comments Off on Why Business Investment Isn’t Booming
The best way to grow the economy, and thereby top line growth and increase competitiveness is to stimulate business investment. Business investment has been sub-par for a while, despite record low funding cost and record returns on capital. We look at some possible explanations, capacity utilization, payout ratios and increasing concentration. Source: Why Business Investment […]
October 3rd, 2017 · Comments Off on It’s The Economy, Stupid!
Globalization and other forces of structural change do not necessarily have to ravage economies. An interesting example is that of the German Mittelstand small and medium sized industrial companies which have thrived in the face of globalization. Domestic policies and institutions can shape outcomes to a considerable degree. Source: It’s The Economy, Stupid | Seeking […]
September 22nd, 2017 · Comments Off on Amazon Has Become A Macro Phenomenon
Has Amazon become so big that it is starting to affect how the US economy behaves? The evidence is somewhat mixed, Amazon probably exerts downward pressure on prices, but not on wages. At least, not yet, because we are likely to be close to an inflection point where the automation of the whole logistical trajectory […]