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Entries Tagged as 'Economy'

Another Own Goal?

April 18th, 2018 · Comments Off on Another Own Goal?

The trade tensions between the US and China are heating up. Much of the US focus is on Chinese efforts to expand in high-tech industries in general and optical networking industries in particular. Hence, the US is putting sand in the wheels of the expansion of important Chinese companies like ZTE and Huawei. But these […]

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Tags: Economic Policy · Economy

Stock Buybacks As Economic Stimulus

April 11th, 2018 · Comments Off on Stock Buybacks As Economic Stimulus

One of the criticisms of the recent tax cut is that most of the corporate tax cuts are likely to go to share buybacks. Rather than trying to deny that, some defenders argue that these buybacks are good for the economy. While buybacks are certainly good for shareholders, we’ll investigate whether they can be considered […]

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Tags: Economy · Voodoo economics

Risks Are Increasing

April 6th, 2018 · Comments Off on Risks Are Increasing

Market risks are increasing with a more assertive President, less constrained by mainstream advisers repositioning into a more populist and neo-conservative direction. The more immediate worry are the chances of escalating trade conflicts, a direct result of the populist turn. But there are a couple of saving graces, at least for now. Source: Risks Are […]

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Tags: Economy · The Markets

Booming World Economy Is Facing Constraints

January 9th, 2018 · Comments Off on Booming World Economy Is Facing Constraints

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, […]

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Tags: Economy

The Amazon Economy

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 […]

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Tags: AMZN · Economy

A Bitcoin Economy?

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 […]

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Tags: COIN · Economy

Why Trickle Down Doesn’t Work

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 […]

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Tags: Economy · Voodoo economics

The Consequences Of Permanently Low Interest Rates

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 | […]

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Tags: Economy · The Markets

The Uber Economy

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 […]

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Tags: Economy

A Tax Cut For Shareholders

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 […]

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Tags: Economy · Voodoo economics