It seems that we’re once again in a Solow Paradox world where we see incredible new tech all around us, apart from the productivity statistics. We look at three different explanations, not all of which we find convincing. At a micro level, change is happening and investors can seek out companies with high investments in […]
Entries Tagged as 'Economy'
August 6th, 2018 · No Comments
August 4th, 2018 · No Comments
Mohammed El-Erian has declared that the US alone has escaped the “new normal,” a concept he coined in 2009 to predict subdued growth for the post-financial crisis economies. Now that the US has reached “escape velocity” and people start coming back to the labor market, the Fed can keep on raising rates. We will argue […]
July 19th, 2018 · Comments Off on The Tax Cuts Might Not Stimulate The Economy At All
The tax cuts are not likely to boost business investment by much. But analysis from the San Francisco Fed show that fiscal stimulus during boom times is a lot less effective, and might not have much effect at all. Investors can still rejoice in the increased optimism and buybacks. Source: The Tax Cuts Might Not […]
July 5th, 2018 · Comments Off on Dormant Capital, An American Problem
Much of the effect of tax cuts for corporations depends on the notion that capital is scarce; it isn’t. Capital is abundant. The problem is much has accumulated at corporations and the top of the income and wealth pyramid where it largely sits inactive. Tax cuts might move the needle in one respect as they […]
July 4th, 2018 · Comments Off on The Trump Economy Half A Year After The Tax Cuts
Half a year after the tax cuts the economy is on sound footing and unemployment at multi-decade lows. Proponents of the tax cuts claim they are responsible for an economic revival. While we don’t exclude the possibility that this revival might still arrive, nothing in the figures suggests that the economy has been propelled on […]
July 2nd, 2018 · Comments Off on The U.S. Is Broke!
Debt scares once again resurface with US public debt at historically high levels and entitlement spending set to increase further. Some argue the US is basically broke. We will try to show that many of the arguments used are exaggerated and show you a country that should be much more broke, yet is thriving nevertheless. […]
June 27th, 2018 · Comments Off on Corporations Don’t Invest Enough
We’re experiencing a solid economy with low unemployment, but easy money and now fiscal stimulus are hiding underlying problems from sight. The biggest problem is perhaps disappointing business investment, which is the key ingredient for making the economy future-proof. It is curious, given businesses have enjoyed record margins, profitability, cash hoards, record low interest rates, […]
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 […]
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 […]
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 […]