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It seems reasonable to assume that the coronavirus outbreak is morphing into a global pandemic and that the US will not be spared from community spreading. This will compound the economic damage already washing up from abroad through domestic disruption and worsening business and consumer confidence. Stimulus will be of little help as much of […]

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The economic and political situation in Europe is deteriorating pretty alarmingly, stocks are close to, or already in a bear market. Economically, there is the threat of a return of the euro crisis; politically, there is the threat of political disintegration. With sensible market reformers like Macron having run aground, it’s perhaps time for something […]

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The US economy has created as much wealth as any advanced economy, if not more so, but many have been left out of this wealth creation altogether. Trade has been blamed for this, but the experience of some other, more open economies show that this doesn’t have to be the case. While trade and technology […]

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We might have been too pessimistic about the impact of the tax cuts on the economy. New data about business investment and productivity growth paint a better picture; even if it’s a little soon to argue, a new trend has been established. Business investment and productivity growth are especially important to investors, as a material […]

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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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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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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 […]

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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 […]

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Pimco analysts Richard Clarida, Andrew Balls, and Daniel Ivascyn cite “insecure stability” as a key factor that will affect policy decisions around the world. “Over our five-year secular horizon we believe that the global economy will be ‘driving without a spare tire’ as the Fed raises rates and shrinks its balance sheet,” write the Pimco […]

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Stocks are pricing in a considerable amount of higher economic growth. However, there are a number of barriers that make it difficult to meaningfully achieve higher economic growth in the US. We go through some of these, most notably the labor market and the risks of higher inflation. The Hurdles To Higher Economic Growth | […]

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