economics
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economics
high-value manufacturing industries have economic effects that go far beyond their own activities; they generate service-sector employment and are vital to sustaining the kinds of pools of local talent that are needed to spur innovation and technological breakthroughs.
Zongyuan Zoe Liu • China’s Real Economic Crisis
High-value manufacturing industries do more for the economy than just their own work; they create jobs in other areas like services. They also help build a strong community of skilled workers, which is important for coming up with new ideas and technology.
They occur instead for two other, related, reasons. First, emerging market borrowers and investors have consistently underestimated the source and magnitude of volatility in emerging financial markets. Second, perhaps as a consequence, borrowers and investors have permitted and even encouraged sovereigns to put into place capital structures that
... See moreMichael Pettis • The Volatility Machine
.economics Financial crisis occurs because of Capital Structure
... See moreUsing a comprehensive dataset, covering a wide range of macroeconomic and financial variables, we demonstrate that it is the interaction of asset price bubbles and credit growth that poses the gravest risk to financial stability. These results, based on long-rung historical data, offer the first sound statistical support based on large samples for
Noah Smith • Will Data Centers Crash the Economy?
From a capital cycle perspective, the above situations only become attractive when stock market valuations fall to a fraction of replacement cost and a path opens up for dealing with the excess capacity.
Edward Chancellor • Capital Returns
countries and even regions are subject to market-related risks and shocks that can disrupt their behavior, just as companies are, and these risks are transmitted in the same way: through their capital structures. In fact any economic entity’s capital structure can be seen as a sort of volatility machine, one of whose main functions is precisely to
... See moreMichael Pettis • The Volatility Machine
.economics capital structure creating volatility for a company is similar to capital structure creating volatility for a country
It is enough to summarize the key liquidity events that preceded the booms.
Michael Pettis • The Volatility Machine
Bonds have a tendency to peak about midway through an economic expansion and hit bottom about midway through a contraction.
John J. Murphy • Intermarket Analysis
Companies follow a U-shaped pattern of cash holdings across their lifespan: • Firms in the introduction stage hold the most cash — with cash making up nearly a third of their assets. This is perhaps because they raise a lot of money, and then slowly burn through it all developing new products, and building their market.
• As companies mature, with
... See moreKaustubhs • Cash Rules Everything Around Companies
Let us, therefore, try to see exactly what happens when technical improvements and labor-saving machinery are introduced.