economics

The ECB were justified in panicking about the threat of deflation. An environment that is simultaneously debt laden and has falling prices will quick devolve into a crisis, as revenues and wages will struggle to cover interest payments on previously accumulated debt. Interest payments definitely do not fall in sympathy with prices therefore

Finally, the sale of assets—such as selling cash, stocks, bonds, or real estate to finance spending—can also drive nominal spending. However, large-scale asset sales are usually indicative of a shortfall in economic activity and are typically used to essentially plug a hole in spending by economic actors rather than as a durable source of ongoing

Given that I am a macro investor I look at cues to explain aggregate profits of all firms of the market. Individual firm’s profit is a produce of how well it runs its operations and how it is able to out-compete others in creating good products at low cost with good sales and distribution strategies. Assessing all these parameters is the job of my

When any one global market (even one as big as the United States) is the only one to reach a new high, it qualifies as a global divergence.

Pharma and biotech firms top the charts — over 55% of their total assets are held in cash, or in other assets that can quickly be turned into cash. Software companies, too, hold more than 30% of their assets in cash.

At the other end of the spectrum, traditional industries like energy, at 4%, and utilities, at less than 1%, maintain far leaner cash

Putting Them Together

The United States is running larger fiscal deficits than most other countries, and its private sector has a higher proportion of long term fixed rate debt than most other countries. This means that in an interest rate hiking cycle, the United States has been rather de-sensitized to rising rates compared to other countries

LBJ's increased government spending added $42 billion, or 13%, to the national debt. It was almost double the amount added by JFK, but less than a third of the debt added by President Nixon. Since Johnson, every president has increased the debt by at least 30%.

A devaluation will most certainly cause a shift in Greek consumption levels by changing the real value of household income. Depending on how the devaluation takes place and what other steps the Greek government takes, the impact on the trade deficit will be positive and fairly predictable—even if it is true that Greece cannot produce anything it

That is a major omission! If the slowdown in TFP growth can be explained by ideas getting harder to find, why did growth hit a brick wall in 1973 as opposed to slowly decaying as soon as ideas became harder to find?

Well, one question to ask might be “Which factors contributed to TFP growth in the last good decades, the 1950s and 1960s, and when