economics

For these reasons, makers of mainframe computers, and makers of the 14-inch disk drives sold to them, historically needed gross profit margins of between 50 percent and 60 percent to cover the overhead cost structure inherent to the value network in which they competed.

The "AI Profit Juice" (The Boom): Mechanism: Corporations are spending massive amounts on AI infrastructure (data centers, chips). In the immediate term, this CapEx is recorded as revenue for other companies (like NVIDIA or construction firms), boosting GDP and corporate profits instantly. The Accounting trick: Crucially, the cost of this

The more and better tools, the bigger and harder challenges builders can address with them.

People are smart. We’ve solved most of the challenges that are possible to solve given the tools currently at our disposal, give or take a little given the fact that we’re also good at getting in our own way. So we build new tools to tackle new challenges.

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I don’t know how many times I have to keep saying this before the rest of the profession figures it out. Never reason from a price change. It makes no sense to argue whether a higher price will increase or decrease quantity. Here is a S&D diagram. I dare you to show me how price changes affect quantity.

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In April, we returned to the theme in a piece titled “Generational Arbitrage.” As the name implies, a historic price disparity had broken out between the two fuels in North America. This was driven by global oil prices being held artificially high by the Organization of the Petroleum Exporting Countries (OPEC) and the fact that marginal oil

A wholesale bank’s liabilities are repo borrowings, not deposits. This places US Treasury notes and bonds at the very centre of the modern monetary system. Lately, bank regulators have been attempting to further reduce and even remove Treasuries from capital ratio requirements. This should allow banks to significantly expand wholesale bank lending

when analyzing the prospects of both value and growth stocks, it is necessary to take into account asset growth, at both the company and the sectoral level.

Often, excessive deficits or surpluses reflect domestic distortions -for instance overly loose fiscal policy in deficit countries, or insufficient safety nets that cause excessive precautionary savings in surplus economies. Assessing excessive current accounts requires a comprehensive analysis of the fundamental determinants of national savings and