economics

When you keep forecasting that simple, you free up time and bandwidth for other activities. I like studying the investing behaviors that never change, and I’d never have the time to do that if I spent my day predicting what the economy will do next quarter.

For several years before the pandemic, the Indian banking sector was embroiled in a crisis that manifested in the form of rapidly rising non-performing assets (NPAs) on the balance sheets of banks. NPAs were triggered by large-scale defaults in the corporate sector, with the bulk being reflected on the balance sheets of inadequately capitalised

One of these powerful downmarket voids occurred in the steel industry, for example, when entrant companies employing disruptive minimill process technology entered through low-end beachheads; they have attacked relentlessly upmarket ever since.

Samsung followed a very different path. Its history was less about isolated entrepreneurship than about the construction of a national industrial system in which the state selected, protected, disciplined, and promoted large conglomerates in pursuit of economic transformation.

Keynes, the British economist, had discovered in his work that economies are not machines. They have souls, emotions, and feelings. Keynes called them “animal spirits.”

A central reason for policy intervention in this boom-bust process, Minsky emphasized, is the ever-present danger that the contraction will get out of control and spread into a system-wide debt-deflation. In this way, a normal business recession can become instead a deep and long-lasting depression, such as happened in 1929-1933 when debt deflation

with electricity rose from less than 10 percent in 1935 to nearly 50 percent by 1945.

Globally, during this cycle:

-China has had strong industrial production, but weak consumer spending.

-Europe has been relatively weak both in industrial production and consumer spending.

-The United States has been strong in consumer spending, but relatively weak in industrial production.

It is enough to summarize the key liquidity events that preceded the booms.