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Constantin Gurdgiev: True Economics

Constantin Gurdgiev, a Russian economist based in Dublin, is the creator of True Economics. His blog covers economic ideas and analysis on current news stories and global economic events. Given the level of detail, this blog is more suited for people familiar with intermediate macroeconomic concepts.

24/7/20: Bonds v Stocks: Of Yields, Investors and Large Predators

Corporates are reeling from the COVID19 pandemic impacts, yet stocks are severely overpriced by all possible corporate finance metrics. Until, that is, one looks at bonds. Over the 3 months through June 2020, average 10 year U.S. Treasury yield has been 0.69 percent. Over the same period, average S&P500 dividend yield was 2.02 percent. The gap between the two is 1.33 percentage points, which (with exception of March-May average gap of 1.42 points) is the highest in history of the...

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23/7/20: Globalization and Populism: A Recent Study

I recently came across a fascinating paper by Dani Rodrik, an economist always worth reading. The paper, titled "Why Does Globalization Fuel Populism? Economics, Culture, and the Rise of Right-wing Populism" (NBER Working Paper No. 27526, July 2020) argues that "there is compelling evidence that globalization shocks, often working through culture and identity, have played an important role in driving up support for populist movements, particularly of the right-wing kind."Rodrik carries out...

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22/7/20: COVID19 Update: USA vs EU27

U.S. continues to race ahead of the EU27 in the total counts of COVID19 cases and deaths: U.S. is now significantly divergent to the EU27 in death rates per capita, both in terms of the actual rates and the rates of growth: Notably, the EU appears to have virtually arrested the growth rate in deaths per capita, while the U.S. is experiencing relatively persistent growth in the deaths per capita. However, perhaps the most damning evidence of the systemic U.S. failure to deal with the...

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21/7/20: Stonks and Stinks: S&P500 Net Profit Margins

Stonks reporting season is rolling on. And so far, things are predictably gloomy: Yeeks! But wait, by sector:Seven out of eight sectors are reporting lower net profit margins than 5 year average, with Utilities being the only sector reporting above average margins; Nine out of nine sectors reported so far have lower net profit margins than in 2Q 2019. Per Factset: "For the second quarter, the S&P 500 is reporting a year-over-year decline in earnings of -44.0% and a year-over-year...

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19/7/20: American Exceptionalism on Kool-Aid

American exceptionalism literally transcends education bounds. Here's one instalment: https://twitter.com/MeetThePress/status/1284836775983185921?s=20 - a well-meaning one. In attempting to allocate fault for the disaster of the U.S. public policy response to COVID19 pandemic (see latest on that here: https://trueeconomics.blogspot.com/2020/07/19720-covid19-update-usa-vs-eu27.html), we are now desperately ignoring the fact that not only the White House Administration of today is unfit for...

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19/7/20: COVID19 Update: USA vs EU27

Updating charts for the U.S. vs EU27 comparatives for COVID19 pandemic:U.S. vs EU27 in absolute number of cases and deaths: Key takeaway from the above chart: on 12/07/2020 the U.S. has surpassed the EU27 in the absolute number of deaths related to COVID19. The U.S. now continues to pull away from EU27 in absolute number of deaths attributed to COVID19. EU27 vs U.S. in per capita deaths: Key takeaways from the above chart:Death rates per capita: the U.S. has overtaken the EU27 since...

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19/7/20: COVID19 Update: Worldwide Cases and Deaths

News flow from the Land of the Dumb and Dumber: Global charts:Cases: Week-to-date, new daily case numbers have ranked within top 10 in history of the series in five days, including three all-time highs set within the last five days. The trend is still to the upside despite usual under-reporting of new cases associated with weekend data.Deaths: COVIDIOTS special alert: deaths numbers are not falling. Since the start of July, earlier shallow contraction in daily new deaths counts has...

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18/7/20: Europe, the Land of the Unliving Leadership

If the U.S. of A. is the land of the brain-dead leadership, Europe (the EU) is the land of the unliving ones. The difference is the ratio of effort to failure. The Trump Administration is almost effortlessly creates daily flow of disasters. Meanwhile the EU27 is endlessly engages in strenuous attempts to not achieve something trivial.Latest instalment is the European leadership summit this...

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