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Tag Archives: investment

8/6/21: This Recession Is Different: Corporate Profits Boom

Corporate profits guidance is booming. Which, one might think, is a good signal of recovery. But the recession that passed (or still passing, officially) has been abnormal by historical standards, shifting expectations for the recovery to a different level of 'bizarre'.Consider non-financial corporate profits through prior cycles: Chart 1 above shows non-financial corporate profits per 1 USD of official gross value added in the economy. In all past recessions, save for three, going into...

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3/2/21: Monetary Easing and Stock Market Valuation

There has been quite a puzzling development in recent years in the monetary policy universe. A decade plus of ultra low interest rates has been associated with rising, not falling, risk premium in investment markets. In other words, a dramatically lower cost of new and carried debt induced by lower interest rates - a driver for lower risk, is being offset by something else. What?Laine, Olli-Matti paper "Monetary Policy and Stock Market Valuation" (September 18, 2020, Bank of Finland Research...

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2/2/21: The Disaster of Investing via Smartphones?

Some stuff I've been reading that (sometimes) falls into current newsflow: Kalda, Ankit and Loos, Benjamin and Previtero, Alessandro and Hackethal, Andreas paper, titled "Smart(Phone) Investing? A within Investor-Time Analysis of New Technologies and Trading Behavior"from January 2021 (NBER Working Paper No. w28363, https://ssrn.com/abstract=3772602) :The authors tackle an interesting issue relating to the automated and low cost investing platforms (proliferating in this age of fintech). Per...

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13/11/20: The economy has two chronic illnesses (and neither are Covid)

My column for The Currency this week covers two key long-term themes in the global economy that pre-date the pandemic and will remain in place well into 2025: the twin secular stagnations hypotheses and the changing nature of the productivity. The link to the article is here; https://thecurrency.news/articles/28224/the-economy-has-two-chronic-illnesses-and-neither-are-covid/.  

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31/10/20: Gold Coins Market is Still Hedging Residual Covid Risk

Sales of the U.S. Mint gold coins have moderated off their pandemic highs, but remain elevated by historical standards, especially controlling for higher gold prices:Since hitting a pandemic-period high of 216,500 oz in March 2020 (the highest sales volume since April 2013), the demand has moderated through June, topped 145,000 in July and 149,000 oz in August, and has been around 91,500 through the four weeks of October. This puts October sales above the last three years' average.Average...

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Uptick in US LNG exports a boost for terminals, despite storm challenges

An unusually active Atlantic hurricane season has tested the resilience of US liquefaction infrastructure that is still in its infancy relative to terminals in more mature exporting nations. Utilization is starting to rise toward pre-pandemic levels, as demand and price recovery in buyer markets in Asia and Europe are incentivizing exports. While the trend could quickly turn around – depending on further storm damage and planned or unplanned maintenance – higher consumption during the...

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4/10/20: Technological Deepening Is Coming for Our Jobs

In my recent article for The Currency (link here: https://trueeconomics.blogspot.com/2020/09/my-recent-article-on-potential-long.html), I argued that COVID19 will act as an accelerator of technological capital deepening in the modern economies, with a resulting faster displacement of workers (including highly skilled ones) by technology. McKinsey survey of the developing trends in businesses strategic responses to the pandemic confirms my hypothesis:Per above, across all sectors, and (peer...

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