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Archive for 7. Januar 2020

Tech Will Rule These ’20s, Too

Posted by hkarner - 7. Januar 2020

Date: 06‑01‑2020

Source: The Wall Street Journal By Andy Kessler

Breakthroughs in health and data could match the consumer boom of 100 years ago.

Does history rhyme? A century ago, the ’20s boomed, driven by consumer spending on homes, cars, radios and newfangled appliances like refrigerators, sewing machines and vacuum cleaners. Most Americans couldn’t afford the upfront cost of a lot of these goods, so manufacturers and retailers invented installment plans. Debt ruled as 75% of cars, furniture and washing machines were bought on credit.

The supply‑side policies of Treasury Secretary Andrew Mellon, who pushed for tax cuts in 1921, 1924 and 1926, increased the capital available for new consumer businesses. The consumption boom also sparked a giant service industry: My grandfather ran Kessler’s Refrigeration Service in Brooklyn, N.Y. Lifestyle advertising was perfected on billboards and in tabloids, which, like today, led to complaints about ads’ ubiquity and influence.

And stocks were hot, hot, hot. Radio Corp. of America shares were worth $11 in 1924, $20 in January 1928 and $114 in 1929, with a peak price/earnings ratio of 72. Turns out equities could be bought on installment too—sometimes a margin loan with a measly 10% down payment.

Like the movie “Titanic,” you know how this ends. Speculation. Tariffs. And finally, the crash of Oct. 28‑29, where the market dropped 13% on Black Monday and 12% on Black Tuesday, triggering widespread margin calls for debt repayment. That risk is why the Federal Reserve now caps stock margins at 50%. According to legend, it’s also why windows in New York skyscrapers don’t open. By 1932, RCA stock was worth $3. Den Rest des Beitrags lesen »

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Germany’s last hurrah in a changing world

Posted by hkarner - 7. Januar 2020

Date: 06‑01‑2020

Source: The Economist

Germany will fail to adapt to a changing world

IN 2020 SOME of Germany’s old certainties will be tested to destruction. Its open economy will flirt with recession as the global trading system withers. The American‑guaranteed order that has underpinned German prosperity and security will fray further. A country designed for openness must adjust to a world that is closing.

Structural changes will compound cyclical flutters. Germany’s coddled carmakers are struggling with the shift to electric vehicles and have no answer to declining sales in China. From next‑generation broadband to artificial intelligence, Germany has little stake in rising industries. Low public investment, constrained by self‑imposed fiscal straitjackets, has mortgaged Germany’s future to its present.

Politicians from Angela Merkel down know their country’s doziness is unsustainable, but do little to deal with it, whether by tackling underinvestment in defence, prising open over‑regulated services or accepting compromises on the euro zone. Despite rock‑bottom borrowing costs and low debt, 2020 will not see German politicians embark on the sort of long‑term targeted investment advocated by economists. Geopolitically, Mrs Merkel has urged Europe to take more responsibility. But if Donald Trump looks vulnerable in the run‑up to November’s presidential election, Germans will slip gratefully into fantasies of a return to Pax Americana.

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In 2020, Britain will be divided, damaged and diminished

Posted by hkarner - 7. Januar 2020

Date: 06‑01‑2020

Source: The Economist

Despite Boris Johnson’s landslide victory, Brexit will still suck the country’s political lifeblood like a giant squid

ONE QUESTION about Brexit has been solved as a result of the stunning victory by Boris Johnson’s Conservatives in the election in December: Britain will formally leave the European Union under the relatively amicable exit deal he renegotiated. His 80‑seat majority in Parliament means Remainers can no longer block it. But what happens once the country is formally out is far murkier. In 2020 Brexit will still act like a giant squid that has attached itself to the face of the nation, sucking its lifeblood and refusing to let go. Brexit’s impact can be summarised by three ds: divide, damage and diminish.

Brexit will divide the British more than any other issue. The old class divisions between Labour voters and Tory voters had already begun to crumble before the referendum in 2016, which hastened the formation of new cultural divisions—between the metropolitan areas that attract large numbers of university graduates and the provinces that favour more traditional values. The emerging division is reshaping both Labour (which is split between its loyalty to the working‑class and the new metropolitan elite) and the Tories (who are experimenting with national populism). Den Rest des Beitrags lesen »

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Where the migrants of 2020 will go

Posted by hkarner - 7. Januar 2020

Date: 06‑01‑2020

Source: The Economist

Migrants in 2020 will end up in poorer places

IN 2015 A RECORD number of migrants, hoping to escape violence and poverty, entered Europe illegally. Five years on, the picture will look very different. It is impossible to know how many people will migrate in 2020, but easier to predict where they will end up. America, Australia and EU countries have beefed up their borders, so relatively few would‑be migrants will be accepted compared with the numbers wanting to come. Instead, countries around the edges of the rich world (such as Egypt and Turkey), and ones farther away (such as Bangladesh and Colombia), have been taking in more.

Migrants out of sight will not be out of mind, however. Funding for border patrols in rich countries will rise, but not as steeply as funding to keep migrants from setting out in the first place. In the past five years, the European Union has pledged nearly 50 times more to discourage people from leaving poor countries—with aid, jobs and border surveillance—than to guard its own boundaries. Such programmes will grow and multiply in the year ahead. Den Rest des Beitrags lesen »

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Southern Italy’s Ills Test Shaky National Coalition

Posted by hkarner - 7. Januar 2020

Date: 05‑01‑2020

Source: The Wall Street Journal

Far‑right opposition party of Matteo Salvini seeks to exploit government’s response to regional woes

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Matteo Salvini criticizes Rome’s approach to problems in the South, saying it is pushing companies out of the region.

ROME—The steady decline of Italy’s South, one of Europe’s poorest regions, is emerging as a critical issue for the country’s fragile governing coalition, as banking and industrial troubles there provide a possible opening for a hard‑right party seeking to return to power.

In recent weeks, the Italian government has said it will take over an important southern bank to save it from collapse, and it is fighting to keep alive Europe’s biggest steel plant and a large factory in Naples.

Perennial discontent in the South, which hasn’t fully recovered from the last economic crisis and has scarce job opportunities, makes the region a key political battleground. Indeed, the two parties that make up the governing coalition, the antiestablishment 5 Star Movement and the center‑left Democratic Party, rely heavily on southern voters, who voted overwhelmingly for 5 Star in national elections in 2018.

The far‑right League party of Matteo Salvini, which leads the opposition and is Italy’s most popular party by far, according to opinion polls, is seeking to exploit dissatisfaction with the government’s handling of the South. Mr. Salvini has criticized Rome’s approach to the burgeoning problems there, saying it is pushing companies out of the region. He has made frequent visits to the South, where he has talked with workers who fear losing their jobs, helping increase his support there since the elections. Den Rest des Beitrags lesen »

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A manager’s manifesto for 2020

Posted by hkarner - 7. Januar 2020

Date: 02‑01‑2020

Source: The Economist: Bartleby

Eight resolutions to adopt in the new year

The start of the year is traditionally the time to make resolutions to change your behaviour. Hardly anyone keeps them, of course, but in the spirit of optimism, here are Bartleby’s eight suggestions for what managers ought to resolve to do in 2020.

  1. Give out some praise. People don’t come to work just for the money. They like to feel they are making a valuable contribution. Praise doesn’t have to happen every day and it cannot be generic. Pick something specific that a worker has done which shows extra skill or effort and single them out; ideally so that others can hear the compliment. This is particularly important for the most junior employees, who will feel anxious about their status.
  1. Remember that you set the tone. If a manager is angry and swears a lot, that will be seen as acceptable behaviour. If bosses barely communicate, they are unlikely to receive useful feedback. If they fail to keep their promises, workers will be less likely to co‑operate. And if a manager frequently belittles a particular employee, that person is unlikely to get the respect of their colleagues. In contrast, a more relaxed, open boss is likely to lead to a relaxed, open workplace.

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Debt will kill the global economy. But it seems no one cares

Posted by hkarner - 7. Januar 2020

Date: 05‑01‑2020

Source: The Observer

Warnings from the IMF and World Bank have been dismissed. But even if they are wrong, a demographic crisis looms

The IMF says that large amounts of corporate debt in eight key economies could become unserviceable in the event of a recession.

The warning signs are clear. Debt is rising on every continent and especially in the business sector, which has spent the past decade ramping up its borrowing to previously unheard‑of levels.

Last October, the International Monetary Fund said that almost 40% of the corporate debt in eight leading countries – the US, China, Japan, Germany, Britain, France, Italy and Spain – would become so expensive during a recession that it would be impossible to service. In other words, tens of thousands of businesses, employing millions of people, would have gambled with high levels of borrowing and lost, making themselves insolvent.

Worse, the IMF said the risks were “elevated” in eight out of 10 countries that boasted systemically important financial sectors, adding that this situation was a repeat of the years running up to the last financial crisis.

Last month, the World Bank joined in. It said emerging‑market and developing economies (EMDEs) had pushed their borrowing to a record $55 trillion (£42tn) in 2018. Den Rest des Beitrags lesen »

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