Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Economist’

Markets: will the Trump rally go on?

Posted by hkarner - 7. März 2017

Date: 06-03-2017
Source: The Economist

The post-election stockmarket surge continues apace. Hopes are so high for corporate tax cuts, deregulation and infrastructure spending from Donald Trump that investors have been willing to ignore the tweetstorms and the continuing revelations of his team’s Russian connections.

The Dow Jones Industrial Average topped 20,000 for the first time in January, and exceeded 21,000 last week. Yet global markets face many challenges in the next few weeks. The Federal Reserve is hinting at an interest-rate increase later this month; elections in the Netherlands and France could see strong showings from far-right (and anti-euro) parties; and both the European Central Bank and the People’s Bank of China may reduce the pace of credit expansion. There is also plenty of scope for American GDP growth to fall short of inflated hopes; the Atlanta Fed’s model points to an annualised rise of just 1.8% in the first quarter. Hold on tight.

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Wanted: a vision for Europe’s future

Posted by hkarner - 6. März 2017

Date: 06-03-2017
Source: The Economist

President François Hollande of France is an unpopular lame duck, Germany’s Angela Merkel has been in power for a decade, Italy’s Paolo Gentiloni is an interim prime minister and Spain’s Mariano Rajoy is a second-timer leading a minority government.

Today these grizzled veterans will meet in the magnificent halls of Versailles to try to find a way to put a fresh and exciting face on the European Union. Den Rest des Beitrags lesen »

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Restoring Trust in Expertise

Posted by hkarner - 2. März 2017

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World Trade Flows Grew at Slowest Pace since Financial Crisis

Posted by hkarner - 27. Februar 2017

Date: 25-02-2017
Source: The Wall Street Journal

Signs of a modest pickup toward year-end

A South Korean shipping vehicle at Hamburg harbor in Germany. Global trade flows grew by 1.2% in 2016.

International trade flows grew at the slowest pace since the financial crisis in 2016, but there were signs of a modest pickup as the year drew to a close.

The Netherlands Bureau for Economic Policy Analysis said on Friday that the volume of exports and imports of goods was 1.2% higher than in 2015, marking a slowdown from the 2% rate of growth recorded in the preceding year and the smallest rise since volumes crashed in 2009.

However, there were signs exports and imports might be reviving, with volumes up 1.1% in the final three months of the year compared with the third quarter, almost double the rate of increase in the three months to September. Den Rest des Beitrags lesen »

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European Central Bankers Don’t Like What They’re Hearing From Trump

Posted by hkarner - 25. Februar 2017

Date: 24-02-2017
Source: The Wall Street Journal

Political style and economic policy, particularly protectionism, concern pro-globalization policy makers

trump-ccPresident Donald Trump, has sent up enough protectionist flags to concern EU central bankers.

Two top European central bankers had harsh words about the economic policy coming from the U.S. in remarks Thursday.

The establishment of protectionist policies in the U.S. risks undermining a key element to wealth, the head of Germany’s central bank said.

The blunt language reflects the concern felt across the globe from policy makers as they try to make sense of President Donald Trump’s unconventional economic policy and political style.

“The U.S. erecting trade barriers leading to other countries becoming more protectionist would, I firmly believe, potentially call into question one of the key pillars of our prosperity,” said Jens Weidmann in the opening of the central bank’s annual report.

The new president’s administration has angered many in Germany by accusing Europe’s largest economy of unfairly benefiting from an undervalued euro. Den Rest des Beitrags lesen »

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Are technology firms madly overvalued?

Posted by hkarner - 25. Februar 2017

Date: 23-02-2017
Source: The Economist: Schumpeter

Three financial sanity tests for whether there is a bubble

madly-overvaluedIS THE technology industry in La La Land? There are alarming signs. House prices in San Francisco have risen by 66% more than in New York over the past five years. Even at the height of the dotcom bubble in 2001, the gap was lower, at 58%. Shares of technology firms trade on their highest ratio to sales since the turn of the century. Four of the world’s most valuable firms are tech companies: Apple, Alphabet, Microsoft and Amazon. Snap, a tiddler with $400m of sales and $700m of cash losses in 2016, is expected to list shares on March 1st that will give it a valuation of over $20bn.

For companies and investors in any industry, it is hard to work out if you are living in a bubble. To help, Schumpeter has created three sanity tests for global tech firms. These examine their cashflow, whether investors differentiate between companies, and whether forecasts of their future earnings suffer from a fallacy of composition. The exercise suggests that tech valuations are frothy, but not bubbling. Den Rest des Beitrags lesen »

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Why taxing robots is not a good idea

Posted by hkarner - 24. Februar 2017

Date: 23-02-2017
Source: The Economist: Free exchange

Bill Gates’s proposal is revealing about the challenge automation poses

BILL GATES is an unlikely Luddite, however much Microsoft may have provoked people to take a hammer to their computers. Yet in a recent interview with Quartz, an online publication, he expressed scepticism about society’s ability to manage rapid automation. To forestall a social crisis, he mused, governments should consider a tax on robots; if automation slows as a result, so much the better. It is an intriguing if impracticable idea, which reveals a lot about the challenge of automation.

In some distant future robots with their own consciousnesses, nest-eggs and accountants might pay income taxes like the rest of us (presumably with as much enthusiasm). That is not what Mr Gates has in mind. He argues that today’s robots should be taxed—either their installation, or the profits firms enjoy by saving on the costs of the human labour displaced. The money generated could be used to retrain workers, and perhaps to finance an expansion of health care and education, which provide lots of hard-to-automate jobs in teaching or caring for the old and sick. Den Rest des Beitrags lesen »

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It’s Like the Financial Crisis Never Happened…

Posted by hkarner - 24. Februar 2017

Date: 23-02-2017
Source: The Economist

A decade since the U.S. subprime crisis began, and everything’s wonderful on Wall Street

wall-street-ccA decade after the world began to notice the losses on derivatives linked to the toxic waste of structured subprime mortgages, American stocks have produced such big returns that the biggest crash in generations barely registers.

The 10-year average compound return on U.S. shares was 4.9% a year after inflation at the start of 2016, only slightly below the average for world stocks since the end of the Gilded Age in 1900, according to calculations for Credit Suisse by Elroy Dimson,Paul Marsh and Mike Staunton of London Business School.

The same isn’t true for the rest of the world. British stocks made only 3% after inflation, including dividends, in the past decade, while real Japanese returns were barely positive and French shares delivered less than 2%. German stocks weren’t quite so bad thanks to its export powerhouses, and their 4.3% return adjusted for inflation is in line with the very long-term return from the world outside the U.S.

This global divergence is covered up by the record highs of global stocks in the past week. On Wednesday morning in London the MSCI All-Country World index was setting another new high after breaking the 2015 high a week ago. Den Rest des Beitrags lesen »

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Economists in Denial

Posted by hkarner - 24. Februar 2017

Photo of Robert Skidelsky

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Why European institutions cannot handle the Greek crisis

Posted by hkarner - 19. Februar 2017

Date: 17-02-2017
Source: The Economist
Subject: The European Union’s delicate political economy

GREECE’S marathon crisis is at least instructive. Past flare-ups have illustrated a textbook’s worth of economic principles. The latest episode—a dispute over the sustainability of Greece’s mammoth debt—provides a lesson in political economy. The beleaguered economy itself is not at the centre of the disagreement; rather it is the European Commission and the IMF and others that are at loggerheads, squabbling over projections of Greek growth. This sort of institutional wrangling is not incidental to the process of European integration; it has historically been a crucial ingredient, helping defang the continent’s tricky interstate relations. But as Greece’s latest turn in the spotlight demonstrates, the role of Europe’s institutions has changed during the euro-area crisis. Paradoxically, they themselves have become part of the existential threat facing the European project. Den Rest des Beitrags lesen »

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