"...President Trump’s efforts to invoke national controls to remobilize America’s decayed industrial base..."
"Quarantines prevent work. Finished products and parts cannot be made and shipped. Sales cannot take place without products to sell. Without revenues companies cannot pay employees and other expenses. Incomes decline across the world. Companies go bankrupt."
"The median net worth of households in the middle 20% of income rose 4% in inflation-adjusted terms to $81,900 between 1989 and 2016, the latest available data. For households in the top 20%, median net worth more than doubled to $811,860. And for the top 1%, the increase was 178% to $11,206,000."
Trade skirmishes will continue – and even escalate, especially in Tech. One example is China warning Germany not to join the US effective blockade of Huawei. If Germany excludes the Chinese 5G wireless gear, China will threaten car imports – which is Germany’s weak spot.
Longer-term, a deeper correction remains likely, particularly as we head into 2020. If economic and earnings data don’t begin to improve markedly, as currently expected by Wall Street, the current overvaluation of asset price is going to become more problematic to justify.
A low level of economic complexity isn’t necessarily a problem. Many countries with middle-to-low scores in the ranking have great standards of living and a high level of wealth. Countries like Canada, Norway, and Australia were all well down the list.
One of the key factors driving stocks higher in the wake of a trade “accommodation” rather than a peace treaty is momentum – markets want to go higher, anticipating growth. But the market is equally driven by the volume of cash ready to be thrown at it. There is no shortage of ready liquidity - in this sense of too much easy money chasing too few assets, rather than liquidity: “who wants to buy this” conundrum.
There is no reason why meritocracy can’t be compatible with an agenda focused on reducing poverty. However it may require abandoning the myth that every difference in outcome is the result of government not doing enough, or discrimination of some kind.