"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.
"The U.S. manufacturing purchasing managers’ index from the Institute for Supply Management came in at 47.8% in September, the lowest since June 2009, marking the second consecutive month of contraction. Any figure below 50% signals a contraction."
U.S. personal computer maker HP Inc said on Thursday it will cut up to 16% of its workforce as part of a restructuring plan aimed at cutting costs. The company will cut about 7,000 to 9,000 jobs through a combination of employee exits and voluntary early retirement, it said in a statement
Today, we are facing a global economic slowdown, an impeachment crisis in Washington and a rapidly escalating trade war simultaneously, and it seems like almost everyone on Wall Street is suddenly talking about “the coming recession”. In such an environment, any piece of bad news is going to push stocks lower, and that is certainly what happened on Wednesday…
There was a Soviet-era phrase that NATO had three functions: keep the Americans in, the Russians out, and the Germans down. The three jobs of the EU now are: keep the Americans out, the Germans in, and the British down.
What in the world is the Federal Reserve doing? For months the Fed has been trying to publicly convince us that the U.S. economy is “strong”, and Fed Chair Jerome Powell recently unequivocally stated that “the Federal Reserve is not currently forecasting a recession”, but the Fed’s actions tell a completely different story.