On the Horizon

By |2018-01-05T14:57:36-04:00January 5th, 2018|Categories: Global Market Update|Tags: , , , |

What does 2018 look like? Photo: Dave Meier. Source: Picography On its face, next year looks a lot like this year, just starting from a higher level. The economy – already growing well – should accelerate. A coordinated global expansion is currently underway. This will lead unemployment to fall and wages to rise. That will push inflation marginally higher, but not too high. The Fed will respond with a couple of rate hikes, but new Fed Chair [...]

Making Records

By |2018-01-05T14:55:35-04:00January 5th, 2018|Categories: Global Market Update|Tags: , , |

What kind of year was 2017? Vinyl record-cutting machine. Photo: JacoTen. Source: Wikipedia Looking back, it was a year of records. The stock market is closing at or near its all-time high; the Dow hit a record level 69 times this year (so far). And for the first time in a long time, the US wasn’t the strongest large market in the world. While the S&P 500 is up 22%, the Chinese stock market is up 24% [...]

China Futures

By |2017-12-20T12:15:03-04:00December 14th, 2017|Categories: Global Market Update|Tags: , , , |

What’s happening in China? Pudong Skyline. Photo: Pjt56. Source: Wikipedia China is the second largest single economy in the world and over half the size of the US economy. It’s home to some of the largest – and fastest growing – tech companies: Tencent, Alibaba, Baidu, and others. And of course, over 1.4 billion people live there, the most populous nation on the planet. They import and export over $3.7 trillion of products every year. China’s growth [...]

Collective Losses

By |2017-10-05T10:49:53-04:00September 29th, 2017|Categories: Global Market Update|Tags: , , , |

Are people just selfish? Soviet propaganda poster from the 1930s. Source: Eurasianet That’s the question I asked when looking back at the some of the big collectivization movements in the 20th century. After the Communist Revolution in Russia, the central government set food prices too low. Peasants in the countryside chose to consume their produce rather than sell it, and there were food shortages in the cities. The government’s response was to collectivize the farms – giving [...]

Trade Uber Alles

By |2017-09-11T10:20:47-04:00September 11th, 2017|Categories: Global Market Update|Tags: , , |

How did Germany get so lucky? Source: Global Sourcing Blog China entered the World Trade Organization in 2001. This has an immense, positive impact on their exports. With trade came growth, and China’s growth meant low-skilled jobs were at risk. In the US, workers who lost their jobs had a hard time finding new employment, and often dropped out of the workforce. Our labor participation rate peaked in the year 2000, and has fallen steadily since, despite [...]

Rebooting Expectations

By |2017-01-13T15:01:44-04:00January 13th, 2017|Categories: Global Market Update|Tags: , , , |

What’s happening in the global economy? JP Morgan Global Manufacturing PMI. Source: Bloomberg It’s no secret that the US stock market is approaching record levels. Business news reports seem to be obsessed with the Dow’s flirtation with the 20,000 mark – which first neared about a month ago. But far more important than Disney or IBM’s price – stock prices, after all, determine the level of the Dow Jones Industrial Average – is the status of the [...]

The Great Wall of Debt

By |2016-11-17T15:39:04-04:00November 9th, 2016|Categories: Global Market Update|Tags: , , |

What effect does China’s debt have on its economy? Photo: Severin Stadler. Source: Wikipedia The Great Wall of China was built over the course of several centuries to protect the Chinese Empire from invasion by mostly northern nomadic tribes. It stretches about 1,500 miles, although with all the extensions and branches, there are over 20,000 miles of fortifications. In the short run, the Great Wall served to discourage raiders and helped rulers manage trade. In the long [...]

Great Expectations

By |2016-11-17T15:39:49-04:00October 24th, 2016|Categories: Global Market Update|Tags: , , , |

Is the market suffering from a case of mistaken identity? Public Domain. Scene from “Great Expectations.” Source: Wikipedia In Charles Dickens’ novel “Great Expectations,” his main character Pip is a poor orphan who suddenly starts to receive money from an unknown source. He thinks his mysterious benefactor is the cold and eccentric Miss Havisham. Miss Havisham is wealthy but mysterious, and she had taken Pip on as a companion for herself and her adopted daughter, Estella. In [...]

Chinese Fortunes

By |2016-11-17T15:40:50-04:00October 3rd, 2016|Categories: Global Market Update|Tags: , , |

What’s happening in China? Forbidden City in Beijing. Photo: Saad Aktar. Source: Wikimedia Anyone who wants to understand the global economy needs to have a sense of what’s happening in China. China has the second largest economy in the world--almost 2/3rds the size of the US. Last year they grew more than the US and Europe combined. They’re essentially tied with Canada as our largest merchandise trading partner, providing 15% of our imports and exports--$300 billion worth. [...]

The Tiger and the Dragon

By |2016-11-17T15:52:55-04:00April 21st, 2016|Categories: Global Market Update|Tags: , , , |

Is India on-track to overtake China? Photo: Jeff Kubina. Source: Animal Photos China’s growth has slowed. We know this from innumerable reports. The reduction in aggregate demand resulting from China’s economic shift from manufacturing to services is at the heart of the bust in commodity prices. But what about India? They have over a billion people, most of whom are trying to emerge from poverty. And they have a competitive democratic system—rather than a Party-led autocracy—along with [...]