Tag: economy

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Updating modern corporate finance

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“Stagflation” of the 1970s – the improbable combination of high unemployment and runaway inflation-  proved painful and protracted, but explains the U.S. stock market’s remarkable forty-year run of 12 per cent average annual returns since then. Why is Japan still mired in a decades-long recession- and the Chinese economy in a tailspin? What account for the resilience of U.S. stock and labour markets in the wake of the Covid-19 pandemic and in the face of the Fed’ record interest rate hikes? Donald H Chew, editor of the journal of Applied Corporate Finance, traces the revival moment of America’s corporate and stock … Continue reading Updating modern corporate finance

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Seven turbulent decades of Global finance

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Professor of economist at Harvard and former chief economist at the IMF, Kenneth Rogoff explores the global rise of the U.S. dollar and reveals why the future stability is far from assured and argues that America’s currency might not have reached today’s lofty pinnacle without certain amount of good luck. The sharp sell-off of US Treasury bonds following Trump’s April 2 announcement of America’s highest tariff wall for a century confirmed Rogoff’s view that the recently prevailing belief that real interest rates will be “lower forever” is a dangerous myth. He sees America’s, and hence the dollar’s, “Achilles heel”, as … Continue reading Seven turbulent decades of Global finance

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Arsenal of economic weapons: How the US weaponised Dollar

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Chokepoints is one of the most pivotal geopolitical shifts of our time. As Russia, China and Iran have sought to upend the international order, America and its allies have mounted unprecedented economic retaliation. Now the global economy is a weapon of war. Globalisation was once hailed as the great leveller, bringing prosperity to all. Former top US State Department official and a scholar, at Columbia university, Edward Fishman, takes us into the back rooms of power around the world, meeting an eclectic group of innovator: the diplomats, lawyers, and financial whizzes who have masterminded a fearsome new arsenal of economic … Continue reading Arsenal of economic weapons: How the US weaponised Dollar

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Have we lost ability to make things?

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We live in a manufactured world, Unless you are floating naked through space, you are right  now in direct contact with multiple manufactured products. How ofoten we stop to think: where do the things we buy actually come from? American President, Donald Trump, promised in his recent inaugural address, America would soon become “a manufacturing nation once again”. His planned tariffs, will encourage some global companies to relocate factories back to the US.  Academic expert on innovation and technology at Cambridge University, Tim Minshall’s Your Life Is Manufactured is about perils of losing touch with the art of making things .  This … Continue reading Have we lost ability to make things?

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Wealth Transfer

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The superrich wanted Great Wealth Transfer, by becoming philanthropist effectively means transfer of family wealth from the Baby Boomer generation to their children. Vanguard estimated that by 2030, around $10.6 trillion will have been transferred between generations in the United States, $.35 trillion in Europe, and $2.8 trillion in Asia. These are enormous figures, but globally, the private equity industry had $8.2 trillion of assets under management at the end of 2023. There is great wealth transfer happening every day that has contributed to this enormous accumulation of wealth: the monopolization of the economy.  Wealth transfer emerges from the pocketbooks … Continue reading Wealth Transfer

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Variation in prosperity and poverty

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The success and prosperity of a nation boils down to their institutions, legal fairness and political transparency. Most countries lack the sense of equality by having exclusionary policies designed to enrich the elites and exploit the poor majority, preventing technological innovation, but social tensions, the legacy form civil conflict, geography, corruption and policy failure, contribute to government weakness. Extractive economic institutions do not create incentives needed for people to save, Invest and innovate.  Higher productivity promotes faster economic growth, and faster growth allows a nation to escape poverty. Nobel prize-winning economist, Daron Acemoglu and James A. Robinson makes meticulous enquiry … Continue reading Variation in prosperity and poverty

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US banks made $1tn windfall from Fed’s higher rates

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US banks made $1tn windfall profit by failing to pass on to savers the higher interest rates that were kept in place by the Federal Reserve for the past two and half years. Lenders earned higher yields for their deposits at the Fed but kept rates lower for many savers, according the review of Federal Deposit Insurance Corporation data. The boost to the country’s in excess of 4, 000 banks has helped increase their profit margin. While rates on some savings accounts were raised in line with the Fed’s target of more than 5 per cent, the majority of depositors, … Continue reading US banks made $1tn windfall from Fed’s higher rates

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Bureaucratic inertia and geopolitical distraction

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Lost Decade is a bureaucratic take on American policy’ slow  pivot  to the east and to Asia-cnetric geopolitics and its implications for America’s present and future. Across the political spectrum, there is wide agreement that Asia should stand at the center of US foreign policy. But this worldview, first represented in the Obama Administration’s 2011 “Pivot to Asia, marks a dramatic departure from the entire history of American grand strategy. Both trump and Biden continued in a similar vein to little effect. In the upcoming US election, both likely candidates President Joe Biden and ex-president Donald Trump more or less … Continue reading Bureaucratic inertia and geopolitical distraction

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Pound hits $1.30 amid global market jitters

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The Sterling Pound hit its highest level against the dollar in a year on Wednesday as investors bet on UK interest rates staying higher for longer. The data reveal the rate of inflation was proving more stubborn than expected by some analysts which prompted traders to cut bets on an easing of rates in August, and sent the pound above $1.30 for the first time since last July. The Pound has also boosted by market hoping new Labour government will offer economic stability. UK inflation was steady in June, in line with Bank of England’s target rate of 2 per … Continue reading Pound hits $1.30 amid global market jitters

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Central Banks could bring about price stability

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Shock Value tells the untold story of prices and price stabilisation in the United States, many foundational moments in American economic history – the establishment of paper money, wartime price controls, the rise of the modern Federal Reserve- occurred during financial panics as prices either inflated or deflated sharply. The government’s decisions in these moments, intended to control price fluctuations, have produced both lasting effects and some of the most contentious debates in the American’s history. Shock Values reveals how the American state and been shaped by a massive, ever-evolving effort to insulate its economy from the real and perceived … Continue reading Central Banks could bring about price stability