I wish I had the kind of hubris to make a bunch of predictions that all turned out not to happen (high inflation, recession, etc) then come back a year later with more predictions and a “trust me bro, I’m 100% sure this time”
Do not mistake a resilient global economy for populist success
131–140 of 297 posts
Re: Do not mistake a resilient global economy for populist success
#132Earlier quoted context omitted.
While I sympathise and agree with the point, it’s easiest to blame political parties but the electorate are also to blame. They simply want to have their cake and eat it too. Plenty of times post-GFC where parties have tried or proposed much needed reform only for the voters, gerrymandered by the press, to throw their toys out of the pram. Theresa May’s “demantia tax”, Starmer’s winter fuel allowance for example. Sad…
> Starmer’s winter fuel allowance for example. To me this is a prime example of the problem - they were really just fucking around at the edges anyway. It wasn't any sort of major reform. That old scene from Futurama often springs to mind - "I say that your 3% Titanium tax goes too far!" "And I say that your 3% Titanium tax doesn't go too far enough!" I do agree the press are complicit though.
Completely. That was the thing about the winter fuel allowance. It was largely a nothing burger and yet they couldn’t allow them to get it through. You could see almost immediately after they pulled back, what little confidence and ability the government had melt away. It’s been more of the same ever since
Re: Do not mistake a resilient global economy for populist success
#133Earlier quoted context omitted.
> indicies that usually do not perform that well MSCI EM has outperformed MSCI US since it's inception in 2001 if you look at total return.
Small caps and emerging markets in the long run should outpace advanced high cap markets as they have more room to grow. There's also some other interesting aspects of emerging markets specifically: they never went more than 4.5 years before recovering from a crash to ath, whereas it took the SP500 12 years and EU 600 index 14 to recover from the 2000 one.
Google etc may be a US based company, but they can leverage emerging markets just fine.
There’s a stronger argument to be made for small caps, but stock buybacks allow any company’s stock to effectively experience exponential growth even with flat earnings. IE there’s little long term difference between buying back 2% a stock every year and ~2% actual growth every year assuming you never hold the majority of shares. (as in 1/0.98 ~= 1.02)
Re: Do not mistake a resilient global economy for populist success
#134Do not mistake economic indicators such as GDP or "growth" for meaningful measures of economic health.
Unless you have better alternatives you’re not really saying much.
And I don’t think anyone relies only on GDP. Typically you’d look at employment rates, inflation, etc.
Re: Do not mistake a resilient global economy for populist success
#135Earlier quoted context omitted.
I try to see it positive. With the AI bubble, I finally habe a tangible example to point to when I say that GDP growth is a bad indicator for economic success
You could have used the example of Ireland before. They score extremely well on GDP, and yet the quality of life of an average Irish person is on par with the rest of the Western Europe, with the costs of housing pressuring everything else.
Yeah, but everyone knows why. The IMF has called out that 40% of Ireland’s GDP isn’t real because it flows into and back out (back to the US mostly) due to tax schemes.
Re: Do not mistake a resilient global economy for populist success
#136Earlier quoted context omitted.
The roi is unfortunately not the same if you earn your money in euros and need to pay your taxes in euros. At one point one has to do a forex trade and that will be a loss for the euro investor
Only if you convert it at a loss and are unable to wait for USD to recover. If (and it is, admittedly, a big assumption) we assume that USD and EUR are broadly stable currencies over the long term, then short term changes in the ratio don't matter for long term investors. You're buying a share of productive capacity, the currency it is listed in doesn't matter.
It's reasonable to assume they're broadly stable, but being broadly stable doesn't mean a drop will "recover". There's no specific ratio that the currencies are being pushed to. Permanent changes in the baseline can and do happen.
> You're buying a share of productive capacity, the currency it is listed in doesn't matter.
But I don't own a fixed percentage of production, I own a fixed number of shares and the number of shares can change. If the number of shares doubles, then my investment is worth half as much.
Re: Do not mistake a resilient global economy for populist success
#137Earlier quoted context omitted.
I said meaningful measure of economic health, not growth. :-) But I'm not sure. The book "Mismeasuring our lives" gives five recommendations for developing improved measures: 1. Look at income and consumption rather than production 2. Consider income and consumption jointly with wealth 3. Emphasize the household perspective (with this they seem to be focusing on more meaningful measurement of in-kind services and int…
> even a decrease in GDP could result in most people being better off if it occurred because of wealth redistribution Which mechanisms exist to redistribute wealth fairly?
What's your subjective definition of fair?
Re: Do not mistake a resilient global economy for populist success
#138Earlier quoted context omitted.
Small caps and emerging markets in the long run should outpace advanced high cap markets as they have more room to grow. There's also some other interesting aspects of emerging markets specifically: they never went more than 4.5 years before recovering from a crash to ath, whereas it took the SP500 12 years and EU 600 index 14 to recover from the 2000 one.
Google etc may be a US based company, but they can leverage emerging markets just fine. There’s a stronger argument to be made for small caps, but stock buybacks allow any company’s stock to effectively experience exponential growth even with flat earnings. IE there’s little long term difference between buying back 2% a stock every year and ~2% actual growth every year assuming you never hold the majority of shares.…
> Google etc may be a US based company, but they can leverage emerging markets just fine.
Not sure what are you trying to say.
Re: Do not mistake a resilient global economy for populist success
#139Earlier quoted context omitted.
It makes sense if you're looking at it from the perspective of a European investor. e.g. You start with 1000 EUR, convert and buy into an S&P500 fund, wait a year, sell and convert back to EUR. Celsius and Fahrenheit doesn't work as an analogy because the rate does not change over time as it does with currencies.
I think it depends on whether you're planning on holding it in currency or using the currency to buy other things. Does the cost of material goods and services mostly stay the same in EUR, or does it somewhat follow the S&P? If more the latter, then converting to EUR is just a very temporary exchange and its nominal amount doesn't exactly matter.
> Does the cost of material goods and services mostly stay the same in EUR, or does it somewhat follow the S&P?
I don't understand this question, are you asking if material goods and services in Europe, which uses EUR, "somewhat" follows the S&P, a US stock market index?
Re: Do not mistake a resilient global economy for populist success
#140Earlier quoted context omitted.
Unless you can demonstrate that there is in fact an AI bubble, that is simply begging the question. Notice how the term “housing bubble” is used much less frequently today than 10 years ago? That’s because that so-called bubble has been ballooning in size for three decades now, and almost nobody still believes that it will “burst” in any meaningful sense. The Dotcom bubble was in many ways an outlier.
OT: I enjoyed seeing a dictionary-correct use of the term 'begging the question' in the wild :-)
What other uses are there? I only know the phrase as a synonym for “assuming the conclusion”, i.e., a type of circular reasoning.