Oil Industry - A Paragon of Efficiency?

Oil Was Written Off. Now It’s the Most Productive US Industry
https://www.bloomberg.com/news/features/2024-10-31/why-oil-is-outpacing-tech-as-the-most-productive-us-industry
Oil and gas extraction has seen the fastest labor productivity gains of any sector in the past decade. 

Greenland in the Limelight

Greenland faces one of history’s great resource rushes—and curses
https://www.economist.com/finance-and-economics/2024/10/31/greenland-faces-one-of-historys-great-resource-rushes-and-curses 

Fiscal and Monetary Challenges Facing UK

More muddling through won’t deliver the growth Britain craves
https://www.ft.com/content/2214a41d-c702-4c60-9c36-490cbea54b65
The country needs a strategy that takes on its most obvious weaknesses

Borrowing costs surge as markets turn on Reeves
https://www.telegraph.co.uk/business/2024/10/31/borrowing-costs-surge-stocks-tumble-fears-debt-binge-reeves/
Investors react to warnings that debt-fuelled Budget will raise interest rates and hurt growth

The British budget combines large numbers and a narrow vision
https://www.economist.com/leaders/2024/10/30/the-british-budget-combines-large-numbers-and-a-narrow-vision

Worklessness and mass migration make it harder to set interest rates, warns Bank’s chief economist
https://www.telegraph.co.uk/business/2024/11/08/worklessness-mass-migration-harder-set-interest-rates/

 
Related:
https://www.theguardian.com/business/2024/oct/31/uks-borrowing-costs-rise-as-reevess-budget-prompts-fears-of-slower-interest-rate-cuts
https://www.telegraph.co.uk/business/2024/10/30/how-reeves-record-tax-raid-condemned-britain-lower-growth/ 

Are US Stocks Overvalued?

The Market Is Fairly Upbeat. Is It the Calm Before a Storm?
https://www.nytimes.com/2024/11/01/business/election-stocks-bonds-deficit.html
Stocks have risen this year despite uncertainties and outright hostilities in U.S. politics and around the world. But bonds and other markets show signs of concern, our columnist says.

How investors could shield against a decline in US returns
https://www.telegraph.co.uk/business/2024/10/30/how-investors-could-shield-against-decline-in-us-returns/
Assessing whether the market is under or over-valued is easier with hindsight 

Investors should not fear a stockmarket crash
https://www.economist.com/finance-and-economics/2024/10/24/investors-should-not-fear-a-stockmarket-crash
Take a long view, and shares are a lot less risky than many realise 

Carried Interest

Carried interest: private equity’s tax break
https://www.ft.com/content/711f21e3-3c2a-4e12-8647-625d0925887d
The lower-taxed performance fee has helped buyout firms’ executives amass personal fortunes 

Economic and Policy Challenges Facing Advanced and Emerging Economies

No President Can Revive US Manufacturing Employment by Robert Lawrence
https://www.project-syndicate.org/commentary/us-manufacturing-employment-decline-driven-by-broader-historical-economic-forces-by-robert-z-lawrence-2024-10
 
Can Europe Create an Innovation Economy? By Philippe Aghion, Mathias Dewatripont, and Jean Tirole
https://www.project-syndicate.org/commentary/europe-falling-behind-us-innovation-technology-what-to-do-about-it-by-philippe-aghion-et-al-2024-10
 
Can India Become a Developed Economy by Mid-Century? By Anne Krueger
https://www.project-syndicate.org/commentary/india-developed-country-status-requires-sweeping-reforms-by-anne-o-krueger-2024-10
 
Developing countries should reject American-style protectionism by Arvind Panagariya
https://www.project-syndicate.org/commentary/united-states-industrial-policy-undermines-multilateral-trade-by-arvind-panagariya-2023-12 

GDP Updates

Gross Domestic Product, Third Quarter 2024 (Advance Estimate)
https://www.bea.gov/news/2024/gross-domestic-product-third-quarter-2024-advance-estimate
Real gross domestic product (GDP) increased at an annual rate of 2.8 percent in the third quarter of 2024, according to the "advance" estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.0 percent. 

German economy unexpectedly grows, avoiding recession
https://www.reuters.com/markets/europe/german-economy-grew-by-02-third-quarter-2024-10-30/
 
GDP up by 0.4% in the Euro Area and by 0.3% in the EU
https://ec.europa.eu/eurostat/en/web/products-euro-indicators/w/2-30102024-ap

Note: US reports quarterly GDP data on an annualized basis while Europe does not.

Spain's Balancing Act

Spain Opens Its Doors to China as a European Trade War Looms
https://www.nytimes.com/2024/10/30/business/spain-china-investment.html
Spain is forging a path as a “connector” country, drawing Chinese investment as it abstained from taking a position on European tariffs on electric cars. 

Spanish PM in India seeking to bolster trade ties
https://finance.yahoo.com/news/spanish-pm-india-seeking-bolster-104455715.html

Bad Candidates and a Flawed Democracy

Big money is complicit in the unravelling of American democracy
https://www.telegraph.co.uk/business/2024/10/29/big-money-complicit-unravelling-american-democracy/

In Election’s Final Days, Dark Money and ‘Gray Money’ Fund Hidden Agendas
https://www.nytimes.com/2024/10/30/us/politics/dark-money-presidential-campaign.html
Big-money operatives are taking advantage of lax rules at the end of the campaign to hide the true source of their money until after the election is called — or for forever.

 
Has Kamala Harris blown it?
https://www.newstatesman.com/cover-story/2024/10/kamala-harris-moment-of-truth
For Democrats, the summer’s “politics of joy” has turned into an autumn of deepening anxiety. 

It’s Costly, Long and Exhausting: Welcome to America’s Elections
https://www.wsj.com/politics/elections/elections-cost-us-highest-spend-b8475961
U.S. elections cost about 40 times more per person than in the U.K. or Germany. It is the wild west of campaign finance. 

Voters Are Deeply Skeptical About the Health of American Democracy
https://www.nytimes.com/2024/10/27/us/politics/american-democracy-poll.html
Nearly half say it does not do a good job representing the people, and three-quarters say it is under threat, according to a Times/Siena poll.

Related:

The Economic Philosophy of Donald Harris
https://www.newyorker.com/news/the-weekend-essay/the-economic-philosophy-of-donald-harris
The Trump campaign has portrayed the Vice-President’s father as a Marxist. He insists he’s been caricatured.

Botswana’s Star Dims

In Botswana’s Election, Diamond Profits Are a Defining Issue
https://www.nytimes.com/2024/10/29/world/africa/botswana-election-diamonds.html
The party that has governed the country since 1966 could lose power as the economy struggles from a slump in demand for diamonds, which made Botswana an African success story. 

Dumb and Dumber – Harvard Edition

Harvard’s Not-So-Smart Money: Two Decades of Poor Returns and Rich Pay
https://www.bloomberg.com/news/features/2024-09-29/harvard-endowment-generates-poor-returns-rich-pay-over-20-years
Its money managers underperformed after changing personnel and strategies at the worst times. 

Bonds Markets Finally Pay Attention to US Fiscal Profligacy

Deficit Threat Drives Bond Yields Higher
https://www.wsj.com/finance/investing/deficit-threat-drives-bond-yields-higher-6a043d44
Investors expect Trump would widen budget gap with tax cuts
 
My take from 2023:
Fitch’s downgrade of US debt wasn’t a mistake — it was long overdue 
https://thehill.com/opinion/finance/4138215-fitchs-downgrade-wasnt-a-mistake-it-was-long-overdue/ 
America’s long-term fiscal sustainability challenge
https://thehill.com/opinion/finance/3965613-americas-long-term-fiscal-sustainability-challenge/ 

Tech Weirdos

Elon Musk Wants Big Families. He Bought a Secret Compound for His.
https://www.nytimes.com/2024/10/29/business/elon-musk-children-compound.html
As the billionaire warns of population collapse and the moral obligation to have children, he’s navigating his own complicated family. 

Are Credit Rating Agencies Biased?

Rating agencies and Africa: the absence of people on the ground contributes to bias against the continent – analyst
https://theconversation.com/rating-agencies-and-africa-the-absence-of-people-on-the-ground-contributes-to-bias-against-the-continent-analyst-237778
 
Does Africa need its own credit rating agency?
https://www.ft.com/content/1bbf3aa8-04b5-4292-8a64-06c136a22fb8
A pan-continental body is not a cure-all for its debt problems 

Should Taxpayers Subsidize Childcare Services?

The Places Across America Where Child Care Is on the Ballot
https://www.wsj.com/politics/elections/child-care-subsidy-taxes-election-2024-a2691ad0
With little movement at the federal level, locals are looking at child care as an economic issue and asking taxpayers to help pay for it
 
Related:
https://www.nationalreview.com/corner/the-broader-case-for-not-penalizing-childless-adults/
https://www.nationalreview.com/corner/the-real-reason-vances-child-tax-comments-are-bad/ 

The Winners and the Losers

They Used to Be Ahead in the American Economy. Now They’ve Fallen Behind.
https://www.nytimes.com/interactive/2024/10/26/upshot/census-relative-income.html
In 1980 white non-college men employed full-time earned 7% more than the average full-time US worker. In 2022, their inflation-adjusted income has remained relatively flat, and they earned less than women with a college degree.
 
Related:
https://vivekjayakumar.blogspot.com/2024/09/are-educated-women-leaving-behind-their.html 

Climate Change and Homeownership

Climate Change Should Make You Rethink Homeownership
https://www.nytimes.com/2024/10/29/opinion/renting-owning-climate-change.html
Benjamin Keys:

Homeownership is not simply a financial decision, but also a deeply emotional one. It’s core to the American dream, representing financial permanence and a sense of stability for young and old families alike. But climate change is likely making homeownership more expensive and less predictable in large swaths of the country, and it’s only getting worse.
As insurance premiums and property taxes rise, and future home values grow more uncertain, it’s time for some prospective buyers set on living in areas with high risk of hurricanes, floods, wildfires and tornadoes to reconsider homeownership as a financial goal. Renting is quickly becoming a better way for many people to enjoy these places with much less financial baggage.

Inflation - Public Perception Matters

Is Pay Beating Inflation? It’s Complicated.
https://www.nytimes.com/2024/10/28/business/economy/inflation-wages-pay-salaries.html
On average, wages have risen faster than prices in recent years. But not all Americans are getting ahead.
 
Inflation Has Cooled, but Americans Are Still Seething Over Prices
https://www.wsj.com/economy/consumers/us-inflation-price-hike-psychology-c8a3f69b
Many people—though not all—saw wage increases that kept pace with the pandemic’s rapid price hikes, but the psychological toll remains. 

Even households earning over $150,000 a year are living paycheck to paycheck, Bank of America says
https://fortune.com/2024/10/28/paycheck-to-paycheck-money-six-figures-bank-of-america-rich-stress/
https://finance.yahoo.com/news/even-households-earning-over-150-174148736.html

Job Market Reality

Why It’s So Hard to Find a Job in This Strong Labor Market
https://www.barrons.com/articles/jobs-hiring-work-payrolls-d5b004e9 

 

At a Pivotal Moment, U.S. Economic Data Will Be a Mess

https://www.wsj.com/economy/jobs/at-a-pivotal-moment-u-s-economic-data-will-be-a-mess-9224ad9f

Days before the election and a Fed meeting, the employment report and other indicators will be distorted by hurricanes and a strike

How Bad is Grade Inflation at American Schools?

Your A student is average — don’t blame the SAT and ACT

https://thehill.com/opinion/education/4953230-parents-misconception-gpa-sat-act/

David Blobaum:
The most common refrain from parents is that their child “is a good student but a bad test-taker.” This comment reveals a fundamental disconnect between what parents understand about grades from school and standardized test scores. So here’s what parents need to understand about seemingly divergent grades and test scores, to help them position their kids for academic success.
Some students are, in fact, just bad test takers, which typically means they don’t perform well under pressure. But, in my experience tutoring thousands of students, this explanation only applies to a small percentage of students. In most cases, an alternate explanation is true: Despite having a sky-high GPA in honors classes, the student is actually just an average student.
According to UCLA’s Higher Education Research Institute Freshman Survey, 86 percent of the surveyed students at BA-granting universities had A-averages in high school. Thus, A-averages are not rare at all. They are, in fact, average.

Massachusetts, Famed for Tough School Standards, Rethinks Its Big Test
https://www.nytimes.com/2024/10/27/us/massachusetts-mcas-test-high-school.html
A ballot measure would do away with the requirement that high schoolers pass a test to graduate. Opponents say it could water down academics for struggling students.

Existing Home Sales

This Year’s Housing Turnaround Ended Before It Started
https://www.wsj.com/economy/housing/us-housing-market-stuck-2024-4830d4f7
Sales of existing homes are on track for the worst two-year period since the mid-1990s 

Should Investors Pay Attention to the Elections?

For Investors, What if This Time Is Different?
https://www.nytimes.com/2024/10/27/business/market-history-elections-disasters.html
Disregarding politics has worked brilliantly in the United States for a century. But market history offers comfort only up to a point, our columnist says. 

Canada Rethinks its Immigration Stance

Canada's Immigration Rethink

https://economics.bmo.com/en/publications/detail/fb3ff12e-3054-4c6b-befb-fe9d2fac77af/

While this move will dampen demand, all else equal—think spending in retail, food and telecom services—we need to dispel the narrative that slower population growth will be bad for the economy. Real GDP per capita has been stagnant on balance since 2016 while that in the U.S. has expanded by 16%. And, since 2022Q2, Canada’s per-capita output has fallen outright in seven of eight quarters. One can argue that the surge in TRs has diverted resources to housing, and allowed firms to lean on low-cost labour, at the expense of productivity.

In the job market, slack is building as job creation can't keep up with labour supply growth.

A tidal wave of immigration is swamping my country. It may not survive

https://www.telegraph.co.uk/news/2024/11/01/canada-peoples-party-immigration-is-the-issue/

Everything that historically made Canada what it was is rapidly being destroyed

 

With immigration cuts, Ottawa is rethinking its economic principles

https://www.theglobeandmail.com/business/article-with-immigration-cuts-ottawa-is-rethinking-its-economic-principles/

Trudeau Reverses Course on Immigration as Support Plunges

https://www.bloomberg.com/news/articles/2024-10-24/trudeau-reverses-course-on-immigration-after-support-plunges