The digital economy provides a number of services for which the marginal price (given an internet connection) is zero: games like Candy Crush, email, web searches, access to information and entertainment, and many more. Because users are not paying an additional price for using these services, this form of economic output doesn’t seem to be captured by conventional economic statistics. Leonard Nakamura, Jon Samuels , and Rachel Soloveichik offer some ways of thinking about the question in in “Measuring the `Free’ Digital Economy within theGDP and Productivity Accounts, written for the Economic Statistics Centre of Excellen...
Greetings from Copenhagen. I did a beefier post on the plane, so be sure to check that out if you haven’t already. During this layover, I’ll just observe that, thanks to China saying it isn’t going to be propping up this fake boom with endless Treasury purchases anymore, markets are somewhat weak. Nothing earth-shattering (or even earth-shaking), but at least the color is right. NQ might have even put in a decent short-term top. In spite of this weakness (which these days you never know how long will persist), the ES, shown below, is still miles away from its trendline. Markets are profoundly lofty right now, and even if we stay in an ...
TMV is a 3 X short the TLT 20 year treasure bond ETF. This trade is based on the TLT. For well over three years now the TLT has been building out what looks like a massive H&S top with the top of the right shoulder now in play. I’m going to take an initial position and buy 250 shares of TMV, 3 X short the TLT, and buy 250 shares at the market at 18.83 with the sell/stop on a daily close below the right shoulder low on the daily chart for the TMV at 17.35. I’m anticipating the the right shoulder high on the TLT will be the ultimate high. There will be several more entry points if this trades starts to workout. A second buy point would...
The New England Patriots are the winningest professional football team of the new millennia. While we could post a long list of reasons for their success, there is one that stands above the rest. In a recent interview, Patriots quarterback Tom Brady stated that they start each year with one goal; win the Super Bowl. Unlike many other teams, the Patriots do not settle for a better record than last year or improved statistics. Their single-minded goal is absolute and crystal clear to everyone on the team. It provides a framework and benchmark to help them coach, manage and play for success. Interestingly, when most individuals, and many insti...
While the world worries about inflation, US import prices (ex petroleum) printed a shocking 0.2% decline MoM in December (a big drop from recent monthly gains and big miss to expectations). This is the biggest monthly decline since June 2016… Year over year, import price gains rolled over… Headline import prices also missed expectations, rising just 0.1% MoM in December (the weakest gain since July). China’s deflation export was stable…...
As more states relax the regulation for the recreational use of marijuana investors are eager to look for opportunities in this budding sector. But we should look closely at the reality of using marijuana for medical purposes and other products. Companies related to the growing or distribution of cannabis products do have positive prospects for year, but there will most likely be many examples of failures as well. It’s an investor’s job to figure out which businesses will thrive and which wont. The general expectation in the marketplace shows that the marijuana companies have to deliver. But this will be very difficult for INSYS Therapeut...
I’ve blogged quite a bit about adapting to change lately, and will continue to do so as banking-as-usual (BAU) is not an option. It’s similar to standing in the middle of the road. If you stand there for long enough, you’ll get run over. This is as true in banking: if you stop changing, you die. Now banks know this – they’re not stupid – and have been changing a lot over the past decades. Since I started in banking, we’ve seen the mass adoption of ATMs; the introduction, growth and move to offshoring call centres; the deployment of online and now mobile banking; the rise of algorithmic, high frequency trading; the drive towards ...
Now that the champagne has gone flat and college football season has come to an end, investors are facing 2018 square in the eye. Sure, based on consensus forecasts, it appears as if there are no great expectations for the new year in terms of the economic outlook, but who can blame anybody, especially after experiencing what seemed to be a virtuous cycle of mediocre growth numbers and surprisingly low inflation on almost a yearly basis? That raises the question: Could 2018 actually be any different? The below consensus U.S. economic and rate forecasts do not appear to offer any groundbreaking insights. In terms of growth, real GDP is exp...
Video Length: 00:06:19 A quick uptick in US Treasury yields the past 24-hours has rekindled memories of the 2013 ‘taper tantrum’ in bond markets when a sharp rise in yields proved to be symptomatic of a greater issue: investors were fleeing USD-based assets as the QE punchbowl was being taken away. As history shows, the ‘taper tantrum’ was nothing more than nervous hands expressing uncertainty over the direction of monetary policy at a time when the economic recovery from the Global Financial Crisis was fragile. We’re in a very different set of circumstances today. To draw any other conclusions at present time wo...