When looking at Asset Classes….
An asset class is a group of investments that have similar characteristics, are subject to the same laws and regulations, and generally respond similarly to market fluctuations.
Oil or Turmoil?
The economics of crude oil pricing is one of the most complex and variable mechanisms in the commodities market; indeed, as a depleting non-renewable resource, its cost of extraction depends not only on the current rate of production but also on the amount of cumulative production. In this sense, the low-carbon transition is driving rapid change across global energy systems.
The Recovery Shape is W, hopefully…
Many shapes for different economic recessions and hopes. A V-shaped starts off with a sharp decline, followed by a strong recovery. A U-shaped starts off with a more gradual drop, once hits bottom it stays there for some time prior to bouncing back. An L-shaped recession, the worst one, starts with a sharp decline in economic activity followed by a very slow recovery period. A W-shaped has GDP, employment, industrial output sharply declining and rising for two times in a row…
The 2021 Recovery
From the Balance of Payment it is possible to understand the amount and direction of the net capital inflow (or outflow). Indeed, making an educated guess on the new locations for investment and trade may make the difference in investing after the epidemic.
Macro Indicators in the Aftermath
The current status of the economy of the US is relevant for many other countries; thus, it is important to understand the strength and resiliency of its economy.
Naive Principal Component Analysis
Behind the Principal Component Analysis there is a geometric interpretation of the data; specifically, a principal component is a direction in which the data has the largest variation.
Sentiment Analysis
In finance, sentiment refers to the measurement of the excessive confidence, either positive or negative, of investors in a specific situation. The fundamental reason why it is studied is because psychologists determined sentiment as a relevant factor affecting the judgement and decisions of investors.
The Geopolitics of Currencies
The 1944 Bretton Woods agreement jumpstarted the dollar into its reserve currency status. While economists proposed global trust and confidence in the US ability to pay its obligations, a more compelling justitification has its roots in United States’ political influence.
Assessing the Impact of Modern Monetary Policy on Citizens and Small Businesses
With respect to the COVID-19 impact, it has not passed unobserved that the $3.3 trillion issuance of debt securities in the first half of 2020 has been purchased only by the U.S. Federal Reserve (46%) and national/international private investors (40%); instead, foreign central banks, already holding trillions of dollars of U.S. Treasuries, did not acquire a significant amount. In other terms, it seems the U.S. is substantially moving to own its debt in what we can define a Japanese way of managing the economy; probably, other developed countries will soon engage in similar practices.
Entering Recession with Covid-19 and Deflation
Epidemic models may help in assessing the impact of COVID-19 on the economy as well as to understand the market’s interpretation of the virus impact. In this respect, Shiller’s narrative economics may provide insights with wider practical implications than behavioral economics.
