Tag: Macro

macro analysis
The 2021 Recovery

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.

The Geopolitics of Currencies

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

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

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.

Safe Heaven Portfolio Analysis

Safe Heaven Portfolio Analysis

Safe heaven portfolio can be a wise option considering 2019 marks the 11th year to an already-extended bull market which started in in the aftermath of the great financial crisis. It has been a long and very rewarding run for all investors… Especially REIT investors who have continued their long streak of market outperformance. Since we are likely to hit a recession sooner rather than later (1-2 years), tracking a safe heaven portfolio is important.

Financial Constraints on Inventory Investment

Financial Constraints on Inventory Investment

Inventories have been studied by macro-economist for their role in the business cycles (Abramovitz 1950) and their relation with corporate profits (Mitchell 1951, Lucas 1977) and with the volatility of cash flows (Fazzari, Hubbard et al. 1988), both key leading indicators of the state of the economy (Carpenter, Fazzari et al. 1994); other evidence suggests their implications on the general level of the economy in case of financial shocks because of erroneous forecasts (Bernanke and Gertler 1989, Bernanke, Gertler et al. 1996) or their limited efficiency in collateralization (Berk 2014).

Guessing Market Cycles

Guessing Market Cycles

Market cycles can be analized through the formation of bubbles consisting of four phases: Accumulation, Mark-Up, Distribution, and Mark-Down. Usually, accumulation coincides with the early stages of recovery, mark-up with the consolidation of the economic condition leading to a bullish sentiment, distribution substantially with lateral movements and indecision in market sentiment, and mark-down with the early stages of mid recession.

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