Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, March 2, 2023

AI Summary. U.S. construction spending on manufacturing facilities has doubled from mid-2021 levels, with the growth attributable to the computers and electronics industry, which is running at 6x its recent average. The amounts remain small relative to total U.S. construction spending of $152bn on a seasonally adjusted basis.

Matt Klein The Overshoot
Date Posted:

.@M_C_Klein reports that construction spending by the computer and electronics industry is running at 6x its pace in mid-2021.

Is surging factory construction spending driven by computers and electronics?

Core argument: U.S. construction spending on manufacturing facilities as of January 2023 was double its mid-2021 level, with the growth attributable to the computers and electronics industry, which is running at 6x its recent average.

Construction spending on manufacturing facilities has been surging. In dollar terms, spending as of January 2023 was double what it was as recently as mid-2021. Moreover, this growth is entirely attributable to surging spending by the computers and electronics industry, which is currently running 6x the recent average. These numbers are not large relative to total U.S. construction spending ($152 billion January on a seasonally-adjusted basis) but they are worth paying attention to. Ideally, this investment should eventually lead to more domestic productive capacity that will boost long-term growth and reduce inflationary constraints on spending.

Takeaways by Macro Roundup® AI

  1. U.S. construction spending on manufacturing facilities as of January 2023 was double its mid-2021 level, with the growth attributable to the computers and electronics industry, which is running at 6x its recent average.
  2. Manufacturing facility construction spending remains small relative to total U.S. construction spending, which was $152 billion in January on a seasonally adjusted basis.
  3. Rising manufacturing construction investment could eventually add domestic productive capacity that boosts long-term growth and eases inflationary constraints on spending.

AI Summary. A survey of over 1,400 faculty members by the Foundation for Individual Rights and Expression found 52% fear losing their job or reputation over a misunderstanding of something they said or did, or over something from their past posted online. Nearly three-quarters of conservative faculty and 40% of liberal faculty expressed this fear.

Samuel Abrams Reason
Date Posted:
Is Database:
Database

.@SamuelAbramsAEI notes a recent survey that found over half of college professors are concerned about losing their job over a misunderstanding or something they said in the past.

.@SamuelAbramsAEI notes a recent survey that found over half of college professors are concerned about losing their job over...

Do professors across the political spectrum fear losing their jobs over misunderstandings?

Core argument: 52 percent of faculty surveyed by the Foundation for Individual Rights and Expression (FIRE) say they fear losing their job or reputation over a misunderstanding of something they said or did, or over someone posting something from their past online.

As the academy gets younger it grows more authoritarian, according to a new survey of over 1,400 faculty members conducted by the Foundation for Individual Rights and Expression (FIRE). More than half of faculty—52 percent—say they're afraid they'll lose their job or reputation over a misunderstanding of something they said or did, or because someone posted something from their past online. While almost three-quarters of conservative faculty expressed this year, 40 percent of even liberal faculty agree. That's staggering: two in five professors who are a part of the prevailing orthodoxy on campus are fearful of losing their jobs over a misunderstanding.

Takeaways by Macro Roundup® AI

  1. 52 percent of faculty surveyed by the Foundation for Individual Rights and Expression (FIRE) say they fear losing their job or reputation over a misunderstanding of something they said or did, or over someone posting something from their past online.
  2. Nearly three-quarters of conservative faculty report this fear, compared with 40 percent of liberal faculty, in FIRE's survey of more than 1,400 faculty members.
  3. FIRE's survey of over 1,400 faculty members indicates that as the academy grows younger it becomes more authoritarian.

Sam Abrams notes a recent survey that found over half of college professors are concerned about losing their job over a misunderstanding or something they said in the past, “…As the academy gets younger it grows more authoritarian, according to a new survey of over 1,400 faculty members conducted by the Foundation for Individual Rights and Expression (FIRE). More than half of faculty—52 percent—say they’re afraid they’ll lose their job or reputation over a misunderstanding of something they said or did, or because someone posted something from their past online. While almost three-quarters of conservative faculty expressed this year, 40 percent of even liberal faculty agree. That’s staggering: two in five professors who are a part of the prevailing orthodoxy on campus are fearful of losing their jobs over a misunderstanding…”

Samuel Abrams, “40 Percent of Liberal Professors Are Afraid They’ll Lose Their Jobs over a Misunderstanding,” Reason, March 1, 2023, https://www.aei.org/op-eds/40-percent-of-liberal-professors-are-afraid-theyll-lose-their-jobs-over-a-misunderstanding/

40 Percent of Liberal Professors Are Afraid They’ll Lose Their Jobs over a Misunderstanding

As the academy gets younger it grows more authoritarian, according to a new survey of over 1,400 faculty members conducted by the Foundation for Individual Rights and Expression (FIRE). The free speech group’s findings portend a dark future for higher education if this course isn’t reversed—and if faculty minds don’t become more open to dissenting viewpoints.

Over the past decade or so, many academic departments embraced ideological views in their teaching and research, promoting social justice–laden scholarship as a way of correcting the wrongs of the past. Unsurprisingly, many departments developed left-of-center academic monocultures, becoming unfriendly to differing opinions. Young faculty entering the profession are only adding to this academic echo chamber.

As a professor, I’m on the younger side for faculty members. My cohort is much more illiberal than their older colleagues. Two-thirds of faculty over 55 years old said students shouting down a speaker is never acceptable. That number plummets to 37 percent for faculty 35 and under.

Shockingly, younger faculty report more acceptance of violence to combat speech. While 97 percent of older faculty say it’s never acceptable for students to use violence to stop a campus speech, only 79 percent of younger faculty agree. That one in five younger professors show any level of acceptance for violence to stop speech should alarm all of us.

Mixing age with ideology reveals even more pronounced support for illiberal attitudes. Among liberal faculty 35 and under, only 23 percent indicated that students shouting down a speaker is never acceptable, compared with 88 percent of conservative faculty. Moderate faculty in this age group were also much more likely than their conservative colleagues to endorse the acceptability of these tactics.

Perhaps most alarming of all, only 64 percent of young and liberal faculty say it’s never acceptable for students to use violence to stop a campus speech.

Illiberalism runs deep among young liberal faculty members, and their views regrettably resemble those of their students rather than their more senior peers. As newer and far less tolerant numbers of professors replace older faculty, colleges and universities may be in a true crisis if the higher education enterprise destroys its core values.

The research also finds that faculty members are self-censoring at higher rates. In 1955, at the end of the second Red Scare after World War II during the age of McCarthy and deep anti-communist fear, 9 percent of social scientists said they toned down their writing for fear of causing controversy. Today, 25 percent say they’re very or extremely likely to self-censor their writing in academic publications.

More than half of faculty—52 percent—say they’re afraid they’ll lose their job or reputation over a misunderstanding of something they said or did, or because someone posted something from their past online. While almost three-quarters of conservative faculty expressed this year, 40 percent of even liberal faculty agree. That’s staggering: two in five professors who are a part of the prevailing orthodoxy on campus are fearful of losing their jobs over a misunderstanding.

As the report says, this “speaks volumes about the climate of fear, intimidation, and censorship on campus.”

This cannot be the environment of the future. Our society cannot thrive when opposing voices are met with fists rather than facts. And as a professor, I know that what starts on campus rarely stays there. This fear will continue to grow and infect our neighborhoods, our workplaces, and our communities.

There is still time to course correct. But students, trustees, donors, alumni, and the public must demand better from the faculty today before these young authoritarians run higher education tomorrow.

AI Summary. The article argues that smartphones are the likely explanation for declining teen happiness, noting that the technology became commonplace in the 2010s just as measures of teen happiness dropped and that younger Americans adopted it faster than older ones. It points to social media, made constantly accessible by phones and notifications, and the resulting social isolation as the mechanism.

Noah Smith Noahpinion
Date Posted:

.@Noahpinion argues that smartphones and social media are increasing social isolation and driving the rise in teenage unhappiness.

Are smartphones the likely cause of declining teen happiness?

Core argument: Smartphones became commonplace in the 2010s, when teen happiness fell sharply, with 2010–11 an especially important moment and younger Americans adopting the technology faster than older ones.

The first reason smartphones should be our prior is that the timing just lines up really well. The smartphone was invented in 2007, but it didn’t really become commonplace until the 2010s, exactly when teen happiness fell off a cliff: Younger Americans adopted the technology more quickly than older ones; 2010-11 seems to have been an especially important moment. And of course, the “killer app” for smartphones was social media. When you had to go to a computer to check Facebook or Twitter, you could only experience it intermittently; now, with a smartphone in your pocket and notifications enabled, you were on every app all the time. Why would that make us unhappy? There’s an obvious reason: social isolation.

Takeaways by Macro Roundup® AI

  1. Smartphones became commonplace in the 2010s, when teen happiness fell sharply, with 2010–11 an especially important moment and younger Americans adopting the technology faster than older ones.
  2. Social media was the smartphone's "killer app," shifting use from intermittent checks at a computer to constant engagement with notifications enabled.
  3. Social isolation is the obvious proposed reason that constant smartphone-based social media use would make people unhappy.

AI Summary. The authors find that the long-run decline in US Treasury yields since 1980 is fully accounted for by movements in a narrow window around Federal Reserve policy meetings, while yield changes outside that window prove transitory. They suggest the Federal Reserve conveys information to markets about the long-run level of interest rates.

Sebastian Hillenbrand Social Science Research Network
Date Posted:
Is Database:
Database

.@seba_hill documents that almost all the decline in real interest rates since 1980 occurred in a 3-day window around Fed announcements.

Does the long-run decline in interest rates happen around Fed meetings?

Core argument: A narrow window around Federal Open Market Committee meetings fully captures the secular decline in U.S. Treasury yields since 1980, while yield movements outside that window are transitory and wash out over time.

A narrow window around Fed meetings fully captures the secular decline in U.S. Treasury yields since 1980. By contrast, yield movements outside this window are transitory and wash out over time. This is surprising because the forces behind the secular decline are thought to be independent of monetary policy. Why did the secular decline in interest rates occur around FOMC meetings? While the Fed might have no direct control of long-term yields, it seems possible that the Fed provides information to the market about the long-run level of interest rates. This long-run Fed information effect might therefore explain why long-term interest rates move around FOMC meetings. In recent decades, this would imply that the market learned about secular interest rate decline – including the trend in r∗– from the Fed.

Takeaways by Macro Roundup® AI

  1. A narrow window around Federal Open Market Committee meetings fully captures the secular decline in U.S. Treasury yields since 1980, while yield movements outside that window are transitory and wash out over time.
  2. The concentration of the yield decline around FOMC meetings is surprising because the forces behind the secular decline in interest rates are thought to be independent of monetary policy.
  3. A possible long-run Fed information effect, in which the Fed conveys information to markets about the long-run level of interest rates, would imply that markets learned about the secular decline in rates, including the trend in r*, from the Fed.

AI Summary. China recorded about 9.6m births, roughly half the 17.9m recorded six years earlier, and millions of young people have joined movements expressing alienation from work ("lying flat") and from Chinese society itself ("let it rot"). A viral video of a man telling pandemic enforcers "we are the last generation" spread the despairing hashtag #Lastgeneration.

Nicholas Eberstadt Washington Post
Date Posted:

Nicholas Eberstadt @AEIecon argues that the 46% plunge in China’s birth rate over the last six years is driven by a new national pessimism among young people.

Do falling birth and marriage rates reveal deep pessimism in China?

Core argument: China recorded about 9.6 million births in 2022, roughly half the 17.9 million recorded six years earlier.

In 2022, China had only about half as many births as just six years earlier (9.6 million vs. 17.9 million). We see millions of young people joining spontaneous movements expressing alienation from work — tang ping (lying flat) — and from Chinese society itself — bai lan (let it rot). Last year, during one of the regime’s innumerable, drastic pandemic lockdowns, a video went viral in China before authorities could memory hole it. In the video, faceless hazmat-clad health police try to bully a young man out of his apartment and off to a quarantine camp, even though he has tested negative for the coronavirus. He refuses to leave. “Don’t you understand,” they warn, “if you don’t comply, bad things can happen to your family for three generations.” “Sorry” he replies mildly. “We are the last generation. Thank you.” That moment prompted the spread in China of a despairing social media hashtag: #Lastgeneration.

Takeaways by Macro Roundup® AI

  1. China recorded about 9.6 million births in 2022, roughly half the 17.9 million recorded six years earlier.
  2. Millions of young Chinese have joined spontaneous movements expressing alienation from work, tang ping ("lying flat"), and from Chinese society itself, bai lan ("let it rot").

AI Summary. China's top anti-corruption watchdog has instructed bankers to rectify their mindsets, abandon "hedonistic" lifestyles and pretensions of being a "financial elite," and stop emulating Western practices, signaling that the Communist Party's campaign to tighten its grip on the financial system is continuing.

Bloomberg Staff Bloomberg
Date Posted:

The Communist Party is warning Chinese bankers to “abandon pretensions of being the ’financial elite.’” @markets

The Communist Party is warning Chinese bankers to “abandon pretensions of being the ’financial elite.’” @markets

Is China tightening the Communist Party's grip on its financial sector?

Core argument: China's Central Commission for Discipline Inspection issued a 3,500-word commentary directing bankers to rectify their mindsets, clean up "hedonistic" lifestyles, and stop copying Western ways.

Bankers in China are being told to rectify their mindsets, clean up their “hedonistic” lifestyles and stop copying Western ways. The directives, part of a 3,500-word commentary last week from the country’s top anti-graft watchdog, are just the latest sign that President Xi Jinping’s campaign to tighten the Communist Party’s grip on the financial system has a long way to go. China’s Central Commission for Discipline Inspection said bankers should abandon pretensions of being the “financial elite.”

Takeaways by Macro Roundup® AI

  1. China's Central Commission for Discipline Inspection issued a 3,500-word commentary directing bankers to rectify their mindsets, clean up "hedonistic" lifestyles, and stop copying Western ways.
  2. China's Central Commission for Discipline Inspection told bankers to abandon pretensions of being the "financial elite.".
  3. The directives to Chinese bankers are the latest sign that Xi Jinping's campaign to tighten the Communist Party's grip on the financial system has a long way to go.

AI Summary. A survey by the Foundation for Individual Rights and Expression finds 52% of college professors, including 40% of liberal faculty, fear losing their jobs over a misunderstanding or something they said or wrote. Younger faculty are more likely to accept tactics such as shouting down speakers to suppress speech.

Samuel Abrams Reason
Date Posted:
Is Database:
Database

Academic freedom crisis deepens: 52% of professors fear job loss over speech, including 40% of liberals. FIRE study: 25% self-censor writing, younger faculty more accepting of speech suppression

Do most college professors fear losing their jobs over their words?

Core argument: A Foundation for Individual Rights and Expression (FIRE) survey found 52% of college professors fear losing their jobs over a misunderstanding or something they have said or written, including 40% of liberal faculty.

A survey by the Foundation for Individual Rights and Expression (FIRE) reveals that 52% of college professors fear job loss due to misunderstandings or past statements, with 40% of liberal faculty sharing this concern. This anxiety reflects a broader trend of increasing authoritarianism in academia, particularly among younger faculty who are more likely to accept illiberal tactics such as shouting down speakers or even using violence to suppress speech. The survey highlights a significant shift in academic culture, where self-censorship is rising, with 25% of faculty now likely to tone down their writing to avoid controversy. This climate of fear and censorship threatens the core values of higher education and could have wider societal implications if not addressed.

Takeaways by Macro Roundup® AI

  1. A Foundation for Individual Rights and Expression (FIRE) survey found 52% of college professors fear losing their jobs over a misunderstanding or something they have said or written, including 40% of liberal faculty.
  2. Self-censorship is rising among faculty in the FIRE survey, with 25% saying they are likely to tone down their writing to avoid controversy.
  3. Younger faculty in the FIRE survey are more likely to accept illiberal tactics against speech, including shouting down speakers and using violence to suppress it.

Sam Abrams notes A survey that found over half of college professors are concerned about losing their job over a misunderstanding or something they said in the past, “…As the academy gets younger it grows more authoritarian, according to a new survey of over 1,400 faculty members conducted by the Foundation for Individual Rights and Expression (FIRE). More than half of faculty—52 percent—say they're afraid they'll lose their job or reputation over a misunderstanding of something they said or did, or because someone posted something from their past online. While almost three-quarters of conservative faculty expressed this year, 40 percent of even liberal faculty agree. That's staggering: two in five professors who are a part of the prevailing orthodoxy on campus are fearful of losing their jobs over a misunderstanding…”

Samuel Abrams, "40 Percent of Liberal Professors Are Afraid They’ll Lose Their Jobs over a Misunderstanding,"Reason, March 1, 2023, https://www.aei.org/op-eds/40-percent-of-liberal-professors-are-afraid-theyll-lose-their-jobs-over-a-misunderstanding/

40 Percent of Liberal Professors Are Afraid They’ll Lose Their Jobs over a Misunderstanding

As the academy gets younger it grows more authoritarian, according to a new survey of over 1,400 faculty members conducted by the Foundation for Individual Rights and Expression (FIRE). The free speech group’s findings portend a dark future for higher education if this course isn’t reversed—and if faculty minds don’t become more open to dissenting viewpoints.

Over the past decade or so, many academic departments embraced ideological views in their teaching and research, promoting social justice-laden scholarship as a way of correcting the wrongs of the past. Unsurprisingly, many departments developed left-of-center academic monocultures, becoming unfriendly to differing opinions. Young faculty entering the profession are only adding to this academic echo chamber.

As a professor, I’m on the younger side for faculty members. My cohort is much more illiberal than their older colleagues. Two-thirds of faculty over 55 years old said students shouting down a speaker is never acceptable. That number plummets to 37 percent for faculty 35 and under.

Shockingly, younger faculty report more acceptance of violence to combat speech. While 97 percent of older faculty say it’s never acceptable for students to use violence to stop a campus speech, only 79 percent of younger faculty agree. That one in five younger professors show any level of acceptance for violence to stop speech should alarm all of us.

Mixing age with ideology reveals even more pronounced support for illiberal attitudes. Among liberal faculty 35 and under, only 23 percent indicated that students shouting down a speaker is never acceptable, compared with 88 percent of conservative faculty. Moderate faculty in this age group were also much more likely than their conservative colleagues to endorse the acceptability of these tactics.

Perhaps most alarming of all, only 64 percent of young and liberal faculty say it’s never acceptable for students to use violence to stop a campus speech.

Illiberalism runs deep among young liberal faculty members, and their views regrettably resemble those of their students rather than their more senior peers. As newer and far less tolerant numbers of professors replace older faculty, colleges and universities may be in a true crisis if the higher education enterprise destroys its core values.

The research also finds that faculty members are self-censoring at higher rates. In 1955, at the end of the second Red Scare after World War II during the age of McCarthy and deep anti-communist fear, 9 percent of social scientists said they toned down their writing for fear of causing controversy. Today, 25 percent say they’re very or extremely likely to self-censor their writing in academic publications.

More than half of faculty—52 percent—say they’re afraid they’ll lose their job or reputation over a misunderstanding of something they said or did, or because someone posted something from their past online. While almost three-quarters of conservative faculty expressed this year, 40 percent of even liberal faculty agree. That’s staggering: two in five professors who are a part of the prevailing orthodoxy on campus are fearful of losing their jobs over a misunderstanding.

As the report says, this “speaks volumes about the climate of fear, intimidation, and censorship on campus.”

This cannot be the environment of the future. Our society cannot thrive when opposing voices are met with fists rather than facts. And as a professor, I know that what starts on campus rarely stays there. This fear will continue to grow and infect our neighborhoods, our workplaces, and our communities.

There is still time to course correct. But students, trustees, donors, alumni, and the public must demand better from the faculty today before these young authoritarians run higher education tomorrow.

Friday, March 3, 2023

AI Summary. Wage growth running near a 5% annual rate is historically associated with about 4% inflation, and sustaining it alongside 2% inflation would require a large rise in productivity growth or continually falling profit margins. Because monetary policy works with long and variable lags, the Federal Reserve should tighten faster and further rather than wait.

Jason Furman Wall Street Journal
Date Posted:

.@jasonfurman argues that January’s inflation data suggests the Fed should raise rates by 50bps at the next meeting and “shift expectations toward a terminal rate of around 6%.”

.@jasonfurman argues that January’s inflation data suggests the Fed should raise rates by 50bps at the next meeting...

Should the Fed tighten faster and further to bring down inflation?

Core argument: Wage growth running at about 5% annually is historically associated with roughly 4% inflation, and the author argues that pace will persist unless the unemployment rate rises.

Wage growth is currently running at an annual rate of about 5%. Sustaining such wage growth with 2% inflation would require a large increase in productivity growth or continually falling profit margins. I’d root for either outcome, but I wouldn’t bet on them. Falling wage growth could bring down inflation, but in an economy with nearly two job openings for every person looking for work, don’t expect it to happen. Instead, the most probable outcome is that if the unemployment rate doesn’t rise, wages will continue to grow at that pace, which historically is associated with about 4% inflation. Monetary policy operates with long and variable lags. Given that most of the tightening in financial conditions was already in place 10 months ago and, if anything, the real economy and demand have strengthened in recent months, it would be foolish to sit and wait for the medicine to work. In fact, lags are precisely why the Fed should do more now —considering it will take months for whatever the central bank does next to have a meaningful effect on inflation.

Takeaways by Macro Roundup® AI

  1. Wage growth running at about 5% annually is historically associated with roughly 4% inflation, and the author argues that pace will persist unless the unemployment rate rises.
  2. Sustaining 5% wage growth alongside 2% inflation would require a large increase in productivity growth or continually falling profit margins, outcomes the author would root for but not bet on.
  3. Because monetary policy operates with long and variable lags, most tightening in financial conditions was in place 10 months ago, and the real economy and demand have strengthened, the author argues the Fed should do more now.

AI Summary. An analysis estimates that China ceded roughly $150bn of global market share in labor-intensive goods over the decade following the global financial crisis, with India capturing no more than 10% of it while manufacturing's share of India's economy declined. Despite a professed export-oriented policy, India remains too resistant to two-way trade to exploit the opening.

Alan Beattie Financial Times
Date Posted:

.@alanbeattie writes that Indian trade policy drifts towards “protectionism and import substitution,” and therefore India is poorly positioned to take advantage of decoupling from China. Manufacturing value added as a % of Indian GDP has been declining.

Can India capture the export market share China is ceding?

Core argument: Arvind Subramanian of Brown University, formerly chief economic adviser to India's government, calculates that China ceded about $150bn of global market share in labor-intensive goods in the decade or so after the global financial crisis, with India capturing no more than 10% of it.

Arvind Subramanian, an academic at Brown University in the US and former chief economic adviser to the Indian government calculates that in the decade or so since the global financial crisis, China gave up about $150bn of global market share in labor-intensive goods, of which India attracted no more than 10 per cent. The share of manufacturing in the Indian economy actually declined over that period. Calling yourself a globalizer doesn’t make you one. Modi sounds a lot more ambitious about competing in the world economy than many of his predecessors. But despite his government’s professed outward-looking export policy, it’s still too allergic to two-way trade to take full advantage of the huge space in global supply networks that is being opened up as China moves on.

Takeaways by Macro Roundup® AI

  1. Arvind Subramanian of Brown University, formerly chief economic adviser to India's government, calculates that China ceded about $150bn of global market share in labor-intensive goods in the decade or so after the global financial crisis, with India capturing no more than 10% of it.
  2. The share of manufacturing in India's economy declined over the same period in which China was giving up global market share in labor-intensive goods.
  3. Narendra Modi sounds more ambitious about competing in the world economy than many predecessors, but his government remains too averse to two-way trade to fully exploit the space opening in global supply networks as China moves on.

AI Summary. Foxconn, Apple's main manufacturer, plans to expand iPhone production in India as it diversifies beyond China, aiming for roughly 20m units annually at its Chennai-area plant and up to 100,000 workers. It is also considering a new site in Hyderabad and semiconductor facilities in India.

Rajesh Roy, Yoko Kubota and Philip Wen Wall Street Journal
Date Posted:

Apple’s primary manufacturer Foxconn is considering a major expansion in India, potentially assembling 20M units in 2024. Apple shipped 225M iPhones globally in 2022. @WSJ

Apple’s primary manufacturer Foxconn is considering a major expansion in India, potentially assembling 20M units in...

Is iPhone manufacturing shifting from China to India?

Core argument: Foxconn aims to raise iPhone production at its plant near Chennai, in Tamil Nadu, to roughly 20 million units annually by 2024, according to people familiar with the matter.

Apple’ main manufacturer, Foxconn is considering a major expansion in India, including possibly assembling millions more iPhones and setting up new production sites as it seeks to further diversify beyond China. Foxconn is set to expand production of iPhones at its existing plant near Chennai, in the southern Indian state of Tamil Nadu, people familiar with the matter said. It aims to boost iPhone production to around 20 million units annually by 2024, and roughly triple the number of workers to as many as 100,000, said the people, including a senior Indian government official. In addition, Foxconn is considering building a new production site in the southern city of Hyderabad as well as a silicon carbide fabrication plant and packaging facility in India for its semiconductor business, some of the people said.

Takeaways by Macro Roundup® AI

  1. Foxconn aims to raise iPhone production at its plant near Chennai, in Tamil Nadu, to roughly 20 million units annually by 2024, according to people familiar with the matter.
  2. Foxconn aims to roughly triple the workforce at its Chennai-area plant to as many as 100,000 workers, said people familiar with the matter, including a senior Indian government official.
  3. Foxconn is considering a new production site in Hyderabad as well as a silicon carbide fabrication plant and packaging facility in India for its semiconductor business, some of the people said.

AI Summary. The number of US public companies has fallen by about a third over 25 years, leaving a pool dominated by a handful of large technology firms that carry outsized weight in the indexes and making diversification in public markets harder. Private market returns are outpacing public returns over every time horizon.

Hugh MacArthur, Rebecca Burack, et al Bain & Company
Date Posted:

Between 2012 and Q2 2022 the private equity sector has grown by ~ 15% a year to $12.8T total assets under management. @BainAlerts

Are shrinking public markets pushing investors toward private assets?

Core argument: The number of US public companies has fallen by about a third over the past 25 years, leaving a pool dominated by a handful of large tech firms that exert disproportionate sway over the indexes.

The number of US public companies has declined by about a third over the last 25 years, and the remaining pool is dominated by a handful of large tech firms that hold disproportionate sway over the indexes. That makes it increasingly difficult to find adequate diversification in the public markets. Private market returns, meanwhile, are outpacing public returns over every time horizon, while alternative funds provide access to the broad global economy and the fullest range of asset classes. These advantages explain why private markets continue to grow relative to the public markets.

Takeaways by Macro Roundup® AI

  1. The number of US public companies has fallen by about a third over the past 25 years, leaving a pool dominated by a handful of large tech firms that exert disproportionate sway over the indexes.
  2. Private market returns are outpacing public market returns over every time horizon, while alternative funds offer access to the broad global economy and the fullest range of asset classes.
  3. The difficulty of finding adequate diversification in public markets, combined with the return advantage of private markets, explains why private markets continue to grow relative to public markets.

AI Summary. Inflation-adjusted US house prices stand 3.9% below their peak, and an affordability index built from median income, a 15% down payment, and a 2% allowance for property taxes, insurance and maintenance shows homes recently at their least affordable since 1982, when 30-year mortgage rates topped 14%.

Bill McBride Calculated Risk
Date Posted:

.@calculatedrisk reports affordability is at it’s lowest point since 1982 when 30-year mortgage rates were over 14%. On his chart, lower is more affordable.

How affordable are US homes relative to inflation-adjusted price peaks?

Core argument: Inflation-adjusted U.S. house prices stand 3.9% below their peak.

I’ve put together my own affordability index using median income from the Census Bureau (estimated 2021 and 2022), assuming a 15% down payment, and used a 2% estimate for property taxes, insurance and maintenance. This is probably low for high property tax states like New Jersey and Texas, and too high for lower property tax states. For house prices, I used the Case-Shiller National Index, Seasonally Adjusted (SA). Here is what the index looks like (lower is more affordable like the FirstAm index): Affordability improved slightly in December as both mortgage rates and house prices declined. In October, houses were the least “affordable” since 1982 when 30-year mortgage rates were over 14%. Note that by this index, during the early ‘80s, homes were very unaffordable due to the very high mortgage rates. During the housing bubble, houses were at about the same level of unaffordability using 30-year mortgage rates, however, during the bubble, there were many “affordability products” that allowed borrowers to be qualified at the teaser rate (usually around 1%) that made houses seem more affordable.

Takeaways by Macro Roundup® AI

  1. Inflation-adjusted U.S. house prices stand 3.9% below their peak.
  2. The author's affordability index, built from Census Bureau median income, a 15% down payment, a 2% allowance for property taxes, insurance and maintenance, and the seasonally adjusted Case-Shiller National Index, improved slightly in December as mortgage rates and house prices declined.
  3. Houses were the least affordable on this index in October since 1982, when 30-year mortgage rates topped 14%, while during the housing bubble "affordability products" qualifying borrowers at teaser rates near 1% made homes seem more affordable.