Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…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
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “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


Tuesday, October 17, 2023

AI Summary. Treasury market liquidity has tracked its historical relationship with interest rate volatility, indicating liquidity has not been unusually poor given the level of rate volatility, though the two-year note shows somewhat higher-than-expected price impact. The market's capacity to smoothly handle large trading flows remains a concern for policymakers and market participants.

Michael Fleming Federal Reserve Bank of New York
Date Posted:

The @NewYorkFed finds U.S. Treasury liquidity is within the historical bounds implied by the current level of interest rate volatility.

Is Treasury market liquidity unusually poor given interest rate volatility?

Core argument: Treasury market liquidity in 2023 has tracked its historical relationship with interest rate volatility, indicating liquidity has not been unusually poor given the level of rate volatility.

The 2023 observations (in gray) fall in line with the historical relationship. That is, the association between liquidity and volatility in 2023 has been consistent with the past association between these two variables. This is true for the ten-year note as well, whereas for the two-year note the evidence points to somewhat higher-than-expected price impact given the volatility (as also occurred in fall 2008, March 2020, and 2022). While Treasury market liquidity has not been unusually poor given the level of interest rate volatility, continued vigilance by policymakers and market participants is appropriate. The market’s capacity to smoothly handle large trading flows has been of concern since March 2020.

Takeaways by Macro Roundup® AI

  1. Treasury market liquidity in 2023 has tracked its historical relationship with interest rate volatility, indicating liquidity has not been unusually poor given the level of rate volatility.
  2. The two-year Treasury note shows somewhat higher-than-expected price impact given volatility, as also occurred in fall 2008, March 2020, and 2022, while the ten-year note remains in line with the historical association.
  3. Continued vigilance by policymakers and market participants is appropriate, as the Treasury market's capacity to smoothly handle large trading flows has been of concern since March 2020.

Related Articles:

  • Liquidity Event — U.S. Treasuries remain the world's most liquid security, but daily cash trading volumes have not kept pace with the growth in issuance, leaving the market structurally less liquid. Principal trading firms account for 20% of cash market volumes yet withdraw when volatility rises, making their liquidity provision illusory.
  • Resilience Redux in the US Treasury Market — The authors argue that large, persistent US federal deficits and limited dealer balance-sheet flexibility will cause outstanding Treasury debt to grow rapidly relative to the market's capacity to intermediate trades, absent significant changes in market structure. They contend broad central clearing, all-to-all trading, real-time post-trade reporting, capital-regulation changes, and transparent official purchase programs could strengthen market capacity and resilience.
  • Living with High Public Debt — High public debt ratios are likely to persist because large sustained primary budget surpluses are politically unrealistic, real interest rates are already very low, faster global growth is hard to engineer, inflation is not a sustainable route to reducing debt, and financial repression is less feasible amid liberalized markets.

AI Summary. Household surveys show median inflation expectations trending toward 2%, but the New York Federal Reserve's Survey of Consumer Expectations finds about 40% of respondents expect medium-term inflation above 4% — above pre-2020 levels and stable to rising. A commodity price spike could push median expectations above 2%.

Joseph Wang Fed Guy Blog
Date Posted:

While median inflationary expectations are settling close to 2%, @FedGuy12 writes that inflation expectations are at risk of becoming unanchored, as 40% of recent @NewYorkFed respondents think inflation will be > 4% in the medium term.

Are household inflation expectations less anchored than the median suggests?

Core argument: The New York Fed's Survey of Consumer Expectations, a monthly survey of a nationally representative group of 1,300, finds around 40% of respondents expect medium-term inflation above 4%, notably higher than pre-2020 levels.

Widely followed households surveys find that median inflation expectations are trending towards 2%, but they also show that the median is fragile. The New York Fed’s Survey of Consumer Expectations, a monthly survey of a nationally representative group of 1300, finds that around 40% of respondents expect inflation to be higher than 4% in the medium term. That result is notably higher than pre-2020 levels and has remained stable to rising over the past several months. A potential spike in commodity prices from geopolitical developments could very quickly push inflation upward and tip median expectations comfortably above 2%. A shift in expectations is not yet happening, but it would almost certainly prompt aggressive policy action.

Takeaways by Macro Roundup® AI

  1. The New York Fed's Survey of Consumer Expectations, a monthly survey of a nationally representative group of 1,300, finds around 40% of respondents expect medium-term inflation above 4%, notably higher than pre-2020 levels.
  2. Median household inflation expectations are trending toward 2% in widely followed surveys, but the share expecting inflation above 4% has held stable to rising over the past several months.
  3. A potential spike in commodity prices from geopolitical developments could quickly push inflation upward and tip median expectations comfortably above 2%, a shift that is not yet happening but would almost certainly prompt aggressive policy action.

Related Articles:

  • Inflation Expectations, the Phillips Curve, and Stock Prices — Professional economists' median one-year-ahead consumer price inflation forecast has become less sensitive to actual inflation: a regression slope of 0.71 from 1949 through 1998 fell to 0.18 from 1999 onward, implying forecasts now adjust very little in response to realized inflation.
  • What We’ve Learned About Inflation — US core inflation measures include the cost of owner-occupied housing by imputing what homeowners would pay to rent from themselves, while Europe's core measure leaves owner-occupied housing out entirely. Measured the European way, US inflation is already back to 2%, while European inflation remains well above target.
  • Rate Cuts — The Federal Reserve might refrain from cutting interest rates if inflation does not fall enough, or if economic growth runs above potential, unemployment pushes below its 50-year low, and financial conditions ease further. In that case, policymakers could argue the short-run neutral rate is higher than common estimates, making current policy less restrictive than assumed.

AI Summary. The authors estimate that firm owners bear roughly half the burden of state corporate tax changes, with workers bearing 35–40% and landowners 10–15%. Alternative identification strategies put the owners' share at about 52% to 62%.

Juan Carlos Suárez Serrato and Owen Zidar National Bureau of Economic Research
Date Posted:

Owners of firms bear half the incidence of state corporate taxes with workers and landowners paying 35-40% and 10-15% respectively. @J_C_Suarez @omzidar

Owners of firms bear half the incidence of state corporate taxes with workers and landowners paying 35-40% and 10-15%...

Who bears the burden of state corporate tax changes?

Core argument: The authors' central estimate is that firm owners bear roughly half the incidence of state corporate tax cuts, with workers bearing 35–40% and landowners 10–15%.

The strategy that identifies firms owner's incidence using the reduced-form effect on labor demand of incumbent firms delivers an estimate of 61.9% (SE = 11%). The second strategy that uses the effects of business taxes on local productivity (TFP) yields an estimate of the firm's owner share of 52.3% (SE = 34%). Our second main finding is that our extended structural model that incorporates these new moments delivers an estimate for firm owners of 53.3% (SE = 12%). Overall, our central estimate is that firm owners bear roughly half of the incidence, while workers and landowners bear 35-40 percent and 10-15 percent, respectively.

Takeaways by Macro Roundup® AI

  1. The authors' central estimate is that firm owners bear roughly half the incidence of state corporate tax cuts, with workers bearing 35–40% and landowners 10–15%.
  2. Identifying incidence from the reduced-form effect on labor demand of incumbent firms yields a firm owner share of 61.9% (SE = 11%), while the strategy using effects of business taxes on local total factor productivity yields 52.3% (SE = 34%).
  3. The authors' extended structural model incorporating these moments estimates the firm owner share at 53.3% (SE = 12%).

Related Articles:

  • End of an Era: The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns — The authors estimate that declining interest and corporate tax rates accounted for over 40% of real corporate profit growth from 1989 to 2019, while falling risk-free rates explain the entire expansion in price-to-earnings multiples. Real earnings before interest and taxes grew slightly more slowly than in 1962–1989, at 2.2% versus 2.4% per year.
  • Who Gains from Corporate Tax Cuts? — The authors estimate that corporate tax cuts boost overall investment and employment, with goods-producing firms such as manufacturers raising capital expenditure and wage bills without changing dividends, and a 1% cut in the marginal tax rate lifting their capital spending by as much as 8%. Service-sector firms instead direct most of the windfall to dividends.
  • The Economics of Inequality in High-Wage Economies — United States Income, Wealth, Consumption, and Inequality Diana Furchtgott-Roth

AI Summary. The US is restricting sales of Nvidia's A800 and H800 chips, designed specifically for the Chinese market, and curbing exports to two Chinese artificial-intelligence chip firms. The export controls aim to block China's access to advanced semiconductor technology with military uses.

Mackenzie Hawkins and Jenny Leonard Bloomberg
Date Posted:

The Biden Administration tightened export restrictions on advanced semiconductor technology, restricting the sale of Nvidia’s A800 and H800 chips to China. @markets

The Biden Administration tightened export restrictions on advanced semiconductor technology, restricting the sale of...

Is the US closing loopholes on China-specific AI chip exports?

Core argument: The US export rules target Nvidia's A800 and H800 chips, which Nvidia designed for the Chinese market after the Biden administration's initial October restrictions, according to a senior US official.

The US is restricting the sale of chips that Nvidia designed specifically for the Chinese market and curbing exports to two Chinese artificial-intelligence chip firms, as part of sweeping updates to export controls that are designed to block China’s access to highly advanced semiconductor technology. The tighter controls will target Nvidia’s A800 and H800 chips, a senior US official said, which the American firm created for export to the Asian country after the Biden administration introduced its initial restrictions last October. Those curbs, including the updated rules released Tuesday, aim to prevent China from accessing cutting-edge technology with military uses.

Takeaways by Macro Roundup® AI

  1. The US export rules target Nvidia's A800 and H800 chips, which Nvidia designed for the Chinese market after the Biden administration's initial October restrictions, according to a senior US official.
  2. The updated export controls also curb exports to two Chinese artificial-intelligence chip firms, part of sweeping updates aimed at blocking China's access to highly advanced semiconductor technology.
  3. The chip curbs, including the updated rules released Tuesday, are designed to prevent China from accessing cutting-edge technology with military uses.

Related Articles:

  • China AI & Semiconductors Rise: US Sanctions Have Failed — China's Kirin 9000S is a better-designed, leading-edge chip than the West realizes, developed without access to extreme ultraviolet lithography or cutting-edge US intellectual property, indicating existing export controls have not worked. The authors argue only decisive, full-scale measures—not half measures—could prevent China from mass-manufacturing chips needed for high-end military applications.
  • Huawei Building Secret Network for Chips, Trade Group Warns — Huawei has entered chip production, acquiring at least two existing plants and building at least three more, part of at least 23 fabrication facilities underway in China with planned investments of more than $100bn by 2030, according to the Semiconductor Industry Association. China is on track to hold more than half of global capacity in older-generation semiconductors by around 2030.
  • China Imports Record Amount of Chipmaking Equipment — Chinese customs data show semiconductor production tool imports reached nearly $5bn over two months, up 70% from $2.9bn a year earlier, a record high. Most of the equipment came from the Netherlands and Japan, which have imposed export restrictions on chipmaking equipment alongside the US.

AI Summary. Most of Russia's cumulative current account surplus reflects capital flight by Russians and non-Russians, with at most roughly a third ($90bn of $262bn) resembling accumulation of sovereign wealth or "shadow reserves." These persistent outflows help explain the ruble's depreciation by half against the US dollar after access to imports was restored.

Matt Klein The Overshoot
Date Posted:

Revisiting Russia’s current accounts, @M_C_Klein finds widespread capital flight. Cumulative current account surpluses were $262 billion in 2022Q1-2023Q2. During the period, Russian residents had net capital flight of $133 billion.

Does capital flight explain Russia's current account surplus and currency depreciation?

Core argument: At most roughly one-third of Russia's cumulative current account surplus, $90 billion out of $262 billion, reflects anything resembling accumulation of sovereign wealth or "shadow reserves," with the remainder reflecting capital flight by Russians and non-Russians.

Most of Russia’s cumulative current account surplus reflects capital flight by both Russians and non-Russians, with perhaps at most ~1/3 of the surplus ($90 billion out of $262 billion) reflecting anything resembling the accumulation of sovereign wealth or “shadow reserves”. Russia’s net international investment position, which accounts for changes in asset valuation, paints the same basic picture even more starkly. According to the CBR, the value of Russia’s foreign assets as of June 30 2023 was $100 billion lower than on December 31, 2021, while the value of Russia’s liabilities to the rest of the world was down by $432 billion. These persistent pressures help explain why the ruble has depreciated so much—down by half against the U.S. dollar since June 2022—after Russia’s access to imports was restored.

Takeaways by Macro Roundup® AI

  1. At most roughly one-third of Russia's cumulative current account surplus, $90 billion out of $262 billion, reflects anything resembling accumulation of sovereign wealth or "shadow reserves," with the remainder reflecting capital flight by Russians and non-Russians.
  2. Russia's foreign assets were $100 billion lower on June 30, 2023 than on December 31, 2021, while its liabilities to the rest of the world fell by $432 billion, according to the Central Bank of Russia.
  3. The ruble has depreciated by half against the U.S. dollar since June 2022, a decline that persistent capital outflows help explain after Russia's access to imports was restored.

Related Articles:

  • Pollution Reveals What Russian Statistics Obscure: Industrial Decline — Satellite measurements of nitrogen dioxide and other pollutants over Russia's industrial regions show emissions down 6.2% over the past year, exceeding declines seen during the worst of the coronavirus pandemic, while Russia's official statistics reported industrial production rising 1.2% year-over-year.
  • Russians Have Emigrated in Huge Numbers Since the War in Ukraine — An analysis network estimates that between 817,000 and 922,000 people have left Russia since the start of the war in Ukraine, roughly 1% of the country's workforce, worsening an acute labour shortage. A Moscow think-tank reported that 35% of manufacturing businesses lacked enough workers, the highest share since 1996.
  • Russian Power in Decline — World Health Organization estimates put remaining life expectancy for 15-year-old Russian males in 2019 at 53.7 years, the same as in Haiti and worse than in 23 of the 46 countries the United Nations classifies as least developed. Projecting from those survival patterns, more than one in four 20-year-old Russian males would die before age 60, twice the European risk.

Wednesday, October 18, 2023

AI Summary. A second stage of the monetary tightening cycle is led by long-term interest rates: after a period when short-term rate hikes continued but bond yields traded sideways, long-term yields resumed rising. The earlier reprieve reflected market expectations of future easing and Treasury issuance shifted toward short-term bills funded by excess central bank reserves.

Bob Prince, Greg Jensen, and Karen-Karniol Tambour Bridgewater Associates
Date Posted:

Bridgewater argues we are in a second tightening cycle driven by long rates as expectations for short-term rate cuts fade.

Are long-term interest rates now leading the tightening cycle?

Core argument: The chief investment officers describe a second stage of the tightening cycle led by long-term interest rates, a shift visible in market action beginning in the third quarter.

The second stage of the tightening cycle can be clearly seen in the market action. Earlier in the tightening cycle, short-term interest rates rose and dragged long-term interest rates higher. Then, beginning in October 2022 and lasting almost a year, there was a reprieve. Hikes in short-term interest rates continued, but bond yields traded sideways, reflecting market expectations for future easing, combined with the Treasury circumventing the pressure on long rates by issuing T-bills funded by excess central bank reserves. In the third quarter, both conditions shifted as described above, initiating the next stage of the tightening cycle, led by long rates.

Takeaways by Macro Roundup® AI

  1. The chief investment officers describe a second stage of the tightening cycle led by long-term interest rates, a shift visible in market action beginning in the third quarter.
  2. From October 2022 for nearly a year, bond yields traded sideways even as short-term rate hikes continued, reflecting market expectations for future easing and Treasury issuance of T-bills funded by excess central bank reserves.
  3. Earlier in the tightening cycle, rising short-term interest rates dragged long-term interest rates higher, before both conditions behind the sideways-yield reprieve shifted in the third quarter.

Related Articles:

  • Soft Landing Summer — The estimated 12-month US recession probability has been cut to 15%, matching the postwar unconditional average implied by a recession occurring roughly once every seven years, and far below the 60% Bloomberg consensus. The authors expect interest rates to fluctuate in a higher range than in the post-2008 period.
  • Why No Recession (Yet)? — Real interest rates have risen by almost 10 percentage points, compared with 4 points during the 2004–2006 tightening, yet activity has held up because households entered the episode with large savings accumulated during the pandemic. As those surplus savings are used up and borrowers refinance at higher rates, the full impact of tightening has not yet been felt.
  • Fool Me Once — Market pricing repeatedly resisted the Federal Reserve's "higher for longer" path, betting on low terminal rates and aggressive cuts, which eased financial conditions and made further rate hikes more likely. Pricing now aligns with Federal Reserve guidance for one more hike, while rising long-dated yields and a stronger dollar raise the prospect of overly tight financial conditions.

AI Summary. The price-to-earnings ratio of the largest seven S&P 500 stocks rose from 29 to 45 while the other 493 fluctuated around 19, with index returns driven by those seven. The author argues that, given higher long-term interest rates, either stock prices or those rates must fall.

Torsten Sløk Apollo
Date Posted:
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Torsten Sløk @apolloglobal argues that the “Magnificent Seven” stocks that have led the S+P higher have become “more and more overvalued” given their high P-E ratio (45) and the recent run-up in rates.

Are the largest stocks' valuations inconsistent with higher long-term interest rates?

Core argument: The P/E ratio of the seven largest S&P 500 stocks rose from 29 to 45 in 2023, while the P/E ratio of the other 493 stocks fluctuated around 19.

The P/E ratio for the S&P493 has fluctuated around 19 in 2023. And the P/E ratio for the S&P7 has increased from 29 to 45. The bottom line is that returns this year in the S&P500 have been driven entirely by returns in the seven biggest stocks, and these seven stocks have become more and more overvalued. What is particularly remarkable is that the ongoing overvaluation of tech stocks has happened during a year when long-term interest rates have increased significantly. Remember, tech companies have cash flows far out in the future, which should be more negatively impacted by increases in the discount rate. In short, something has to give. Either stocks have to go down to be consistent with the current level of interest rates. Or long-term interest rates have to go down to be consistent with the current level of stock prices.

Takeaways by Macro Roundup® AI

  1. The P/E ratio of the seven largest S&P 500 stocks rose from 29 to 45 in 2023, while the P/E ratio of the other 493 stocks fluctuated around 19.
  2. Returns in the S&P 500 this year have been driven entirely by the seven biggest stocks, which have become increasingly overvalued.
  3. Tech stock valuations rose during a year of significantly higher long-term interest rates, implying that either stock prices must fall or long-term rates must decline for the two to be consistent.

Related Articles:

  • Long-Term Shareholder Returns: Evidence From 64,000 Global Stocks — A study of about 64,000 global stocks estimates net global stock market wealth creation of $75.7tn, with returns highly concentrated: the top 159 firms (0.25%) account for half of net wealth creation and the top 1,526 (2.39%) account for all of it. Fewer than half of stocks beat one-month US Treasury bills, 42.6% of non-US and 44.8% of US stocks.
  • 7 or 493 Stocks: What Matters for the S&P 500? — The combined market value of the S&P 500's 500 companies rose $5tn, or 15.3%, while the 493 stocks outside the "Magnificent Seven" — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — returned only 4.5%. Those seven stocks accounted for about 71% of the index's return.
  • A Few Stocks Drive the Stock Market: Dot.com Vs. Today Vs. the Last 100 Years — Seven large technology stocks account for nearly 30% of the S&P 500's total value, but the rise of both hyped stocks and the broader market was more extreme during the dot-com era. Historically, only a few stocks have generated most of the stock market's value creation in the US and internationally.

AI Summary. Manhattan recorded the largest county-level income outflow to other states at $16.5bn, with 27.7 cents of every dollar leaving—$4.6bn—going to Florida, including $2.9bn to Miami-Dade County and $1.1bn to Palm Beach County. California had the largest state-level losses, while Florida was the biggest beneficiary with a net gain of $39bn.

Benjamin Glasner Economic Innovation Group
Date Posted:

According to an @InnovateEconomy analysis the Sun Belt, led by Florida and Texas, saw the largest net income gains during the pandemic period driven by internal migration from California and New York. @cojobrien

Where did income move during the pandemic?

Core argument: Manhattan recorded $16.5 billion of income outflows to other states, the largest of any county, with 27.7 cents of every dollar leaving — $4.6 billion in total — going to Florida.

Manhattan was the biggest loser at $16.5 billion of outflows to other states, with nearly 28 cents of every dollar—equaling $4.6 billion in total going to the state of Florida. California saw the greatest losses at the state level, while Florida was the biggest beneficiary with a net gain of $39 billion from other states. Meanwhile, Manhattan saw huge outflows to surrounding suburbs and out-of-state destinations, the largest of which being Florida’s coast. Those seeking warmer weather and sunny beaches led the pack, as former New Yorkers took more than $2.9 billion to Miami-Dade County and $1.1 billion in taxable income decamped for Palm Beach County, FL. In fact, 27.7 cents of every dollar leaving Manhattan went to the state of Florida, equaling $4.6 billion in total.

Takeaways by Macro Roundup® AI

  1. Manhattan recorded $16.5 billion of income outflows to other states, the largest of any county, with 27.7 cents of every dollar leaving — $4.6 billion in total — going to Florida.
  2. Florida was the biggest state-level beneficiary with a net gain of $39 billion in income from other states, while California saw the greatest state-level losses.
  3. Former New Yorkers took more than $2.9 billion of taxable income to Miami-Dade County and $1.1 billion to Palm Beach County, alongside large Manhattan outflows to surrounding suburbs.

Related Articles:

  • Tax Data Reveals Large Flight of High Earners from Major Cities During the Pandemic — Internal Revenue Service migration data show net migration subtracted more than $68bn of taxable income from large urban counties in a single year, about 2% of their total, while adding to taxable income in all other county types. Manhattan lost over $16bn and San Francisco over $8bn, or 20%.
  • Young Families Have Not Returned to Large Cities Post-Pandemic — The under-five population in large urban U.S. counties fell 6.1% while overall population in those counties fell 0.9%, with declines exceeding 10% in the largest counties including New York, Cook County, Illinois, and Los Angeles. Losses of young families were more severe in the Mid-Atlantic and West Coast, while the under-five population grew in Southeastern urban counties.
  • Taxing Billionaires: Estate Taxes and the Geographical Location of the Ultra-Wealthy — The authors estimate that US billionaires move to states without estate taxes as they age, with $80.7bn of Forbes 400 wealth escaping estate taxation as a result. They find that for the average state the added estate tax revenue exceeds forgone income tax revenue by 31%, with California a notable exception.

AI Summary. France's proposed budget implies a deficit of 4.4% of national output, above the European Union's 3% target, with the government expecting to fall below that level only by 2027 — among the last EU countries to comply. The government estimates debt-servicing costs will reach about €75bn a year by then, exceeding spending on education or defense.

Sam Fleming and Leila Abboud Financial Times
Date Posted:

The French government is expanding their planned spending cuts in the face of rising yields. Finance Minister Le Maire noted, “The social welfare state as it stands is not sustainable anymore.”

The French government is expanding their planned spending cuts in the face of rising yields. Finance Minister Le Maire...

Will France's deficits keep debt costs above education and defense spending?

Core argument: France's proposed 2024 budget implies a deficit of 4.4% of national output, well above the EU's 3% target, with the government expecting to fall below that level by 2027, among the last EU countries to comply.

France’s proposed budget for 2024 will lead to a deficit of 4.4% of national output — well above the EU’s 3% target. The government expects the deficit to fall below that level by 2027, making it one of the last EU countries to comply. By the government’s own estimates, the cost of servicing the debt will rise to around €75bn annually in 2027, which would be the single biggest expense in the budget and more than is spent on education or defence. While France has shortened unemployment compensation from 24 months to 18 months in some cases and tweaked other aspects of the unemployment insurance programme, Finance Minister Le Maire said there was a “legitimate question” as to whether the country should go further as it seeks to induce people to go back to work.

Takeaways by Macro Roundup® AI

  1. France's proposed 2024 budget implies a deficit of 4.4% of national output, well above the EU's 3% target, with the government expecting to fall below that level by 2027, among the last EU countries to comply.
  2. By the French government's own estimates, debt-servicing costs will rise to around €75bn annually in 2027, which would be the single biggest budget expense, more than is spent on education or defence.
  3. France has shortened unemployment compensation from 24 months to 18 months in some cases, and Finance Minister Le Maire said there is a "legitimate question" as to whether the country should go further to induce people back to work.

Related Articles:

  • Has Fallen Behind America and the Gap is Growing — The EU economy was somewhat larger than the US in 2008 ($16.2tn versus $14.7tn), but by 2022 the US had grown to $25tn while the EU and UK combined reached only $19.8tn. The dollar's status as the world's reserve currency allows the US to finance its ambitions without unsettling markets.
  • From Strength To Strength — The US produced $25.5tn in GDP, about 25% of the world total—roughly its 1990 share—while China's share stands at 18%; the US share of the G7's nominal GDP rose from 40% in 1990 to 58%. Income per person is now about 30% above western Europe and 54% above Japan, adjusted for purchasing power.
  • Productivity Has Grown Faster in Western Europe than in America — Adjusted for purchasing power, the EU's GDP is roughly 95% of America's, the same share as a decade earlier, while at market exchange rates US prices went from 5.4% above EU levels to 46% higher, largely because of a strong dollar. GDP per person has still grown faster in America than in most of Western Europe.

AI Summary. City-level violent crime statistics in the US are inconsistent and of questionable reliability, though at the national level Federal Bureau of Investigation data usually show trends similar to the Bureau of Justice Statistics' annual crime victimization surveys. In one year, however, the FBI data showed a decline in violent crime while the victimization survey showed a substantial increase.

Justin Fox Bloomberg
Date Posted:
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Compared to violent crime rates in other large US cities, New York City is relatively safe, but not as much as it once was. @foxjust

Is US crime data reliable enough to judge public safety?

Core argument: Across the three non-homicide violent crimes, Minneapolis ranks worst for robbery, New Orleans worst for rape, and Detroit worst by a wide margin for aggravated assault.

Here are the rates for the three non-homicide violent crimes. I’ve kept the cities in the safest-to-least-safe order determined by the Gallup poll. New York City is no longer such a standout on the safe side, although it still is on the safe side by every measure. Minneapolis is worst for robbery, New Orleans for rape, and Detroit — by a mile — for aggravated assault. After my experience compiling these statistics I have to say I’m not super-confident in their reliability. At the national level the errors seem mostly to cancel out, with the FBI data usually showing similar trends to those found in the Bureau of Justice Statistics’ annual crime victimization surveys. Then again, in 2022 the FBI statistics showed a decline in violent crime and the BJS survey a substantial increase, and the local data can be a mess.

Takeaways by Macro Roundup® AI

  1. Across the three non-homicide violent crimes, Minneapolis ranks worst for robbery, New Orleans worst for rape, and Detroit worst by a wide margin for aggravated assault.
  2. New York City is no longer a standout on the safe side of the non-homicide violent crime rankings, though it remains on the safe side by every measure.
  3. FBI crime statistics usually show trends similar to those in the Bureau of Justice Statistics' annual crime victimization surveys, but in 2022 the FBI data showed a decline in violent crime while the BJS survey showed a substantial increase.

Related Articles:

  • New York’s Subways Have Less Crime but More Violence — Major crime on New York's subways is on track to run 13.4% below 2019 levels, but ridership remains down about a third, so crime per rider is much higher this year than from 2006 through 2019. Property crime has not risen; violent incidents account for the increase.
  • The Collapse of Broken-Windows Policing in New York City, Los Angeles, and Washington, DC, 2013–22 — Arrests for minor "broken-windows" offenses—counted as misdemeanors, violations, and infractions per 100,000 residents—fell 74% in New York, 77% in Washington, DC, and 81% in Los Angeles over the period studied, declining steadily in New York and Los Angeles.
  • “New York, Just Like I Pictured It” — New York City retains advantages in sheer size, business diversification, and global financial dominance, with its labor force, airport use, and seated diners back to pre-pandemic levels and low residential and industrial vacancy rates. But mass transit use is 73% of prior levels, office vacancy is 18%, and about 35% of workdays are done from home.

AI Summary. A Nature study tracking bird flu genome changes and reported outbreaks found the virus spread three times faster among wild birds than farmed poultry, attributed to mutations letting it adapt to diverse species. Outbreaks, once seasonal with Northern Hemisphere bird migration, have become persistent, killing millions of birds across five continents.

Miryam Naddaf Nature
Date Posted:

A @Nature study notes a new H5N1 bird flu strain is driving the record worldwide outbreak.

How did the bird flu virus become more deadly and persistent?

Core argument: A Nature study published October 18th found that in 2020 the bird flu virus spread among wild birds three times faster than among farmed poultry, attributing the gap to mutations that let the virus adapt to diverse species.

The study, published in Nature on October 18th, looked at changes to the virus’s genome over time and used data on reported outbreaks to track how it spread. In 2020, the rate of spread among wild birds was three times faster than that in farmed poultry, because of mutations that allowed the virus to adapt to diverse species. Outbreaks are usually seasonal, synchronizing with bird migration in Northern Hemisphere autumn. But since November 2021, they have become persistent. In 2022, the virus killed millions of birds across five continents and seeded outbreaks among farmed mink and various marine mammals.

Takeaways by Macro Roundup® AI

  1. A Nature study published October 18th found that in 2020 the bird flu virus spread among wild birds three times faster than among farmed poultry, attributing the gap to mutations that let the virus adapt to diverse species.
  2. Bird flu outbreaks, which typically followed a seasonal pattern synchronized with Northern Hemisphere autumn bird migration, have been persistent since November 2021.
  3. The bird flu virus killed millions of birds across five continents in 2022 and seeded outbreaks among farmed mink and various marine mammals.

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  • Bird Flu Sample from Chilean Man Showed Some Signs of Adaptation to Mammals — The U.S. Centers for Disease Control and Prevention reported that an H5N1 bird flu sample from a hospitalized Chilean man carried two mutations shown in animal studies to help the virus replicate in mammalian cells. Officials said public risk remains low and the sample lacked other changes needed for efficient human-to-human spread.