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


Thursday, August 29, 2024

AI Summary. Sub-Saharan Africa's working-age population is growing nearly 3% a year, versus close to zero in much of the world, and is projected to exceed China's within about a decade and reach a quarter of the global total. With modest productivity growth near 2%, the region is likely among the world's fastest-growing.

Devon Long and Eka Zhao Bridgewater Associates
Date Posted:
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Sub-Saharan Africa will have 25% of the world’s working-age population by 2050. Currently, the region accounts for 3% of global output. Assuming 2% productivity growth, Bridgewater expects this to double by 2050.

Will a booming working-age population make Sub-Saharan Africa the fastest-growing region?

Core argument: Sub-Saharan Africa's working-age population is growing nearly 3% a year, against close to zero in much of the rest of the world, which would leave the region among the world's fastest-growing even with modest productivity growth of about 2%.

Sub-Saharan Africa’s working-age population is booming. The region will account for a quarter of the world’s working-age population in a few decades and have more people of working age than China in about 10 years. In the years ahead, Sub-Saharan Africa is likely to experience some of the fastest growth in the world. Demographics are a huge tailwind with working-age population growth of nearly 3% when it is close to zero in much of the rest of the world. This means that, even with a modest productivity growth rate of about 2%, the region will be one of the fastest-growing. Currently, Sub-Saharan Africa accounts for just 3% of global output and around 5% of global growth. That will likely increase based on demographics alone.

Takeaways by Macro Roundup® AI

  1. Sub-Saharan Africa's working-age population is growing nearly 3% a year, against close to zero in much of the rest of the world, which would leave the region among the world's fastest-growing even with modest productivity growth of about 2%.
  2. Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to have more people of working age than China in about 10 years.
  3. Sub-Saharan Africa accounts for just 3% of global output and around 5% of global growth, shares likely to rise on demographics alone.

Related Articles:

  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.
  • The World Is Becoming More African — United Nations forecasts project Africans will rise from 8% of the world's people in 1950 to one-quarter by 2100, with the continent holding the world's largest workforce within a decade. McKinsey & Company estimates Africa's per-person economic growth has averaged 1% annually since 1990, against India's 5% and China's 9%.
  • Europe Hopes Barbed Wire Will Keep Migrants Out. It Won’t — The total length of border fences in the European Union grew from 315km to 2,163km over roughly a decade, yet unauthorised crossings made up just 0.13% of all external crossings into the EU. Most migrants arrive via the Mediterranean rather than the Balkans or the eastern land border.

AI Summary. Benin, Africa's largest cotton producer, exports nearly all of its roughly 300,000 tonnes of lint cotton raw, mostly to Bangladesh, and industry experts estimate it forgoes more than 90% of the value by not processing it domestically. The World Bank reports manufacturing's share of GDP in sub-Saharan Africa, excluding high-income countries, fell from 18% to 11%.

David Pilling Financial Times
Date Posted:
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According to World Bank data, manufacturing value added as a % of GDP in sub-Saharan Africa fell from 18% in 1981 to 11% in 2023. This series includes South Africa, Nigeria, and Ethiopia.

Does exporting raw cotton cost African producers most of its value?

Core argument: Benin exports virtually all of its roughly 300,000 tonnes of lint cotton raw, mostly to Bangladesh, where it is turned into clothing for the world's $1.5tn fast-fashion industry.

Virtually Benin's entire cotton crop, of about 300,000 tonnes of lint cotton, is exported raw, mostly to Bangladesh, where it is transformed into clothing for the world’s $1.5tn fast-fashion industry. In selling raw cotton, Benin, Africa’s biggest producer, is missing out on more than 90% of the value, according to industry experts. According to the World Bank, the percentage of manufacturing value added in GDP for sub-Saharan African states, excluding high-income countries, has fallen from 18% in 1981 to 11% in 2023. Benin, with a GDP per capita of about $1,400 at market prices, is only at 10%.

Takeaways by Macro Roundup® AI

  1. Benin exports virtually all of its roughly 300,000 tonnes of lint cotton raw, mostly to Bangladesh, where it is turned into clothing for the world's $1.5tn fast-fashion industry.
  2. Industry experts say Benin, Africa's biggest cotton producer, forgoes more than 90% of the value of its crop by selling it raw.
  3. Manufacturing value added in GDP for sub-Saharan African states excluding high-income countries fell from 18% in 1981 to 11% in 2023, according to the World Bank, with Benin at 10% and GDP per capita of about $1,400.

Related Articles:

  • Exploring the Implications of Sub-Saharan Africa’s Demographic Explosion — Sub-Saharan Africa is projected to hold a quarter of the world's working-age population within a few decades and to surpass China's working-age population in roughly a decade. Even with modest productivity growth near 2%, the region's growth is estimated at 4.5–5.5%, raising its share of global output from about 3% while remaining small.
  • From The Baby Boom To The Baby Bust — Africa's population is forecast to exceed that of all of today's high-income countries plus China by 2060, while age structures elsewhere are inverting. In South Korea, males aged 50-54 make up 4.3% of the population versus 1.5% for those aged 0-4, with similar inversions in China and, more slowly, India.
  • Unproductive Agriculture Is Holding Africa Back — Sub-Saharan Africa produces more than six times as much food as it did in 1961, but it has achieved this mainly by adding inputs — many more farmers and much more land under cultivation and pasture — rather than by raising productivity. The region badly trails the world in agricultural total factor productivity gains.

AI Summary. U.S. consumer energy spending rose 22% to more than $1.7tn in inflation-adjusted terms, a level exceeded in only two years on record, with the U.S. Energy Information Administration attributing most of the increase to higher energy prices, particularly petroleum for transportation. Energy spending equaled 6.7% of nominal gross domestic product, up from 5.6%.

Melissa Alejandro and Brett Marohl Energy Information Administration
Date Posted:

US energy spending as a % of GDP rose from a 50-year low of 5.6% in 2021 to 6.7% in 2022 but remained well below the 13.5% peak in 1980.

Did higher energy prices drive a sharp rise in consumer energy spending?

Core argument: U.S. energy expenditures rose 22% from 2021 to more than $1.7 trillion in 2022 on an inflation-adjusted basis, according to the State Energy Data System.

In 2022, energy expenditures—or the amount of money U.S. consumers spent on energy—increased 22% from 2021 to more than $1.7 trillion when adjusted for inflation, according to our State Energy Data System (SEDS). More money was spent on energy in the United States on an inflation-adjusted basis in 2022 than in all but two years in our records. Higher U.S. energy prices in 2022 compared with 2021, particularly higher petroleum prices for transportation, caused most of the increase in total U.S. energy expenditures. U.S. energy expenditures accounted for 6.7% of nominal gross domestic product (GDP) in 2022, compared with 5.6% in 2021.

Takeaways by Macro Roundup® AI

  1. U.S. energy expenditures rose 22% from 2021 to more than $1.7 trillion in 2022 on an inflation-adjusted basis, according to the State Energy Data System.
  2. Higher U.S. energy prices in 2022 compared with 2021, particularly higher petroleum prices for transportation, caused most of the increase in total U.S. energy expenditures.
  3. U.S. energy expenditures equaled 6.7% of nominal gross domestic product in 2022, compared with 5.6% in 2021, with inflation-adjusted spending higher in only two years on record.

Related Articles:

  • U.S. Energy Production Exceeded Consumption By Record Amount In 2023 — U.S. energy production rose 4% to nearly 103 quadrillion British thermal units while consumption fell 1% to 94, leaving production exceeding consumption by 9 quadrillion British thermal units, the widest gap in records dating to 1949. Dry natural gas, crude oil, natural gas plant liquids, and renewables all reached record output.
  • Electravision — The fossil fuel share of global primary energy is falling about 0.40% per year, matching the pace of decarbonization during the 1973–1988 nuclear buildout, though total carbon dioxide emissions have not declined because energy consumption keeps rising. Renewable energy is used almost exclusively for the electricity grid, with little penetration in industry and transport.
  • Electricity 2024 — More than 8,000 data centers operate globally, with about 33% in the United States, 16% in Europe, and close to 10% in China. US data center electricity use is projected to rise from roughly 200 TWh in 2022, about 4% of US electricity demand, to almost 260 TWh, or 6% of total demand.

AI Summary. California regulators approved an average 34.1% home insurance rate increase for Allstate affecting about 350,000 policyholders, with some premiums rising as much as 650% and others falling by as much as 57%. Major insurers including State Farm and Farmers have pulled back from the state, citing wildfire costs and regulations that capped rate increases.

Nadia Lopez Bloomberg
Date Posted:

Allstate is increasing homeowners insurance rates in CA by a mean of 34.1% in November. Allstate stopped issuing new policies in CA in 2022 citing increased risks and regulators’ efforts to cap rate hikes.

Are home insurance rates rising sharply in wildfire-prone states?

Core argument: Allstate received approval to raise California home insurance rates by an average of 34.1% starting in November, the largest premium increase by a major insurer in the state in three years.

Allstate is set to increase home insurance rates for California customers by an average of 34.1%, marking the biggest jump in premiums for a major insurer in three years as the state faces a deepening property insurance crisis. The rate hike, which will take effect from November, will impact about 350,000 policyholders across California. Some customers will face premium increases of up to 650%, while others may see their rates drop by as much as 57%. The increase is part of the broader upheaval in California’s insurance market, with top insurers like State Farm, Farmers Insurance and others pulling back from the state, citing the escalating costs of wildfires and regulations that have capped rate hikes for decades. Allstate, stopped issuing new homeowner policies in California in 2022.

Takeaways by Macro Roundup® AI

  1. Allstate received approval to raise California home insurance rates by an average of 34.1% starting in November, the largest premium increase by a major insurer in the state in three years.
  2. The Allstate increase will affect roughly 350,000 California policyholders, with some facing premium hikes of up to 650% while others see reductions of as much as 57%.
  3. State Farm, Farmers Insurance and other top insurers have pulled back from California, citing escalating wildfire costs and regulations that have capped rate increases for decades, while Allstate stopped writing new homeowner policies there in 2022.

Related Articles:

  • US Home Insurers Suffer Worst Loss This Century — US home insurers posted a $15.2bn net underwriting loss, the worst since at least 2000 and more than double the prior year's, according to rating agency AM Best, amid natural disasters, inflation and population growth in at-risk areas. Such conditions have prompted insurers to exit disaster-hit markets or raise prices, creating an affordability crisis for many homeowners.
  • Wildfires and Real Estate Values in California — California recorded over 300,000 fire episodes between 1987 and 2022, with the size, intensity, and estimated costs of these episodes increasing in recent years. Proximity to past wildfires has been associated with larger adverse effects on property values in recent years, and the authors find insurance does little to offset those effects.
  • Analyzing State Resilience to Weather and Climate Disasters — The real annual cost of U.S. weather and climate disasters has risen from about $20bn per year in the 1980s to nearly $95bn per year in 2010–19, reaching roughly $153bn in one year. Property insurers absorbed 48% of these costs, uninsured or underinsured homeowners, businesses and farms 37%, the federal government 11%, and state and local governments 4%.

AI Summary. Chinese household spending remains far below its pre-pandemic trend—roughly 14% below as of 2023—and has fared worse than Chinese manufacturing. The corollary has been a sharp expansion of China's trade and current account surpluses.

Matt Klein The Overshoot
Date Posted:

.@M_C_Klein examines Chinese household spending since 2019, including retail sales and services, and concludes that 2024 consumer spending will be at least 16% under the pre-pandemic trend, “massive no matter how you count it.”

Has weak Chinese household spending driven the expansion of China's trade surpluses?

Core argument: Chinese household spending in the GDP accounts stood about 14% below its pre-pandemic trend as of 2023, leaving consumers weaker than Chinese manufacturers after the pandemic.

Chinese consumers were hit exceptionally hard by the pandemic, their spending remains far below the pre-pandemic trend, they have done worse than Chinese manufacturers, and the corollary has been a sharp expansion of China’s trade and current account surpluses. The household spending numbers that correspond to China’s GDP were about 14% below the pre-pandemic trend as of 2023. If we assume that nominal household spending rises by 5% in 2024—which may be overly generous given the retail sales numbers, but not obviously wrong—then consumer spending would be 18% below the pre-pandemic trend. That is almost exactly what the monthly retail sales data implied!

Takeaways by Macro Roundup® AI

  1. Chinese household spending in the GDP accounts stood about 14% below its pre-pandemic trend as of 2023, leaving consumers weaker than Chinese manufacturers after the pandemic.
  2. Assuming nominal household spending rises 5% in 2024, Chinese consumer spending would sit 18% below the pre-pandemic trend, almost exactly matching what the monthly retail sales data imply.
  3. The shortfall in Chinese consumer spending relative to manufacturing has had as its corollary a sharp expansion of China's trade and current account surpluses.

Related Articles:

  • Chinese Weakness is the Real “China Shock” — China's industrial output has grown about 23% since 2019 and real export volumes about 34%, while real imports rose just 6%, with the weakness concentrated in household demand. Nominal retail spending on consumer goods and meals has grown about 3.5% a year, leaving it roughly 16% below its pre-pandemic trend.
  • Why China Is Starting a New Trade War — Chinese policy advisers say China's leadership is guided by building a self-sufficient industrial supply chain that could withstand severe Western sanctions and by a philosophical objection to U.S.-style consumption as wasteful. That leaves exports as the main route to stabilizing a weakened economy and replacing jobs lost in domestic construction, shifting job losses to workers abroad.
  • Why Xi Jinping Is Afraid to Unleash China’s Consumers — China's push for self-sufficiency began in the mid-2000s, and its reliance on global supply chains for inputs into its products has declined alongside that strategy, alongside a doctrine of "comprehensive national security" spanning the economy and society. Analysts argue China now gauges national power in military capacity rather than purely economic terms, making manufacturing central.

AI Summary. The Netherlands plans to limit ASML's ability to service and supply spare parts for its semiconductor-making equipment in China, with licenses covering its top-end deep ultraviolet lithography machines expected not to be renewed. Because the machines are sold with essential maintenance agreements, withdrawing support could render some of them inoperable.

Cagan Koc and Jenny Leonard Bloomberg
Date Posted:

Following US pressure the Netherlands will limit ASML’s ability to service their advanced lithography equipment in China, rendering inoperable many machines that had previously been outside trade restrictions.

Can withholding equipment servicing licenses disable advanced chipmaking machines in China?

Core argument: The Netherlands will likely not renew ASML licenses to service and supply spare parts for its semiconductor equipment in China when they expire at the end of this year, according to people familiar with the matter.

The Netherlands plans to limit ASML's ability to repair and maintain its semiconductor equipment in China. The government will likely not renew certain ASML licenses to service and provide spare parts in China when they expire at the end of this year, according to people familiar with the matter. The decision is expected to cover the company’s top-of-the-line deep ultraviolet lithography, or DUV, machines, said the people, asking not to be named discussing sensitive government decisions. The Dutch company’s chip-making equipment, the most advanced in the industry, is sold with maintenance agreements that are essential to keep them running. Withdrawing such support could render at least some of them inoperable as soon as next year.

Takeaways by Macro Roundup® AI

  1. The Netherlands will likely not renew ASML licenses to service and supply spare parts for its semiconductor equipment in China when they expire at the end of this year, according to people familiar with the matter.
  2. The expected Dutch decision covers ASML's top-of-the-line deep ultraviolet lithography machines, which are sold with maintenance agreements essential to keeping them running, said the people familiar with the matter.
  3. Withdrawing ASML's maintenance support could render at least some of the machines in China inoperable as soon as next year.

Related Articles:

  • Huawei Readies New Chip to Challenge Nvidia, Surmounting U.S. Sanctions — Huawei is close to introducing a new artificial intelligence chip, the Ascend 910C, which Chinese internet companies and telecommunications operators have been testing and which Huawei tells potential clients is comparable to Nvidia's H100, a chip not directly available in China. Aided by state support, Huawei has developed Chinese alternatives to U.S. products despite American sanctions.
  • America & China’s Chip Race — Chinese semiconductor production has reached a record high, rising nearly 29% versus the first half of the prior year, with most of the growth in technologically dated chips that remain key to large downstream industries. China still depends heavily on foreign chips but continues large investments to reduce that dependence.
  • Controversial Chip in Huawei Phone Produced on ASML Machine — China's Semiconductor Manufacturing International Corp. used ASML immersion deep ultraviolet machines, combined with tools from other companies, to produce an advanced Huawei smartphone processor that alarmed the US, according to people familiar with the matter. There is no suggestion the equipment sales violated export restrictions.

Friday, August 30, 2024

AI Summary. Classifying 129 inherently social activities, the authors find social capital rises with post-tax, post-transfer income but at a diminishing rate, with the association strongest for black individuals and weakest for Hispanic individuals. Individuals receiving a greater share of income from government sources tend to have lower social capital, even after accounting for demographics.

Kevin Corinth, Scott Winship and Thomas O’Rourke American Enterprise Institute
Date Posted:

.@kevincorinth @Tqorourke @swinship find that social capital —the value inherent in relationships— has a strong positive relationship with socioeconomic status, including market income and education. @AEI

How does income relate to social capital across individuals?

Core argument: Classifying 129 activities as inherently social across five categories, the authors find social capital rises with post-tax, post-transfer (full) income but at a diminishing rate.

We classify 129 activities as inherently social and group them into five major categories—caring for and helping household members, caring for and helping non-household members, socializing/relaxing/leisure, religious and spiritual activities, and volunteering. Social capital rises with post tax, post transfer (full) income but at a diminishing rate. The association between social capital and income is strongest for black individuals and weakest for Hispanic individuals. Individuals who receive a greater share of their income from government sources tend to have lower levels of social capital, even conditional on demographics. Racial and ethnic minorities in the United States have weaker social capital, although for different reasons. On average, non-Hispanic black individuals have relatively weaker family strength, but relatively stronger social connection. Hispanic individuals have relatively strong family strength and work scores but have lower scores for other components of social capital.

Takeaways by Macro Roundup® AI

  1. Classifying 129 activities as inherently social across five categories, the authors find social capital rises with post-tax, post-transfer (full) income but at a diminishing rate.
  2. The association between social capital and income is strongest for black individuals and weakest for Hispanic individuals, and individuals receiving a greater share of income from government sources tend to have lower social capital even conditional on demographics.
  3. Racial and ethnic minorities in the United States have weaker social capital for different reasons: non-Hispanic black individuals show relatively weaker family strength but stronger social connection, while Hispanic individuals show strong family strength and work scores but lower scores on other components.

Related Articles:

  • Measuring Social Capital: Can We Tell If Some Places Are Richer in Social Capital Than Others? — The Joint Economic Committee's Social Capital Index ranks Louisiana, Nevada, New Mexico, Florida, and Arizona lowest and Utah, Minnesota, Wisconsin, New Hampshire, Vermont, and Colorado highest, with low- and high-ranking states falling consistently below or above the median across subindexes. All but one of the 21 cross-state correlations among the seven subindexes are positive.
  • Post-Pandemic Recovery for America’s Prime Age Labor Force: A Tale of Two Sexes — Prime-age women's labor force participation climbed about 5 points above its pre-pandemic level over a decade, while prime-age men's rose barely a point, only just regaining pre-pandemic levels. Despite economic expansion and labor shortages, work rates for prime-age American men are barely as high as at the trough of the severe Reagan-era recession.

AI Summary. US multinational companies employ 44 million people worldwide, with about 70% — roughly 30 million jobs — in the United States and 14 million abroad. Against total US nonfarm payrolls of 159 million, that means multinationals account for 19% of US employment, leaving more than 80% of US jobs outside large publicly listed firms.

Torsten Sløk Apollo
Date Posted:
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Noting that 80% of American jobs are outside of the S&P 500, Torsten Sløk argues that “privately owned companies continue to be the lifeblood of the US economy.”

How much of US employment lies outside large multinational companies?

Core argument: US multinational enterprises employ 44 million people worldwide, with about 70%, or roughly 30 million jobs, located in the US and 14 million outside it.

Worldwide employment in all US multinational companies is 44 million. About 70% of employment in US multinational enterprises, or about 30 million jobs, are in the US, and 14 million jobs in US multinational firms are outside the US. With total nonfarm payrolls in the US at 159 million, 19% of US employment is in multinational enterprises. Put differently, more than 80% of jobs in the US economy are outside the S&P 500 companies, and privately owned companies continue to be the lifeblood of the US economy.

Takeaways by Macro Roundup® AI

  1. US multinational enterprises employ 44 million people worldwide, with about 70%, or roughly 30 million jobs, located in the US and 14 million outside it.
  2. Against total US nonfarm payrolls of 159 million, employment at US multinational enterprises represents 19% of US employment.
  3. More than 80% of US jobs sit outside S&P 500 companies, with privately owned companies serving as the lifeblood of the US economy.

Related Articles:

  • Many More Private Firms in the US — 87% of US firms with revenue above $100m are privately held rather than publicly traded.
  • Profit Puzzles — The authors propose that the divergence between rising US aggregate profit rates and falling financial market rates reflects a mismatch: national accounts measure returns on capital for all firms, while market rates capture the cost of capital for public firms only. They find public-firm profit rates halved while private-firm profit rates rose, averaging 10% above public firms.
  • The Economics of Inequality in High-Wage Economies — Information technology created investment opportunities exceeding the supply of properly trained talent, while trade with low-wage economies, low-skilled immigration, trade deficits, and aging demographics eased constraints on low-skilled labor and risk-averse savings. The author argues this framework, rather than rising cronyism, explains high returns to success, slowing productivity growth, and low interest rates.

AI Summary. Technology stocks surged and then collapsed in the late 1990s, but the underlying premise that the internet would create hugely profitable new companies proved correct, with some prices too low even as most were too high. Amazon is now worth about a quarter of the Nasdaq's entire market capitalization at its dotcom peak.

Robin Wigglesworth and Eugene Fama Financial Times
Date Posted:

Efficient Markets pioneer Eugene Fama contextualizes the current stock market, “The world is betting that AI is going to rule the world and that Nvidia will have a near monopoly, but who really knows? Efficient markets is a hypothesis. It’s not reality.”

Were technology stock prices during the dotcom boom all too high?

Core argument: Amazon is now worth about a quarter of the Nasdaq's entire market capitalisation at its 2000 dotcom peak, an illustration of Fama's point that some companies made up for the pricing mistakes made on others.

Fama points out how technology stocks also went on a rampage in the late 1990s before collapsing, but that the fundamental premise — that the internet would create huge, vastly profitable new companies — proved to be correct. “Most of the prices were too high [in the dotcom bubble], but some were too low as well. Some companies made up for all the mistakes that were made on the other ones.” Indeed, Amazon is now worth about a quarter of the Nasdaq’s entire market capitalisation at its 2000 dotcom peak. Some of the backlash against the efficient market hypothesis may simply be down to hang-ups around the word “efficient”, which Fama admits he can understand. “I just couldn’t think of a better word. It’s basically saying that prices are right.”

Takeaways by Macro Roundup® AI

  1. Amazon is now worth about a quarter of the Nasdaq's entire market capitalisation at its 2000 dotcom peak, an illustration of Fama's point that some companies made up for the pricing mistakes made on others.
  2. Fama argues that the premise underlying the late-1990s technology stock rampage — that the internet would create huge, vastly profitable new companies — proved correct, even though most prices were too high and some were too low.
  3. Fama says part of the backlash against the efficient market hypothesis stems from hang-ups over the word "efficient," which he used only because he could not think of a better term for the idea that prices are right.

Related Articles:

  • Which U.S. Stocks Generated the Highest Long-Term Returns? — Of the 29,078 U.S. common stocks in a database spanning nearly a century, 51.6% had negative cumulative returns, while 17 stocks returned more than 5m% — led by Altria at 265m%. Those top performers averaged annualized returns of just 13.47%, underscoring the value of time invested.
  • Gen AI: Too Much Spend, Too Little Benefit? — The author argues generative AI is unlikely to drive revenue expansion because it helps employees find information faster rather than find better information. If AI's benefits remain limited to efficiency gains, competitors can adopt the same tools, so cost savings get arbitraged away rather than raising prices or margins.
  • 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.

AI Summary. An election forecasting model shows the Democratic presidential candidate's national polling lead narrowing from 3.8 points to 3.3, with state polls mostly favorable apart from Michigan. The model applies a convention bounce adjustment, and close polling in Pennsylvania remains a concern for her campaign.

Nate Silver and Eli McKown-Dawson Silver Bulletin
Date Posted:

.@NateSilver538 shows Harris’s lead in national polls shrinking from 3.8pp to 3.3pp. He gives Harris a 46.6% probability of winning the electoral college versus 53.1% for Trump. “Tight polls in Pennsylvania are a worry for the vice president.”

Is the Democratic candidate's polling lead narrowing nationally?

Core argument: Kamala Harris's national polling lead narrowed from 3.8 points to 3.3 points, though she fared well in state polls apart from an exception in Michigan.

Kamala Harris’s lead in national polls shrunk from 3.8 points to 3.3 — although with a big exception in Michigan, she had a pretty good day in state polls. The model is making a convention bounce adjustment to Harris’s numbers; if she holds her current standing for another week or two, she’ll begin to move up in the forecast again. Still, the tight polls in Pennsylvania are a worry for the vice president.

Takeaways by Macro Roundup® AI

  1. Kamala Harris's national polling lead narrowed from 3.8 points to 3.3 points, though she fared well in state polls apart from an exception in Michigan.
  2. The Silver Bulletin model applies a convention bounce adjustment to Harris's numbers, and if she holds her current standing for another week or two she will begin moving up in the forecast again.
  3. Tight polling in Pennsylvania is a worry for Harris in the Silver Bulletin 2024 presidential forecast.

Related Articles:

  • Many Gen Z Men Feel Left Behind. Some See Trump As An Answer — National polling shows a gender gap of roughly 39 to 51 percentage points among voters under 30, with young men favoring the Republican candidate and young women favoring the Democrat. The Republican message resonates particularly with young men without college degrees and young men of color.
  • Disconnected: The Growing Class Divide in American Civic Life — 17% of Americans report having no close friends, and survey data show a wide educational gap: 24% of those with a high school education or less have no close friends versus 10% of college graduates. Three decades ago, Americans with less formal education reported social circles at least as large.
  • An Unsettled Electorate: How Uncertainty and Apathy Are Shaping the 2024 Election — A survey of young registered voters finds 54% backing Biden and 46% backing Trump, with 60% of young women supporting Biden while 52% of young men support Trump. Young men are more likely than young women to say the country has gone too far in giving women equal rights, 19% versus 9%.