Edward Conard

Top Ten New York Times Bestselling Author

  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “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
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…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 full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Thursday, October 31, 2024

AI Summary. Among Massachusetts community college entrants, men were far more likely than women to complete associate degrees in science and technology fields, while women were far more likely to finish healthcare degrees, and White and Asian students out-completed Hispanic and Black peers in both. Program leaders report supply constraints limit healthcare programs, not STEM.

Richard Murnane, John Willett, Aubrey McDonough, et al. National Bureau of Economic Research
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A study of MA community college cohorts between 2005-16 estimates that degree attainment in STEM within 6 years rose for males in all racial categories, largely driven by an increase in male enrollment in STEM from 15.4% in 2005 to 24.6% in 2016.

How do community college degree completions differ by gender and race?

Core argument: Among Massachusetts public high school graduates from 2005–2016 who enrolled in a Massachusetts community college, male students had a much higher six-year probability of earning an associate degree in STEM than females, while females were much likelier to complete healthcare degrees.

[We examine] completion rates in Associates Degree healthcare and STEM programs among groups of students who graduated from a MA public high school in a year between 2005 and 2016 and enrolled in a MACC soon thereafter. Male students had a much higher probability of earning an associate degree in a STEM program within six years of their entry into a MACC than did females. Female students had a much higher six-year probability of earning an AD in a healthcare program than did males. White, and especially Asian, students in every entry cohort had higher probabilities of AD attainment in both healthcare and STEM programs than did their Hispanic and Black peers. The estimated six-year probabilities of degree attainment in healthcare, and especially in STEM, increased across the MACC entry cohorts from 2005 through 2016 for students in almost every racial/ethnic group. [According to interviews with MACC program leaders], supply constraints hinder expansion of many healthcare programs, but not STEM programs.

Takeaways by Macro Roundup® AI

  1. Among Massachusetts public high school graduates from 2005–2016 who enrolled in a Massachusetts community college, male students had a much higher six-year probability of earning an associate degree in STEM than females, while females were much likelier to complete healthcare degrees.
  2. White and especially Asian students in every Massachusetts community college entry cohort had higher probabilities of associate degree attainment in both healthcare and STEM programs than their Hispanic and Black peers.
  3. Estimated six-year probabilities of associate degree attainment in healthcare, and especially STEM, rose across entry cohorts from 2005 through 2016 for students in almost every racial/ethnic group, while interviewed program leaders reported supply constraints hindering expansion of many healthcare programs but not STEM programs.

Related Articles:

  • Do Liberal Arts Colleges Pay Off? What the Data Say — 35% of bachelor's degree programs at liberal arts colleges have a negative return on investment, versus 23% elsewhere, meaning students are typically worse off than not attending college. The gap reflects higher tuition and slightly lower alumni earnings, but engineering, computer science, nursing, and economics majors there beat national averages.
  • Marginal Returns to Public Universities — Using admission-score cutoffs across all 35 Texas public universities, the author estimates that marginally admitted students complete an additional year of four-year education, are 12 percentage points more likely to earn a bachelor's degree, and earn 5–10% more than marginally rejected peers, with gains driven by students who otherwise would not attend a four-year school.
  • Where Do STEM Graduates Stem From? The Intergenerational Transmission of Comparative Skill Advantages — Using a Dutch database matching parents' and children's test scores at similar ages, the authors find that parents who were relatively stronger in math than language as children are significantly more likely to have children with the same math advantage. Parents' comparative skill advantage also predicts their own and their children's science and technology field choices.

AI Summary. Downward revisions to global population and GDP projections make climate change appear more tractable, the author argues, since the scenarios used to model emissions rely on socio-economic assumptions that are more extreme than real-world observations. With slower population and economic growth, even partial policy successes could bring emissions consistent with a 2C target within reach.

Roger Pielke Jr. The Honest Broker
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.@RogerPielkeJr argues that more realistic projections of global population and GDP growth suggest that “even partial future policy successes could more easily bring into view future emissions consistent with a 2C temperature target.”

Do lower population and GDP projections make climate change more tractable?

Core argument: Downward revisions to global population and GDP projections make the challenge of climate change appear more tractable, according to the author, who argues the "assumption space" behind emissions scenarios should shift away from extreme socio-economic assumptions toward scenarios consistent with real-world observations.

Updated understandings of population and GDP suggest that, at a minimum, the “assumption space” used to generate scenarios needs to reorient away from extreme socio-economic assumptions and towards more realistic socio-economic scenarios consistent with observations of the real world. Every time global population GDP projections are revised down, the challenge of climate change appears that much more tractable. Of course, peak population and slower economic growth bring with them considerable societal and policy challenges of their own. “Current policy” projections are based on a very conservative set of assumptions — who thinks there will be no new climate and energy policies? — and many countries have committed to accelerating decarbonization. Conditional on slower-than-projected population and/or GDP growth, that means that even partial future policy successes could more easily bring into view future emissions consistent with a 2C temperature target. Basing our expectations on the latest understandings of population and GDP changes is thus essential for a clear-eyed view of climate and energy challenges.

Takeaways by Macro Roundup® AI

  1. Downward revisions to global population and GDP projections make the challenge of climate change appear more tractable, according to the author, who argues the "assumption space" behind emissions scenarios should shift away from extreme socio-economic assumptions toward scenarios consistent with real-world observations.
  2. "Current policy" emissions projections rest on the conservative assumption that no new climate and energy policies will be adopted, even though many countries have committed to accelerating decarbonization.
  3. Conditional on slower-than-projected population and GDP growth, even partial future policy successes could more easily bring future emissions consistent with a 2C temperature target into view, though peak population and slower growth carry their own societal and policy challenges.

Related Articles:

  • The Wealth of Working Nations — Because of population aging, growth in GDP per capita and GDP per working-age adult have diverged across advanced economies; from 1998 to 2019 Japan's accumulated growth per working-age adult was 31.9% versus 29.5% in the US. The authors find a standard neoclassical growth model calibrated to each country's working-age population tracks output per working-age adult in most economies.
  • The Age of Depopulation: Surviving a World Gone Gray — The United States remains the main outlier among developed countries resisting depopulation, with fertility of just over 1.6 births per woman — high for a rich country but below the 2.1 replacement threshold — plus steady immigration. The Census Bureau projects the U.S. population will peak around 2080 and decline continuously thereafter.
  • The Dangerous Effects Of Rising Sea Temperatures — The world's oceans have absorbed 90% of excess heat and about a quarter of human-caused carbon dioxide emissions during the industrial era, and scientists are investigating what drove an anomalous rise in sea temperatures and whether seas will cool again. Researchers caution there is no guarantee oceans will keep absorbing heat at the same rate.

AI Summary. Rural population growth accelerated to 1.4% from 0.7%, a gain of nearly 1m residents, while large urban areas shifted from 1.5% growth to a 0.5% decline, losing more than 500,000 residents. About a third of new residents in rural counties that voted Republican came from Democratic-leaning counties, rising to 40% in rural counties within urban commuting zones.

August Benzow Agglomerations
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Rural counties saw population growth of ~ 1mm persons between 2020-23 largely from urban areas which likely will depolarize the countries politically. As of 2022, 32% of new residents in Trump rural counties came from blue counties. @AugustBenzow

Are city residents moving to rural counties in growing numbers?

Core argument: Rural population growth doubled from 0.7% in 2016–2019 to 1.4% in 2020–2023, a gain of nearly one million residents, while large urban areas flipped from 1.5% growth to a 0.5% decline, losing more than 500,000 residents.

After decades of relative stagnation, rural population growth accelerated in recent years — doubling from 0.7% in 2016-2019 to 1.4% from 2020 to 2023 (representing a gain of nearly one million residents). The trajectory of large urban areas, meanwhile, flipped from 1.5% growth to a 0.5% decline (a loss of more than 500,000 residents). In 2021, 33% of new residents in these Trump rural counties came from blue counties, the highest share in over a decade. In 2022, the last year for which the data is available, the share fell to 32%, which is still higher than before the pandemic. The impact becomes even more pronounced when focusing on rural counties within urban commuting zones (rural countries in which a large share of residents commute to a nearby city for work). In these counties, the percentage of blue-county in-migration was 40% in 2022.

Takeaways by Macro Roundup® AI

  1. Rural population growth doubled from 0.7% in 2016–2019 to 1.4% in 2020–2023, a gain of nearly one million residents, while large urban areas flipped from 1.5% growth to a 0.5% decline, losing more than 500,000 residents.
  2. In 2021, 33% of new residents in Trump rural counties came from blue counties, the highest share in over a decade, easing to 32% in 2022 but remaining above pre-pandemic levels.
  3. Rural counties within urban commuting zones, where a large share of residents commute to a nearby city for work, drew 40% of their in-migration from blue counties in 2022.

Related Articles:

  • Young Families Have Continued Leaving Big Cities Post-Pandemic — Large urban counties have continued to lose population of young children even as their overall population growth resumed, driven by immigration. Birth rates in large urban counties have declined twice as fast as in rural counties over the past decade, and the number of children under five fell in 58% of all US counties.
  • Pandemic Population Boom in Rural Hotspots Sparks Resentment — U.S. rural population grew for a second consecutive year after decades of decline, with non-metro areas outpacing urban growth for the first time in three decades. Gains were concentrated: the 10 rural counties with the largest increases grew about 5% on average versus a 0.4% national rate, and their house prices rose more than 40% over three years.
  • What America’s Relocation Boom Means for Election 2024 — Census Bureau estimates show 16.1m US residents moved to another state over a two-year period. A Bloomberg analysis of state population forecasts finds swing-state counties that Democrats won in 2020 will have gained on net almost twice as many people as Republican-won counties, though North Carolina is an exception.

AI Summary. Registered Republicans who moved chose neighborhoods that voted Republican by an average of 19 points, while Democrats chose neighborhoods Democratic by the same margin, widening the partisan gap between movers' neighborhoods from 31 to 38 points. The gap remained 24 points among demographically similar movers from similar neighborhoods.

Ronda Kaysen and Ethan Singer New York Times
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A NYT analysis of more than 3.5mm voter registration records finds that GOP voters who moved between 2020 and 2024 moved to neighborhoods Trump won by 19pp in 2020. Democratic voters chose Biden neighborhoods by the opposite margin.

Do Americans sort into more politically like-minded neighborhoods when they move?

Core argument: Republican movers chose neighborhoods Trump won by an average of 19 percentage points in 2020, while Democratic movers chose neighborhoods Biden won by 19 points; independents and unaffiliated voters picked more evenly balanced neighborhoods.

Across all movers, Republicans chose neighborhoods Donald J. Trump won by an average of 19 percentage points in 2020, while Democrats chose neighborhoods President Biden won by the opposite margin (also 19 points). In total, movers started in neighborhoods 31 percentage points apart; they ended in neighborhoods 38 points apart. Across the country, the result is a widening gap between blue neighborhoods and red ones. The independents and unaffiliated voters in our set picked more evenly balanced neighborhoods. The different choices that movers made are not easily explained by things like voters’ ages, race, income or if they were leaving a rural or urban area. Even when narrowing our comparisons to demographically similar pairs of people from the same kinds of neighborhoods Democrats and Republicans still chose neighborhoods that were 24 points apart in the 2020 vote. Our analysis suggests partisanship itself, intentional or not, plays a powerful role when Americans uproot and find a new home.

Takeaways by Macro Roundup® AI

  1. Republican movers chose neighborhoods Trump won by an average of 19 percentage points in 2020, while Democratic movers chose neighborhoods Biden won by 19 points; independents and unaffiliated voters picked more evenly balanced neighborhoods.
  2. Movers started in neighborhoods 31 percentage points apart in the 2020 vote and ended in neighborhoods 38 points apart, widening the gap between blue and red neighborhoods across the country.
  3. Among demographically similar pairs of people from the same kinds of neighborhoods, Democrats and Republicans still chose neighborhoods 24 percentage points apart in the 2020 vote, which the analysis suggests indicates partisanship itself plays a powerful role in where Americans move.

Related Articles:

  • How Big-City Expats Might Reshape the Politics Of Rural America — Rural population growth accelerated to 1.4% from 0.7%, a gain of nearly 1m residents, while large urban areas shifted from 1.5% growth to a 0.5% decline, losing more than 500,000 residents. About a third of new residents in rural counties that voted Republican came from Democratic-leaning counties, rising to 40% in rural counties within urban commuting zones.
  • Pandemic Population Boom in Rural Hotspots Sparks Resentment — U.S. rural population grew for a second consecutive year after decades of decline, with non-metro areas outpacing urban growth for the first time in three decades. Gains were concentrated: the 10 rural counties with the largest increases grew about 5% on average versus a 0.4% national rate, and their house prices rose more than 40% over three years.
  • What America’s Relocation Boom Means for Election 2024 — Census Bureau estimates show 16.1m US residents moved to another state over a two-year period. A Bloomberg analysis of state population forecasts finds swing-state counties that Democrats won in 2020 will have gained on net almost twice as many people as Republican-won counties, though North Carolina is an exception.

AI Summary. Pew Research polling finds a 17-point gender gap and a 29-point education gap in presidential vote preference. Combining the two, the divide is widest between men without a college degree and women with one, a 43-point difference.

Celinda Lake and Amanda Iovino New York Times
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According to @pewresearch, there is a 43pp gap between college women, who are breaking for Harris by 27pp, and non-college men, who are breaking Trump by 16pp. Levels of support by gender have varied substantially according to @dcoxpolls

Do gender and education together drive the widest voting divide?

Core argument: Pew Research's poll shows a 17-point gender gap in the presidential race, with Trump ahead by 8 points among men and Harris ahead by 9 points among women.

According to a recent poll by Pew Research, the gender gap is 17 points, with Mr. Trump ahead 8 points among men and Ms. Harris up 9 points among women. The gap by education is 29 points, with Mr. Trump ahead 10 points among people without a college degree and Ms. Harris ahead 19 points among those with one. But broken up by gender and education, we see that the gaps are driven particularly by men without a college degree and women with a college degree, with an overall difference of 43 points.

Takeaways by Macro Roundup® AI

  1. Pew Research's poll shows a 17-point gender gap in the presidential race, with Trump ahead by 8 points among men and Harris ahead by 9 points among women.
  2. The education gap in Pew's poll is 29 points, with Trump leading by 10 points among voters without a college degree and Harris leading by 19 points among college graduates.
  3. Broken out by gender and education together, the gaps are driven particularly by men without a college degree and women with one, an overall difference of 43 points.

Related Articles:

  • Are Young Men Really Going to Vote for Donald Trump? — Polling finds men aged 18 to 24 are far less likely to identify as feminist and liberal than men aged 25 to 29, and young men hold very different views from their female peers about how the world treats women. The author argues this divergence leaves young men's worldview less aligned with Democrats' current values and priorities.
  • The Politics of Progress and Privilege: How America’s Gender Gap Is Reshaping the 2024 Election — Survey data show 35% of Americans say the term "feminist" describes them somewhat or very well, down from 51% earlier. Women are more likely than men to identify as feminist (42% vs 27%), with the widest gap among those age 18–29, where 55% of women but 31% of men claim the label.
  • Young Women Are Starting To Leave Men Behind — Across the developed world, the share of young men neither in education, employment, nor seeking work has climbed steadily for decades, and in the UK, France, Spain, and Canada young men now outnumber young women outside the economy for the first time. Over 80% of this group in the UK report long-term health problems.

AI Summary. A pig on a backyard farm in Oregon tested positive for H5N1 bird flu, the first such case in a US pig, with infection found throughout its body despite no signs of illness. Pigs are considered mixing vessels in which human and bird flu viruses can exchange genes, raising concern that hybrid strains could emerge that infect humans more easily.

Riley Griffin, Rthvika Suvarna, and Antonia Mufarech Bloomberg
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A pig in Oregon tested positive for the H5N1 bird flu. Public health officials have been worried that the virus would jump into swine as pigs have “long been considered mixing vessels where flu viruses from humans and birds can exchange genes.”

Do bird flu infections in pigs raise the risk to humans?

Core argument: One of five pigs on a backyard farm in Crook County, Oregon, tested positive for H5N1 bird flu, the first such case in a pig in the US, with evidence of infection throughout its body.

A pig tested positive for the H5N1 bird flu for the first time in the US the infection was confirmed in a pig kept on a backyard farm in Crook County, Oregon. Pigs have long been considered mixing vessels where flu viruses from humans and birds can exchange genes. The concern is that such hybrid, or reassortant, pathogens can emerge with characteristics that allow them to infect humans more easily. The owners of the backyard farm alerted officials when ducks and geese started getting sick and dying. One of five pigs on the farm has been confirmed with H5N1, with evidence of infection throughout its body. The animal didn’t show any sign of illness, the USDA said in a statement. All five pigs were euthanized.

Takeaways by Macro Roundup® AI

  1. One of five pigs on a backyard farm in Crook County, Oregon, tested positive for H5N1 bird flu, the first such case in a pig in the US, with evidence of infection throughout its body.
  2. Pigs have long been considered mixing vessels in which human and bird flu viruses exchange genes, and the concern is that reassortant pathogens can emerge with characteristics allowing easier infection of humans.
  3. The infected pig showed no sign of illness, according to the USDA, and all five pigs on the farm were euthanized after the owners alerted officials to ducks and geese sickening and dying.

Related Articles:

  • Is Bird Flu Spreading Among People? Data Gaps Leave Researchers In The Dark — A US bird flu infection in a person with no known contact with animal carriers, alongside illness in two close contacts, has left researchers awaiting data to determine whether human-to-human transmission has emerged. Gaps in surveillance persist because some states do not require farmers to test dairy cattle for the virus.
  • Animal Farm — The H5N1 bird flu virus spreads among wild aquatic birds before passing to domesticated animals, with highly pathogenic strains killing 90%-100% of infected poultry within 48 hours and causing the death or culling of 82m US poultry and $2-$3bn in losses. The virus has also spread to US cattle, reducing milk production in infected herds.
  • Possible Cluster of Human Bird-Flu Infections Expands in Missouri — The Centers for Disease Control and Prevention reported a possible cluster of eight bird-flu cases in Missouri, which could represent the first person-to-person transmission of the H5N1 virus in the United States. Infections in seven of the individuals, a household member and six healthcare workers, have not been confirmed, leaving open other flulike illnesses.

Friday, November 1, 2024

AI Summary. Using the quasi-random assignment of 760,000 children in U.S. military families, the authors estimate that childhood neighborhood quality affects SAT scores, college attendance, and earnings, with 20 years in a county one standard deviation "better" raising SAT composites by 10 points and earnings by 2.2 percentile points. Estimated effects are similar across race and sex.

Laura Kawano, Bruce Sacerdote, William Skimmyhorn and Michael Stevens National Bureau of Economic Research
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By equalizing average neighborhood quality for black and white families, Kawano et al estimate that the Army’s quasi-random locational assignment reduces the black-white earnings gap among the children of Army personnel at age 25 by 23%.

How much does childhood neighborhood quality affect test scores and earnings?

Core argument: Estimated neighborhood effects are three times more potent at the zip code level, where 20 years of exposure to a one county-level standard deviation better zip code raises college-going by 6.7 percentage points, SAT composite scores by 38 points, and age-25 income percentile by 6.1 points.

Using the quasi-random assignment of 760,000 children in U.S. military families, we show that neighborhood attributes experienced during childhood have powerful impacts on SAT scores, college-going and earnings. Twenty years of exposure in a 1 standard deviation "better" county raises SAT composite scores by 10 points (1.8 percentiles), raises college attendance by1.7 percentage points, earnings by 2.2 percentile points, and lowers EITC receipt by 10%. Impacts are three times more potent when we measure neighborhood quality at the zip code level:twenty years of exposure to a one (county level) standard deviation better zip code raises college going by 6.7 percentage points, SAT composite by 38 points and income percentile at age 25 by 6.1 points. The same locations benefit children with equal potency across race or sex [see Fig. 7]. The striking similarity in estimated neighborhood effects across groups has potentially important implications for understanding how the effects of place might influence group-based inequalities. Random assignment to place cuts the black-white gap in earnings from a hypothetical 4.8% down to the observed 3.7% or a 23% reduction.

Takeaways by Macro Roundup® AI

  1. Estimated neighborhood effects are three times more potent at the zip code level, where 20 years of exposure to a one county-level standard deviation better zip code raises college-going by 6.7 percentage points, SAT composite scores by 38 points, and age-25 income percentile by 6.1 points.
  2. The same locations benefit children with equal potency across race and sex, and random assignment to place cuts the black-white earnings gap from a hypothetical 4.8% to the observed 3.7%, a 23% reduction.

Related Articles:

AI Summary. US oil and gas extraction productivity nearly tripled in a decade, and crude output reached a record 13.3m barrels a day — 48% above Saudi Arabia — with under a third of the rigs. BloombergNEF projects production growth of 600,000 barrels a day on higher well productivity.

Catarina Saraiva, David Wethe, Mitchell Ferman, and Kevin Crowley Bloomberg
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Between 2012 and 2022, productivity in the American oil and gas sector rose by nearly a factor of 3, driving output to 13.3mm barrels/day of crude – 48% more than Saudi Arabia – while reducing rig count by a third.

Is oil and gas extraction now America's most productive industry?

Core argument: Productivity in US oil and gas extraction almost tripled in the 10 years ending in 2022, compared with a near-doubling in some tech-driven industries.

Productivity in the oil and gas extraction sector almost tripled in the 10 years ending in 2022, compared with a near-doubling in some tech-driven industries. The nation’s crude output has risen to a record 13.3 million barrels a day, 48% more than Saudi Arabia. All with less than a third of the rigs and far fewer workers than were needed 10 years ago. US oil production will grow by 600,000 barrels a day in 2025, about 50% more than this year's growth, due to higher well productivity, according to BloombergNEF.

Takeaways by Macro Roundup® AI

  1. Productivity in US oil and gas extraction almost tripled in the 10 years ending in 2022, compared with a near-doubling in some tech-driven industries.
  2. US crude output has risen to a record 13.3 million barrels a day, 48% more than Saudi Arabia, using less than a third of the rigs and far fewer workers than were needed 10 years ago.
  3. BloombergNEF projects US oil production will grow by 600,000 barrels a day in 2025, about 50% more than this year's growth, due to higher well productivity.

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.
  • US Shale: The Marginal Supplier Matures — The responsiveness of US oil supply to prices has declined and is estimated to be much smaller for publicly traded producers than private ones, with a 10% price increase raising US liquids output by roughly 1%, or 200,000 barrels a day. That implies US supply would offset only about 20-25% of a geopolitical supply shock.
  • United States Produces More Crude Oil Than Any Country, Ever — The United States has produced more crude oil than any nation at any time for six consecutive years, averaging 12.9m barrels per day in 2023 and surpassing the prior record of 12.3m barrels per day. Output fell to 5.0m barrels per day in 2008 before rising as producers applied hydraulic fracturing and horizontal drilling.

AI Summary. Public and private markets are converging, including liquidity in public and private credit, so assets in both can be either safe or risky. With 90% of active public-equity managers underperforming their index, global equity investors have become highly leveraged to Nvidia through passive investing, high index concentration, and a high share of foreign ownership.

Torsten Sløk Apollo
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Torsten Sløk notes “90% of active managers of public equities underperform their index.” He warns that globally equity investors have become highly leveraged to Nvidia.

Are the lines between public and private, safe and risky, blurring?

Core argument: 90% of active managers of public equities underperform their index.

Public and private markets are converging, liquidity in public and private credit markets is converging. In a world where public and private markets are converging, public markets can be safe and risky, and private markets can be safe and risky. 90% of active managers of public equities underperform their index. Global equity investors have become highly leveraged to Nvidia because of the rise in passive investing, high concentration in equity markets, and a high share of foreign ownership

Takeaways by Macro Roundup® AI

  1. 90% of active managers of public equities underperform their index.
  2. Global equity investors have become highly leveraged to Nvidia because of the rise in passive investing, high concentration in equity markets, and a high share of foreign ownership.
  3. Public and private markets are converging, including liquidity in public and private credit markets, leaving both public and private markets able to be safe or risky.

Related Articles:

  • Updating Our Long-Term Return Forecast For US Equities to Incorporate the Current High Level of Market Concentration — The authors estimate the S&P 500 will deliver an annualized nominal total return of 3% over the next 10 years, roughly 1% in real terms, modeling long-term returns as a function of starting valuation, market concentration, frequency of economic contractions, corporate profitability, and interest rates. The index returned 13% annualized over the past decade, above its 11% long-term average.
  • US Exceptionalism: Drivers of Equity Outperformance and What’s Needed for a Repeat — US companies need about 7% earnings-per-share growth to deliver a normal 4% equity risk premium above the risk-free rate, versus about 3% for other developed markets, with the highest expectations embedded in technology and the largest US tech firms. Chinese companies could generate a 4% risk premium over Chinese bonds with no earnings growth.
  • Stock Market Concentration — Over 2014–2023 the 10 largest U.S. stocks averaged 19% of market capitalization while generating 47% of total economic profit, and by 2023 they were 27% of market capitalization and 69% of economic profit. The S&P 500 returned above its average when concentration was rising and below it when concentration was falling.

AI Summary. The rise of the populist right is not specific to the US, with Brexit preceding Trump and radical right parties in or near power across much of Europe. The left has measurably become the party of the upper echelons, leaving the right free to appeal to the lower-status majority.

John Burn-Murdoch Financial Times
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Win or lose, @jburnmurdoch argues Trumpism will outlast Trump throughout the West, pointing to a rise in support for right-leaning parties by voters with lower educational attainment and earnings in the UK and Europe as well as the U.S.

Is the populist right's rise a broader Western shift?

Core argument: The rise of the populist right and the elevated prominence of social issues did not originate in the US, with Brexit preceding Trump and radical right parties now in power or near it across much of Europe.

The rise of the populist right and elevated prominence of social issues is neither specific to the US nor even originated there. Brexit preceded Trump, and radical right politicians and parties are now in power, or close to it, across much of Europe. Looking at wider societal shifts across the west suggests this is no coincidence, but the result of strong headwinds. The left has measurably become the party of the upper echelons, giving the right free rein to appeal to the lower-status majority just as norms against reactionary politics break down and voters sour on the polished elite.

Takeaways by Macro Roundup® AI

  1. The rise of the populist right and the elevated prominence of social issues did not originate in the US, with Brexit preceding Trump and radical right parties now in power or near it across much of Europe.
  2. Wider societal shifts across the West suggest the populist right's simultaneous rise is no coincidence but the result of strong headwinds.
  3. The left has measurably become the party of the upper echelons, leaving the right free to appeal to the lower-status majority as norms against reactionary politics break down and voters sour on the polished elite.

Related Articles:

  • Trudeau Reverses Course on Immigration as Support Plunges — Canada plans to admit about 395,000 permanent residents, nearly 20% fewer than the 485,000 expected this year, and set its first target for temporary immigrants such as international students and foreign workers, cutting their numbers by roughly 446,000 over two years. The government projects the population would fall 0.2% in each of the next two years.
  • The Force Shaping Western Politics — The foreign-born share of the population has risen sharply since 1990 in nearly every large Western country. As mainstream politicians from the center-right to the left dismissed voters' concerns about immigration, many voters drifted toward extreme-right parties that promised to reduce it.
  • Changing Sub-Saharan Africa’s Growth Trajectory — 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.

AI Summary. The Silver Bulletin presidential election forecast rates the race roughly a toss-up, with polling showing no sign of a late swing toward either candidate. Recent state polling favored the Democratic ticket in the "Blue Wall" states of the upper Midwest.

Nate Silver and Eli McKown-Dawson Silver Bulletin
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The most recent @NateSilver538 update showed Harris’s national lead down to 1.1pp from a peak of 3.5pp on October 2. The model gives Trump a 53.8% chance of winning the electoral college.

Is the presidential race still a toss-up in late polling?

Core argument: The Silver Bulletin presidential forecast update is favorable for Kamala Harris, with strong polling for her in the Blue Wall states.

Good update for Harris with some strong polling for her in the Blue Wall states. Not much sign of a last-minute swing in the race. We are likely locked into something roughly in the toss-up range, unless the last round of NYT/Siena polls weigh strongly toward one side. We’ll run another update in the afternoon if there’s a significant amount of polling.

Takeaways by Macro Roundup® AI

  1. The Silver Bulletin presidential forecast update is favorable for Kamala Harris, with strong polling for her in the Blue Wall states.
  2. Silver Bulletin sees little sign of a last-minute swing in the presidential race, which is likely locked into roughly toss-up territory.
  3. Silver Bulletin points to the last round of New York Times/Siena polls as what could weigh the race strongly toward one side.

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