Edward Conard

Top Ten New York Times Bestselling Author

  • “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
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…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
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…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 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
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Friday, May 29, 2026

AI Summary. Labor's share of gross domestic income fell to 51%, the lowest since records began in 1947, while profits' share rose to 12.1%, the highest since 1950. Inflation-adjusted hourly wages are up 3% since the end of 2019, compared with a 50% rise in profits.

Greg Ip Wall Street Journal
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At 51%, labor’s share of gross domestic income is at its lowest level since 1947. Corporate profits’ share of gross domestic income is now 12.1%, its highest level since 1950. In real terms, hourly wages are up 3% since Q4 2019, while profits have risen 50%.

Is labor's share of income falling while profits' share rises?

Core argument: Labor's share of gross domestic income fell to 51% in the first quarter, the lowest since records began in 1947, while profits' share rose to 12.1%, the highest since 1950.

To understand why people are so miserable about the economy, look no further than Thursday’s report on gross domestic product. Not how much GDP grew, but how it was divvied up. Worker compensation—wages and benefits—grew 0.8% in the first quarter from the fourth, while domestic corporate profits jumped 2.7%. As a result, labor’s share of gross domestic income (conceptually similar to GDP) sank to 51%, the lowest since records began in 1947. Profits’ share climbed to 12.1%, the highest since 1950. It’s the latest milestone in a trend that became pronounced in the 2000s, then picked up speed after the pandemic. Adjusted for inflation, hourly wages are up 3% since the end of 2019 while profits are up 50%. That, in a nutshell, explains the chasm between an ebullient stock market and anxious public.

Takeaways by Macro Roundup® AI

  1. Labor's share of gross domestic income fell to 51% in the first quarter, the lowest since records began in 1947, while profits' share rose to 12.1%, the highest since 1950.
  2. Worker compensation grew 0.8% in the first quarter from the fourth, while domestic corporate profits jumped 2.7%.
  3. Adjusted for inflation, hourly wages are up 3% since the end of 2019 while profits are up 50%, which the article offers as the explanation for the gap between an ebullient stock market and an anxious public.

Related Articles:

  • US Consumer Sentiment Slides to Record Low on Price Concerns — The University of Michigan's consumer sentiment index fell 5 points to 44.8, a record low and weaker than all economist projections in a Bloomberg survey. Consumers expect prices to rise 3.9% annually over the next five to 10 years, up from 3.5%, and 4.8% over the coming year.
  • Real Wages Start To Shrink In Developed Countries — US annual inflation of 3.8% outpaced average hourly earnings growth of 3.6%, leaving prices rising faster than pay for the first time in two years, while Eurozone workers face a fresh energy-driven setback. JPMorgan attributes the real wage decline to Middle East conflict and expects growth to resume if energy prices retreat.
  • Why the Labor Share Keeps Falling: Taxes! — The measured corporate labor share fell from 63% in 1978 to 58% in 2017, but the authors estimate that tax-driven reclassification of wages as S corporation profit and the shift of high-labor-share firms into partnerships account for about 1.6 percentage points, roughly a third of the decline.

AI Summary. Purchasing-power-parity comparisons match similar products across countries at a point in time, while national price deflators adjust for quality change over time, so the two can diverge even when both are well constructed. Standard measures show US labor productivity growing substantially faster than France's over three decades, while annual current-PPP conversion shows similar growth.

Philippe Aghion, Antonin Bergeaud and Luis Garicano Project Syndicate
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Responding to Krugman, Aghion, Bergeaud and Garicano argue that the US’s lead in technology “is not helping America and Europe in the same way. It has led to higher US wages and profits, and the gap is widening each year.”

Do different price conversion methods change measured productivity growth gaps?

Core argument: Seven standard measures of real labor-productivity growth, which convert GDP using national deflators from national accounts and related datasets, agree that US productivity has grown substantially faster than French productivity over three decades.

By comparing products at the same date, PPP tries to avoid [issues related to quality improvements]. If the same phone is sold in France and in the US in 2024, the PPP survey can compare the two prices directly. It does not have to ask whether the 2024 phone is better than the 2023 phone, but whether French and US American products are sufficiently similar at that date. This is why PPPs and national deflators can diverge even when both are well constructed. The national deflator adjusts for quality change over time, while the PPP comparison relies much more on product matching across countries at a point in time. When exact matches are unavailable or unrepresentative, the PPP comparison is solving a different problem than the price deflator. The table puts the issue in perspective. The first seven rows report standard real labor-productivity growth: GDP is transformed using national deflators, from national accounts and related datasets. The last row reports growth in output per hour when GDP is converted every year using current PPPs. The first seven rows agree that US productivity has grown substantially faster than French productivity for three decades. Now read the last row. Convert GDP every year with a current PPP, as in the Krugman-style calculation, and, voilà, French output per hour grows at a similar rate to the US.

Takeaways by Macro Roundup® AI

  1. Seven standard measures of real labor-productivity growth, which convert GDP using national deflators from national accounts and related datasets, agree that US productivity has grown substantially faster than French productivity over three decades.
  2. Converting GDP every year with current purchasing power parities, as in the Krugman-style calculation, yields French output per hour growing at a rate similar to the US.
  3. PPP comparisons rely on matching similar products across countries at a point in time while national deflators adjust for quality change over time, so the two can diverge even when both are well constructed.

Related Articles:

  • Challenging the Narrative of European Decline, Continued — Euro-area income per person falls behind the US when measured in constant 2021 prices but gains on the US when measured using each year's prices, suggesting Europe is holding its own in applying technology. The author argues Europe's real risk is being cut off from strategically important technologies.
  • European Stagnation Is Real — Comparing the United States, France, and Germany at current purchasing power parity prices shows the European economies roughly constant relative to America since 2000, but current-price measures miss output gains in sectors where prices fall, such as software. The author argues constant-price comparisons, the standard approach for growth over time, reveal greater European stagnation.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.

AI Summary. Past financial crises taught countries to accumulate US Treasuries, while war-related financial sanctions taught them to accumulate gold; the author argues a Strait of Hormuz crisis will push countries to stockpile industrial commodities, energy and food while reinvesting in their own power grids. Funding this would drain liquidity from global financial markets for years.

Louis-Vincent Gave Gavekal Research
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Louis-Vincent Gave argues that “the lesson of the Straight of Hormuz” is to continue the shift toward investments in gold and industrial commodities – which will create a sustained liquidity drain on global financial markets.

Will stockpiling commodities instead of reserves drain global market liquidity?

Core argument: The 1997–98 Asian and emerging market crisis, the 2008 global mortgage crisis, and the 2011–13 eurozone crisis each taught the same lesson: accumulate more US Treasuries.

The lesson of the 1997-98 Asian and emerging market crisis was to accumulate more US treasuries. The lesson of the 2008 global mortgage crisis was to accumulate more US treasuries.The lesson of the 2011-13 eurozone crisis was to accumulate more US treasuries. The lesson of the 2022 Ukraine war and consequent financial sanctions was to accumulate more gold. Then what will be the lesson of the Strait of Hormuz crisis? Odds are it will be to accumulate larger inventories of industrial commodities, energy and food while reinvesting in the resilience of one’s own power grid. All of this will require capital and therefore act as a sustained liquidity drain on global financial markets for years to come.

Takeaways by Macro Roundup® AI

  1. The 1997–98 Asian and emerging market crisis, the 2008 global mortgage crisis, and the 2011–13 eurozone crisis each taught the same lesson: accumulate more US Treasuries.
  2. The 2022 Ukraine war and the financial sanctions that followed shifted the lesson from accumulating US Treasuries to accumulating more gold.
  3. The likely lesson of the Strait of Hormuz crisis is to build larger inventories of industrial commodities, energy and food while reinvesting in the resilience of one's own power grid, requiring capital that would drain global market liquidity for years.

Related Articles:

  • Finding China in the U.S.TIC Data — China's holdings of U.S. assets began disappearing from U.S. custodial data after the G-7 immobilized Russia's reserves, and estimating them has grown harder as China diversified away from both U.S. and Belgium-based custodians. Estimates suggest a lower share in long-term Treasuries, more bills, and roughly 10% in agency bonds.
  • Shattered Assumptions And The Energy Quandary — The author argues that energy, rather than fixed income, now serves as the true hedge to equity positions, pushing investors, companies and countries to review their energy allocations and policies. Chinese government bonds diversified equity risk when no other major bond market did, which the author attributes to China being the only major economy without a meaningful inflation problem.
  • You Can’t Print Molecules — Rebuilding after a disruption to a key shipping strait would require governments to finance defense, strategic reserves, domestic energy production, and infrastructure at the same time that inflation expectations are raising funding costs. The author argues capital will rotate out of asset-light sectors that thrived on open sea lanes and cheap energy into asset-heavy physical ones.

AI Summary. Running standard demographic models—including the Cohort-Component, United Nations World Population Prospects, Lee-Carter, and Lotka-Volterra approaches—across all plausible analytical choices yields a wide range of possible global population outcomes for 2050 and 2075. The authors argue that presenting a single population trajectory hides the compounding uncertainty inherent in such projections.

Samuele Lo Piano, Marta Kuc-Czarnecka, Roger Pielke, and Andrea Saltelli Social Science Research Network
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Simulation of the decision chain yielding projections of world population in 2050 that range from 6 to 14B suggests most of the variance in demographic forecasts arises not from parameter uncertainty or data randomness but from model choice.

How much uncertainty do single-trajectory population projections hide?

Core argument: Propagating all plausible analytical choices through global population projections to 2050 and 2075 yields wide overall uncertainty distributions, with the Cohort-Component, UN World Population Prospects, Lee-Carter and Lotka-Volterra models showing distinct sensitivities and outcomes.

We explore demographic predictions by propagating all plausible choices that can be made during the analysis through the modelling process. This approach involves navigating the so-called ’garden of forking paths’—mimicking in silico what would happen if multiple investigators were to examine the same problem. For this, we now abandon [the Chinese government mathematician] Song Jian’s ‘historic’ model and turn to models currently in use: the Cohort-Component and UN WPP models, the Lee-Carter model and the Lotka-Volterra model. Note that in standard use, these tools are used in isolation, see e.g. the FAO’s How to Feed the World in 2050, resting on a single UN WPP population trajectory shielding the reader from the compounding effect of their uncertainty. Unsurprisingly, the exercise capturing the modelling of the modelling process for global population projections to 2050 and 2075 reveals distinct characteristics regarding the sensitivity and projection outcomes of the different models. Once abandoned the straitjacket of Song’s approach, uncertainty is free to manifest itself. The overall uncertainty distributions of the projected populations show a wide range of possible outcomes, reflecting the inherent uncertainties in demographic projections.

Takeaways by Macro Roundup® AI

  1. Propagating all plausible analytical choices through global population projections to 2050 and 2075 yields wide overall uncertainty distributions, with the Cohort-Component, UN World Population Prospects, Lee-Carter and Lotka-Volterra models showing distinct sensitivities and outcomes.
  2. Standard demographic practice uses these projection models in isolation, as in the FAO's How to Feed the World in 2050, which rests on a single UN World Population Prospects trajectory and shields readers from the compounding effect of their uncertainty.
  3. Abandoning Song Jian's historic model and navigating the "garden of forking paths"—mimicking in silico what would happen if multiple investigators examined the same problem—allows uncertainty in demographic projections to manifest itself.

Related Articles:

  • The Demographic Future of Humanity: Facts and Consequences — The authors estimate the world total fertility rate is around 2.17, below the global replacement rate of roughly 2.21, meaning humanity is already below replacement, with fertility and births falling faster than anticipated. They project middle-income countries' fertility may fall below that of rich countries outside East Asia, with emigration compounding population decline.
  • World Depopulation: Prospects and Implications — The US is projected to account for a growing share of the rich world's labor force, youth, and highly educated talent, with continuing population and labor force growth and only moderate aging through 2050. Its fertility, though below replacement, exceeds that of East Asian and nearly all European countries, and sustained legal immigration is essential to this demographic advantage.
  • Take the Under — 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.

AI Summary. Japan's population fell from 126.1m in 2020 to 123m in 2025, the largest decline since census collection began in 1920, and is projected to reach 87m by 2070. All but two of Japan's 47 prefectures recorded decreases, while the Tokyo metropolitan area rose slightly to 37m.

Javier Hernández, Pablo Robles and Kiuko Notoya New York Times
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Japan’s population has declined by ~3.1mm people over the past five years. The countryside is depopulating, while the greater Tokyo area is still growing – and now accounts for ~30% of the population.

How steep is Japan's population decline and how widespread?

Core argument: Japan's population fell from 126.1 million in 2020 to 123 million in 2025, a drop of more than 3 million and the largest decrease since census collection began in 1920, according to preliminary census results.

Japan’s population fell by more than 3 million over the past five years, according to official statistics released on Friday, a drop that underscores the depths of the country’s accelerating demographic crisis. The population stood at 123 million in 2025, according to preliminary census results, down from 126.1 million in 2020. It is the biggest decrease since the government began collecting census data in 1920. Japan’s population peaked in 2008 at 128 million, and it is projected to fall to 87 million by 2070. The country is now roughly the same size it was in 1989. The census data shows that the demographic crisis has now reached almost every part of Japan. All but two of the country’s 47 prefectures reported population decreases in 2025, and the rate of decline is accelerating. Japan’s biggest cities are managing to stave off demographic decline — for now. The population of the Tokyo metropolitan area, which includes Tokyo and the surrounding prefectures of Kanagawa, Saitama and Chiba, rose slightly to 37 million in 2025. The area now accounts for roughly 30% of Japan’s total population.

Takeaways by Macro Roundup® AI

  1. Japan's population fell from 126.1 million in 2020 to 123 million in 2025, a drop of more than 3 million and the largest decrease since census collection began in 1920, according to preliminary census results.
  2. All but two of Japan's 47 prefectures reported population decreases in 2025, and the rate of decline is accelerating, according to the census data.
  3. Japan's population peaked at 128 million in 2008 and is projected to fall to 87 million by 2070, while the Tokyo metropolitan area rose slightly to 37 million in 2025, roughly 30% of the national total.

Related Articles:

  • Depopulation Globally and in the Asia-Pacific: The Shape of Things to Come — Population aging and fertility below replacement levels are connected to a revolution in family structure in which families grow smaller, fewer people marry, and voluntary childlessness becomes common across countries. As a result, families become less able to bear the demands that may be placed on them.
  • Japan’s Labor Market Under Demographic Decline: Evolving Dynamics and Macroeconomic Implications — Japan's fertility rate stood at 1.15 in 2024 and its working-age population peaked in 1995, with the total population peaking in 2008. Rising labor force participation among women and people 65 and over has more than offset the shrinking working-age population, but further gains are limited since both rates already rank among the highest internationally.
  • A Tale of Two Countries: The Real Estate Crises in 1990s Japan and Contemporary China — The authors argue Japan's prolonged recession reflected the interplay of slowing returns to investment, weak consumption, and negative sentiment, and that China is in the middle stages of a multi-year real estate correction under more difficult macroeconomic and demographic conditions. They note China retains advantages, including a state-dominated financial system with implicit government guarantees capable of large-scale intervention.

Monday, June 1, 2026

AI Summary. The author argues that standard productivity measures do not carry the implications for cross-country comparisons of living standards and economic welfare that many economists assume, rather than that European productivity is mismeasured. Faster measured US productivity growth coexists with European relative productivity and purchasing power at current prices not declining.

Paul Krugman Krugman Wonks Out
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Krugman responds to Aghion et al’s critique of his argument that Europe’s lagging productivity vis-à-vis the US has not produced a drop in relative welfare: Constant-price deflators miss Europe’s benefits from falling prices of US tech goods.

Do productivity measures capture cross-country differences in living standards?

Core argument: Responding to Aghion, Bergeaud and Garicano, the author clarifies that he does not claim European productivity is mismeasured, but that standard productivity measures lack the implications for cross-country comparisons of living standards and welfare that many economists attribute to them.

Phillipe Aghion, Antonin Bergeaud and Luis Garicano have written a discussion of the response to my Europe/US productivity gap. Let me be clear: I am not arguing that European productivity is mismeasured, and never said that. I am, instead, arguing that standard measures of productivity do not have the implications for cross-country comparisons of living standards and economic welfare that many people – including many economists – think they have. I wanted to understand how to reconcile these different rates of productivity growth with the fact that relative European productivity and purchasing power at current prices have not declined. I have no idea why Aghion et al believe that a table showing multiple estimates of higher productivity growth in the US contributes to the discussion. [Aghion, et al argue] “Current PPPs and national deflators are giving sharply different answers to what at first sight looks like the same price question, but as we saw, is not.” Indeed. That’s exactly the point I’ve been trying to make.

Takeaways by Macro Roundup® AI

  1. Responding to Aghion, Bergeaud and Garicano, the author clarifies that he does not claim European productivity is mismeasured, but that standard productivity measures lack the implications for cross-country comparisons of living standards and welfare that many economists attribute to them.
  2. The author seeks to reconcile faster measured US productivity growth with the fact that relative European productivity and purchasing power at current prices have not declined.
  3. Aghion, Bergeaud and Garicano state that current purchasing power parities and national deflators give sharply different answers to what at first sight looks like the same price question, which the author identifies as precisely his own point.

Related Articles:

  • The Mismeasurement of Europe’s Productivity — Purchasing-power-parity comparisons match similar products across countries at a point in time, while national price deflators adjust for quality change over time, so the two can diverge even when both are well constructed. Standard measures show US labor productivity growing substantially faster than France's over three decades, while annual current-PPP conversion shows similar growth.
  • Challenging the Narrative of European Decline, Continued — Euro-area income per person falls behind the US when measured in constant 2021 prices but gains on the US when measured using each year's prices, suggesting Europe is holding its own in applying technology. The author argues Europe's real risk is being cut off from strategically important technologies.
  • European Stagnation Is Real — Comparing the United States, France, and Germany at current purchasing power parity prices shows the European economies roughly constant relative to America since 2000, but current-price measures miss output gains in sectors where prices fall, such as software. The author argues constant-price comparisons, the standard approach for growth over time, reveal greater European stagnation.

AI Summary. European productivity growth has trailed the United States for three decades, and measures using current purchasing-power-parity conversions versus national price deflators answer different questions. The authors argue the flat current-purchasing-power-parity series reflects changing the price yardstick each year rather than showing Europe is keeping pace.

Philippe Aghion, Antonin Bergeaud, and Luis Garicano Silicon Continent
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Aghion et al. note that Krugman does not dispute the claim that Europe’s productivity has lagged the US for 30 years, but sidestep his case for measuring the role of falling prices of US tech goods in cushioning the welfare impact on European consumers.

Does Europe's flat productivity gap reflect a shifting price yardstick?

Core argument: European productivity growth has trailed the United States for three decades, a point on which both Krugman and the authors agree, with Krugman stating explicitly that he is not arguing European productivity is mismeasured.

Krugman and we agree that (1) European productivity growth has trailed the United States for three decades, and Krugman says so clearly (”I am not arguing that European productivity is mismeasured, and never said that.”) (2) Current-PPP chain and a national deflator answer different questions. (3) The weighting mechanism by which an economy that produces goods with falling relative prices sees part of its volume gain valued away, is part of the channel to explain the paradox. We disagree still on one crucial question: Krugman reads the flat current-PPP line as evidence that Europe is not falling behind, while we see it as the product of moving the price measurement stick every year. Hence we do not see the current- PPP line as indicative of anything interpretable.

Takeaways by Macro Roundup® AI

  1. European productivity growth has trailed the United States for three decades, a point on which both Krugman and the authors agree, with Krugman stating explicitly that he is not arguing European productivity is mismeasured.
  2. Current-PPP chain measures and a national deflator answer different questions, and the authors argue the flat current-PPP line reflects moving the price measurement stick every year rather than evidence that Europe is not falling behind.
  3. The authors identify a weighting mechanism, in which an economy producing goods with falling relative prices sees part of its volume gain valued away, as part of the channel explaining the paradox.

Related Articles:

  • How Should We Measure Economic Power? — The authors argue profits measure economic power because they show a firm can do what others can't, and by that metric U.S. firms dominate globally—with Japan and Europe significant and China second-tier—implying greater U.S. power than GDP or industrial output comparisons suggest. The gap favoring the U.S. is most pronounced in high-tech products.
  • Ed Conard Debates Furman On “The Expected Value of Risk Taking” — A debate on U.S. fiscal policy argues that spending increases, rather than the tax increases needed to fund them, slow growth, and that higher taxes would reduce the expected value of America's innovative risk-taking. The argument holds that cutting debt below 100% of GDP is critical.
  • Challenging the Narrative of European Decline, Continued — Euro-area income per person falls behind the US when measured in constant 2021 prices but gains on the US when measured using each year's prices, suggesting Europe is holding its own in applying technology. The author argues Europe's real risk is being cut off from strategically important technologies.

AI Summary. The cyclically adjusted price/earnings ratio developed at Yale University stands at its highest level since 2000, above where it was before the 1929 crash, while sales multiples are the highest in history. Earnings forecasts have surged, leaving room for multiples to expand further only if revenues and margins deliver.

John Authers Bloomberg
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John Authers argues investors have an underlying confidence that the “Iranian situation will not cause serious damage,” noting the S&P 500 is up 10% since the start of the Iran War relative to a flat MSCI All-World net American equities.

Are stock valuations stretched to their highest levels on record?

Core argument: Robert Shiller's cyclically adjusted price/earnings ratio stands at its highest level since September 2000, exceeding even its reading on the eve of the 1929 Great Crash.

Historic earnings multiples, looking back at profits over the last decade, appear extreme: The widely followed cyclically adjusted price/earnings ratio mapped by Robert Shiller of Yale University is at its highest since September 2000, exceeding even where it was on the eve of the Great Crash in 1929. But earnings forecasts have been through a dramatic surge in the last three months. If current profit forecasts are accurate, there is indeed some room for multiples to expand a bit further. But sales multiples are by far the highest in history, so much rests on both revenues and margins delivering on their promise.

Takeaways by Macro Roundup® AI

  1. Robert Shiller's cyclically adjusted price/earnings ratio stands at its highest level since September 2000, exceeding even its reading on the eve of the 1929 Great Crash.
  2. Earnings forecasts have surged over the past three months, leaving some room for multiples to expand further if those profit forecasts prove accurate.
  3. Sales multiples are by far the highest in history, leaving valuations dependent on both revenues and margins delivering on their promise.

Related Articles:

  • Chart of the Day: U.S. Households at Record Equity Allocation Heading into AI IPOs — U.S. households hold a record share of their assets in equities, exceeding the dot-com and Nifty Fifty eras, while price-earnings multiples sit near all-time highs and fewer than 10 stocks account for almost 40% of the S&P 500's market value. The author argues equity ownership has become structural rather than discretionary, making markets simultaneously more stable and more fragile.
  • Bayes and Base Rates 2.0: How History Can Guide Our Assessment of the Future — Applying historical base rates to OpenAI's published sales forecasts, the authors find that no U.S. public company in roughly 18,900 firm-period observations from 1950 to 2024 achieved five-year sales growth as fast as the company projects. Reported forecasts imply compound annual growth rates ranging from 85% to 118%.
  • One Hundred Years in the U.S. Stock Markets — Over a century, U.S. publicly traded stocks generated roughly $91tn in shareholder wealth enhancement, with returns strongly positively skewed and dominated by a relatively small number of high-performing firms. Because most possible outcomes fall below the mean in a skewed distribution, the authors argue financial planning should focus on median outcomes or the full distribution.

AI Summary. Index providers are shortening the waiting periods that determine when newly listed companies can be added to major stock indexes, with Nasdaq cutting the wait for its Nasdaq 100 Index to 15 trading days from a three-month minimum and FTSE Russell moving to five trading days. The changes accommodate companies large enough at listing that index rules cannot exclude them.

Lu Wang, Bailey Lipschultz and Isabelle Lee Bloomberg
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If the S&P follows its competitors by fast-tracking SpaceX, the resulting passive demand for SpaceX from funds tracking indexes would be a collective ~$20B or ~25% of the offering.

Are index providers shortening waiting periods to admit newly listed giants?

Core argument: Nasdaq cut the minimum listing period for Nasdaq 100 Index eligibility to 15 trading days from a three-month minimum, allowing SpaceX to join the index of the largest non-financial companies on its exchange.

Indexes built to track markets are now being asked to accommodate companies that are already too large to exclude by the time they arrive. To the index overlords who steer trillions of dollars in flows through the eligibility rules they set, adding a company like SpaceX is simply a matter of reflecting the market as it really is. Nasdaq changed its rules so SpaceX can join the Nasdaq 100 Index, a cohort of the largest non-financial companies listed on its exchange, in just 15 trading days, down from a three-month minimum. FTSE Russell adopted a similar approach, shortening the waiting time to five trading days, and S&P Dow Jones Indices is expected to decide soon following its own consultation on the subject, potentially opening the S&P 500 Index itself to welcome instant mega-caps like SpaceX.

Takeaways by Macro Roundup® AI

  1. Nasdaq cut the minimum listing period for Nasdaq 100 Index eligibility to 15 trading days from a three-month minimum, allowing SpaceX to join the index of the largest non-financial companies on its exchange.
  2. FTSE Russell shortened its waiting period to five trading days, and S&P Dow Jones Indices is expected to decide soon after its own consultation, potentially opening the S&P 500 Index to instant mega-caps like SpaceX.
  3. Index providers, whose eligibility rules steer trillions of dollars in flows, are being asked to accommodate companies already too large to exclude by the time they arrive.

Related Articles:

  • An AI IPO Impact Update: The AnthroPix Effect May Be $5-Trillion+ — A closed-end fund holding small private stakes in OpenAI, SpaceX, and Anthropic has more than doubled in under two weeks and trades at nearly triple its last reported net asset value. The author argues this reflects investor appetite for any exposure to pre-IPO artificial intelligence companies, which will pull money out of other assets.
  • SpaceX Shows $4.3 Billion Loss as Musk Targets Record IPO — SpaceX reported revenue of $18.7bn, up from $14bn a year earlier, while swinging from a $791m profit to a loss of $4.94bn, according to its filing. Its Starlink satellite internet business supplies about two-thirds of sales, with subscribers rising from 2.3m to 8.9m over two years.
  • Trampled Underfoot by a Stampede of Unicorns — A database trawl counts 1,727 private companies valued above $1bn globally, and if private market valuations are accurate, the largest of them have outperformed public markets since the pandemic. Several, led by SpaceX and OpenAI, plan initial public offerings, which can signal trouble ahead since insiders are choosing to sell.

AI Summary. Blue Origin reported an anomaly during a hotfire test in which its New Glenn rocket was fueled and its engines fired, and employees said an initial assessment showed severe damage to the company's only launch pad and related equipment. Employees said the failure was expected to severely affect launch plans, including 12 planned New Glenn flights.

Rafe Rosner-Uddin Financial Times
Date Posted:

Blue Origin’s New Glenn rocket exploded days before a planned satellite launch for Amazon’s Leo internet constellation. The explosion resulted in severe damage to Blue Origin’s only launch pad and will severely impact the firm’s 2026 launch plans.

Does damage to a sole launch pad disrupt planned flights?

Core argument: A Blue Origin New Glenn rocket exploded during a hotfire test, which the company described as "an anomaly," causing what employees told the FT was severe damage to Blue Origin's only launch pad.

The company said it had “experienced an anomaly during today’s hotfire,” a pre-flight procedure in which the rocket was loaded with fuel and its engines were fired to test systems. Multiple employees told the FT an initial assessment of the site showed severe damage to Blue Origin’s only launch pad and other equipment, including a lightning tower and transporter erector used to lift rockets into position ahead of launch. The failure was expected to severely impact the company’s launch plans this year, the people added. New Glenn was scheduled to ferry 48 satellites for Amazon’s Leo internet constellation. Blue Origin has been seeking to build up its launch cadence and planned to carry out 12 flights using New Glenn this year.

Takeaways by Macro Roundup® AI

  1. A Blue Origin New Glenn rocket exploded during a hotfire test, which the company described as "an anomaly," causing what employees told the FT was severe damage to Blue Origin's only launch pad.
  2. Damage extended beyond the pad to a lightning tower and the transporter erector used to lift rockets into launch position, according to employees who spoke to the FT.
  3. Blue Origin planned 12 New Glenn flights this year, including one carrying 48 satellites for Amazon's Leo internet constellation, and employees said the failure was expected to severely impact those plans.

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