MWAV

Guidelines in forming inflation expectations

Communication is important. And more so when communicating about Inflation! Trying to decipher CentralBank-speak is never easy. Philip R. Lane, Member of the Executive Board of the ECB, in this article discusses medium-term inflation goals.

He suggests using these as guidelines for households, firms and market participants in forming INFLATION expectations. This requires a consistent communication strategy, especially when INFLATION has been very low versus the target rate.

Jeremy Grantham’s Keynote Address : 5th Annual Sustainable Investing Conference.

Are you worried about your future?
Jeremy Grantham, the legendary Co-Founder and Chief Investment Strategist of GMO, makes a fascinating presentation – as useful to entrepreneurs and thinkers of financial and “natural” capital as to eco-fund-investors. He analyzes trends ranging from insect disappearance, grain productivity, soil depth in Iowa, to oil prices, population growth, ocean and atmospheric temperature, electric cars, weather events, US equity portfolio construction and the likelihood of existing weather trends accelerating immigration of environmental and economic refugees from Africa into North America and Europe. I believe he underestimates the capacity of the human mind for radical innovation and faster evolution. Having said that, the issues he flags are of extreme importance for anyone who wonders about the future shape of the world.

How The Economic Machine Works by Ray Dalio

In this fascinating 30 minute watch, hedge fund legend Ray Dalio – Founder of investment firm Bridgewater Associates uses engaging verbal and visual language to explain how the economy works. He simplifies and illustrates concepts of deleveraging and deficits making these ideas easily understandable.
APAC Economist on China’s economy

APAC Economist on China’s economy

Alicia Herrero, chief APAC economist at Natixis, talks on Bloomberg about China’s economy, and the People’s Bank of China’s (their Central Bank) new swap facility. What is interesting about this facility is that it creates CNY liquidity initially via perpetual bonds and eventually allowing these bonds to be swapped for other debt instruments . The aim is to encourage banks’ lending in China, shore up bank capital and keep interest rates low (by setting the bond interest rates at a low rate of 4.50% saving as a broader signal). This is essentially, in spirit, if not in letter, a TARP (troubled assets relief program, USA GFC, 2008) and TLTRO  (Europe, Greece, Spain,Italy crisis, 2011/2012 and continuing) rolled into one.

Full article here: https://www.bloomberg.com/news/videos/2019-01-27/china-s-fiscal-situation-has-worsened-natixis-says-video

 

Ray Dalio – World Economic Forum 2019

Billionaire Ray Dalio says tax changes like those proposed by Alexandria Ocasio-Cortez will have ‘huge’ impact on economy

Ray Dalio, at the 2019 World Economic Forum at Davos, queries the proposed dramatic increase in the marginal tax rate for the super-rich while acknowledging the circumstances that have led to such a proposal.

  • The “income and opportunity gap” will determine the winner of the next election, hedge fund billionaire Ray Dalio says.
  • “How tax rates are changed will have a huge effect on incentives and could have a huge effect on capital flows, and that will have big effects on markets and economies,” says Dalio.
  • The manager of the world’s biggest hedge fund spoke in an exclusive interview from the sidelines of the World Economic Forum in Davos.

Full article here: https://www.cnbc.com/2019/01/23/ray-dalio-says-us-tax-changes-will-have-huge-impact-on-markets.html