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☆ With Inflation This High, Nobody Knows What a Dollar Is Worth
▼ + stars: | 2024-04-26 | by ( Jeff Sommer | ) www.nytimes.com time to read: +1 min

But exactly how inflation is hurting, helping and confusing people is hard to understand. There’s a fancy name for the common human failure to see past the gaudy prices largely created by inflation. This widespread inability to recognize what money is really worth is known as money illusion. Irving Fisher, a Yale economist, wrote a book about it nearly a century ago. But their insights tend to be forgotten when prices are fairly stable, as they were in the United States until three years ago.

Persons: you’re, Irving Fisher, John Maynard Keynes Organizations: Yale Locations: British, United States

☆ Ron Insana: A market shake-up could be around the corner as inflation remains sticky
▼ + stars: | 2024-03-15 | by ( Ron Insana | ) www.cnbc.com time to read: +4 min

Here's a question on the minds of investors amid recent hotter-than-anticipated inflation readings and this powerful rally: Are we due for a stock market scare? However, as of late, there have been some early warning signs that the declines in inflation may be slowing. Other areas have also sent up some flags that could adversely affect stocks and bonds in the short run. However, it is unwise to ignore what market signals are suggesting, at least in the short run. But in the short run, we should remain on heightened alert for changes in this year's outlook.

Persons: It's, I'm, John Maynard Keynes, Ron Insana Organizations: Federal Reserve, New York Federal Reserve, West Texas, Atlanta Federal, CNBC, Financial Partners Locations: York

☆ The biggest risks US businesses face in 2024
▼ + stars: | 2024-01-14 | by ( Bryan Mena | ) edition.cnn.com time to read: +11 min

But, while businesses have plenty to be grateful for and much to be optimistic about, the coast isn’t clear. Last week, surveys from the National Federation of Independent Business (NFIB) and The Conference Board detailed the biggest risks that businesses are currently worried about. Here are some of the biggest risks for American businesses in 2024. Those financial stresses can reduce the willingness of banks to lend to others businesses and also to consumers,” she said. Bank earnings look really bad this quarter.

Persons: there’s, “, John Maynard Keynes, ”, ” Dana Peterson, Bill Dunkelberg, ” Peterson, ” Suzanne Clark, We’re, Mike Johnson, Chuck Schumer, Fitch, Clark, JPMorgan Chase, Nicole Goodkind, Krystal Hur, FactSet, Martin Luther King Jr, Morgan Stanley, Goldman Sachs Organizations: CNN Business, Bell, DC CNN, Federal, National Federation of Independent Business, Board, US, of Commerce, of American, Conference Board, Conference, CNN, Fed, Corporate, US Chamber of Commerce, chamber’s State of American, AAA, Moody’s Investors Service, US Chamber, Commerce’s, Google, Citigroup, Bank, JPMorgan, FactSet, Revenue, Profit, Federal Deposit Insurance Corporation, Valley Bank, Signature Bank, Bank of America, FDIC, Citi, China’s National Bureau of Statistics, Alcoa, National Statistics, US Commerce Department, US Labor Department, Federal Reserve, University of Michigan, National Association of Realtors Locations: Washington, Wells, Corporate America, chamber’s State, BlackRock, Amazon, Argentina, Japan

☆ ECB hawk Schnabel scraps more rate hikes after 'remarkable' inflation drop
▼ + stars: | 2023-12-05 | by ( ) www.reuters.com time to read: +4 min

Euro zone inflation tumbled to 2.4% last month from above 10% a year earlier after a record string of rate hikes. Schnabel, who had insisted just a month ago that rate hikes must remain an option because the "last mile" of the inflation fight may be the toughest, said she had shifted stance after three unexpectedly benign inflation readings in a row. "The most recent inflation number has made a further rate increase rather unlikely." "The recent inflation print has given me more confidence that we will be able to come back to 2% no later than 2025." Schnabel said weak growth as a result of the ECB's rate hikes is helping the inflation fight but that a deep or prolonged recession is unlikely, with recent survey data supporting expectations for a recovery.

Persons: Isabel Schnabel, Jim Urquhart, Schnabel, John Maynard Keynes, Christine Lagarde, Francois Villeroy de, Yannis Stournaras, Joachim Nagel, Balazs Koranyi, Catherine Evans Organizations: European Central Bank, Teton, Jackson, REUTERS, Rights, ECB, Reuters, Bank of Greece, Thomson Locations: Jackson , Wyoming, U.S, French, Francois Villeroy de Galhau

☆ AI-Driven Cataclysm Could Rock the Job Market: Top Economist
▼ + stars: | 2023-09-18 | by ( Aki Ito | ) www.businessinsider.com time to read: +33 min

Over the course of three conversations this summer, Acemoglu told me he's worried we're currently hurtling down a road that will end in catastrophe. "There's a fair likelihood that if we don't do a course correction, we're going to have a truly two-tier system," Acemoglu told me. "I was following the canon of economic models, and in all of these models, technological change is the main mover of GDP per capita and wages," Acemoglu told me. In later empirical work, Acemoglu and Restrepo showed that that was exactly what had happened. "I realize this is a very, very tall order," Acemoglu told me.

Persons: who's, Katya Klinova, Daron Acemoglu, Simon Johnson, Acemoglu, Johnson, we've, he's, we're, Power, James Robinson, —, Robinson, David Autor, Pascual Restrepo, Restrepo, John Maynard Keynes, Simon Simard, Lord Byron, Eric Van Den Brulle, hasn't, it's, Gita Gopinath, Paul Romer, Romer, What's, Daron, GPT, Asu Ozdaglar, It's, Mark Madeo, Tattong, Erik Brynjolfsson, Brynjolfsson, There's, Yoshua Bengio, Yuval Noah Harari, Andrew Yang, Elon Musk, I've, That's, Aki Ito Organizations: Getty, MIT, of Technology, Hulton, London School of Economics, Stagecoach, Technology, —, International Monetary Fund, Microsoft, Asu, Companies, Computer, Greenpeace, Communications, Big Tech, Workers Locations: Silicon Valley, America, Boston, Istanbul, Turkey, Acemoglu, England, United States, Britain, Australia

☆ The ‘Neutral’ Interest Rate, R-Star, and Other Difficult Economic Numbers - The New York Times
▼ + stars: | 2023-08-25 | by ( Paul Krugman | ) www.nytimes.com time to read: +2 min

Yet even though economics lends itself to number-crunching, getting or even defining the numbers we crunch can be problematic. In particular, the Fed would very much like to know how high it needs to keep the interest rate — or more precisely, the interest rate minus expected inflation — to avoid overheating the economy and reigniting inflation. This “natural rate of interest,” a term invented in 1898 by the Swedish economist Knut Wicksell, is often referred to as r* or r-star. Back in 1968, Milton Friedman, in a deliberate echo of Wicksell, argued that there is also a “natural” rate of unemployment consistent with stable inflation. Since referring to any level of unemployment as natural raises some people’s hackles, this is often referred to as the NAIRU, for non-accelerating inflation rate of unemployment — and often denoted as, you guessed it, u*.

Persons: —, John Maynard Keynes, Victoria, Queen Elizabeth —, don’t, Knut Wicksell, Milton Friedman Locations: Swedish

☆ How Economists Got the Inflation Debate Wrong (on Both Sides) - The New York Times
▼ + stars: | 2023-07-14 | by ( Paul Krugman | ) www.nytimes.com time to read: +2 min

True, economists’ games have been rather lacking in sex and, at least so far, violence. But while I’m tempted to use the old line about how academic disputes are so vicious because the stakes are so small, these debates matter. A current case in point is the determination of central banks across the world to get inflation down to 2 percent. That target emerged in large part from academic research suggesting (probably wrongly) that inflation at that rate would be more or less optimal. I was on Team Transitory, but as inflation went far higher for far longer than I had imagined possible, I admitted that I got it wrong.

Persons: I’m, John Maynard Keynes, Madmen Organizations: HBO

A net 1,400 lots of short positions were covered by the time the market was suspended at 08:15. Xiang Guangda, the charismatic head of China's Tsingshan Holding Group, has attracted much media attention for being the big nickel short. The existence of at least once big nickel short wasn't exactly a secret in the market. LME nickel crisis had turned into potential LME clearing house crisis with Chamberlain having to juggle both parts of the meltdown while also being a nickel market specialist. The handful that remained, as one participant later recalled, knew nothing whatsoever about what was going on in the nickel market so decided to call everyone else back into the room.

Persons: Elliott, Street, Matthew Chamberlain, Chamberlain, Jane Street, Oliver Wyman's, Xiang Guangda, wasn't, Oliver Wyman, John Maynard Keynes, Xiang, doesn't, David Evans Organizations: London, Royal, of Justice, Hong Kong Exchanges, HK, Elliott Associates, Jane, Global, Tsingshan Holding, SEE, Bloomberg, Thomson, Reuters Locations: U.S, Ukraine

☆ Biden finally met with top lawmakers to discuss a debt ceiling solution — but McCarthy says there wasn't 'any new movement' as a catastrophic default inches closer
▼ + stars: | 2023-05-09 | by ( Ayelet Sheffey | Juliana Kaplan | ) www.businessinsider.com time to read: +5 min

Biden met with congressional leaders on Tuesday to discuss raising the debt ceiling. The US could default on its debt as soon as June 1 if Congress doesn't act. "I didn't see any new movement," McCarthy told reporters following the meeting. In the hours leading up to the meetings, McCarthy told Punchbowl News that "we should just get in the room and solve this thing. If Congress fails to raise the debt ceiling, Americans could experience devastating consequences.

☆ Science Proves the 4-Day Workweek Prevents Burnout, Helps Productivity
▼ + stars: | 2023-04-24 | by ( Shubham Agarwal | ) www.businessinsider.com time to read: +13 min

At the time, back in 2018, a New Zealand firm had just wrapped up a landmark trial to test the efficacy of a four-day workweek. A lot of the benefits of the four-day workweek come down to a simple, everyday activity: sleep. A lot of the benefits of the four-day workweek come down to a simple, everyday activity: sleep. Less time, more productiveThough the four-day workweek may seem like a recent phenomenon, it's been decades in the making. But for now, the four-day workweek certainly has the potential to be a far-reaching antidote to pressing workplace concerns such as mass resignations and the burnout crisis.

☆ Guest view: Why bank investors have it the hardest
▼ + stars: | 2023-04-21 | by ( Rupak Ghose | ) www.reuters.com time to read: +6 min

But what matters at least as much for shareholders is the risk of near or total wipe-out, as demonstrated by Silicon Valley Bank and Credit Suisse. No investor could have known that Credit Suisse allowed Archegos to fund its trades with insufficient cash collateral. More recently, U.S. authorities seemed to flip-flop on whether uninsured depositors at other banks would enjoy the same protection offered to Silicon Valley Bank’s customers. The upshot for bank investors is that seemingly low valuations might not be low enough. Previously, he was head of corporate strategy at UK-based brokers ICAP and NEX, and an equity research analyst at Credit Suisse focused on the financial sector.

☆ A flawed but useful economic model for a bleak age
▼ + stars: | 2023-04-14 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

Modern Monetary Theory, which endorses unlimited government spending, was all the rage during the years of ultra-low interest rates. John Cochrane’s fiscal theory fits the bill. Cochrane, a senior fellow of the Hoover Institution at Stanford University, recently published “The Fiscal Theory of the Price Level”. Not only are high interest rates incapable of arresting inflation, fiscal theory suggests they actually make the problem worse. Nor do bondholders operate with rational expectations, as fiscal theory suggests.

☆ ChatGPT is strengthening the case for a 4-day workweek
▼ + stars: | 2023-04-04 | by ( Jacob Zinkula | ) www.businessinsider.com time to read: +7 min

Such a productivity boost could make a four-day workweek more possible. Calls for implementing a four-day workweek have picked up steam over the past year as pilot programs have described promising results. "Any technology that increases productivity, ChatGPT included, makes a shorter workweek more feasible," Carl Benedikt Frey, an Oxford economist, told Insider. 'The workweek length is up for grabs'Rep. Mark Takano, a Democrat from California, is among those advocating a four-day workweek. "Yes, ChatGPT might make a four-day workweek more feasible in principle," Frey said.

☆ Let's ditch the 5-day workweek and the 8-hour workday, says a professor writing a book on how to fix work
▼ + stars: | 2023-03-05 | by ( Juliana Kaplan | ) www.businessinsider.com time to read: +6 min

He thinks a shorter week and a shorter work day are overdue, and that we're heading in the right direction. People do want to work, Bruno said, but they don't want to be resentful about being there. When it comes to a shorter workweek, Bruno said, "I'm very confident it would bring people in, because what are you saying to those people? Senator Bernie Sanders is calling for a shorter workweek; Rep. Mark Takano has reintroduced his proposal to make a 32-hour workweek law in the US. Have you tried out a shorter workweek or workday?

☆ The US could be 4 months away from a potentially disastrous debt-ceiling breach, but nobody's negotiating over how to fix it
▼ + stars: | 2023-03-04 | by ( Ayelet Sheffey | Juliana Kaplan | ) www.businessinsider.com time to read: +8 min

GOP lawmakers have refused a clean increase, but have yet to produce details on what they want in a deal. The US could breach the debt ceiling as soon as July, the CBO estimated. That's because no one seems to be ready or willing to negotiate over how to raise the debt ceiling. The debt ceiling dictates how much money the government can borrow to pay off the expenses it's already approved. For now, Biden's administration has maintained that raising the debt ceiling should be done in a bipartisan way, and without negotiations.

Analysts agree that U.S. equity valuations are expensive, nominally and relative to history and overseas peers. The S&P 500 is still up 3.5% this year, the Nasdaq up 10%, and the S&P 500 price-to-earnings ratio comfortably above historical averages and current international comparisons. "The equity market is buying into a pretty rosy outlook, the 'immaculate disinflation' concept. The S&P 500 is currently trading at around 18.5 times 12-month forward earnings. "Neither of these outcomes are favorable for premium market valuations," Lerner wrote in a note on Monday.

☆ Factbox: Four-day working week: some are seeing a win-win
▼ + stars: | 2023-02-21 | by ( Mark John | ) www.reuters.com time to read: +4 min

Whether they will have the longevity of France's landmark 35-hour working week bill, enshrined into law in 2000, remains to be seen. The country's telecom giant Telefonica separately offered its employees a four-day week - but in exchange for a 12% pay cut. ITALY - Italy's biggest bank Intesa Sanpaolo last year offered staff the option of a four-day working week on the same salary from this January, the first such move by a major Italian employer. Travel company Nordic Visitor, with offices in Iceland, Scotland and Sweden, reduced the working week to 35 hours from 40. Consumer goods giant Unilever has also experimented with a four-day working week for local staff.

Wall Street giant Goldman Sachs - often a market mover with its big macro calls - is a good example. Last month's Bank of America survey of fund managers around the world still had net 68% expecting recession this year. Rates markets reared up to price Fed rates back above 5% and now expect them higher at yearend than they are today. And yet market volatility gauges have stayed peculiarly serene. Bond market volatility (.MOVE) remains well above its 20-year mean - but it has retreated sharply to two-thirds of last year's peaks.

☆ We could soon be facing the biggest financial crisis in history as Republicans threaten to stop paying America's bills
▼ + stars: | 2023-01-19 | by ( Ayelet Sheffey | Juliana Kaplan | ) www.businessinsider.com time to read: +11 min

Republicans are using the debt ceiling as leverage to achieve spending cuts on Democratic priorities. But failing to raise the debt ceiling by the summer could cause the US to default on its debt. Consequences of default are dire, and Biden has urged the GOP to not bargain with the debt limit. "Failure to raise the debt limit will not reduce our debt, but it would wreck the economy if it led to a default. "When you talk about the trillion dollar platinum coin, it sounds very silly — and it is really silly!"

☆ Why recession fears are back: Americans are losing faith
▼ + stars: | 2022-12-16 | by ( Christine Romans | ) edition.cnn.com time to read: +4 min

The famous British economist John Maynard Keynes coined the phrase “animal spirits” to describe what drives investors, consumers and business leaders. “At the end of the day, a recession is a loss of faith,” said Mark Zandi, chief economist at Moody’s Analytics. Yellen explained this week that recession risks permanently exist. “There are always risks of a recession,” Yellen told CBS’s “60 Minutes” in an interview that aired on Sunday. Hopefully we don’t lose faith and run for the bunker and go into recession.”— CNN’s Elizabeth Yang contributed to this report.

☆ Why Inflation Took Off in 2022—and What Happens Next
▼ + stars: | 2022-12-15 | by ( Vincent Reinhart | ) www.wsj.com time to read: 1 min

In 2022, the Federal Reserve made history, almost surely launching hundreds of academic papers, dissertations and tell-all tomes to occupy interest for years to come. For most central bankers, attention is the worst of outcomes. Rather, most believe their ambition should be to follow John Maynard Keynes’s advice and “manage to get themselves thought of as humble, competent people, on the level with dentists.”The Fed only garners such attention making or correcting a major mistake—and there was a bit of both this year. Inflation was allowed to hit a 40-year high. Monetary policy had to pivot forcefully to raise the target range for the overnight rate to 4.25% to 4.5% in 2022, including four 0.75-percentage-point installments.

These so-called Twitter Files were proof of “free speech suppression,” the billionaire claimed. But for supporters, the details are less important than the narrative: another battle in Musk’s grand war to protect and enable “free speech” — seemingly everywhere and anywhere. Before Musk, Twitter wisely began labeling and then removing tweets that disseminated false information about the pandemic. But it feels like Musk’s actions as head of Twitter are incorrectly being blended with his statements on free speech. Musk’s self-proclaimed defenses of free speech sound good — most Americans remain, rightly, committed to this fundamental tenet of constitutional freedom.

☆ ‘Young Bloomsbury’ Review: A Bohemia of Their Own
▼ + stars: | 2022-11-25 | by ( Donna Rifkind | ) www.wsj.com time to read: +1 min

It’s impossible to appreciate the context of Nino Strachey’s book “Young Bloomsbury” without a clear understanding of what Old Bloomsbury was. Unfortunately, that presents its own difficulties, since no one, not even the Bloomsbury Group’s original members, has ever agreed on how to define it. The achievements of the group took place in a variety of fields: literature (Virginia Woolf and E.M. Forster), art history (Roger Fry and Clive Bell), biography (Lytton Strachey), painting and decorative arts (Vanessa Bell and Duncan Grant), international politics (Leonard Woolf) and economics (John Maynard Keynes). Among them, Virginia Woolf, Keynes and Fry were the farthest-reaching innovators. But if the others did not reach the same heights, their work nonetheless remains significant.

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