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China must stop its coal industry [Noah Smith, Noahpinion]

By William McClain
In Noah Smith [Noahpinion]
February 17, 2023
235 views
C
  • China is the world’s chief emitter of carbon dioxide, dwarfing the U.S.
  • China is rapidly transitioning to renewables, building more solar in one year than all the solar installed in the U.S.
  • China is still the world’s coal superpower and coal consumption is expected to continue increasing for at least 3 years
  • The coal industry is politically very powerful in China, with coal companies, provincial governments, and industry workers all relying on it for income and jobs
  • The U.S. may be able to help China transition away from coal by making solar cheaper, cutting a deal to reduce oil use, or by imposing carbon tariffs
  • Leaving coal in the ground provides a form of insurance against future collapses of civilization

Published February 17, 2023
Visit Noahpinion to read Noah Smith’s original post China must stop its coal industry

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No-Landing and the Anti-gravity Economy [kyla scanlon, Kyla’s Newsletter]

By William McClain
In Kyla Scanlon [Kyla's Newsletter]
February 17, 2023
272 views
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  • Retail Sales increased the most in TWO years in January, driven by food services and dining, motor vehicles and people spending in general.
  • For inflation, The CPI print came in kind of hot with core services and goods continuing to rise, mostly driven by shelter costs.
  • The labor market is still strong, with people looking for cars and homes again.
  • The worry now is that there is a new normal of inflation, that it will just hang out around 4-5%.
  • The economy is still moving and grooving, but dancing to the wrong song.
  • The market believes that the Fed will continue its hiking journey, but financial conditions have loosened.
  • People are still spending money on vacations, despite vacation inflation.
  • People are so sick of Things, they don’t care anymore, a phenomena known as the yoloconomy.
  • The market wants to keep dancing, but the Fed is moving towards them quickly, slowly wagging their finger in the no-no motion.
  • The Fed rate hikes have not moved through the economy yet, due to the design of the 30Y fixed-rate mortgage.
  • People are spending more money because of credit card debt and continued dip into savings.
  • People are exhausted and want to consume passively.
  • The economy is booming despite the Fed’s pressure because people are prioritizing profit over people.

Published February 16, 2023
Visit Kyla’s Newsletter to read kyla scanlon’s original post No-Landing and the Anti-gravity Economy

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Decoupling is not deglobalization [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
February 16, 2023
267 views
D

• Decoupling from China is gaining steam, but many voices in the financial press and international economic organizations are sounding a note of concern.
• Critics of decoupling often conflate it with deglobalization, but they are not the same. Decoupling could even make the world more globalized.
• Actual deglobalization started before Trump, likely due to the financial crisis of 2008.
• Studies predict significant losses from decoupling, but their models rely on questionable assumptions.
• Instead of reverting to the old equilibrium of 2015, we should be thinking about how to shape the next wave of globalization in a way that encourages global economic growth while also providing security.

Published February 16, 2023
Visit Noahpinion to read Noah Smith’s original post Decoupling is not deglobalization

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Europe has to stand against Russia [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
February 12, 2023
242 views
E

• Russia has regained the initiative in the war in Ukraine, with a shift in tactics to infantry and artillery barrages, and a mobilization of 300,000 troops.
• Russia’s imperialistic ambitions are clear, with a desire to regain control over former USSR republics, former Warsaw Pact countries, and even parts of Germany.
• Ukraine needs sustained outside help to prevail against Russia’s larger population and resources.
• The U.S. is an unreliable partner against Russia, with support for Ukraine becoming a culture-war wedge issue, and private contractors not always seeing eye to eye with the U.S. government.
• Europe must unite and prepare itself to prevail in a long stand-off with the aggressive empire next door.
• The U.S. is increasingly focusing its attention on Asia, not Europe, and this could weaken its ability to defend Europe from Russia.
• Europe is more powerful than Russia in terms of population, manufacturing output, and economic dependence.
• Europe has already adapted to the cutoffs of Russian gas and oil, and can continue to do so.
• Europe must increase its defense spending, put aside internal squabbles, and recognize that it is on the side of the “good guys” in order to defend itself against Russia.
• The U.S. stabilized Europe in the 20th century, but now Europe must prove that it can defend its own freedom.

Published February 12, 2023
Visit Noahpinion to read Noah Smith’s original post Europe has to stand against Russia

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Canada’s Balancing Act [Joseph Politano, Apricitas Economics]

By Spencer Chen
In Joseph Politano [Apricitas Economics]
February 11, 2023
263 views
C

• Canada’s economic fortunes are tied to America’s, but the country has taken a more conservative approach to the pandemic, leading to slower real GDP growth.
• Now, however, Canada’s economy is on better footing than America’s, with better public health policies leading to faster employment recovery and a commodity boom.
• Inflation has surged, but firms expect cost pressures to decelerate and the Bank of Canada has raised rates by 0.25%.
• Job growth has been strong and broad-based, with immigration and tourism returning.
• Capacity constraints are abating, and wage growth remains comparatively muted.
• The commodity cycle is a headwind, with the value of Canadian commodity exports falling.
• Canadian banks are not tightening as aggressively as their American counterparts.

Published February 11, 2023
Visit Apricitas Economics to read Joseph Politano’s original post Canada’s Balancing Act

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The Developing Country Industrialization series [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
February 10, 2023
240 views
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• Robert Lucas’ quote is used to introduce the article, which is about the development of various countries.
• The article is based on the ideas of Joe Studwell and Ha-Joon Chang, who wrote books about how countries can develop.
• The article looks at the development of Bangladesh, Dominican Republic, Eastern Bloc, Ghana, India, Indonesia, Jamaica, Mexico, Pakistan, Philippines, Poland and Malaysia, Turkey, Ukraine, and Vietnam.
• Each country is discussed in terms of their development strategies, successes, and failures.
• The article concludes with plans for the next series, which will include Ethiopia and Thailand.

Published February 10, 2023
Visit Noahpinion to read Noah Smith’s original post The Developing Country Industrialization series

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The state of Bidenomics [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
February 9, 2023
273 views
T

• Joe Biden gave a good State of the Union speech this week, focusing on economic policy rather than foreign affairs or culture wars.
• The U.S. economy is currently in a disinflationary boom, with high employment and fast wage growth, but low inflation.
• Biden deserves some credit for this, as he signaled confidence in the Fed Chair, eased sanctions on Venezuela, and reversed his restrictive approach to oil drilling.
• However, two years of high inflation have taken a bite out of wages and incomes, leaving some lasting scars.
• To boost wages and incomes, Biden can increase labor demand by pumping up investment, and increase labor’s bargaining power by passing the PRO Act and staffing federal agencies with pro-union people.
• Biden’s grand unified theory of Bidenomics includes three pillars: investment, cash benefits, and job provision in care industries.
• Biden has been pushing for investment to boost labor demand, but so far there has been no investment boom.
• The U.S. is facing delays and high construction costs that are preventing investment from happening.
• Biden needs to tackle the basic problem of stymieing investment, not just spend more money.
• To boost wages and incomes, Biden can increase labor demand by pumping up investment, and increase labor’s bargaining power by passing the PRO Act and staffing federal agencies with pro-union people.

Published February 9, 2023
Visit Noahpinion to read Noah Smith’s original post The state of Bidenomics

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Margin and Opportunity [kyla scanlon, Kyla’s Newsletter]

By Spencer Chen
In Kyla Scanlon [Kyla's Newsletter]
February 9, 2023
277 views
M

• Things are still weird in the economy, with speculative mania continuing despite the Fed raising rates.
• Bing could be the new Google as Microsoft goes into AI-Powered search.
• Adam Neumann came out to explain his new company, which is focused on community-owned apartments.
• The economy is a circuit board of people, interacting with each other and other things, money is the electric current.
• Emoconomics is the combination of feelings and expectations, fueled by data.
• George Soros and his work on reflexivity and Keynes and animal spirits show that if prices are bad, people feel bad and the economy feels bad.
• Fischer Black’s 1986 paper Noise states that the price level and rate of inflation are literally indeterminate and determined by expectations.
• Wealth inequality has only gotten worse, and the divergence in ‘vibes’ is demarcated by the widening gap between those that can shrug off inflation and those who cannot.
• The Fed’s primary tool to reset the vibes has been to raise rates, which has a direct impact on consumers.
• The combination of a lack of belief with a breaking macro environment has made it so we can talk ourselves into a downturn through tipping dominoes and feedback loops.

Published February 9, 2023
Visit Kyla’s Newsletter to read kyla scanlon’s original post

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Chartbook #195: How to pay for Putin’s war?Russia’s technocrats torn between defense of the austerity status quo and national mobilization. [Adam Tooze, Chartbook]

By Spencer Chen
In Adam Tooze [Chartbook]
February 8, 2023
243 views
C

• The Russian economy emerged from the first shock of the war and sanctions in 2022 far better than many expected, with a fall in GDP of just 2.2%.
• Putin’s reaction was to crow that the experts were wrong, but the underlying issue is economic management.
• The track record of stability clocked up by Putin’s regime comes at a heavy price in terms of macroeconomic imbalance.
• Putin’s regime has increasingly resorted to “War Keynesianism”, with large salary payments to soldiers propping up incomes and building a constituency loyal to the regime.
• Russia must manage the bottlenecks imposed by sanctions and ensure that aggregate demand continues to bubble along.
• The truce between the war economists and the conservative advocates of continuity as personified by Nabiullina has held, but it will be tested in 2023.
• The budget deficit is 1.8 trillion RUB (1.2% of GDP) and liquid assets in the National Welfare Fund amount to 4% of GDP.

Published February 8, 2023
Visit Chartbook to read Adam Tooze’s original post Chartbook #195: How to pay for Putin’s war?Russia’s technocrats torn between defense of the austerity status quo and national mobilization.

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Repost: Why I’m so excited about solar and batteries [Noah Smith, Noahpinion]

By Spencer Chen
In Noah Smith [Noahpinion]
February 7, 2023
176 views
R

• Solar and battery technology is revolutionizing the energy landscape, making renewable energy cheaper than ever before.
• The productivity slowdown of the 1970s was likely caused by expensive energy, as oil prices rose and no better energy sources were available.
• IT innovation has driven some productivity growth, but not enough to replace the energy stagnation.
• Solar and battery technology is driving a new technological revolution, with costs continuing to decline.
• Cheap energy has the potential to drive productivity growth, enabling a variety of benefits such as desalination, improved home appliances, more efficient construction, and electric transportation.
• Cheap energy could also reduce inequality, if the productivity gains are shared equally.

Published February 7, 2023
Visit Noahpinion to read Noah Smith’s original post Repost: Why I’m so excited about solar and batteries

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