Fortune (April 27)
“The Iran conflict has confirmed a transformation in the economics of warfare toward cheap, mass-produced weapons, forcing a wholesale rethinking of military procurement.” Iran’s strategy “is the opposite of the West’s model of precision lethality.” It deliberately embraces mass losses because “even the most advanced defenses can be overwhelmed with sufficient volume” and “cost asymmetry” places tremendous burden on the enemy. In this case, “cost asymmetry is worsened by severe production and supply-chain constraints.” The U.S. has burned through 50% of its THAAD interceptors, with the next delivery of THAAD interceptors not expected until April 2027.
Tags: Cheap, Conflict, Cost asymmetry, Economics, Iran, Mass losses, Mass-produced, Military procurement, Precision lethality, Production, Rethinking, Supply-chain constraints, THAAD interceptors, Transformation, U.S., Volume, Warfare, Weapons
Wall Street Journal (February 27)
“Economics 101 teaches that international trade is all about comparative advantage.” Specialization and trade result “in everyone getting more of everything.” This theory “no longer guides global trade. Instead, what’s happening looks more like portfolio theory. Countries are no longer maneuvering to maximize gains. They’re diversifying to minimize losses. The risk they’re hedging against? The U.S.”
Tags: Comparative advantage, Diversifying, Economics, Hedging, International trade, Maximize gains, Minimize losses, Portfolio theory, Risk, Specialization, U.S.
Washington Post (April 9)
“Trump grabbed a life preserver. In announcing a 90-day pause on most tariffs… he acknowledged, however reluctantly, the harsh realities of economics, foreign policy and domestic politics.” While the pause is “indeed worth rejoicing,” it is only a partial pause as the trade war continues with China. “Investors, business and consumers will still be living with uncertainty. For the long term, Trump and his team are well advised to come up with a less volatile economic strategy.”
Tags: Business, China, Consumers, Economic strategy, Economics, Foreign policy, Investors, Lfe preserver, Partial, Pause, Politics, Realities, Tariffs, Trade war, Trump, Uncertainty, Volatile
Bloomberg (October 21)
“The global economy is heading toward year end with unexpected tailwinds as slowing inflation clears a path for an unlikely soft landing. But while the economics side of the equation is looking up, political hurdles lie ahead.” The biggest hurdle may be the U.S. election. “The resilience of the world’s major economies is about to be tested” if Trump is elected and institutes his tariff program.
Tags: Economics, Election, Global economy, Inflation, Major economies, Political hurdles, Resilience, Soft landing, Tailwinds, Trump, U.S., Unexpected
Institutional Investor (August 29)
“Now that investors can get factor-based funds on the cheap, they’re pushing quants in new directions.” This presents new challenges. “One is a move away from a heavy reliance on decades of historical data and back tests to tying this in-depth research to the realities of the current economic and market environment.” Another challenge is “getting the right people” to do this. “Many quant managers historically hired people with expertise in data,” but “now it’s the background in economics and finance that’s become critical.”
Tags: Back tests, Challenges, Cheap, Data, Economic, Economics, Factor-based funds, Finance, Historical data, Investors, Managers, Market, Quants, Realities, Reliance, Research
Oilprice.com (November 18)
“The real reason that Big Oil won’t raise production is a matter of simple economics. Keeping the supply tight is just too good for the bottom line…. In fact, according to figures from Deloitte LLP, oil explorers in the United States are making more money now than at any other point in the more-than decade-long history of the nation’s shale revolution.”
Tags: Big oil, Bottom line, Decade, Deloitte, Economics, Money, Production, Shale revolution, Supply, Tight, U.S.
Financial Times (May 28)
ExxonMobil’s annual general meeting should be “a wake-up call for other executives with a bunker mentality.” Engine No 1, an obscure hedge fund, got shareholders to elect two directors by focusing on economics, not ethics, arguing that “Exxon has been so slow to recognize the need for a transition away from fossil fuel that its revenues will crumble, destroying investor capital.” Today’s activists “are not just trying to save the world; they are also trying to save their own portfolios in a world where regulators are enforcing green standards.”
Tags: Activists, AGM, Bunker mentality, Capital, Directors, Economics, Engine No 1, Ethics, ExxonMobil, Fossil fuel, Hedge-fund, Investor, Portfolios, Revenues, Shareholders, Transition, Wake-up
Forbes (March 12)
“If the economics world handed out gold medals for unintended consequences, Japan’s Yoshiro Mori would be a shoo-in.” While “Japan has had more sexist-rant scandals,” none of those “occurred on the IOC’s watch—or during the social-media age.” The $25 billion being spent on the Olympics could, oddly, “be money well spent if the sexism scandal that felled Mori gets Japan to finally get serious about gender parity,” expanding the annual economy by the $750 billion that womenomics is expected to unleash.
Tags: Economics, Gender parity, Gold medals, IOC, Japan, Mori, Olympics, Scandals, Sexist, Social media, Unintended consequences, Womenomics
Bloomberg (November 2)
China’s belt and road master plan “to project Chinese power, influence and trade across much of the world could well undermine all three.” The trillion-dollar global infrastructure scheme has gotten out of control. “A scaled-down, better-managed Belt and Road—guided more by economics and less by politics—should, as intended, promote growth and trade across the region and beyond. That would serve everybody’s interests.”
Tags: Belt and road, China, Economics, Growth, Influence, Infrastructure, Politics, Power, Trade
The Economist (March 31)
“Just six words suffice to sum up President Donald Trump’s approach to trade …make threats, strike deals, declare victory.” But this will not create a victory. “Even if conflict is averted and China gives ground… the result will be a bad one for the world, and for America. That is partly because of Mr Trump’s character. If he thinks he has won one fight, he is likelier to start another. It is also because his policy is founded on wretched economics and dangerous politics.”
Tags: China, Conflict, Dangerous, Deals, Economics, Politics, Threats, Trade, Trump, Victory, Wretched
