Salient to Investors: Gary Shilling writes: The pessimistic economic theories are wrong. Weak growth will NOT last forever despite the Reinhart-Rogoff findings that the economy contracts at a 0.1 percent annual rate when government debt exceeds 90 percent of GDP. In the late 1970s and early 1980s many economists presumed
READ MORE... →Salient to Investors: Economist Thomas Piketty excludes human capital – an individual’s labor power, skills, training and abilities – from his analysis of wealth inequality because it cannot be owned or traded on a market, but recognizes it is key to understanding inequality. Sean Reardon at Stanford said low-income kids
READ MORE... →Salient to Investors: Philip Vermeulen at the ECB said: The top 1 percent of US households owns 35-37 percent of all wealth, higher than the 34 percent finding of the 2010 US Survey of Consumer Finances. Our knowledge of the wealth distribution is imperfect, and very likely underestimates wealth at
READ MORE... →Salient to Investors: A Bernstein Research study “Do High R&D Spenders in Tech Generate Stock Outperformance?” found: Over 1, 3, 5, and 10-year periods, the companies with the lowest spending on R&D tended to perform the best on Wall Street. Over the past 5 years, stocks in the biggest R&D
READ MORE... →Salient to Investors: Sabine Lautenschlaeger at ECB said radical programs such as QE should only be considered in real emergency situations, like imminent deflation, because the side effects are especially significant, but said that those risks are neither visible nor expected. Benoit Coeure at ECB said rates will remain very
READ MORE... →Salient to Investors: The economy resembles the 1970s more than the 1990s. Alan Blinder at Princeton sees risk of the economy moving in the same direction as it did after 1973, though we are a long way from seeing a sustained rise in inflation. Blinder said the long-term trend in
READ MORE... →Salient to Investors: The Pew Research Center said the share of mothers with children under age 18 who do not work away from home rose to 29 percent in 2012, versus the modern-era low of 23 percent in 1999, which ended the decline in most years from 1970 to 1999. D’Vera
READ MORE... →Salient to Investors: Jeremy Grantham at GMO said: The slow recovery is due to the Fed’s actions. In the 1980s the US had an aggregate debt level of 1.3 times GDP versus 3.3 times debt now and yet GDP has been slowed – showing that more debt or QE does
READ MORE... →Salient to Investors: TS Eliot called TV “a medium of entertainment which permits millions of people to listen to the same joke at the same time, and yet remain lonesome”. Ethan Kross et al at the University of Michigan and the University of Leuven found that Facebook use correlated with
READ MORE... →Salient to Investors: Paul Krugman said weak emerging markets are the downside of the mad rush by investors for return in an economic environment that was very poor due to weak economic performance in developed markets. When the amount people want to save exceeds the volume of investments worth making
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