AYA Analytica financial health memo February 2018
As of February 2018, this regular podcast is available on our Andy Yeh Alpha fintech network platform.
President Trump tweets his key decision to oust State Secretary Rex Tillerson due to intense disagreement over diplomatic affairs.
President Trump tweets his decision to oust State Secretary Rex Tillerson after several months of intense disagreement over diplomatic affairs.
Trump sometimes uses tweets to disparage the former Exxon-Mobil CEO's efforts at international diplomacy.
Also, Trump nominates CIA Director Mike Pompeo to replace Tillerson, and then Deputy CIA Director Gina Haspel succeeds Pompeo as the first woman to lead the Central Intelligence Agency (CIA).
In fact, this strategic Rexit move arises as President Trump is about to embark on historic and high-level direct dialogues with North Korean commander-in-chief Kim Jong Un.
Pompeo may initiate bilateral secret talks with the North Korean dictator to facilitate a smooth and peaceful transition to denuclearization.
Pompeo has yet to demystify when and where the potential Trump-Kim summit may take place.
Moreover, Rexit signals that President Trump often plays hardball on foreign affairs in the midst of substantial geopolitical tension and uncertainty.
Tillerson indeed disagrees with President Trump on several fronts.
First, President Trump insists on withdrawing from the Paris climate change accord, whereas Tillerson suggests that American should commit to staying in this accord.
Second, Tillerson seems soft on President Trump's preference for supporting the current embargo against Qatar in opposition to Saudi Arabia.
This latter geopolitical issue can affect global oil price fluctuations in the medium term.
Third, President Trump and Tillerson further differ in their stances on whether American should pursue diplomatic solutions to denuclearization in North Korea and Iran.
Trump prefers to extend the duration of economic sanctions on these countries in order to reach peaceful resolution, but Tillerson dismisses such brute force.
All of these geopolitical issues affect international stock market development, economic policy uncertainty, and energy-driven inflation.
The Trump team blocks Broadcom's bid for Qualcomm due to national security concerns and 5G telecom network issues.
The Trump administration blocks Broadcom's bid for Qualcomm due to national security concerns and 5G telecom network issues.
Broadcom primarily make microchips for broadband communication networks such as wireless broadband telecoms, modems, routers, and switches.
The White House takes an extraordinary action to block this major corporate deal that might inadvertently give China more influence in global technology.
In an executive order, President Trump blocks Broadcom's $117 billion bid for Qualcomm due to national security concerns.
There is credible evidence that Broadcom and its affiliates (such as China's HuaWei and ZTE) might threaten to impair U.S. 5G telecom network dominance and digital supremacy.
For this reason, both Broadcom and Qualcomm must immediately and permanently abandon the takeover proposal.
The Trump administration releases a recent investigation that China's theft of intellectual properties such as U.S. patents, trademarks, and copyrights etc has cost American companies around $1 trillion.
In response, the Trump administration may introduce punitive tariffs on Chinese imports to dramatically reduce bilateral trade deficits.
This deficit reduction can contribute to a better balance in the U.S. congressional budget for better mid-term election results that favor the Trump administration.
Peter Thiel shares his money views of President Trump, Facebook, Bitcoin, global finance, and trade.
Peter Thiel shares his money views of President Trump, Facebook, Bitcoin, global finance and trade etc.
As an early technology adopter, Thiel invests in Facebook and Bitcoin.
The former connects people with better social integration around the world, and the latter provides a new crypto medium of exchange for online payments.
Network effects breed positive feedback loops, whereas, there is a critical inflection point where these network effects fall over into the madness of crowds.
As one of the co-founders for PayPal and Palantir, Thiel thinks it is important to ensure third-party payment security for safer cross-border finance and trade.
Thiel supports President Trump because his economic policy reform helps avoid fake culture wars between different civilizations.
Trump tax cuts and infrastructure expenditures help boost American household consumption, firm production, and financial intermediation.
In light of antitrust investigations into Google and some other Silicon Valley tech firms, Thiel considers these firms in trouble as government regulation looms as a major business risk.
As a serial entrepreneur, Thiel emphasizes the importance of ambition that transcends just making money for a company.
Disruptive innovation not only replaces prior technology, but also significantly improves and enriches the economic lives of others.
President Xi seeks Chinese congressional approval for abolishing his term limits of strongman rule with better trade deals and economic ties.
President Xi seeks Chinese congressional approval and constitutional amendment for abolishing his term limits of strongman rule with more favorable trade deals and economic ties.
Foreign investors now activate their keen interest in Chinese tech titans such as Baidu, Alibaba, and Tencent (BAT).
Baidu specializes in Chinese online search; Alibaba focuses on international e-commerce and fintech solutions; and Tencent derives most revenue from Chinese instant messengers such as WeChat and Tencent QQ, online games, and other entertainment and lifestyle software solutions.
BATs operate as oligopolies with competitive moats that manifest in the form of patents, trademarks, copyrights, and other intellectual properties.
Their high product market concentration serves as a primary explanation for worse income and wealth inequality in China.
President Xi's strongman rule can further entrench these Chinese tech titans with product market dominance.
This new Sino political economy defeats the western purpose of admitting China into the World Trade Organization (WTO) after the post-war collapse of the Soviet Union.
China resists both regional trade integration and global economic order and thus often fails comply with WTO trade rules on fair trade and intellectual property protection.
Few mainland residents embrace democracy, economic freedom, and the rule of law in China.
White House economic advisor Gary Cohn resigns due to his opposition to President Trump's protectionist tariff stance.
White House top economic advisor Gary Cohn resigns due to his opposition to President Trump's recent protectionist decision on steel and aluminum tariffs.
These steel and aluminum tariffs target Canada, Europe, Mexico, and China.
Some western allies may receive interim exemptions on a case-by-case basis.
Through this abrupt tariff tactic, President Trump seeks to dramatically reduce U.S. trade and budget deficits for better mid-term election results.
The former Goldman Sachs president had strongly opposed trade barriers such as tariffs, quotas, and even embargoes.
Cohn serves as a steady man in the White House and attempts to push President Trump away from some of his most aggressive instincts on trade.
In fact, Cohn would prefer the U.S. to keep the North American Free Trade Agreement (NAFTA).
As a proponent of international free trade, Cohn would support the U.S. to join the Trans-Pacific Partnership (TPP).
In effect, these global free trade movements reflect the collective wisdom and combination of cross-border interests and efforts for fewer trade frictions.
CNBC economic media commentator Larry Kudlow is likely to succeed Cohn as the Director of the National Economic Council.
Kudlow may defend the Trump administration's gradual tariff tactics against China, Canada, Europe, and Mexico.
Trump imposes tariffs on steel and aluminum in a trade war with some exemptions for Canada and Mexico.
Trump imposes high tariffs on steel (25%) and aluminum (10%) in a new trade war with subsequent exemptions for Canada and Mexico.
The Trump administration's Trade Act Section 232 investigation suggests that the main sources of U.S. steel-and-aluminum trade deficits are Canada, Europe, Mexico, and China.
In light of both Section 301 and Section 232 investigations, the steel and aluminum tariffs seem to target China and the European Union.
There are a pair of pertinent problems with imposing tariffs on foreign imports of this nature.
First, this tariff tactic is a massive diplomatic gambit.
In effect, this tactic may create the imminent risk of retaliation from multiple countries.
Second, this strategic move inevitably leads to higher consumer prices from food cans to cars and airplanes insofar as these products involve the use of steel or aluminum.
In fact, these price increases can feed back to fuel higher inflation in America.
Also, American households and firms may experience higher costs and so lower disposable income.
The resultant decrease in aggregate demand can be detrimental to U.S. economic output, employment, and capital investment.
When push comes to shove, the law of inadvertent consequences counsels caution.
Fed's new chairman Jerome Powell testifies before Congress for the first time.
Fed's new chairman Jerome Powell testifies before Congress for the first time.
He vows to prevent price instability for U.S. consumers, firms, and financial intermediaries by gradually raising interest rates to contain inflation.
Several stock market observers and commentators warn of the Yellen-Powell regime switch from dovish to hawkish monetary policy decisions.
However, Powell seeks to balance the need to guard against excessive inflation with the real benefits of allowing the U.S. economy to enjoy the tailwinds of Trump fiscal stimulus, economic output expansion, full employment, and robust wage growth.
The Federal Reserve now explores whether the U.S. unemployment rate can fall to the lowest range of 3.8% to 4.1% in 17 years before inflation starts to accelerate.
In accordance with Powell's congressional testimony, the Federal Reserve's current monetary policy instruments include its gradual upward interest rate adjustment, balance sheet shrinkage, and 2% symmetric core CPI inflation target.
Powell confines his testimony to the dual mandate of both price stability and maximum employment with minimal discussions of distributional economic inequality issues in America.
With respect to financial deregulation, Powell expects to roll back at least some of the more stringent Dodd-Frank rules and stress tests on large banks and other financial institutions.
Buffett discusses Berkshire's cash ambition, its reinsurance business, and his succession plan.
Warren Buffett releases his annual letter to Berkshire Hathaway shareholders as of February 2018.
Buffett discusses Berkshire Hathaway's cash ambition, its reinsurance business, the recent increase in corporate net worth, and his succession plan.
First, Buffett highlights the importance of *float* for insurance companies like Berkshire Hathaway, i.e. the company collects insurance premiums that have not been paid out as claims.
Buffett and Munger can invest the float as these premiums absorb losses gradually throughout the life of each insurance policy.
Because this reinsurance counterbalances long-tail losses, Berkshire can grow its float to extraordinary levels over time.
Second, corporate cash stockpiles surge to $116 billion, so Buffett prefers to maintain this cash position for near-term mergers and acquisitions (instead of dividend payout and share buyback).
However, Buffett considers most recent takeover targets with no sensible purchase prices at the current stage of the real business cycle.
Also, Buffett emphasizes the fact that debt-free investors can better take advantage of short-term stock market crashes such as Black Monday in 1987, the Asian financial crisis in 1997, and the global economic recession in 2008.
Berkshire experiences a one-time hefty increase in net worth by $65 billion or 23% primarily due to the Trump tax cuts.
These tax credits not only strengthen Berkshire's current fortress balance sheet, but also allow Buffett and Munger to cast a wider net of potential M&A deals.
Third, Buffett announces that Berkshire's next CEO will oversee company operations while the other half of this job will be given to stock-pickers who specialize in dynamic asset management.
On the latter investment front, the likely successors are Todd Combs and Ted Weschler.
These high-skill money managers both have successfully grown their assets under management (AUM) to $25 billion in early-2018.
Under this succession plan, Combs and Weschler will thus continue the value investment philosophy in the post-Buffett reinsurance business structure.
Snap cannot keep up with the Kardashians because its stock loses $1 billion market value after Kylie Jenner tweets about her decision to leave Snapchat.
Snap cannot keep up with the Kardashians because its common stock loses market value 7% or $1 billion right after Kylie Jenner tweets about her decision to leave Snapchat.
The root cause of this rare incidence may be Snap's recent redesign, or Jenner's newfound motherhood.
The former can be a real concern that her 25 million Twitter followers share in numerous replies.
These empathetic users aggravate this deep concern about Snap's recent redesign and thus echoes ambivalent Wall Street investor sentiments.
Several Wall Street stock analysts point out that it can be more difficult for Snap to monetize the Snapchat business model in contrast to ad-income-driven Facebook, Google, and Twitter.
In recent times, Snap initiates some smart strategic moves to draw a clear line between social interactions and media posts and video streams.
In fact, Snap needs to manage this interim transition well as celebrity influencers such as Kylie Jenner are an essential source of high-quality content in the Snap recipe for success.
With 25 million Twitter followers, Jenner carries a great deal of social influence over millennials.
In terms of demographic attributes, the typical Snapchat user is between 18 and 24 years old and tends to have much shorter attention span.
Fed minutes reflect gradual interest rate normalization in response to high inflation risk.
Fed minutes suggest gradual interest rate normalization in response to higher inflation risk.
FOMC members revise up the economic projections made at the previous December 2017 committee forum.
Many financial economists and market watchers expect gradual further hawkish adjustments in U.S. monetary policy.
These hawkish adjustments inevitably entail interest rate hikes that help constrain money supply growth near full employment.
In effect, these gradual hawkish adjustments help better balance the inexorable and mysterious trade-off between inflation and unemployment.
As Treasury bond yields rise in response to this hawkish monetary policy stance, most major U.S. stock market indices such as Dow Jones, S&P 500, and NASDAQ decline as a result.
Several FOMC members remain cautious about high asset valuation and leverage within Corporate America.
Numerous public corporations make productive use of debt and cash stockpiles with generous cash dividends and share repurchases.
Also, excessive cash accumulation, high asset valuation, and incessant corporate debt usage breed financial contagion with little impact on real macro variates such as economic output, employment, and capital investment.
This recent trend may or may not sustain in the long run.
The resultant concern thus signals bouts of potential financial instability outside the financial system.
President Trump unveils his ambitious $1.5 trillion public infrastructure plan.
President Trump unveils his ambitious $1.5 trillion infrastructure plan.
Trump proposes offering $100 billion in federal incentives to encourage states and cities to invest in roads, bridges, highways, railways, and water utilities.
These federal incentives help spur $1.5 trillion infrastructure expenditures over the next decade.
Transportation Secretary Elaine Chao indicates to the House Transportation and Infrastructure Committee that the Trump administration seeks to work with Congress to find bipartisan solutions.
All options are on the table, and the Trump administration is open to considering all revenue sources.
This plan calls for allocating at least $200 billion in initial federal funds to encourage states, cities, and the private sector to spur $1.5 trillion infrastructure expenditures over the next decade.
Also, this plan would reduce the amount of time for issuing onsite construction permits for infrastructure projects to 2 years.
Since his presidential election victory, Trump has thus far focused on trade, healthcare, immigration, gun control, and other socioeconomic issues.
There may or may not be enough time for passing an infrastructure bill in mid-2018 or late-2018.
U.S. lawmakers may need to act fast during a lame-duck interim session after the November 2018 midterm elections.
The new Fed chairman Jerome Powell faces a new challenge in the form of core CPI rate hikes toward 1.8%-2.1%.
The new Fed chairman Jerome Powell faces a new challenge in the form of both core CPI and CPI inflation rate hikes toward 1.8%-2.1% year-over-year with strong wage growth.
The recent greenback depreciation aggravates these inflationary concerns as non-farm payroll unemployment declines toward 4% or even 3.9%.
This dollar depreciation raises U.S. import prices and thus can drive greater inflationary momentum.
More substantive evidence can shine fresh light on whether the current Trump stock market rally indicates irrational exuberance for most stock and bond investors.
The Federal Reserve can raise the interest rate to better balance the dual mandate of price stability and maximum employment.
Powell needs to weigh the pros and cons of another interest rate hike that effectively constrains money supply growth near full employment.
Price stability helps reduce economic policy uncertainty that may inadvertently dampen both household consumption and capital investment decisions.
On the other hand, Powell should pick the low-hanging fruits of full employment before America experiences the next gradual deterioration in labor market conditions.
During the Trump administration, it takes about 3% to 3.5% real GDP economic growth for macro momentum to trickle down to the typical U.S. household, producer, and financial intermediary.
Supply-side Trumpism needs to prove its feasible case in due course.
Rampant stock market fears shake investor confidence during the recent Fed Chair transition from Yellen to Powell.
Quant Quake 2.0 shakes investor confidence with rampant stock market fears and doubts during the recent Fed Chair transition from Janet Yellen to Jerome Powell.
This healthy fundamental recalibration indicates the recent fact that 96% of all S&P 500 stocks experience 20% drastic declines from their own 52-week high share prices.
Investor concerns pertain to U.S. inflationary momentum and bond yield appreciation.
As professional forecasters mull over the inexorable and mysterious trade-off between inflation and unemployment, the new Federal Reserve chairman tends to retain a hawkish monetary policy stance.
In this light, these forecasters predict that the Federal Reserve may hike the neutral interest rate at least 3 to 4 times this year.
This neutral interest rate helps contain inflation near full employment well within Powell's congressional dual mandate.
AQR money manager and founder Cliff Asness points out that the U.S. financial system remains robust with less leverage and fair valuation despite the recent stock market plunge in early-February 2018.
Asness believes in his conservative implementation of quantitative strategies across the vast majority of his fundamental factor portfolios of stocks, bonds, commodities, and currencies.
His favorite value and momentum factor investment strategies resonate with Warren Buffett's long-term asset investment philosophy: *Price is what we pay, and value is what we get. We should be fearful when others are greedy, and we should be greedy when others are fearful.*
In his recent letter to Berkshire Hathaway shareholders, Warren Buffett emphasizes that stock market corrections are often both normal and unpredictable.
From a long-term perspective, the stock market sometimes goes *on sale*.
Buffett thus suggests that it is important for investors to replenish their cash positions in order to take advantage of sporadic stock market corrections.
When these corrections take place, the stock price often fall below the long-term equilibrium intrinsic value.
Beyond conventional wisdom, greed is *good* and pays well in the tripartite form of capital gains, cash dividends, and share repurchases.
U.S. senators urge the Trump administration to prevent the IMF from bailing out several countries that face predatory Chinese loans.
U.S. senators now urge the Trump administration with a bipartisan proposal to block the International Monetary Fund (IMF) from bailing out several countries that face predatory Chinese loans.
These predatory Chinese loans are part of the Belt-and-Road infrastructure development plan for the next decade.
Belt-and-Road is a $8 trillion global infrastructure plan that the Xi administration now uses to expand its economic prowess around the world.
In effect, the Xi administration makes productive use of this infrastructure debt to control the economic policies in several Asian countries such as Sri Lanka and Pakistan.
President Xi intends to transform Belt-and-Road into a new world economic order with fresh and unique Chinese dominance.
U.S. State Secretary Mike Pompeo points out that at least 23 of these 68 Belt-and-Road countries now face financial debt difficulties.
This debt distress signals the collective reliance of Belt-and-Road countries on China.
Also, China holds about $1.2 trillion U.S. Treasury bonds, bills, and notes and thus can directly influence the U.S. yield curve.
Should the Belt-and-Road countries fail to honor their principal and interest payments on their debt contracts with China in the absence of IMF bailout finance, the Xi administration may have to unload its U.S. Treasury bond positions.
In turn, China may effectively use its rich foreign reserves to entrench its current 260% public-debt-to-GDP ratio and Belt-and-Road infrastructure debt distress.
In the worst-case scenario, these ripple effects may inadvertently cause U.S. yield curve inversion.
Yield curve inversion reflects a negative term spread between short-term and long-term interest rates, indicates corporate investment sentiments with respect to mergers and acquisitions and capital expenditures, and so often recurs in the early dawn of a severe economic recession.
This red alert poses a major gray rhino or some obvious highly probable negative incidence in contrast to improbable black-swan rare events such as the U.S. subprime mortgage crisis, the European sovereign debt spiral, and the Global Great Depression.
For these legitimate reasons, the Trump administration's advisors and delegates such as Pompeo, Mnuchin, and Kudlow need to alleviate this economic security concern in due course.
President Donald Trump delivers his first state-of-the-union address.
President Donald Trump delivers his first state-of-the-union address.
Several key highlights touch on socioeconomic issues from fiscal stimulus and trade protectionism to infrastructure, immigration, and national security.
The massive Trump tax cuts provide tremendous relief for the middle-class Americans and small businesses.
About 3 million American workers receive tax incentives primarily due to this legislative win for the Trump administration and Republican-driven Congress.
When the U.S. Trade Act Section 301 investigation concludes in due course, the Trump administration expects to escalate tariffs, quotas, and even embargoes on Chinese imports.
These tariffs and other trade barriers effectively penalize China for perennial patent, trademark, and copyright infringement and other intellectual property theft.
This trade protectionism helps eradicate hefty U.S. trade deficits to the detriment of China and some western allies such as Canada, Europe, and Mexico.
Trump also urges Congress to pass new legislation in order to replenish $1.5 trillion U.S. modern infrastructure with new roads, bridges, highways, railways, and waterways.
Moreover, the Trump administration designs new immigration policies with better border control to circumvent drugs, gangs, and other criminal activities that plaque many U.S. immigrant communities.
Finally, Trump introduces foreign investment restrictions in defense of national economic security from LTE broadband technology to 5G telecommunication.
All of these economic reforms can help ensure sustainable economic prosperity in America.
After its iPhone X launch, Apple reports its highest quarterly revenue over $80 billion in the tech titan's 41-year history.
After its flagship iPhone X launch, Apple reports its highest quarterly sales revenue over $80 billion in the tech titan's 41-year history.
Apple expects to distribute to its shareholders $143 billion cash stockpiles in the form of cash dividends and share repurchases.
Apple also plans to make $30 billion capital investments in America in the next 5 years.
Most of these capital expenditures contribute to opening data centers for iCloud services.
Apple expects to create more than 20,000 new jobs at its extant campuses and a new one for technical support.
In fact, Apple is the latest one to announce new cash distributions that arise from the new Trump tax holiday.
For the Trump administration and Republican-driven Congress, this legislative victory aims to transform corporate tax credits into better jobs and higher wages.
Some companies may instead funnel these tax credits into share buyback and dividend payout in order to side-step American workers.
It is thus important for most investors to assess whether these tax cuts can serve as key fiscal stimulus for better domestic employment and macroeconomic growth.
In due course, the Trump stock market rally can continue in the medium term only when 3%-3.5% real GDP growth trickles down to benefit the typical U.S. consumer, producer, and financial intermediary.
Amazon, Berkshire Hathaway, and JPMorgan Chase establish a new company to reduce U.S. employee health care costs.
Amazon, Berkshire Hathaway, and JPMorgan Chase form a new company to reduce U.S. employee health care costs in direct negotiations with drugmakers, doctors, and hospitals.
Jeff Bezos, Warren Buffett, and Jamie Dimon effectively take on the world's most expensive healthcare network.
This new non-profit venture poses a new challenge to an inefficient U.S. healthcare system.
Also, this joint venture causes the share prices of healthcare companies to decline across the board.
The new company will initially focus on innovative technology for high-quality and transparent healthcare for more than 500,000 U.S. employees across Amazon, Berkshire, and JPMorgan.
The tripartite entity can negotiate directly with drugmakers, doctors, and hospitals in order to use their vast databases to handle higher healthcare service costs.
In turn, these negotiations undercut the healthcare industry's middlemen from health insurers to pharmacies such as CVS, Aetna, Cigna, Merck, J&J, and Novartis.
U.S. healthcare expenditures increase faster than inflation from year to year.
As of early-2018, these healthcare expenditures account for 18% of total real GDP.
U.S. corporations sponsor healthcare benefits and services for more than 160 million American workers.
Overall, the new tripartite joint venture represents a major healthcare innovation that can shake up the inefficient U.S. healthcare industry.
Former Fed Chair Alan Greenspan discerns asset bubbles in the American stock and bond markets in early-2018.
As he refrains from using the memorable phrase *irrational exuberance* to describe bullish investor sentiments, Alan Greenspan discerns asset bubbles in the U.S. stock and bond markets in early-2018.
Despite some recent healthy fundamental recalibration, Greenspan warn of high U.S. stock indices from Dow and S&P 500 to NASDAQ and Fortune 500.
Also, Greenspan points that that the current government bond yields hover not far from historically low thresholds.
The latter may transform into potential yield curve inversion, which often signals the early dawn of an economic recession.
In fact, this inversion correctly predicts U.S. economic downturns in all decades right after the 1960s.
As the Federal Reserve gradually normalizes and tightens its monetary policy stance, interest rates continue to raise the relative likelihood of yield curve inversion.
Greenspan shares his ingenious insight that higher long-term government bond yields may determine the extent and duration of bullish investor sentiments during the current interest rate hike.
Whether the Trump administration can address the fiscal gap with $2+ trillion government expenditures and $1.5 trillion tax cuts critically depends on the future U.S. real GDP growth trajectory.
The Trump administration expects 3%-3.5% U.S. real GDP economic growth for this self-finance to trickle down to the typical American.
On balance, Greenspan's prescient comments warn of the current fiscal shortfall that may fuel U.S. debt escalation as a proportion of total real GDP.
Most major economies grow with great synchronicity several years after the global financial crisis.
Most major economies grow with great synchronicity several years after the global financial crisis.
These economies experience high stock market valuation, healthy fundamental recalibration, job creation, greater productivity, and artificial-intelligence automation.
For instance, the U.S. economy operates near full employment with 1.5%-2% moderate inflation, $2.45 trillion mandatory government expenditures, and $1.5 trillion tax cuts.
Also, Europe finally feels the benign effects of easy money that arises from the European Central Bank's quantitative-easing and negative-interest-rate monetary policies.
Asian tiger economies such as Hong Kong, Singapore, South Korea, and Taiwan experience economic revival due to the upstream prosperity of Apple-and-Samsung-driven mobile device production.
Recent oil price increases boost economic gains for Russia, Saudi Arabia, and other middle-east producers.
Brazil still suffers the ripple effects of a veritable depression and now flashes tentative signs of economic recovery with high population dividends.
However, several other economies exhibit weak macro momentum with chaotic bouts of economic policy uncertainty.
England now has to confront high unstable exchange rates, wide stock market gyrations, and trade barriers in the post-Brexit investment horizon.
China may land hard with sub-6% real GDP economic growth due to the potential Sino-American trade war.
Mexico may fail to transcend fears and doubts that the Trump administration menaces its recent economic convalescence with hefty tariffs and border taxes.
The International Monetary Fund (IMF) now predicts 2.7%-3% U.S. real GDP growth and 3.7%-3.9% economic growth worldwide.
IMF research warns of economic inequality, cybersecurity, extreme weather, as well as political confrontations such as U.S.-Korean nuclear threats and fair trade barriers.
E.U. antitrust regulators impose a fine on Qualcomm for advancing its exclusive microchip deal with Apple.
European Union antitrust regulators have imposed a fine on Qualcomm for advancing its exclusive microchip deal with Apple to block out rivals such as Intel and TSMC.
The European Commission takes into account Qualcomm's multi-year dominance in the LTE microchip market with rapid mobile broadband connections.
In recent times, Qualcomm attempts to force Apple and its upstream suppliers to use its trademark microchips exclusively in return for lower licensing fees.
Qualcomm can thus unfairly cut out intense competition in the LTE chipset market.
In fact, Qualcomm pays billions of U.S. dollars to Apple so that it would not buy from other microchip producers.
These payments represent not just price reductions, but the primary condition that Apple would exclusively use Qualcomm's baseband chipsets in all its iPhones and iPads.
Several other smart phone rivals such as Lenovo, OPPO, vivo, and Xiaomi express an active interest in buying $2 billion Qualcomm chipsets over 3 years.
No microchip rivals would be able to effectively challenge Qualcomm in this market regardless of product quality improvements.
As a result, the European Commission has to penalize Qualcomm for its anti-competitive market behavior.
This E.U. regulatory decision has deep economic implications for Apple and other mobile device suppliers and manufacturers worldwide.
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President Trump tweets his key decision to oust State Secretary Rex Tillerson due to intense disagreement over diplomatic affairs.
President Trump tweets his decision to oust State Secretary Rex Tillerson after several months of intense disagreement over diplomatic affairs.
Trump sometimes uses tweets to disparage the former Exxon-Mobil CEO's efforts at international diplomacy.
Also, Trump nominates CIA Director Mike Pompeo to replace Tillerson, and then Deputy CIA Director Gina Haspel succeeds Pompeo as the first woman to lead the Central Intelligence Agency (CIA).
In fact, this strategic Rexit move arises as President Trump is about to embark on historic and high-level direct dialogues with North Korean commander-in-chief Kim Jong Un.
Pompeo may initiate bilateral secret talks with the North Korean dictator to facilitate a smooth and peaceful transition to denuclearization.
Pompeo has yet to demystify when and where the potential Trump-Kim summit may take place.
Moreover, Rexit signals that President Trump often plays hardball on foreign affairs in the midst of substantial geopolitical tension and uncertainty.
Tillerson indeed disagrees with President Trump on several fronts.
First, President Trump insists on withdrawing from the Paris climate change accord, whereas Tillerson suggests that American should commit to staying in this accord.
Second, Tillerson seems soft on President Trump's preference for supporting the current embargo against Qatar in opposition to Saudi Arabia.
This latter geopolitical issue can affect global oil price fluctuations in the medium term.
Third, President Trump and Tillerson further differ in their stances on whether American should pursue diplomatic solutions to denuclearization in North Korea and Iran.
Trump prefers to extend the duration of economic sanctions on these countries in order to reach peaceful resolution, but Tillerson dismisses such brute force.
All of these geopolitical issues affect international stock market development, economic policy uncertainty, and energy-driven inflation.
The Trump team blocks Broadcom's bid for Qualcomm due to national security concerns and 5G telecom network issues.
The Trump administration blocks Broadcom's bid for Qualcomm due to national security concerns and 5G telecom network issues.
Broadcom primarily make microchips for broadband communication networks such as wireless broadband telecoms, modems, routers, and switches.
The White House takes an extraordinary action to block this major corporate deal that might inadvertently give China more influence in global technology.
In an executive order, President Trump blocks Broadcom's $117 billion bid for Qualcomm due to national security concerns.
There is credible evidence that Broadcom and its affiliates (such as China's HuaWei and ZTE) might threaten to impair U.S. 5G telecom network dominance and digital supremacy.
For this reason, both Broadcom and Qualcomm must immediately and permanently abandon the takeover proposal.
The Trump administration releases a recent investigation that China's theft of intellectual properties such as U.S. patents, trademarks, and copyrights etc has cost American companies around $1 trillion.
In response, the Trump administration may introduce punitive tariffs on Chinese imports to dramatically reduce bilateral trade deficits.
This deficit reduction can contribute to a better balance in the U.S. congressional budget for better mid-term election results that favor the Trump administration.
Peter Thiel shares his money views of President Trump, Facebook, Bitcoin, global finance, and trade.
Peter Thiel shares his money views of President Trump, Facebook, Bitcoin, global finance and trade etc.
As an early technology adopter, Thiel invests in Facebook and Bitcoin.
The former connects people with better social integration around the world, and the latter provides a new crypto medium of exchange for online payments.
Network effects breed positive feedback loops, whereas, there is a critical inflection point where these network effects fall over into the madness of crowds.
As one of the co-founders for PayPal and Palantir, Thiel thinks it is important to ensure third-party payment security for safer cross-border finance and trade.
Thiel supports President Trump because his economic policy reform helps avoid fake culture wars between different civilizations.
Trump tax cuts and infrastructure expenditures help boost American household consumption, firm production, and financial intermediation.
In light of antitrust investigations into Google and some other Silicon Valley tech firms, Thiel considers these firms in trouble as government regulation looms as a major business risk.
As a serial entrepreneur, Thiel emphasizes the importance of ambition that transcends just making money for a company.
Disruptive innovation not only replaces prior technology, but also significantly improves and enriches the economic lives of others.
President Xi seeks Chinese congressional approval for abolishing his term limits of strongman rule with better trade deals and economic ties.
President Xi seeks Chinese congressional approval and constitutional amendment for abolishing his term limits of strongman rule with more favorable trade deals and economic ties.
Foreign investors now activate their keen interest in Chinese tech titans such as Baidu, Alibaba, and Tencent (BAT).
Baidu specializes in Chinese online search; Alibaba focuses on international e-commerce and fintech solutions; and Tencent derives most revenue from Chinese instant messengers such as WeChat and Tencent QQ, online games, and other entertainment and lifestyle software solutions.
BATs operate as oligopolies with competitive moats that manifest in the form of patents, trademarks, copyrights, and other intellectual properties.
Their high product market concentration serves as a primary explanation for worse income and wealth inequality in China.
President Xi's strongman rule can further entrench these Chinese tech titans with product market dominance.
This new Sino political economy defeats the western purpose of admitting China into the World Trade Organization (WTO) after the post-war collapse of the Soviet Union.
China resists both regional trade integration and global economic order and thus often fails comply with WTO trade rules on fair trade and intellectual property protection.
Few mainland residents embrace democracy, economic freedom, and the rule of law in China.
White House economic advisor Gary Cohn resigns due to his opposition to President Trump's protectionist tariff stance.
White House top economic advisor Gary Cohn resigns due to his opposition to President Trump's recent protectionist decision on steel and aluminum tariffs.
These steel and aluminum tariffs target Canada, Europe, Mexico, and China.
Some western allies may receive interim exemptions on a case-by-case basis.
Through this abrupt tariff tactic, President Trump seeks to dramatically reduce U.S. trade and budget deficits for better mid-term election results.
The former Goldman Sachs president had strongly opposed trade barriers such as tariffs, quotas, and even embargoes.
Cohn serves as a steady man in the White House and attempts to push President Trump away from some of his most aggressive instincts on trade.
In fact, Cohn would prefer the U.S. to keep the North American Free Trade Agreement (NAFTA).
As a proponent of international free trade, Cohn would support the U.S. to join the Trans-Pacific Partnership (TPP).
In effect, these global free trade movements reflect the collective wisdom and combination of cross-border interests and efforts for fewer trade frictions.
CNBC economic media commentator Larry Kudlow is likely to succeed Cohn as the Director of the National Economic Council.
Kudlow may defend the Trump administration's gradual tariff tactics against China, Canada, Europe, and Mexico.
Trump imposes tariffs on steel and aluminum in a trade war with some exemptions for Canada and Mexico.
Trump imposes high tariffs on steel (25%) and aluminum (10%) in a new trade war with subsequent exemptions for Canada and Mexico.
The Trump administration's Trade Act Section 232 investigation suggests that the main sources of U.S. steel-and-aluminum trade deficits are Canada, Europe, Mexico, and China.
In light of both Section 301 and Section 232 investigations, the steel and aluminum tariffs seem to target China and the European Union.
There are a pair of pertinent problems with imposing tariffs on foreign imports of this nature.
First, this tariff tactic is a massive diplomatic gambit.
In effect, this tactic may create the imminent risk of retaliation from multiple countries.
Second, this strategic move inevitably leads to higher consumer prices from food cans to cars and airplanes insofar as these products involve the use of steel or aluminum.
In fact, these price increases can feed back to fuel higher inflation in America.
Also, American households and firms may experience higher costs and so lower disposable income.
The resultant decrease in aggregate demand can be detrimental to U.S. economic output, employment, and capital investment.
When push comes to shove, the law of inadvertent consequences counsels caution.
Fed's new chairman Jerome Powell testifies before Congress for the first time.
Fed's new chairman Jerome Powell testifies before Congress for the first time.
He vows to prevent price instability for U.S. consumers, firms, and financial intermediaries by gradually raising interest rates to contain inflation.
Several stock market observers and commentators warn of the Yellen-Powell regime switch from dovish to hawkish monetary policy decisions.
However, Powell seeks to balance the need to guard against excessive inflation with the real benefits of allowing the U.S. economy to enjoy the tailwinds of Trump fiscal stimulus, economic output expansion, full employment, and robust wage growth.
The Federal Reserve now explores whether the U.S. unemployment rate can fall to the lowest range of 3.8% to 4.1% in 17 years before inflation starts to accelerate.
In accordance with Powell's congressional testimony, the Federal Reserve's current monetary policy instruments include its gradual upward interest rate adjustment, balance sheet shrinkage, and 2% symmetric core CPI inflation target.
Powell confines his testimony to the dual mandate of both price stability and maximum employment with minimal discussions of distributional economic inequality issues in America.
With respect to financial deregulation, Powell expects to roll back at least some of the more stringent Dodd-Frank rules and stress tests on large banks and other financial institutions.
Buffett discusses Berkshire's cash ambition, its reinsurance business, and his succession plan.
Warren Buffett releases his annual letter to Berkshire Hathaway shareholders as of February 2018.
Buffett discusses Berkshire Hathaway's cash ambition, its reinsurance business, the recent increase in corporate net worth, and his succession plan.
First, Buffett highlights the importance of *float* for insurance companies like Berkshire Hathaway, i.e. the company collects insurance premiums that have not been paid out as claims.
Buffett and Munger can invest the float as these premiums absorb losses gradually throughout the life of each insurance policy.
Because this reinsurance counterbalances long-tail losses, Berkshire can grow its float to extraordinary levels over time.
Second, corporate cash stockpiles surge to $116 billion, so Buffett prefers to maintain this cash position for near-term mergers and acquisitions (instead of dividend payout and share buyback).
However, Buffett considers most recent takeover targets with no sensible purchase prices at the current stage of the real business cycle.
Also, Buffett emphasizes the fact that debt-free investors can better take advantage of short-term stock market crashes such as Black Monday in 1987, the Asian financial crisis in 1997, and the global economic recession in 2008.
Berkshire experiences a one-time hefty increase in net worth by $65 billion or 23% primarily due to the Trump tax cuts.
These tax credits not only strengthen Berkshire's current fortress balance sheet, but also allow Buffett and Munger to cast a wider net of potential M&A deals.
Third, Buffett announces that Berkshire's next CEO will oversee company operations while the other half of this job will be given to stock-pickers who specialize in dynamic asset management.
On the latter investment front, the likely successors are Todd Combs and Ted Weschler.
These high-skill money managers both have successfully grown their assets under management (AUM) to $25 billion in early-2018.
Under this succession plan, Combs and Weschler will thus continue the value investment philosophy in the post-Buffett reinsurance business structure.
Snap cannot keep up with the Kardashians because its stock loses $1 billion market value after Kylie Jenner tweets about her decision to leave Snapchat.
Snap cannot keep up with the Kardashians because its common stock loses market value 7% or $1 billion right after Kylie Jenner tweets about her decision to leave Snapchat.
The root cause of this rare incidence may be Snap's recent redesign, or Jenner's newfound motherhood.
The former can be a real concern that her 25 million Twitter followers share in numerous replies.
These empathetic users aggravate this deep concern about Snap's recent redesign and thus echoes ambivalent Wall Street investor sentiments.
Several Wall Street stock analysts point out that it can be more difficult for Snap to monetize the Snapchat business model in contrast to ad-income-driven Facebook, Google, and Twitter.
In recent times, Snap initiates some smart strategic moves to draw a clear line between social interactions and media posts and video streams.
In fact, Snap needs to manage this interim transition well as celebrity influencers such as Kylie Jenner are an essential source of high-quality content in the Snap recipe for success.
With 25 million Twitter followers, Jenner carries a great deal of social influence over millennials.
In terms of demographic attributes, the typical Snapchat user is between 18 and 24 years old and tends to have much shorter attention span.
Fed minutes reflect gradual interest rate normalization in response to high inflation risk.
Fed minutes suggest gradual interest rate normalization in response to higher inflation risk.
FOMC members revise up the economic projections made at the previous December 2017 committee forum.
Many financial economists and market watchers expect gradual further hawkish adjustments in U.S. monetary policy.
These hawkish adjustments inevitably entail interest rate hikes that help constrain money supply growth near full employment.
In effect, these gradual hawkish adjustments help better balance the inexorable and mysterious trade-off between inflation and unemployment.
As Treasury bond yields rise in response to this hawkish monetary policy stance, most major U.S. stock market indices such as Dow Jones, S&P 500, and NASDAQ decline as a result.
Several FOMC members remain cautious about high asset valuation and leverage within Corporate America.
Numerous public corporations make productive use of debt and cash stockpiles with generous cash dividends and share repurchases.
Also, excessive cash accumulation, high asset valuation, and incessant corporate debt usage breed financial contagion with little impact on real macro variates such as economic output, employment, and capital investment.
This recent trend may or may not sustain in the long run.
The resultant concern thus signals bouts of potential financial instability outside the financial system.
President Trump unveils his ambitious $1.5 trillion public infrastructure plan.
President Trump unveils his ambitious $1.5 trillion infrastructure plan.
Trump proposes offering $100 billion in federal incentives to encourage states and cities to invest in roads, bridges, highways, railways, and water utilities.
These federal incentives help spur $1.5 trillion infrastructure expenditures over the next decade.
Transportation Secretary Elaine Chao indicates to the House Transportation and Infrastructure Committee that the Trump administration seeks to work with Congress to find bipartisan solutions.
All options are on the table, and the Trump administration is open to considering all revenue sources.
This plan calls for allocating at least $200 billion in initial federal funds to encourage states, cities, and the private sector to spur $1.5 trillion infrastructure expenditures over the next decade.
Also, this plan would reduce the amount of time for issuing onsite construction permits for infrastructure projects to 2 years.
Since his presidential election victory, Trump has thus far focused on trade, healthcare, immigration, gun control, and other socioeconomic issues.
There may or may not be enough time for passing an infrastructure bill in mid-2018 or late-2018.
U.S. lawmakers may need to act fast during a lame-duck interim session after the November 2018 midterm elections.
The new Fed chairman Jerome Powell faces a new challenge in the form of core CPI rate hikes toward 1.8%-2.1%.
The new Fed chairman Jerome Powell faces a new challenge in the form of both core CPI and CPI inflation rate hikes toward 1.8%-2.1% year-over-year with strong wage growth.
The recent greenback depreciation aggravates these inflationary concerns as non-farm payroll unemployment declines toward 4% or even 3.9%.
This dollar depreciation raises U.S. import prices and thus can drive greater inflationary momentum.
More substantive evidence can shine fresh light on whether the current Trump stock market rally indicates irrational exuberance for most stock and bond investors.
The Federal Reserve can raise the interest rate to better balance the dual mandate of price stability and maximum employment.
Powell needs to weigh the pros and cons of another interest rate hike that effectively constrains money supply growth near full employment.
Price stability helps reduce economic policy uncertainty that may inadvertently dampen both household consumption and capital investment decisions.
On the other hand, Powell should pick the low-hanging fruits of full employment before America experiences the next gradual deterioration in labor market conditions.
During the Trump administration, it takes about 3% to 3.5% real GDP economic growth for macro momentum to trickle down to the typical U.S. household, producer, and financial intermediary.
Supply-side Trumpism needs to prove its feasible case in due course.
Rampant stock market fears shake investor confidence during the recent Fed Chair transition from Yellen to Powell.
Quant Quake 2.0 shakes investor confidence with rampant stock market fears and doubts during the recent Fed Chair transition from Janet Yellen to Jerome Powell.
This healthy fundamental recalibration indicates the recent fact that 96% of all S&P 500 stocks experience 20% drastic declines from their own 52-week high share prices.
Investor concerns pertain to U.S. inflationary momentum and bond yield appreciation.
As professional forecasters mull over the inexorable and mysterious trade-off between inflation and unemployment, the new Federal Reserve chairman tends to retain a hawkish monetary policy stance.
In this light, these forecasters predict that the Federal Reserve may hike the neutral interest rate at least 3 to 4 times this year.
This neutral interest rate helps contain inflation near full employment well within Powell's congressional dual mandate.
AQR money manager and founder Cliff Asness points out that the U.S. financial system remains robust with less leverage and fair valuation despite the recent stock market plunge in early-February 2018.
Asness believes in his conservative implementation of quantitative strategies across the vast majority of his fundamental factor portfolios of stocks, bonds, commodities, and currencies.
His favorite value and momentum factor investment strategies resonate with Warren Buffett's long-term asset investment philosophy: *Price is what we pay, and value is what we get. We should be fearful when others are greedy, and we should be greedy when others are fearful.*
In his recent letter to Berkshire Hathaway shareholders, Warren Buffett emphasizes that stock market corrections are often both normal and unpredictable.
From a long-term perspective, the stock market sometimes goes *on sale*.
Buffett thus suggests that it is important for investors to replenish their cash positions in order to take advantage of sporadic stock market corrections.
When these corrections take place, the stock price often fall below the long-term equilibrium intrinsic value.
Beyond conventional wisdom, greed is *good* and pays well in the tripartite form of capital gains, cash dividends, and share repurchases.
U.S. senators urge the Trump administration to prevent the IMF from bailing out several countries that face predatory Chinese loans.
U.S. senators now urge the Trump administration with a bipartisan proposal to block the International Monetary Fund (IMF) from bailing out several countries that face predatory Chinese loans.
These predatory Chinese loans are part of the Belt-and-Road infrastructure development plan for the next decade.
Belt-and-Road is a $8 trillion global infrastructure plan that the Xi administration now uses to expand its economic prowess around the world.
In effect, the Xi administration makes productive use of this infrastructure debt to control the economic policies in several Asian countries such as Sri Lanka and Pakistan.
President Xi intends to transform Belt-and-Road into a new world economic order with fresh and unique Chinese dominance.
U.S. State Secretary Mike Pompeo points out that at least 23 of these 68 Belt-and-Road countries now face financial debt difficulties.
This debt distress signals the collective reliance of Belt-and-Road countries on China.
Also, China holds about $1.2 trillion U.S. Treasury bonds, bills, and notes and thus can directly influence the U.S. yield curve.
Should the Belt-and-Road countries fail to honor their principal and interest payments on their debt contracts with China in the absence of IMF bailout finance, the Xi administration may have to unload its U.S. Treasury bond positions.
In turn, China may effectively use its rich foreign reserves to entrench its current 260% public-debt-to-GDP ratio and Belt-and-Road infrastructure debt distress.
In the worst-case scenario, these ripple effects may inadvertently cause U.S. yield curve inversion.
Yield curve inversion reflects a negative term spread between short-term and long-term interest rates, indicates corporate investment sentiments with respect to mergers and acquisitions and capital expenditures, and so often recurs in the early dawn of a severe economic recession.
This red alert poses a major gray rhino or some obvious highly probable negative incidence in contrast to improbable black-swan rare events such as the U.S. subprime mortgage crisis, the European sovereign debt spiral, and the Global Great Depression.
For these legitimate reasons, the Trump administration's advisors and delegates such as Pompeo, Mnuchin, and Kudlow need to alleviate this economic security concern in due course.
President Donald Trump delivers his first state-of-the-union address.
President Donald Trump delivers his first state-of-the-union address.
Several key highlights touch on socioeconomic issues from fiscal stimulus and trade protectionism to infrastructure, immigration, and national security.
The massive Trump tax cuts provide tremendous relief for the middle-class Americans and small businesses.
About 3 million American workers receive tax incentives primarily due to this legislative win for the Trump administration and Republican-driven Congress.
When the U.S. Trade Act Section 301 investigation concludes in due course, the Trump administration expects to escalate tariffs, quotas, and even embargoes on Chinese imports.
These tariffs and other trade barriers effectively penalize China for perennial patent, trademark, and copyright infringement and other intellectual property theft.
This trade protectionism helps eradicate hefty U.S. trade deficits to the detriment of China and some western allies such as Canada, Europe, and Mexico.
Trump also urges Congress to pass new legislation in order to replenish $1.5 trillion U.S. modern infrastructure with new roads, bridges, highways, railways, and waterways.
Moreover, the Trump administration designs new immigration policies with better border control to circumvent drugs, gangs, and other criminal activities that plaque many U.S. immigrant communities.
Finally, Trump introduces foreign investment restrictions in defense of national economic security from LTE broadband technology to 5G telecommunication.
All of these economic reforms can help ensure sustainable economic prosperity in America.
After its iPhone X launch, Apple reports its highest quarterly revenue over $80 billion in the tech titan's 41-year history.
After its flagship iPhone X launch, Apple reports its highest quarterly sales revenue over $80 billion in the tech titan's 41-year history.
Apple expects to distribute to its shareholders $143 billion cash stockpiles in the form of cash dividends and share repurchases.
Apple also plans to make $30 billion capital investments in America in the next 5 years.
Most of these capital expenditures contribute to opening data centers for iCloud services.
Apple expects to create more than 20,000 new jobs at its extant campuses and a new one for technical support.
In fact, Apple is the latest one to announce new cash distributions that arise from the new Trump tax holiday.
For the Trump administration and Republican-driven Congress, this legislative victory aims to transform corporate tax credits into better jobs and higher wages.
Some companies may instead funnel these tax credits into share buyback and dividend payout in order to side-step American workers.
It is thus important for most investors to assess whether these tax cuts can serve as key fiscal stimulus for better domestic employment and macroeconomic growth.
In due course, the Trump stock market rally can continue in the medium term only when 3%-3.5% real GDP growth trickles down to benefit the typical U.S. consumer, producer, and financial intermediary.
Amazon, Berkshire Hathaway, and JPMorgan Chase establish a new company to reduce U.S. employee health care costs.
Amazon, Berkshire Hathaway, and JPMorgan Chase form a new company to reduce U.S. employee health care costs in direct negotiations with drugmakers, doctors, and hospitals.
Jeff Bezos, Warren Buffett, and Jamie Dimon effectively take on the world's most expensive healthcare network.
This new non-profit venture poses a new challenge to an inefficient U.S. healthcare system.
Also, this joint venture causes the share prices of healthcare companies to decline across the board.
The new company will initially focus on innovative technology for high-quality and transparent healthcare for more than 500,000 U.S. employees across Amazon, Berkshire, and JPMorgan.
The tripartite entity can negotiate directly with drugmakers, doctors, and hospitals in order to use their vast databases to handle higher healthcare service costs.
In turn, these negotiations undercut the healthcare industry's middlemen from health insurers to pharmacies such as CVS, Aetna, Cigna, Merck, J&J, and Novartis.
U.S. healthcare expenditures increase faster than inflation from year to year.
As of early-2018, these healthcare expenditures account for 18% of total real GDP.
U.S. corporations sponsor healthcare benefits and services for more than 160 million American workers.
Overall, the new tripartite joint venture represents a major healthcare innovation that can shake up the inefficient U.S. healthcare industry.
Former Fed Chair Alan Greenspan discerns asset bubbles in the American stock and bond markets in early-2018.
As he refrains from using the memorable phrase *irrational exuberance* to describe bullish investor sentiments, Alan Greenspan discerns asset bubbles in the U.S. stock and bond markets in early-2018.
Despite some recent healthy fundamental recalibration, Greenspan warn of high U.S. stock indices from Dow and S&P 500 to NASDAQ and Fortune 500.
Also, Greenspan points that that the current government bond yields hover not far from historically low thresholds.
The latter may transform into potential yield curve inversion, which often signals the early dawn of an economic recession.
In fact, this inversion correctly predicts U.S. economic downturns in all decades right after the 1960s.
As the Federal Reserve gradually normalizes and tightens its monetary policy stance, interest rates continue to raise the relative likelihood of yield curve inversion.
Greenspan shares his ingenious insight that higher long-term government bond yields may determine the extent and duration of bullish investor sentiments during the current interest rate hike.
Whether the Trump administration can address the fiscal gap with $2+ trillion government expenditures and $1.5 trillion tax cuts critically depends on the future U.S. real GDP growth trajectory.
The Trump administration expects 3%-3.5% U.S. real GDP economic growth for this self-finance to trickle down to the typical American.
On balance, Greenspan's prescient comments warn of the current fiscal shortfall that may fuel U.S. debt escalation as a proportion of total real GDP.
Most major economies grow with great synchronicity several years after the global financial crisis.
Most major economies grow with great synchronicity several years after the global financial crisis.
These economies experience high stock market valuation, healthy fundamental recalibration, job creation, greater productivity, and artificial-intelligence automation.
For instance, the U.S. economy operates near full employment with 1.5%-2% moderate inflation, $2.45 trillion mandatory government expenditures, and $1.5 trillion tax cuts.
Also, Europe finally feels the benign effects of easy money that arises from the European Central Bank's quantitative-easing and negative-interest-rate monetary policies.
Asian tiger economies such as Hong Kong, Singapore, South Korea, and Taiwan experience economic revival due to the upstream prosperity of Apple-and-Samsung-driven mobile device production.
Recent oil price increases boost economic gains for Russia, Saudi Arabia, and other middle-east producers.
Brazil still suffers the ripple effects of a veritable depression and now flashes tentative signs of economic recovery with high population dividends.
However, several other economies exhibit weak macro momentum with chaotic bouts of economic policy uncertainty.
England now has to confront high unstable exchange rates, wide stock market gyrations, and trade barriers in the post-Brexit investment horizon.
China may land hard with sub-6% real GDP economic growth due to the potential Sino-American trade war.
Mexico may fail to transcend fears and doubts that the Trump administration menaces its recent economic convalescence with hefty tariffs and border taxes.
The International Monetary Fund (IMF) now predicts 2.7%-3% U.S. real GDP growth and 3.7%-3.9% economic growth worldwide.
IMF research warns of economic inequality, cybersecurity, extreme weather, as well as political confrontations such as U.S.-Korean nuclear threats and fair trade barriers.
E.U. antitrust regulators impose a fine on Qualcomm for advancing its exclusive microchip deal with Apple.
European Union antitrust regulators have imposed a fine on Qualcomm for advancing its exclusive microchip deal with Apple to block out rivals such as Intel and TSMC.
The European Commission takes into account Qualcomm's multi-year dominance in the LTE microchip market with rapid mobile broadband connections.
In recent times, Qualcomm attempts to force Apple and its upstream suppliers to use its trademark microchips exclusively in return for lower licensing fees.
Qualcomm can thus unfairly cut out intense competition in the LTE chipset market.
In fact, Qualcomm pays billions of U.S. dollars to Apple so that it would not buy from other microchip producers.
These payments represent not just price reductions, but the primary condition that Apple would exclusively use Qualcomm's baseband chipsets in all its iPhones and iPads.
Several other smart phone rivals such as Lenovo, OPPO, vivo, and Xiaomi express an active interest in buying $2 billion Qualcomm chipsets over 3 years.
No microchip rivals would be able to effectively challenge Qualcomm in this market regardless of product quality improvements.
As a result, the European Commission has to penalize Qualcomm for its anti-competitive market behavior.
This E.U. regulatory decision has deep economic implications for Apple and other mobile device suppliers and manufacturers worldwide.
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