On the back of COVID19 consumption habits have drastically changed thereby impacting even the best made business plans globally. Normal everyday activities that we took for granted like going to work, schools and entertainment venues have come to a standstill as these now posed a potential risk to life.
Given the new realities, companies have seen consumption going down, individual savings going up and supply of goods and services become uncertain due to global supply chain issues, all of which have led to an increase in insecurity amongst the various stakeholders in the economy.
According to Morgan Stanley, Global Recession in 2020 is a base case scenario. A recession is often defined as a period of decline in economic activity like trade, industrial output and consumer spending. As a recession is inevitable, we looked at the economic and financial downturns and recoveries in the past century to look for similarities with today’s COVID19 crisis.
What we have done here:
1) Assessed this problem statement - COVID 19 has led us to a situation where we are in both a health as well as an economic crisis. Are there past recessions and crisis that we can look at to learn from?
2) Analyzed the two recessions that occurred in the 21st century by metrics like the economic and financial factors - how the GDP Growth and Unemployment were affected, how the financial markets reacted and how the sectoral recovery looked like?
3) Examined the Spanish Flu pandemic, the Roaring 20’s (a decade of massive expansion in the economy), and the Great Depression by metrics like the economic and financial factors
This document analyzes how Mexican immigrant remittance behavior affected the propagation of the 2008/2009 financial crisis. It discusses how remittances are Mexico's second largest source of foreign income after oil. For the first time since 1995, remittances dropped in 2008 by 3.6% due to job losses in the US construction and manufacturing sectors as a result of the financial crisis. The drop in remittances significantly impacted Mexico's economy, which relies heavily on foreign income.
The document provides an overview of the four periods characterizing the COVID-19 pandemic from beginning to end: pre-pandemic, peak-pandemic, recovery, and new normal. It describes key events and impacts during each period, including 22 million Americans filing for unemployment during the peak, and the slow and gradual recovery period expected to last months or years as restrictions are loosened. Underneath the pre-pandemic economy's rosy exterior were dormant weaknesses like income inequality that were exacerbated by the pandemic.
The document provides an overview of the Argentine economic crisis from 1999-2002. It discusses key factors that contributed to the crisis, including high government debt levels, tax increases that reduced business confidence, and a decline in exports following the devaluation of Brazil's currency. During this period, Argentina experienced a recession with GDP falling significantly each year, high inflation, increasing unemployment, and a "run on the banks" as people lost confidence. The crisis peaked in 2002 with inflation reaching 41% and poverty rates rising to 58%. To recover, Argentina abandoned its currency peg and let the peso float, boosting exports and reducing imports.
The document provides information on Argentina's economy through various metrics like GDP, sectoral contribution, trade balance, consumption etc. It mentions that Argentina has an upper middle income economy which benefited from natural resources and educated population. However, the economic performance has been uneven with periods of growth alternating with recessions. In recent years, the GDP growth recovered after the 2001 economic crisis and devaluation of the peso. The largest sectors are services, manufacturing and agriculture while exports are led by agricultural goods and imports dropped during recession.
This document provides an overview of recent macroeconomic trends in the British economy. It includes graphs showing GDP per capita in the UK compared to other countries from 1950-2009, as well as labour productivity growth rates. The UK has traditionally lagged behind in labour productivity. The document will examine potential reasons for this in upcoming weeks. It also summarizes the post-war economic landscape in Britain, which was dominated by Keynesian policies aimed at full employment through demand management. Key policies implemented included nationalization, production and consumption controls, and incomes policies to manage inflation. Issues with balance of payments deficits also led to periodic stops and goes in aggregate demand policies.
The Prospect for Global Economic Recovery and where Bangladesh stands on the ...Md. Tanzirul Amin
The following article was written by me, and was published in the Economic Trends section of the Keystone Quarterly Review (Volume-31) on November 30, 2020: https://lnkd.in/g9nGxzn
The article covers the prospect for recovery of the global economy, and how Bangladesh might perform in its journey across the recovery curve. Moreover, major signs of potential economic recovery and shapes of projected recovery curves are discussed.
From waste to taste, dr Tóth Gergely, 27. 3. 2015.FEFA Faculty
This document presents an analysis of sustainability indicators from 10,000 BC to 2008. It finds that:
1. Earth fullness (the ratio of human ecological footprint to biocapacity) has increased dramatically over this period, from 0.05% in 10,000 BC to 150.84% in 2008, indicating global overshoot.
2. Major transitions like the emergence of agriculture, civilizations, and industrialization were associated with accelerating increases in both population and Earth fullness. The most rapid changes occurred after 1820 with the Industrial Revolution.
3. A regression analysis estimates ecological footprints from 10,000 BC and finds increasing correlation with GDP over time, calling into question the long-
Argentine economic depression was a major downturn in Argentina's economy. It began in 1999 with a decrease of real Gross Domestic Product (GDP). The crisis caused the fall of the government, default on the country's foreign debt, widespread unemployment, riots, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar.
By 2002 GDP growth had returned, surprising economists and the business media.
This document analyzes how Mexican immigrant remittance behavior affected the propagation of the 2008/2009 financial crisis. It discusses how remittances are Mexico's second largest source of foreign income after oil. For the first time since 1995, remittances dropped in 2008 by 3.6% due to job losses in the US construction and manufacturing sectors as a result of the financial crisis. The drop in remittances significantly impacted Mexico's economy, which relies heavily on foreign income.
The document provides an overview of the four periods characterizing the COVID-19 pandemic from beginning to end: pre-pandemic, peak-pandemic, recovery, and new normal. It describes key events and impacts during each period, including 22 million Americans filing for unemployment during the peak, and the slow and gradual recovery period expected to last months or years as restrictions are loosened. Underneath the pre-pandemic economy's rosy exterior were dormant weaknesses like income inequality that were exacerbated by the pandemic.
The document provides an overview of the Argentine economic crisis from 1999-2002. It discusses key factors that contributed to the crisis, including high government debt levels, tax increases that reduced business confidence, and a decline in exports following the devaluation of Brazil's currency. During this period, Argentina experienced a recession with GDP falling significantly each year, high inflation, increasing unemployment, and a "run on the banks" as people lost confidence. The crisis peaked in 2002 with inflation reaching 41% and poverty rates rising to 58%. To recover, Argentina abandoned its currency peg and let the peso float, boosting exports and reducing imports.
The document provides information on Argentina's economy through various metrics like GDP, sectoral contribution, trade balance, consumption etc. It mentions that Argentina has an upper middle income economy which benefited from natural resources and educated population. However, the economic performance has been uneven with periods of growth alternating with recessions. In recent years, the GDP growth recovered after the 2001 economic crisis and devaluation of the peso. The largest sectors are services, manufacturing and agriculture while exports are led by agricultural goods and imports dropped during recession.
This document provides an overview of recent macroeconomic trends in the British economy. It includes graphs showing GDP per capita in the UK compared to other countries from 1950-2009, as well as labour productivity growth rates. The UK has traditionally lagged behind in labour productivity. The document will examine potential reasons for this in upcoming weeks. It also summarizes the post-war economic landscape in Britain, which was dominated by Keynesian policies aimed at full employment through demand management. Key policies implemented included nationalization, production and consumption controls, and incomes policies to manage inflation. Issues with balance of payments deficits also led to periodic stops and goes in aggregate demand policies.
The Prospect for Global Economic Recovery and where Bangladesh stands on the ...Md. Tanzirul Amin
The following article was written by me, and was published in the Economic Trends section of the Keystone Quarterly Review (Volume-31) on November 30, 2020: https://lnkd.in/g9nGxzn
The article covers the prospect for recovery of the global economy, and how Bangladesh might perform in its journey across the recovery curve. Moreover, major signs of potential economic recovery and shapes of projected recovery curves are discussed.
From waste to taste, dr Tóth Gergely, 27. 3. 2015.FEFA Faculty
This document presents an analysis of sustainability indicators from 10,000 BC to 2008. It finds that:
1. Earth fullness (the ratio of human ecological footprint to biocapacity) has increased dramatically over this period, from 0.05% in 10,000 BC to 150.84% in 2008, indicating global overshoot.
2. Major transitions like the emergence of agriculture, civilizations, and industrialization were associated with accelerating increases in both population and Earth fullness. The most rapid changes occurred after 1820 with the Industrial Revolution.
3. A regression analysis estimates ecological footprints from 10,000 BC and finds increasing correlation with GDP over time, calling into question the long-
Argentine economic depression was a major downturn in Argentina's economy. It began in 1999 with a decrease of real Gross Domestic Product (GDP). The crisis caused the fall of the government, default on the country's foreign debt, widespread unemployment, riots, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar.
By 2002 GDP growth had returned, surprising economists and the business media.
1) Keynesian economics argues that government spending can help recover economies from recessions by increasing aggregate demand. However, during recessions individuals may paradoxically save more due to uncertainty, worsening the economic downturn.
2) The COVID-19 pandemic led to an economic shutdown in India in 2020, resulting in unprecedented rises in savings but limited opportunities to spend. Widespread job and income losses also forced many to dip into savings.
3) As predicted by Keynesian theory, the reduction in demand due to higher savings and lower consumption and production led to job cuts and rising unemployment, creating a vicious cycle that was difficult for the government's supply-side measures to address before the pandemic.
Speculation in food commodity derivatives markets contributed to the huge spike in global food prices between 2007-2008. The deregulation of these markets in the 1990s and 2000s allowed large financial institutions like Goldman Sachs to create commodity index funds, drawing huge amounts of speculative capital into food commodities. By 2008, speculators dominated long positions in key food crops like maize and wheat. This speculation amplified price movements driven by real supply and demand factors, causing food prices to rise over 80% in a year and contributing to increased global hunger.
The document outlines eight trillion-dollar macroeconomic trends expected to drive global economic growth between now and 2020:
1. The next billion consumers - Rising incomes in emerging markets will bring over a billion new consumers into the global middle class, expanding markets.
2. Old infrastructure, new investments - Advanced economies will invest in aging infrastructure through public-private partnerships while emerging economies continue building infrastructure.
3. Militarization following industrialization - As economic power shifts to Asia, military spending and capabilities will also shift, increasing risks of conflict and opportunities for arms producers.
The document outlines eight trillion-dollar macroeconomic trends that are expected to drive global economic growth between 2010 and 2020: 1) The next billion consumers, 2) Old infrastructure, new investments, 3) Militarization following industrialization, 4) Growing output of primary inputs, 5) Developing human capital, 6) Keeping the wealthy healthy, 7) Everything the same, but nicer, 8) Prepping for the next big thing. These eight trends are estimated to increase global GDP by $27 trillion total by 2020, with the trends of developing human capital and keeping the wealthy healthy accounting for about half of the expected growth. The document also discusses some implications that businesses should consider in positioning themselves to profit from these macro
Individual Thesis: Signs of Japanification In South Korean Economy - Threats ...Hoonjae Gwak
Individual Thesis presented in the 32nd Korea-Japan Student Forum (KJSF) held in August 2016. I was the Coordinator of the Department of Economy in the 32nd KJSF.
Macro-economical concept applied in Egypt such as : unemployment rate, Economical political power, long run variables and stock market, role of the central bank all that and more you can see under the topic Egypt between black yesterday and welling tomorrow
This is the seventh of our reports on billionaire wealth, continuing our investigation into this historic era of wealth generation. Our research universe covers more than 2,000 billionaires from 43 markets in the Americas, EMEA and APAC, looking back over more than two decades.
The document provides an overview of the United States economy including key statistics such as GDP, GDP growth rate, GDP per capita, inflation rate, labor force statistics, unemployment rate, main industries, electricity production, oil production and reserves, poverty levels, and national debt. It discusses the country's economic history, monetary policy, government intervention in the economy, and predictions about the future direction of the US economy.
The Great Depression began after a period of economic growth and optimism in the 1920s. Speculation was rampant and many believed the boom would continue indefinitely. However, on October 29, 1929, the stock market crashed, marking the beginning of a decade long economic decline. GDP was halved, unemployment rose to 25%, farm prices and incomes dropped sharply. Several factors contributed to the depression, including uneven economic growth that did not benefit all sectors, high consumer debt levels, overproduction, and an unstable construction industry. Government policies also exacerbated problems through high tariffs, a regressive tax system, and lax financial regulations. President Hoover's policies failed to stimulate the economy or stabilize international finance. It was not until Roosevelt
The document provides an economic summary and outlook for Q4 2010. It includes:
1) Key economic indicators such as interest rates, stock prices, and consumer confidence showing mixed signs of recovery.
2) A review of important financial and industry news in Q4 2010, including the Fed announcing $600B in debt purchases and Republicans gaining control of the House.
3) An analysis of both positive and negative factors for the economic outlook, with small business and big company spending poised to increase but unemployment and the housing market remaining weak.
This document provides an introduction and overview of the global economic meltdown of 2008. It discusses several key causes, including unsustainable consumption and borrowing in the US fueled by surpluses from other countries like China. It also cites the greed of investment bankers and failure of regulators. The crisis has had severe impacts around the world and shown the failures of both capitalism and communism. Moving forward will require finding a new, sustainable economic model.
This document discusses how the world is changing and the implications for the future, particularly by 2040. It acknowledges that understanding economic trends is important but not sufficient to achieve resilient and inclusive growth. The main points discussed are major global shifts happening by 2030, including the rise of China and India as economic powers and the impact of digital media. It also outlines some key challenges facing the Western Cape, such as unemployment, the impact of carbon pricing on exports, social issues like crime and violence, and infrastructure constraints.
John Maynard Keynes was a 20th century British economist whose ideas helped shape policy responses to the Great Depression. His 1936 work, The General Theory of Employment, Interest and Money, challenged classical economic theories that markets would naturally reach full employment. Keynes argued that government needs to stimulate aggregate demand through spending, especially during economic downturns, in order to boost employment. His ideas helped justify New Deal programs in the US and influenced the establishment of institutions and policies aimed at preventing future depressions, including automatic stabilizers, the FDIC, SEC and Federal Reserve reforms. While later challenged, Keynesian economics remain influential in macroeconomic theory and policy.
The document traces the development of the American economy from its colonial roots to modern times. It discusses how the economy had to be built from nothing by immigrants in the colonial era. In the 1800s, the economy grew but recessions were frequent and severe. By the 1900s, the US had the largest economy in the world and continued developing innovative industries. While no longer dominant, the American economy remains highly influential as a global leader in many high-tech fields.
The Great Depression had severe economic effects across Europe and Australia in the 1930s. In the UK, industries and exports declined sharply after 1929. The UK abandoned the gold standard in 1931, devaluing the pound and boosting exports. High unemployment led the government to cut wages and spending. Rearmament from 1936 and Keynesian policies after WWII helped recovery. The Depression weakened democracies and strengthened fascist movements in Germany and Italy. Australia's export-reliant economy suffered badly with unemployment reaching 29% in 1932.
Vieslekcija Latvijas Universitātē: Kā D. Trampa prezidentūra ietekmē Eiropu? ...Latvijas Banka
ASV ir lielākā pasaules tautsaimniecība, nozīmīgākā tirdzniecības partnervalsts un būtisks investīciju avots ES. Savukārt ASV dolārs un eiro ir dominējošās globālās rezervju valūtas. Tāpēc norises ASV būtiski ietekmē Eiropu, t.sk. Latviju. Ietekmi izjūtam, lai gan ASV un Latvijas tiešie ekonomiskie sakari (tirdzniecība un finanšu plūsmas) ir diezgan nelieli.
Kopš Donalda Trampa ievēlēšanas ASV prezidenta amatā, šķiet, katru dienu plašsaziņas līdzekļi pievērš sabiedrības uzmanību prezidenta kārtējam izteiksmīgajam tvītam vai komentāram. Taču vai vienmēr vārdiem seko darbi?
Kādi bijuši būtiskākie prezidenta D. Trampa administrācijas lēmumi līdz šim?
Kādu ASV prezidenta administrācijas rīcību varētu gaidīt turpmāk?
Kāda varētu būt tās ietekme uz ASV, pasaules un Eiropas ekonomisko attīstību?
Lekcija sniegs atbildes uz šiem un citiem jautājumiem par ASV ekonomisko attīstību.
The document traces the development of the American economy from its origins as marginal colonial economies through its growth into a huge, integrated, industrial powerhouse that dominated the global economy in the late 19th/early 20th centuries. It discusses how the early American economy had to be built from nothing by settlers, the economic challenges of the 1800s including financial crises and recessions, the measures taken during the 1900s like government spending to strengthen the economy during downturns, and how despite fears, the US remains a leader in many high-tech fields today although it no longer dominates globally as it once did due to its relatively small population.
The document discusses Gross Domestic Product (GDP), including its definition, history, and methods of calculation. GDP is the primary measure of a nation's production and was created by Simon Kuznets in 1937 to help the US government understand the economy during the Great Depression. It measures the total value of goods and services produced within a country's borders in a year. GDP can be calculated using three approaches - production, expenditure, and income.
This document provides an introduction and overview of the global economic meltdown of 2008. It discusses several key causes, including unsustainable consumption and borrowing in the US fueled by surpluses from other countries like China. It also cites the greed of investment bankers and failure of regulators. The crisis has had severe impacts around the world and shown the failures of both capitalism and communism. Moving forward, there is a need for a more sustainable and balanced economic system that benefits all people equitably.
Andrés Solimano, President and Founder of the International Center for Globalization and Development, presented on the history of recessions in the 20th century on 11 June 2019 at the OECD Development Centre for their "DEV Talks" series.
Asset bubbles, fin crises and the role of human behaviourDuy Nguyen
This document discusses the recurring nature of asset bubbles, financial crises, and their relationship to human behavior. It notes that bubbles and crises have occurred frequently throughout history, at least once per year globally for the past two centuries. While proximate causes like loose monetary policy and regulation have played a role, the author argues that human behavior provides the best overarching explanation. Understanding our own psychological tendencies may help mitigate future crises, but as long as humans act as humans, complete prevention is impossible and reducing severity and frequency is the most that can be hoped for.
1) Keynesian economics argues that government spending can help recover economies from recessions by increasing aggregate demand. However, during recessions individuals may paradoxically save more due to uncertainty, worsening the economic downturn.
2) The COVID-19 pandemic led to an economic shutdown in India in 2020, resulting in unprecedented rises in savings but limited opportunities to spend. Widespread job and income losses also forced many to dip into savings.
3) As predicted by Keynesian theory, the reduction in demand due to higher savings and lower consumption and production led to job cuts and rising unemployment, creating a vicious cycle that was difficult for the government's supply-side measures to address before the pandemic.
Speculation in food commodity derivatives markets contributed to the huge spike in global food prices between 2007-2008. The deregulation of these markets in the 1990s and 2000s allowed large financial institutions like Goldman Sachs to create commodity index funds, drawing huge amounts of speculative capital into food commodities. By 2008, speculators dominated long positions in key food crops like maize and wheat. This speculation amplified price movements driven by real supply and demand factors, causing food prices to rise over 80% in a year and contributing to increased global hunger.
The document outlines eight trillion-dollar macroeconomic trends expected to drive global economic growth between now and 2020:
1. The next billion consumers - Rising incomes in emerging markets will bring over a billion new consumers into the global middle class, expanding markets.
2. Old infrastructure, new investments - Advanced economies will invest in aging infrastructure through public-private partnerships while emerging economies continue building infrastructure.
3. Militarization following industrialization - As economic power shifts to Asia, military spending and capabilities will also shift, increasing risks of conflict and opportunities for arms producers.
The document outlines eight trillion-dollar macroeconomic trends that are expected to drive global economic growth between 2010 and 2020: 1) The next billion consumers, 2) Old infrastructure, new investments, 3) Militarization following industrialization, 4) Growing output of primary inputs, 5) Developing human capital, 6) Keeping the wealthy healthy, 7) Everything the same, but nicer, 8) Prepping for the next big thing. These eight trends are estimated to increase global GDP by $27 trillion total by 2020, with the trends of developing human capital and keeping the wealthy healthy accounting for about half of the expected growth. The document also discusses some implications that businesses should consider in positioning themselves to profit from these macro
Individual Thesis: Signs of Japanification In South Korean Economy - Threats ...Hoonjae Gwak
Individual Thesis presented in the 32nd Korea-Japan Student Forum (KJSF) held in August 2016. I was the Coordinator of the Department of Economy in the 32nd KJSF.
Macro-economical concept applied in Egypt such as : unemployment rate, Economical political power, long run variables and stock market, role of the central bank all that and more you can see under the topic Egypt between black yesterday and welling tomorrow
This is the seventh of our reports on billionaire wealth, continuing our investigation into this historic era of wealth generation. Our research universe covers more than 2,000 billionaires from 43 markets in the Americas, EMEA and APAC, looking back over more than two decades.
The document provides an overview of the United States economy including key statistics such as GDP, GDP growth rate, GDP per capita, inflation rate, labor force statistics, unemployment rate, main industries, electricity production, oil production and reserves, poverty levels, and national debt. It discusses the country's economic history, monetary policy, government intervention in the economy, and predictions about the future direction of the US economy.
The Great Depression began after a period of economic growth and optimism in the 1920s. Speculation was rampant and many believed the boom would continue indefinitely. However, on October 29, 1929, the stock market crashed, marking the beginning of a decade long economic decline. GDP was halved, unemployment rose to 25%, farm prices and incomes dropped sharply. Several factors contributed to the depression, including uneven economic growth that did not benefit all sectors, high consumer debt levels, overproduction, and an unstable construction industry. Government policies also exacerbated problems through high tariffs, a regressive tax system, and lax financial regulations. President Hoover's policies failed to stimulate the economy or stabilize international finance. It was not until Roosevelt
The document provides an economic summary and outlook for Q4 2010. It includes:
1) Key economic indicators such as interest rates, stock prices, and consumer confidence showing mixed signs of recovery.
2) A review of important financial and industry news in Q4 2010, including the Fed announcing $600B in debt purchases and Republicans gaining control of the House.
3) An analysis of both positive and negative factors for the economic outlook, with small business and big company spending poised to increase but unemployment and the housing market remaining weak.
This document provides an introduction and overview of the global economic meltdown of 2008. It discusses several key causes, including unsustainable consumption and borrowing in the US fueled by surpluses from other countries like China. It also cites the greed of investment bankers and failure of regulators. The crisis has had severe impacts around the world and shown the failures of both capitalism and communism. Moving forward will require finding a new, sustainable economic model.
This document discusses how the world is changing and the implications for the future, particularly by 2040. It acknowledges that understanding economic trends is important but not sufficient to achieve resilient and inclusive growth. The main points discussed are major global shifts happening by 2030, including the rise of China and India as economic powers and the impact of digital media. It also outlines some key challenges facing the Western Cape, such as unemployment, the impact of carbon pricing on exports, social issues like crime and violence, and infrastructure constraints.
John Maynard Keynes was a 20th century British economist whose ideas helped shape policy responses to the Great Depression. His 1936 work, The General Theory of Employment, Interest and Money, challenged classical economic theories that markets would naturally reach full employment. Keynes argued that government needs to stimulate aggregate demand through spending, especially during economic downturns, in order to boost employment. His ideas helped justify New Deal programs in the US and influenced the establishment of institutions and policies aimed at preventing future depressions, including automatic stabilizers, the FDIC, SEC and Federal Reserve reforms. While later challenged, Keynesian economics remain influential in macroeconomic theory and policy.
The document traces the development of the American economy from its colonial roots to modern times. It discusses how the economy had to be built from nothing by immigrants in the colonial era. In the 1800s, the economy grew but recessions were frequent and severe. By the 1900s, the US had the largest economy in the world and continued developing innovative industries. While no longer dominant, the American economy remains highly influential as a global leader in many high-tech fields.
The Great Depression had severe economic effects across Europe and Australia in the 1930s. In the UK, industries and exports declined sharply after 1929. The UK abandoned the gold standard in 1931, devaluing the pound and boosting exports. High unemployment led the government to cut wages and spending. Rearmament from 1936 and Keynesian policies after WWII helped recovery. The Depression weakened democracies and strengthened fascist movements in Germany and Italy. Australia's export-reliant economy suffered badly with unemployment reaching 29% in 1932.
Vieslekcija Latvijas Universitātē: Kā D. Trampa prezidentūra ietekmē Eiropu? ...Latvijas Banka
ASV ir lielākā pasaules tautsaimniecība, nozīmīgākā tirdzniecības partnervalsts un būtisks investīciju avots ES. Savukārt ASV dolārs un eiro ir dominējošās globālās rezervju valūtas. Tāpēc norises ASV būtiski ietekmē Eiropu, t.sk. Latviju. Ietekmi izjūtam, lai gan ASV un Latvijas tiešie ekonomiskie sakari (tirdzniecība un finanšu plūsmas) ir diezgan nelieli.
Kopš Donalda Trampa ievēlēšanas ASV prezidenta amatā, šķiet, katru dienu plašsaziņas līdzekļi pievērš sabiedrības uzmanību prezidenta kārtējam izteiksmīgajam tvītam vai komentāram. Taču vai vienmēr vārdiem seko darbi?
Kādi bijuši būtiskākie prezidenta D. Trampa administrācijas lēmumi līdz šim?
Kādu ASV prezidenta administrācijas rīcību varētu gaidīt turpmāk?
Kāda varētu būt tās ietekme uz ASV, pasaules un Eiropas ekonomisko attīstību?
Lekcija sniegs atbildes uz šiem un citiem jautājumiem par ASV ekonomisko attīstību.
The document traces the development of the American economy from its origins as marginal colonial economies through its growth into a huge, integrated, industrial powerhouse that dominated the global economy in the late 19th/early 20th centuries. It discusses how the early American economy had to be built from nothing by settlers, the economic challenges of the 1800s including financial crises and recessions, the measures taken during the 1900s like government spending to strengthen the economy during downturns, and how despite fears, the US remains a leader in many high-tech fields today although it no longer dominates globally as it once did due to its relatively small population.
The document discusses Gross Domestic Product (GDP), including its definition, history, and methods of calculation. GDP is the primary measure of a nation's production and was created by Simon Kuznets in 1937 to help the US government understand the economy during the Great Depression. It measures the total value of goods and services produced within a country's borders in a year. GDP can be calculated using three approaches - production, expenditure, and income.
This document provides an introduction and overview of the global economic meltdown of 2008. It discusses several key causes, including unsustainable consumption and borrowing in the US fueled by surpluses from other countries like China. It also cites the greed of investment bankers and failure of regulators. The crisis has had severe impacts around the world and shown the failures of both capitalism and communism. Moving forward, there is a need for a more sustainable and balanced economic system that benefits all people equitably.
Andrés Solimano, President and Founder of the International Center for Globalization and Development, presented on the history of recessions in the 20th century on 11 June 2019 at the OECD Development Centre for their "DEV Talks" series.
Asset bubbles, fin crises and the role of human behaviourDuy Nguyen
This document discusses the recurring nature of asset bubbles, financial crises, and their relationship to human behavior. It notes that bubbles and crises have occurred frequently throughout history, at least once per year globally for the past two centuries. While proximate causes like loose monetary policy and regulation have played a role, the author argues that human behavior provides the best overarching explanation. Understanding our own psychological tendencies may help mitigate future crises, but as long as humans act as humans, complete prevention is impossible and reducing severity and frequency is the most that can be hoped for.
The document discusses the economic problem of water scarcity in Australia and how markets attempt to solve this problem. It explains that water is a scarce resource in Australia, especially in the Murray-Darling Basin. This creates an economic problem and opportunity costs as choices must be made on how to allocate the limited water. The role of markets is then discussed, where the price of water is determined by the interaction of supply and demand. Markets can help solve the economic problem of scarcity by efficiently allocating the scarce water resource.
Contemplating Covid 19 Economic Recovery and a Market Performance Comparison ...Niraj Singhvi
Maple Growth Partners is of the opinion that the economic recovery will likely be W-shaped, however, it all depends on the stricter/ longer government interventions during the course of the virus outbreak. We looked at the market performance during the prior outbreaks to understand the length of the virus impact on to the economy. Interestingly, all the previous major virus outbreaks occurred when the world was already dealing with some political/ economic adversities. We provided a gist of typical leading/lagging economic indicators to be cognizant of the ongoing market impact driven by Covid 19 outbreak. Lastly,
we also analyzed gold prices to see if there’s any shift in demand for this safe haven asset during periods of pandemic uncertainties.
Financial crisis and Its Effects on Security Markets.pptxBharatRachuri1
The document discusses various financial crises throughout history including their causes and effects. It provides details on the Great Depression of the 1920s, the OPEC oil crisis of the 1970s, the dot-com bubble of 2000, and the 2008 global financial crisis. It notes that the Great Depression resulted in a 25% unemployment rate in the US and an 80% drop in stock market values. The OPEC crisis quadrupled oil prices between 1973-1974. The document also outlines signs of financial bubbles like rising unemployment and inflation, declining housing sales, and sustained stock market losses.
This chapter introduces macroeconomics and its key concepts. It discusses long-term economic growth and short-term fluctuations in areas like GDP, unemployment, inflation, and government/trade deficits. Macroeconomics aims to address challenges in boosting growth, stabilizing prices, employment and reducing deficits. The tools available are fiscal policy, which alters taxes and spending, and monetary policy, which influences interest rates and money supply. Examples from the US and other nations illustrate trends in these macroeconomic indicators over time.
This document provides an overview of key business practices introduced by major American companies between 1900-2000 that helped shape the US economy. It discusses practices introduced by IBM like the System/360 mainframe that standardized the computer industry, the SABRE airline reservation system, and the barcode. It also summarizes practices by Amazon like third-party seller networks, Bank of America like establishing a branch system and developing magnetic ink character recognition for checks, and Berkshire Hathaway's focus on acquisitions and share repurchases under Warren Buffett's leadership. The document aims to illustrate innovative business models that emerged from leading US firms and impacted business globally.
Longer run economic consequence of pandemicRein Mahatma
- The study examines the long-term economic consequences of major pandemics using data on real interest rates from 1314-2018 in Europe.
- It finds that significant macroeconomic effects of pandemics persist for about 40 years, with the real natural rate of interest substantially depressed following pandemics. The natural rate declines for decades and reaches its lowest point about 20 years after a pandemic.
- In contrast, major armed conflicts do not have similar persistent effects and may even have the opposite effect, likely due to differences in how capital is affected during wars versus pandemics.
KCIs - EXAMPLE WILLIAM RICHMOND ‘old model’ econom.docxDIPESH30
KCIs - EXAMPLE
WILLIAM RICHMOND
‘old model’ economic development
The term has been used to describe Australian economic development (as measured by
the European yardstick of increases in GDP) up to the end of the 1920s. The central
characteristic of the period is that rural industries (i.e. those based on the use of land)
provided the main basis of economic development (i.e. increases in GDP). Three phases
of ‘old model’ have been identified: the first, until about 1860 when new land was being
brought into use; the second, until about 1890 when capital was being applied to land so
that land could be used more intensively for the grazing of sheep and the production of
wool; and the third, until the end of the 1920s when the more intensive use of land was
based on the ‘new rural industries, i.e. those involving the use of land for agriculture
rather than the grazing of sheep. It was the second of these phases that resulted in a rapid
increase in production) and a level of GDP per head considerably in excess of any other
comparable country.
trade protection
This term refers to a policy of protecting (or shielding) producers within an economy
from competition from overseas producers. In Australian economic history it refers
particularly to the protection of producers within the manufacturing sector, in order that
the Australian manufacturing sector could develop. The main instrument of the policy
was the tariff (in effect a tax on imports) which made overseas produced goods less
competitive relative to domestically produced goods. The policy was implemented in the
1920s when there were major increases in tariff levels, and in the context of the 1930s
Depression, this being one factor in the relatively rapid recovery from the Depression.
The policy continued to characterise the Australian economy in post-WWII decades. In
so far as trade protection resulted in the extensive development of industries that were
economically inefficient it has been held to be one of the main factors underlying the
poor economic performance of the Australian economy for most of the twentieth century.
the price of iron ore since the year 2000
The price of iron ore was approximately $12-$14 per tonne in the early 2000s then started
to increase sharply after 2004, reaching a peak of nearly $180 per tonne in 2011. After
this time it fell steadily to about $50 - $60 per tonne. The significance of this lies in the
fact that iron ore is the largest export commodity. There were major positive economic
effects through linkages to other industries, both through the expenditure of incomes
made by owners and employees and (‘backwards’) through the supply of inputs to
producers of iron ore. There was also large-scale investment associated with the
development of new mines and on infrastructure associated with mining projects. A
further effect was that the value of the Australian dollar (because ...
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INSTRUCTIONS
1) The “New Era”, while celebrated by many Americans, was also rejected
by large segments of the country.
A) Who were those reactionary critics, and what “New” historical
phenomena did they find so repugnant?
B) How did such reactionaries express their anxieties: what groups, laws,
movements, etc.?
2) Although the Great Crash on Wall Street symbolically ended the 1920s
economic boom, fundamental weaknesses in the U.S. economy actually
paved the way for the Great Depression.
A) Explain these major structural flaws in the national economy and why
they helped cause the Depression.
B) Identify their roots: why did such flaws exist in the first place? Look to
the 1920s and connect those developments to 1930s struggles.
3) Franklin D. Roosevelt was elected on promising a “New Deal” for a
depression-ravaged American public.
A) What major economic and social problems did Roosevelt face upon his
election in 1932?
B) How did the Roosevelt Administration attempt to revolve those
problems? Focus on Roosevelt’s first two years in office, or the so-called
“First New Deal”.
5) The Second World War demanded an immense mobilization on the
American homefront.
A) With (white) men away, what traditionally marginalized groups of
people helped produce this unprecedented amount of materials? How did
they contribute to the war effort?
B) What were the legacies of World War II? Consider its social effects as
well as its impact on America’s economy, foreign policy, and governing
structures.
Please answer clearly for each essay prompt.
P O P U L A T I O N A N D D E V E L O P M E N T R E V I E W.docxgerardkortney
P O P U L A T I O N A N D D E V E L O P M E N T R E V I E W 3 1 ( 4 ) : 6 0 5 – 6 4 3 ( D E C E M B E R 2 0 0 5 ) 605
The Next 50 Years:
Unfolding Trends
VACLAV SMIL
FUNDAMENTAL CHANGES in human affairs come both as unpredictable discon-
tinuities and as gradually unfolding trends. Discontinuities are more com-
mon than is generally realized, and technical developments offer some of
the best examples of these underappreciated shifts. Incremental engineering
progress (improvements in efficiency and reliability, reduction of unit costs)
and gradual diffusion of new techniques (usually following fairly predict-
able logistic curves, no matter whether the innovations are mass-produced
consumer items or advanced industrial processes) are very much in evidence,
but they are punctuated by surprising, sometimes stunning, discontinuities.
The modern history of flight is an apt illustration of these inherent
unpredictabilities (Smil 2006). In 1955 it did not require extraordinary imagi-
nation to see that intercontinental jet travel would become a large-scale en-
terprise. But no one could have predicted (just a year after the third fatal
crash of the pioneering British Comet and the consequent grounding of the
first program of commercial jet flight) that by 1970 there would be a plane
capable of carrying more than 400 people. The Boeing 747 was a result of
Juan Trippe’s vision and William Allen’s daring, not an inevitable outcome
of a technical trend. And more surprises followed, including a counterintui-
tively massive increase in the total volume of commercial flying: between
1972 and 1981 two rounds of large oil price increases more than quintupled
(in real terms) the price of crude oil (from which all of the aviation kerosene
is refined), yet worldwide passenger traffic expanded relentlessly and its vol-
ume was 60 times higher by century’s end than it was in 1955 (ICAO 2001).
Some political discontinuities of the past 50 years have been even more
stunning. Nineteen fifty-five was just six years after the Communist victory
in China’s protracted civil war, only two years after China’s troops made it
impossible for the West to win the Korean War and forced a standoff along
the 38th parallel, and three years before the beginning of the worst famine
in history (Smil 1999). At that time, China, the legitimacy of its regime
606 T H E N E X T 5 0 Y E A R S : U N F O L D I N G T R E N D S
unrecognized by the United States government, was an impoverished, sub-
sistence agrarian economy, glad to receive a few crumbs of wasteful Stalinist
industrial plant, and its per capita gross domestic product was less than 4
percent of the US average. Yet by 2005 China, still very much controlled by
the Communist party, had become a new workshop for the world, an in-
dispensable supplier of goods ranging from pliers to cell phones, and it is
now underwriting America’s excessive spending through its record purchases
of US Treasury bills. How could an.
Business Economics of US is studied where its market and growth from past to present and future challenges to the growth is covered such as depression and debt problems.
The Great Depression was a severe worldwide economic depression that began after a major fall in stock prices in the United States. It caused widespread unemployment that reached 25% in the U.S., the failure of many businesses and banks, and a general decline in prices as well as international trade. The economic depression lasted throughout the 1930s, severely damaging the U.S. economy and resulting in millions of Americans losing their lifetime savings when banks collapsed. The effects were felt globally as unemployment rose and international trade declined.
The document discusses the economic crisis in Venezuela. It describes how Venezuela's economy is heavily dependent on oil exports, which account for over half of GDP. When global oil prices declined sharply in 2014-2015, Venezuela's economy nosedived into a severe crisis. Inflation skyrocketed as the currency lost value. Shortages of food, medicine and other basic goods became widespread as the government struggled to pay its bills. The crisis has led to political instability and unrest as the population grows increasingly impoverished.
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The document provides details about the Great Depression that occurred from 1929 to the late 1930s. It describes how the stock market crash of 1929 led to widespread bank failures as people withdrew their deposits. This caused many businesses to cut wages or lay off workers, resulting in high unemployment. Some key effects included a 30% drop in GDP, mass unemployment, reduced industrial production and exports, and social impacts such as migration within the US. The Depression affected other countries globally due to reduced international trade and their dependence on exporting to the US and other nations.
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
Shelley Morris, Senior Project Manager, Living Pension, Living Wage Foundation
Sarah O'Grady, Journalist
Will Sherlock, Head of External Relations, M&G Plc
Daniela Silcock, Head of Policy Research, Pensions Policy Institute
David Sinclair, Chief Executive, ILC
Jordi Skilbeck, Senior Policy Advisor, Pensions and Lifetime Savings Association
Rt Hon Sir Stephen Timms, former Chair, Work & Pensions Committee
Nigel Waterson, ILC Trustee
Jackie Wells, Strategy and Policy Consultant, ILC Strategic Advisory Board
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
Monthly Market Risk Update: June 2024 [SlideShare]Commonwealth
Markets rallied in May, with all three major U.S. equity indices up for the month, said Sam Millette, director of fixed income, in his latest Market Risk Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
How to Identify the Best Crypto to Buy Now in 2024.pdfKezex (KZX)
To identify the best crypto to buy in 2024, analyze market trends, assess the project's fundamentals, review the development team and community, monitor adoption rates, and evaluate risk tolerance. Stay updated with news, regulatory changes, and expert opinions to make informed decisions.
How Poonawalla Fincorp and IndusInd Bank’s Co-Branded RuPay Credit Card Cater...beulahfernandes8
The eLITE RuPay Platinum Credit Card, a strategic collaboration between Poonawalla Fincorp and IndusInd Bank, represents a significant advancement in India's digital financial landscape. Spearheaded by Abhay Bhutada, MD of Poonawalla Fincorp, the card leverages deep customer insights to offer tailored features such as no joining fees, movie ticket offers, and rewards on UPI transactions. IndusInd Bank's solid banking infrastructure and digital integration expertise ensure seamless service delivery in today's fast-paced digital economy. With a focus on meeting the growing demand for digital financial services, the card aims to cater to tech-savvy consumers and differentiate itself through unique features and superior customer service, ultimately poised to make a substantial impact in India's digital financial services space.
University of North Carolina at Charlotte degree offer diploma Transcripttscdzuip
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Madhya Pradesh, the "Heart of India," boasts a rich tapestry of culture and heritage, from ancient dynasties to modern developments. Explore its land records, historical landmarks, and vibrant traditions. From agricultural expanses to urban growth, Madhya Pradesh offers a unique blend of the ancient and modern.
2. Agenda
Recessions that took place in this century
S&P500 and Nasdaq (Peak to Trough)
Sectoral Recoveries using Index ETF’s
Recessions that took place in the past century
(similar to the current pandemic)
Spanish Flu
Roaring 20s
Great Depression
Where do we stand today?
High Debt Levels and a possible bubble?
Role of Government and Feds in this crisis
@lbvc
3. The two recessions of this century…
2001 Recession 2008 Recession
Global Financial Crisis
@lbvc
4. … were
due to structural problems in the economy
Recession Period ’01 Recession ’08 Recession
Duration 8 Months (Mar’01 -Oct’01)
18 Months (Nov’07 –
May’09)
GDP Decline 0.8% 4.3% (US)
Unemployment 6.8% 10%
Cause
Dot.com bubble, accounting
scandals, 9/11 attacks
(Technology Sector)
Housing and a liquidity crisis
(Financial Sector)
Source: Bloomberg Economics
@lbvc
6. Technology Sector
Consumer
Discretionary
Consumer Staples Financials Healthcare
Microsoft Amazon, eBay Procter and Gamble Berkshire Hathaway Johnson and Johnson
Apple
McDonald’s,
Starbucks
Costco JP Morgan United Health Services
Visa Nike, Hasbro Walmart Bank of America Merck
Adobe Booking Holdings Coco Cola Blackrock Pfizer
Salesforce
PVH Corp,
Tiffany and Co
Colgate American Express CVS
Nvidia Ford, Carnival Cruises Walgreens Bancorp Humana
Index (SPDR) ETF funds used for this analysis
Source: State Street SPDR
@lbvc
8. While the two recessions that have
taken place this century, they’re not really
comparable to today’s pandemic
@lbvc
9. So we looked for similarities
in recessions in the previous century
1914-1918, 1918-1919 1921-1929 1929-1938
Spanish Flu
@lbvc
10. We haven’t seen a
pandemic in a long time
• Spanish Flu is the last known
global pandemic
• According to the CDC, “One-third
of the world’s population was infected
with this flu. The number of deaths
was estimated to be at least 50MM
worldwide”. Compared to an
estimated 40MM casualties in WWI
• Note: Not much data on the impact is
available of the flu is available, as most
of the concentration and efforts were
on the WWI
Source: Collaborative Fund, Investor Amnesia
@lbvc
11. Spanish Flu affected
states and countries
differently
• Milwaukee was much more proactive in
implementing quarantine and closure,
compared to Philadelphia. This led to
lower deaths (See pic on the right)
• In early 1900’s, most states and
countries were self reliant, compared to
today where globalization is at it’s peak
and self reliance is at it’s lowest
• Local quarantine and survivor
immunity were the removal mechanisms
of Spanish flu. No vaccine was ever
discovered.
Source: Investor Amnesia @lbvc
12. Today’s trends are
similar to trends
during the flu
• Service and entertainment industries,
suffered double-digit losses in revenue
• Other businesses that specialized in
health care products (drug stores)
experienced an increase in revenues
• 1918 influenza pandemic was short-
term and society recovered quickly, but
individuals affected by this had
their lives changed forever
Street car conductor
in Seattle not allowing
passengers aboard
without a mask in1918
Some news articles
from a newspaper in
Little Rock, Arkansas
Source: St. Louis Fed
@lbvc
13. Economic impact of WWI and Spanish Flu
USA 1914 1918 1920 1921
GDP/Capita
($2011)
7,334 8,648 8,485 8,134
Unemployment
(%)
8 1.4 2.3 11.9
Inflation (%) 1.0 17.86 (1.5) (11)
WW1 Post Spanish Flu
Source: Our world in data, The balance
@lbvc
14. US enters
the War
The start of
Spanish Flu
1915
Source: Long term trends, Macro Trends
The market’s
reaction
Dow Jones
Index
Going into Spanish
Flu, The S&P 500 was
fairly undervalued
@lbvc
15. During this period,
the US transitioned from
an agri-economy to a
manufacturing economy
Post- flu came the roaring 20’s, led by
an explosion in the manufacturing sector
Source: A wealth of common sense
@lbvc
16. Technology advancements
and growth in disposable
income led to a change
in habits
• The 1920s ushered in the influx of new
consumer products like automobile,
airplane, radio, assembly line, refrigerator,
washing machine, and many more
• Fall in the highest tax rates from 77% in
1919 to 58% in 1922 to 25% in 1925,
created more disposable income
• Unemployment was at 3% during this
period, one of the lowest levels post WW1
% of
families
with
durables
Electric
Lights
Inside
Plumbing
Washing
Machines
Car
1910 15 - <1 1
1920 35 20 8 26
1930 68 51 24 60
Increased purchase and
usage of consumer
products
16Source: CSU – Modern Economy
@lbvc
17. Credit played a vital role
in the economic growth
• 60% of the cars and radios bought from
1925-29 were on credit
• In 1929, the US GDP was worth $105BN
and the private debt was close to
$160BN
• Corporate debt grew from $57BN to
90BN from 1921 to 1929
• Mortgages grew by 8x from 1921-29
Source: St. Louis Fed 17@lbvc
18. The roaring 20’s saw an unprecedented
growth in the economy
1914 1918 1920 1921 1929
GDP/Capita
($2011)
7,334 8,648 8,485 8,134 10,543
Unemployment
(%)
8 1.4 2.3 11.9 3.2
Inflation (%) 1.0 17.86 (1.5) (11) 0
Source: Our world in data, The Balance 18
WW1 Post
Spanish Flu
Roaring 20’s
@lbvc
19. Post roaring 20’s, when
the bubble burst, it was
the start of the Great
Depression
• The economy soon became overheated,
it became a place of higher supply than
demand, which led to deflation
• The country suffered four years of
contraction, which led to 30% fall in
GDP in just four years (see chart)
• The unemployment rate reached
25% by 1933, up from 3%
19Source: The Balance
Changes in the
economy (1929 – 33)
United States
Industrial Production -46%
Wholesale Prices -32%
Foreign Trade -70%
Unemployment +607%@lbvc
20. By 1929, S&P 500 was overvalued
Source: Long term trends 20@lbvc
21. 10 years of gains wiped out in 3 short years
“In the late 1920s, the Fed
was also reluctant to raise
interest rates in response
to soaring share prices,
leaving rampant bank lending
to push prices higher still.
When the Fed did belatedly
act, the bubble burst with a
vengeance”
4000+ banks had to shut down,
which accounted for 50% in
America
Dow Jones
Jan’1928
Fed Rates:
3.5%
Jul’1928
5%
Jul’1929
6%
During the roaring 20’s, we saw
massive credit expansion. At the
end of this period, increase in Fed
rates caused increased burden on
consumers and the bubble burst
leading to the Great Depression
21Source: Macro Trends
@lbvc
22. The impact of the great depression
took the economy back by 20 years
It was a global crisis and not just US centric, much like the
health pandemic today.
1914 1918 1920 1921 1929 1933
GDP/Capita ($)
(Base 2011)
7,334 8,648 8,485 8,134 10,543 7,270
Unemployment
(%)
8 1.4 2.3 11.9 3.2 24.9
WW1 Post
Spanish Flu
Roaring 20’s Period of Great
Depression
Source: Our world in data, The balance 22@lbvc
23. To save the economy,
government stimulus
called the New Deal
was initiated
• Government stimulus was passed in
1933, 42 months after the start of the
recession.
• The Government invested $7BN in
various projects under Public Works
Administration (PWA) to create
employment and increase workers
buying power
• Public Works Administration was a
project where funds were used for
infrastructure and construction projects
like bridges, roads, hospitals and
schools
The total stimulus is estimated to be
~ $42BN over a 7 year period,
which accounted for almost
40% of the GDP back then
Source: Bond Capital, History of New Deal
23
@lbvc
24. Recovery took 25 years to reach 1929 levels
Dow Jones
Source: Macro Trends 24@lbvc
26. A decade without recession
50
100
150
200
250
300
Apr-13
Jun-13
Aug-13
Oct-13
Dec-13
Feb-14
Apr-14
Jun-14
Aug-14
Oct-14
Dec-14
Feb-15
Apr-15
Jun-15
Aug-15
Oct-15
Dec-15
Feb-16
Apr-16
Jun-16
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
Feb-18
Apr-18
Jun-18
Aug-18
Oct-18
Dec-18
Feb-19
Apr-19
Jun-19
Aug-19
Oct-19
Dec-19
Feb-20
Since Mar-13
Consumer discretionary, 219
Financials, 184
Consumer staples, 149
S&P 500, 193
Nasdaq, 269
Technology, 304
Healthcare, 205
The bull market has been driven by the
technology sector in the past 7 years
S&P 500 Recovered
from the 2008
recession only in
March 2013
Source: Google Finance 26@lbvc
27. 4.8% fall in US GDP in the first
quarter already, with a further
~30% decline expected in Q2
Consumer spending fell by 7.5%
in March, highest since 1959,
the household incomes fell by 2%,
while household savings increased
to 13.1%, highest since 1981
Source: MarketWatch 27
Change in US GDP in Q1 2020 %
Healthcare (2.25)
Food Services and Accommodations (1.61)
Recreation (1.01)
Motor Vehicles (0.95)
Clothing (0.78)
Transportation (0.74)
Food 1.11
Residential Investment 0.74
Other Non Durable Goods 0.70
Software 0.16
Financial Services and Insurance 0.15
@lbvc
28. Today, we have a three fold problem
- an event driven economic freeze,
a valuation bubble and a potential debt crisis
28@lbvc
29. Today’s GDP to Global Debt is at 1 : 3.3, highest it has
ever been
29@lbvc
30. Since 2008, for every $1 increase in GDP,
the public debt grew by $1.50
Source: Fred
Public Debt to
GDP is at 109%
as of 2019,
expected to
increase in the
next few years
@lbvc
31. Debt levels are the highest they have
ever been for consumers and businesses
Household Debt accounts for 70% of GDP Non Financial Corporate Debt accounts for 52% of GDP
@lbvc
32. Ability to pay back this debt has never been lower
@lbvc
33. In 2019, the S&P grew by 31%, but majority of the returns were
driven by from a valuation multiple rather than earnings
Investors fueled by access to liquidity have been irrationally
driving up valuations, in hopes of earnings catching up
@lbvc
34. Quality of debt has never been worse and is deteriorating
Expansion in BBB bonds, which is
one grade above the junk bonds
The downgrades in bonds have been happening
at a faster rate than the 2008 recession
@lbvc
35. Unemployment is expected to reach the Great
Depression levels very soon
• 30MM jobs lost in the last six
weeks. Highest since 1934
• An economist claims that during
recovery, unemployment
decreases at 1-1.5% only. It could
take a decade to come back to
Mar 2020 unemployment levels
• During the Great Financial Crisis,
the unemployment rate had
touched 10%
Source: Forbes
Took 10 years to go
from
10% to 3%
@lbvc
36. S&P 500 PE ratio, we were in a bubble
before we entered the pandemic
Trading at 25x P/E multiple as of Feb 2020
Source: Long Term Trends
@lbvc
37. Inspite of all this, the stock market is showing us a
different story
• The S&P500 is up 2% YTD, after a 34%
fall in stock market in March
• Reasons for such a quick recovery
being two fold:
• Federal reserve and Government
Stimulus generating the confidence in
the markets (See slide 38,39,40)
• Big tech is stronger than ever as
COVID has accelerated the online
penetration in each and every sector
from shopping to working to
socializing, you name it.
Jan 2020 – July 2020@lbvc
38. Historically, the Fed has reduced interest rates by 5%
during recessions to provide economic growth
• Fed for the first time ever started
buying corporate bonds and ETF’s
• In 5 short months, the Fed has
expanded it’s balance sheet by a
whooping $3 Trillion (13%)
• The feds action has brought tons of
confidence and liquidity in the
markets. The increase in liquidity
is one of the reason for the sharp
recovery in the S&P500
5%
5%
Fed Interest Rates
Opportunity to
reduce the rates by
5% is no more an
option
Source: Macro Trends
@lbvc
39. The US government has announced $2 trillion+
worth of stimulus in the economy
Source: Bond Capital 1 month vs 42 months @lbvc
40. While, incomes are expected to drop, the government
stimulus is expected to drive the disposable income
This quick disbursal of stimulus is one of the reasons that is maintaining
the consumption from falling as it did during the Great Depression
@lbvc
41. Summary of the economic factors
Recession
Period
Great
Depression
’01 Recession ’08 Recession COVID-19
Duration
9 Years
(1929-1938)
8 Months
(Mar’01 -Oct’01)
18 Months
(Nov’07 –
May’09)
Jan 2020 – ?
(Hopefully soon)
GDP Decline
30% in the first 4
years, 20% in 9
years
0.8%
4.3% (US);
5.1%(World)
20%+
Projected
Unemployment 25% 6.8% 10%
25%+
Projected
Source: Our world in data, The balance
@lbvc
42. While, today’s healthcare crisis looks similar to the Spanish Flu in 1918, the
current economic realities are similar to those going into the Great Depression in
1929.
If the Great Depression is anything to go by the recovery will take a long time and
a combined global effort.
However, unlike the Great Depression, the federal reserves and governments
across the world have acted quickly with significant economic measures which
has softened the blow to the economy from COVID-19.
While there will be unavoidable damage to our economies, certain sectors like the
technology sector will help with recovering from the crisis faster and emerge
stronger than ever before.
@lbvc
44. India is heavily reliant on the financials sector,
compared to the technology sector in the US
Technology,
23
Financials, 13
Healthcare, 14
Consumer
Staples, 7
Consumer
Discretionary,
10
Energy, 4
Industrials, 9
Materials, 3
Utilities, 3
Telecom, 10
Real Estate, 3
S&P 500 Sector Breakdown in 2019 (%)
Technology,
14
Financials, 45
Healthcare, 1
FMCG, 9
Transport
Equipments, 7
Energy, 15
Others , 12
BSE Sensex Breakdown in Oct’19 (%)
@lbvc
45. Impact on Indian markets during the recessions has
only been in ‘08
101
62
327
0
50
100
150
200
250
300
350
Aug-00
Dec-00
Apr-01
Aug-01
Dec-01
Apr-02
Aug-02
Dec-02
Apr-03
Aug-03
Dec-03
Apr-04
Aug-04
Dec-04
Apr-05
Aug-05
Dec-05
Apr-06
Aug-06
Dec-06
Apr-07
2001 Recession
S&P 500 Nasdaq Sensex
101
113
95
20
30
40
50
60
70
80
90
100
110
120
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
2008 Recession
S&P 500 Nasdaq Sensex
193
269
198
50
100
150
200
250
300
Apr-13
Aug-13
Dec-13
Apr-14
Aug-14
Dec-14
Apr-15
Aug-15
Dec-15
Apr-16
Aug-16
Dec-16
Apr-17
Aug-17
Dec-17
Apr-18
Aug-18
Dec-18
Apr-19
Aug-19
Dec-19
Since Mar-13
S&P 500 Nasdaq Sensex
COVID - 19 is the first
time that a recession
has hit all the countries
at a significant level
Source: Google Finance @lbvc
46. Indian stock market is overvalued as of Mar 2020
Higher than the ’08 recession
Source: Business Today
@lbvc
47. India’s public debt is 70% of GDP, with not enough
room to increase it
Other countries like US,
China, Japan all have
public debt over 100% of
their GDP, as they have
better ability to pay their
bonds
Even though, our debt to
GDP is at 70%, we don’t
have enough room to
provide stimulus to the
economy
Source: Trading Economies
@lbvc
48. Our private debt, driven by household debt, is the
highest that it has ever been
12% of GDP as of 2019,
At an all time high
48% of GDP as of 2018,
Fairly flat in the past decade
28
40
35
47
49
25
50 51 49 4950
4748 48
Source: Business Standard, Motilal Oswal
@lbvc
49. Estimated 120MM jobs lost in India as of May’20
(91)
(18) (17)
5
Source: NSSO, CMIE
@lbvc
50. RBI cut it’s repo rate by 0.75% to 4.40% since March
RBI in the past have cut repo
rate to increase liquidity. During
the 2008 Global Financial Crisis,
the repo rate was decreased by
4.25%
Today, RBI doesn’t have the
tools to decrease it by 4.5% as
they have been low Pre-Covid as
well
Source: Trading Economies
@lbvc
51. India’s GDP is expected to decline by 5% in FY21
As India is a developing nation,
the current recession due to
COVID is India’s fourth recession
since independence
@lbvc
52. India imposed stringent lockdown measures that have resulted in
adverse implications on the economy. Businesses in sectors other than
essentials have experienced zero revenue for the first time in April and
May 2020.
Given the Indian economy’s reliance on traditional sectors as compared
to technology, we expect the recovery to happen at a slower rate than
the developed economies.
This presents an opportunity for technology led businesses to drive
adoption and grow faster. As individuals and businesses have been
under lockdown, they have interacted with technology more than ever
when it comes to consumption of all forms like education, payments,
entertainment, etc.
Crises drive creativity and innovation. Past recessions have seen new
startups emerge driven by technology globally and we fully expect that it
to happen in India as well.
@lbvc