Nice article from @MESandbu. This from a theme in sellside research before Christmas. Could the pandemic break secular stagnation & deliver a decade of strong growth?

A thread on an interesting report by Goldman Sachs' Peter Oppenheimer, the bank's chief global equity strategist. He points out that Goldman's "Bear Market Risk Indicator" is looking ominous.

There are three factors that suggest that the recent stability could evaporate and that equities are "about to enter a sustained bear market", Oppenheimer says.

First is the fact that growth, inflation and interest rate outlook is unfriendly for equities.

Second is that greater volatility, such as multiple corrections and new peaks (which we've seen in 2018) tend to presage a full bear market.

Here is Goldman's data showing how falls and bounces tend to come ahead of "the dramatic final fall".

A few thoughts on tax policy. Thread:

So you are worth >$100M or perhaps even a few billion. There are only two ways to become this rich.

1. You start a business that becomes very successful.
2. You inherit wealth from your family. 1/

Whether you created a great company or inherited a lot of wealth, you are now sitting on a capital asset. You don’t really have any ordinary income (not meaningful to be relevant) and you never will. To the extent you ever pay taxes, it will be capital gains. 2/

The highest tax rate that the super rich will ever pay on their income (or wealth) is 20% capital gains tax. So, the super rich pay the equivalent effective tax rate of any American earning $75K (when you include FICA taxes). Same as a teacher or a cop. 3/

The question following from this obvious injustice in the tax system is the appropriate policy for taxing capital income. Economic policy would suggest that the best tax rate on capital is 0%. Why? ...4/

...Because in a capitalist society you want capital flowing efficiently without friction to its most productive use. Benefits of that are obvious. 5/

1/ 2017 vs 2020 Economics

Whatever the many reasons for the coup. The aftermath has been an economic disaster. This is instructive, since Mugabe was a monumental failure in Economics.

I wish to stick to economic facts &figures. I restrict myself exclusively to GOZ & RBZ stats

2/
To be fair to Mnangagwa, as President he is fed a lot of misinformation & politically convenient gibberish by those closest to him & security clusters bent on personal enrichment than national well being.

I say this, because some of the issues are too simple to understand.

3/
Mnangagwa can never commit harakiri ( Japanese suicide by cutting one’s belly) if facts & figures were honestly presented to him. Yet we saw Mugabe commit harakiri. He died a sad death while his lieutenants are now in power. Where the lieutenants honest to Mugabe...

4/
Chinamasa was Mugabe’s finance Minister. Was he frank & honest? If so why would he benefit from Mugabe’s ouster? The same is true of Mugabe’s bureaucracy. Most benefitted from the coup. So we ask if they were honest with him during his reign?

ED suffers the same problem

5/
On Wallstreet, CEO’s are not protected from their critics & independent research. Often they rely entirely on this research & seek it out in developing their strategy.

Once, Patterson Timba kicked out an analyst from his investor briefing. Forgetting strategy is in critique

The “Should we get rid of the GRE?” conversation and the “Should we pay undergrad RAs $15/hour?” conversation have three things in common that I think are really unfortunate — 🧵

(For the record, I personally think we should keep the GRE and that the minimum wage should be $15 but I know a lot more about psychometrics than labor economics so I’m more confident about the former opinion)

1- lack of clarity regarding whether a proposed change is seen as a morally good END in itself, versus a MEANS to another end, and if the latter what that end is

1b - for instance, I don’t care whether or not capital punishment deters crime; it’s instrumental purpose is irrelevant to the fact that I think it’s a moral wrong

1c -for the GRE, do you think testing is Bad, regardless of its utility? Or do you think that under representation of some racial groups is Bad? Or do you think the racial wealth gap is Bad? people rarely clarify what ultimate wrong they are trying to right