Economics Nerd Central

[How bad boy]

So, inflation is broadly considered to be under control. Huzzah.

Right now, we're in a bit of a strange period. There are a bunch of indicators in the US lighting up like Christmas trees. Europe GDP growth rates have been stagnant for a hell of a long time, albeit I'm not convinced living standards have actually slipped. The bottom has finally fallen out of the Chinese housing market, hitting their wider economy. Was always going to happen, maybe it'll stabilise on 2025, maybe not.
Globalisation has been slammed into reverse with the election of DJT.

It's really hard to tell what the future holds for Europe. The US may well go through a rocky period, it feels distinctly bubbly there...

Here are some fun statistics:

Nvidia's current market capitalisation ($3.6 trillion) is higher than India's GDP ($3.55 trillion). Their revenue for the last quarter was $30bn.

Tesla's market capitalisation is $1 trillion, their gross revenue was $25bn last quarter, but only €2bn profit.
Ford's market capitalisation is $43bn, gross revenue $46bn last quarter, albeit they made a loss of ~$900M

Dogecoin's market cap is currently $53bn, bitcoin's $1.7tn, ethereum $393bn.

 

[How bad boy]

From the Trump thread when asked why Gary Stephenson changed my mind on wealth taxes:

I wasn't that concerned about it.

I now am convinced it's behind a bunch of major societal issues, especially house prices, is one of the root causes (amongst others) to current excessive government debt and the general running down of government assets.

The proliferation of winner takes all tech is making it much worse.

There's also a belief it'll resolve itself that isn't a given.

I think Gary tends to overemphasise the importance of it in his analysis of why things happen but he's a campaigner with an openly declared message so I'm ok with him doing that.

Dale Vince, founder of Ecotricity, wrote a good article on exactly this subject yesterday:

Tax the rich – do it now. Start with me | Dale Vince

Across the Atlantic, we see more clearly than ever what happens when the extreme wealth of super-rich men becomes an attack on the public good, says green energy industrialist and campaigner Dale Vince

www.theguardian.com

 

[Ogre Moran]

From the Trump thread when asked why Gary Stephenson changed my mind on wealth taxes:


Dale Vince, founder of Ecotricity, wrote a good article on exactly this subject yesterday:

Tax the rich – do it now. Start with me | Dale Vince

Across the Atlantic, we see more clearly than ever what happens when the extreme wealth of super-rich men becomes an attack on the public good, says green energy industrialist and campaigner Dale Vince

www.theguardian.com

An alternative would be anti-trust. Employed by Teddy Roosevelt to break up oligopolies. But Big Tech seems to be 'winner takes all', unlike oil where a homogeneous product was being sold. So anti-trust might need to be in continuous use and that could hold back innovation. I wouldn't be surprised though if Trump threw sand in the wheels were Musk et al to become political liabilities. The anti-trust would be more palatable to the Don then raising taxes on the rich.

 

[Roundyfield]

So, inflation is broadly considered to be under control. Huzzah.

Right now, we're in a bit of a strange period. There are a bunch of indicators in the US lighting up like Christmas trees. Europe GDP growth rates have been stagnant for a hell of a long time, albeit I'm not convinced living standards have actually slipped. The bottom has finally fallen out of the Chinese housing market, hitting their wider economy. Was always going to happen, maybe it'll stabilise on 2025, maybe not.
Globalisation has been slammed into reverse with the election of DJT.

It's really hard to tell what the future holds for Europe. The US may well go through a rocky period, it feels distinctly bubbly there...

Here are some fun statistics:

Nvidia's current market capitalisation ($3.6 trillion) is higher than India's GDP ($3.55 trillion). Their revenue for the last quarter was $30bn.

Tesla's market capitalisation is $1 trillion, their gross revenue was $25bn last quarter, but only €2bn profit.
Ford's market capitalisation is $43bn, gross revenue $46bn last quarter, albeit they made a loss of ~$900M

Dogecoin's market cap is currently $53bn, bitcoin's $1.7tn, ethereum $393bn.

Inflation is leveling off but prices are still considerably higher than five years ago especially in the housing market. The market, in the US, is booming, and profits are soaring for companies. Trump and the gang will definitely fix it.

 

[How bad boy]

Inflation is leveling off but prices are still considerably higher than five years ago especially in the housing market. The market, in the US, is booming, and profits are soaring for companies. Trump and the gang will definitely fix it.

Yeah, people don't see to understand that inflation coming down does not mean things get cheaper.

Deflation is generally toxic for investment as you can make a good return literally doing nothing with cash.

To deal with the fallout from high inflation, you need to boost incomes. That can sometimes impact industry profits so of course it's off the table for the oligarchs running America

 

[MerchantOfEnnis]

Having a core inflation target of 2% following the period of high inflation we've just had is bonkers IMO. Wage growth is probably running at around 5% annually but it varies massively by sector and we're in fairly deep water now after a few mad years with no going back bar a crash which I see no reason to believe is actually coming.

UK gilts now trading at 4.6% which is also insane. The yield spread between 10 years and property has reduced dramatically, although to be fair Dublin is still probably the most attractive European market for CRE investment, somehow. MSCI published their Q4 data yesterday and it's mad to see how poorly office values are performing compared to the sick child of real estate, retail. Although to be fair retail didn't have much further to fall following the shit show during and after Covid. Interestingly retail is now consistently the most invested sector quarterly. Investors know there is serious value to be had as if rebuilds itself

 

[How bad boy]

UK unemployment statistics are out today and it shows the dangers of interpreting headlines to understand the overall health of the economy:

UK pay growth stays high – but Britons are feeling the pinch

Firms are reluctant to hire and unemployment is rising, as inflation dulls the impact of higher wages

www.theguardian.com

UK pay growth stays high – but Britons are feeling the pinch​

Firms are reluctant to hire and unemployment is rising, as inflation dulls the impact of higher wages


If you go into the article:
The unemployment data only runs to July – but it shows 2.3 unemployed people for each vacancy, up from 2.2 in the previous quarter.

The unemployment rate was up by 0.1 percentage points on the previous three months – at 4.7% – the highest rate in four years.

Employment was also rising, however, in part as more people move from being economically inactive, into the workforce.

At 21.1%, the economic inactivity rate was down 0.8 percentage points on a year earlier – though it remains stubbornly higher than before the pandemic.
...
Yet so far that has been a slow process, and wage growth remained relatively robust, at an annual rate of 4.8% excluding bonuses in the three months to July, according to the ONS.

https://www.theguardian.com/busines...ur-market-pay-growth-job-losses-rachel-reeves
Hang on, there's a bunch of stuff happening here with both numerators and denominators.
Let's go to the source:

Employment in the UK - Office for National Statistics

Estimates of employment, unemployment and economic inactivity for the UK.

www.ons.gov.uk

Employment among all adults is now at 34.243M. That's up 232k in the quarter, and 654k in a year. That's a pretty decent performance almost 2% rise in employment in a year. The quarterly figure is a 0.6% rise in overall employment in a quarter, which is quite a bit. Run that for a year and it's almost a million extra people in work.

Unemployment is 1.674M, up 34k in the quarter and 194k in the year.


So while the rate might have ticked up slightly, it's way less than the overall number of people added to the workforce.

The confounding factor here is the people in the "Economically inactive" category, these include students, the ill, retired, carers, and people who have just given up working.

The UK has 9.124 million of them, but that's 287k fewer than this time last year. In fact, this has been a bit of a problem for the UK, went from 8.6M inactive before Covid to a peak of 9.477M in Apr-June 2024.


As a result, I think the actual story is that, contrary to the reports, UK hiring is actually pretty healthy.

Let's go check the headlines on the Telegraph:

And the Daily Mail?

As expected...

 

[Bennyton]

Economic inactivity in the UK as a whole is around 21.5%.

In Northern Ireland it's 27%.

Wild that, 1 in 4 working age people aren't working basically.

It's at around 20% in Ireland, that covers students, sick people, early retirees.

The ability, or inability to get treated by the health service in each place plays a signifigant role.

Booze is too cheap in the UK
Sugar needs to be taxed way more.
Ultra processed foods need to have excise added.
No VAT on gym memberships or exercise equipment.

Being an overweight alcoholic is just as bad for you as smoking like.

Healthy people pay more tax.

 

[How bad boy]

Economic inactivity in the UK as a whole is around 21.5%.

In Northern Ireland it's 27%.

Wild that, 1 in 4 working age people aren't working basically.

It's at around 20% in Ireland, that covers students, sick people, early retirees.

The ability, or inability to get treated by the health service in each place plays a signifigant role.

Booze is too cheap in the UK
Sugar needs to be taxed way more.
Ultra processed foods need to have excise added.
No VAT on gym memberships or exercise equipment.

Being an overweight alcoholic is just as bad for you as smoking like.

Healthy people pay more tax.

Economic inactivity in the UK was 21.5%, it's now 21.1%.
Ireland is down around 17%.

You'd need to dig into the numbers but I suspect the age profile of the countries is another factor too, lot more early retirees in the UK than Ireland as the tail end of the boomers who got gold plated defined benefits pensions retire in the UK. A lot smaller population, relatively speaking, in Ireland.

The UK definitely has a sicker populace in general, it also has an older populace, median age in the UK is about 40.5, its 39 in Ireland. Might not seem like much but it does add some to the illness numbers.

Agree with your points on health, reducing car dependence would massively help too. Not that Ireland is even slightly better on that front, it's not.
I suspect alcoholism is a much bigger problem in Ireland, Ireland has the second highest rate of "Heavy Episodic Drinking" in rich countries, 46% of drinkers having over 60g* of pure alcohol in the past 30 days, in the UK its 33%.

14 years of the Tories has resulted in a complete and utter neglect of areas that suffer from deprivation and the removal of the support they did have, like Sure Start Centres.
The NHS has been fucked for a decade and a half, the HSE is, depending on which measures you use, now performing significantly better.

There's a definite gap opening up in life expectancy, at least some of it is down to the differing covid approaches, but I suspect the performance of the Irish economy and a government that isn't taking an active "fuck you if you're poor" position have got a lot to do with it too.




*that's slightly under 3 pints of guinness, which obviously is not a heavy session...

 

[Bennyton]

You're some poster HBB, nice wan boy.