Author : Thierry Malleret
Date : August 6, 2014
David Bowers, “Treasury Yields – The Only Way is Up”
(Financial Times, July 30, 2014 – paywall)
The MD of Absolute Strategy Research addresses one of the most important issues for investors and argues that the bull bond market is now behind us. He offers three reasons: (1) a major shift – debtor friendly – in the conduct of monetary policy, (2) a US labour market tightening faster than expected; (3) bond yields starting to be constrained by their historical relationship to trend core inflation and to trend nominal GDP. He then offers a few suggestions on where to invest.
Leonid Bershidsky, “Jobs Numbers Mean Nothing in a Part-Time Age”
(Bloomberg View, July 31, 2014)
The title says it all! The Bloomberg columnist points out that last June, 19.3% of the employed U.S. population worked part time, or less than 34 hours a week (ratios are similar in most highly developed countries). The problem, he observes, is that people who work fewer hours make less money, and not just because they put in fewer hours. Income is proportional to working time.
Graham Allison, “Just How Likely Is Another World War?”
(The Atlantic, July 31, 2014)
100 years after the onset of WWI, the Harvard professor assesses seven similarities and seven differences between 1914 and 2014. The most compelling similarity is the famous “Thucydide’s trap”: the structural stress that inevitably occurs when a rapidly rising power (i.e. China) rivals a ruling power (i.e. the US). The conclusion: a world war is plausible, but unlikely.
Jean-Pierre Lehmann, “The democratic drift: political malaise in the age of democracy”
(Open Democracy, July 30, 2014)
Jean-Pierre observes that we moved from “an age of extremes” (the 20th century was dominated by dictators) to an age of democracies (they dominate the political landscape of the 21st century). However, he explains why there is cause for concern, as we face a “global democracy malaise” – a sense of rudderless democratic drift.
Tia Ghose, “Women Are Getting Smarter Faster Than Men, Study Says”
(The Huffington Post, July 29, 2014)
A short posting with many interesting links about new research showing that women tend to outsmart men. Culture plays of course a big role in creating differences in cognition, but on average, a woman’s brain has more connections between hemispheres, while a man’s brain has more connections within hemispheres.