Was Adolf Hitler A Good Economist?

Given that President Trump is currently creating an “aura of economic instability” due to his economic policies does Trump truly believe that Adolf Hitler was a good economist?

By: Ringo Bones

Remember that famous speech coined by Milton Friedman that was later attributed to the late US President Richard Nixon that goes: “…we are all Keynesians now…”? Well the keyword here is Keynesian – as opposed to “Hitlerian” like what US President Trump’s latest economic policy is starting to look like.

During the past few years, the so-called “global populist movement” have recently elected illiberal politicians that can only be described as “Hitlerian” in the hopes of solving genuine problems and concerns – i.e. the economy. Unfortunately, Adolf Hitler was not known for being as a “good economist”, if he was, Keynesian Economics would have an operational counterpart that could be labeled as “Hitlerian Economics”. Would it be only a matter of time when President Trump will ask Brazilian President Jair Bolsonaro for “economic advice”?

It may have been the inherent terror in the so-called inverted yield curve that President Trump’s economic team have been ignoring since they set up shop, never mind the recent red flags from the bond market signaling that holding long term debt is increasingly risky, it seems like the inverted yield curve will strike the US economy as soon as the start of the 2020 fiscal year. Given the recent 800-point drop of the DOW and the recent US Federal Reserve rate cut seems to be doing nothing to prevent this, it seems that the Trump administration is already out of options – economically speaking.

Google Restricting Huawei’s Use Of Android: The E-Commerce Side of the Trade War?

Even though security concerns on Huawei products has been around since 2006, does Google’s latest move now makes Trump’s trade war with China now has a e-commerce front?

By: Ringo Bones

Back around 2006 to 2007, tech-savvy Gen-X’ers’ primary reason for “boycotting” Huawei and ZTE gear was primarily due to the Tibetan Freedom Movement and how Beijing kept incrementally ratcheting their crackdown on Uyghurs since the 1990s. Sadly such concerns were largely forgotten or dipped below the radar of activist social media since a relatively unknown senator from Illinois got elected to The White House. Then and now, no major news correspondent manage to ask Huawei CEO Ren Zhengfei about what he thinks about consumers who chose to boycott Huawei products because of Tibetan Freedom Movement and Uyghur crackdown concerns. But recently in February 2019, the Huawei issue surfaced yet again – and in a way bigger manner – after the company faced growing backlash from Western countries, primarily lead by the Trump Administration, over possible risks posed by using Huawei products in next-generation 5G mobile networks.

Back in Friday, May 17, 2019, the U.S. Commerce Department said it was considering scaling back restrictions to Huawei to “prevent the interruption of existing network operations and equipment.” It was not immediately clear on Sunday whether Huawei’s access to mobile software would be affected. On May 20, 2019, Google decided to start restricting new designs of Huawei smartphones access to some Google apps. This move comes after the Trump Administration added Huawei to a list of companies that American firms cannot trade with unless they have a “special license”. In a statement, Google said it was “complying with the order and reviewing the implications”. At the moment, Huawei declined to comment. The extent to which Huawei will be hurt by the US government blacklist is not yet known as its global supply chain assesses the impact. Chip experts have questioned Huawei’s ability to continue to operate without U.S. help.

At the moment, existing Huawei smartphone users will still be able to update apps and push through security fixes, as well as update Google Play services, but when Google launches the next version of Android later this year, it may not be available on Huawei devices. Future Huawei devices may no longer have apps such as YouTube and Google Maps. Even though Huawei has already a so-called Plan B to prepare them from such scenarios brought about by the Trump Administration’s “Trade War”, the company probably must now abandon its plan to overtake Samsung to become the world’s best-selling smartphone brand by 2020.

Beyond Meat’s Recent IPO Surge: Are the Wolves of Wall Street Now Going Vegan?

With both environmental and health concerns may be driving its recent IPO surge, will Beyond Meat eventually make the Wolves of Wall Street go vegan?

By: Ringo Bones

During the company’s first day of trading at Wall Street back in Thursday, May 2, 2019, the share price of Beyond Meat surged 163 percent, thus signaling surprising interest in a new generation of companies that are creating plant-based alternative to meat. Beyond Meat, which makes vegetarian burgers and sausages, began trading at $25 a share on the Nasdaq stock exchange and ended the day at $65.75. The stock’s first-day pop is one of the biggest in recent IPO history. In the last decade, only two other companies – both of them biotech start-ups – had bigger increases on their first days of trading on major American stock markets, according to the data from the University of Florida professor Jay Ritter.

Beyond Meat is the first ever plant-based meat-alternative company to go public, but it is part of a growing industry of start-ups looking to replace animal agriculture. And in recent weeks have provided several indications that the business is gaining traction largely because of growing environmental and health concerns in both the raising and the consumption of meat. A study conducted back in 2005 have shown that if all Americans reduced their overall meat consumption by just 10-percent, the resulting reduction in overall carbon footprint is akin to taking 20 million cars off the road.

Beyond Meat’s biggest competitor, Impossible Foods, teamed up with Burger King to roll out a meatless-version of the Whopper sandwich last month. Burger King announced this week that it would offer the sandwich at all of its restaurants in the United States, after a trial in the company’s St. Louis restaurants exceeded expectations. A day after Burger King’s announcement, McDonald’s chief executive, Steve Easterbrook, told analysts that his company was “paying close attention” to the trend and considering whether it will develop a meatless alternative to its hamburgers. In the lead-up to the Beyond Meat IPO, the poultry company Tyson Foods said it sold its early stake at Beyond Meat, in part because the food conglomerate is developing its own plant-based protein.

Like many high-tech companies that are debuting on Wall Street this year, Beyond Meat is losing money - $30 million last year – but revenue grew faster than last year’s losses, increasing 170 percent to $88 million. And like its competitors, Beyond Meat pitched investors on the idea that its plant-based burgers and sausages can appeal to traditional meat eaters and break out a niche market that vegetarian alternatives have traditionally occupied.

The start-up, based in the Los Angeles area, has tried to mimic the texture and taste of meat with ingredients like pea protein and beet juice. But it has also argued for the environmental and health benefits of moving away from meat. “I see it as a movement,” Beyond Meat’s chief executive, Ethan Brown, said in an interview back in Thursday, May 2, 2019. “We’re tapping into something within customers – within the human race – that is important.” Beyond Meat’s products are available in 15,000 supermarkets and several fast-food chains.

Leading up to the IPO, Beyond Meat steadily increased the number of shares it planned to sell and the price where it projected the shares to begin trading. The company ended up raising around $240 million in the public offering, which is more than it had raise from private markets. When it last raised money from its investors last fall, the company was valued at $1.35 billion, according to Pitchbook. Beyond Meat manage to finish the Thursday May 2, 2019 trading day to be worth $3.8 billion. The holdings of Beyond Meat’s founder Ethan Brown, are now worth more than $200 million. 

Inverted Yield Curve: Surest Sign Of An Upcoming Economic Recession?

It accurately predicted the September 2008 global credit crunch when it manifested back around July 2007, is the inverted yield curve the surest sign of a looming recession?

By: Ringo Bones

It managed to trigger an Asian market sell-off during the start of the Monday, March 25, 2019 trading day after investors were spooked by the United States’ inverted yield curve of its treasuries. Unfortunately, the Asian traders’ worries aren’t unwarranted, after all when the so-called “pesky inverted yield curve” manifested itself back in July 2007 it accurately foretold the 2008 global credit crunch. Worse still, the Trump Administration has not been preparing for the predicted looming recession since they set up shop back in 2017, relying instead on the so-called tax-break driven “MAGA-nomics” and this – according to the world’s leading economists – could plunge the U.S. economy into recession by 2020 that could make the 2008 recession look like a minor economic slowdown. But first, here’s a brief explanation to what is an inverted yield curve.

An inverted yield curve is an interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the same credit quality. Usually triggered by a loss of investor confidence when, for example, 30-year treasury bonds are ditched by investors in favor of a shorter term 5 or 10-year treasury bonds. This type of yield curve is the rarest of the three main curve types and is considered to be a predictor of economic recession. An inverted yield curve is sometimes referred to as a negative yield curve.

Historically, inversions of the yield curve have come before many of the United States recessions. Due to this historical correlation, the yield curve is often seen as an accurate forecast of the turning points of the business cycle. A recent example is when the U.S. Treasury yield curve inverted in late 2005, 2006 and again back around July 2007 before U.S. equity markets collapsed back in September 2008. The curve also inverted in late 2018 under the watch of the Trump Administration. An inverse yield curve predicts lower interest rates in the future as longer-term bonds are demanded, sending the yields down. Does the Trump Administration have the wherewithal to halt and reverse the looming U.S. economic recession that could arrive around the last quarter of 2020 and enact measures so that it won’t become much worse than the one that happened back in 2008?

Germany Narrowly Avoids Recession In 2019: An Economic Cautionary Tale?

Brexit worries, US retail sales slide, like a bad Valentine’s Day date, the February 14, 2019 stock market rally has fizzled out after a perky start and Germany narrowly avoids recession, is this 2019’s economic cautionary tale?

By: Ringo Bones

The German economy narrowly avoiding recession in 2019 should serve as 2019’s biggest economic cautionary tale because the German economic slowdown is largely caused by President Trump’s ill advised imposition of steep tariffs on German cars exported to the US. Anti globalist Euro-skeptics may cry out that Germany is the only main beneficiary of the European single-currency since its implementation, but Germany catching the economic equivalent of the common cold could have wider implications on the global economy this year.

Germany’s economy just about avoided falling into recession during the final three months of 2018. Europe’s largest economy registered zero growth during the fourth-quarter of 2018, the country’s Federal Statistics Office said. This means it avoided two consecutive quarters of contraction, which is the usual definition of a recession. A weak trade performance dragged on the economy and consumer spending remained subdued. The zero growth recorded in October to December 2018 followed a 0.2-percent contraction in the previous quarter. Reasons for slower growth last year include a slowdown in global economy and a weaker car sector, with German consumers less willing to buy new cars amid confusion over new emission standards.

Despite of a worrying situation, the jobs situation in Germany is particularly pretty good. Unemployment is among the lowest in the world at just above 3-percent. Sadly, a strong economic rebound for Germany for the whole of 2019 is very unlikely citing this year’s early results.