What we’re reading (8/23)
“U.S. Expansion Slowed In August, Survey Shows” (Wall Street Journal). “The U.S. economic expansion is losing momentum. Softening demand at a time of rising Covid-19 cases, labor shortages and persistent knots in shipping networks are restraining businesses in the U.S. and across the globe, according to private-sector surveys released Monday.”
“Dividend Payouts To Hit $1.4 Trillion In 2021, Nearing Pre-Pandemic Levels, Research Shows” (CNBC). “Dividends paid to investors are projected to hit $1.39 trillion in 2021, reflecting a recovery that’s stronger than expected, according to a new report from British asset manager Janus Henderson. The 2021 forecast for dividends is just 3% below the pre-pandemic peak, the firm found. Dividend payments in the second quarter jumped 26% from the same period last year to $471.7 billion, just 6.8% below the levels seen in the second quarter of 2019. Janus Henderson projected that dividend payouts will return to pre-pandemic highs within the next 12 months.”
“God, Money, YOLO: How Cathie Wood Found Her Flock” (New York Times). “Ms. Wood and her firm’s unusual approach to investing — which combines high levels of risk with high levels of transparency about her views to produce, at least last year, astronomically high returns — have connected with new investors in a way the financial industry had only dreamed of. Her aggressive bets on often unprofitable technology stocks are a better fit for traders who brag on Reddit about YOLO-ing their rent money than it ever was for the endowments and institutions that rely on the traditional money management industry, where she spent more than 30 years.”
“A Painful Trade Shock Is Coming To Afghanistan” (Full Stack Economics). “Afghanistan’s economy is in for a difficult year. Even beyond the stresses of rule by the Taliban, the state has some economic weaknesses that will be greatly exacerbated by Taliban rule and political isolation…[t]he last IMF report on the country prior to the collapse of the government counted imports at about $7 billion annually, a huge fraction of Afghanistan’s $19 billion GDP. Imports exceeded exports by about a factor of five…that high level of imports was sustainable under the unusual circumstances of the U.S. presence, it won’t be sustainable going forward…[g]iven that its currency reserves have been frozen to prevent the Taliban from accessing them, it will need to balance its trade deficit quickly, without any adjustment period.”
“Physical Pain, Gender, And Economic Trends In 146 Nations” (Macchia and Oswald in Social Science & Medicine). “More than a quarter of the world's citizens are in physical pain. Physical pain is lower in a boom and greater in an economic downturn…[and] increases in pain are borne almost exclusively by women and found principally in rich nations…[t]he counter-cyclicality of physical pain is not what would be predicted by conventional economic analysis: during an expansion, people typically work harder and longer, and accidents and injuries increase. Nor are the study results due to unemployed citizens experiencing more pain (although they do). Instead, the study's findings are consistent with an important hypothesis proposed recently, using different kinds of evidence, by brain and behavioural-science researchers (e.g., Wiech and Tracey, 2009). The hypothesis is that economic worry can create physical pain.”
