Brad DeLong described the “pig” economist as someone who dives into the details of the economy and wallows around in it until he gets some insight about what is happening. Meanwhile, Nick Rowe is wondering whether we are moving closer or father from being an “apple” economy. This post is a pig’s response.
Month: August 2011
NY Times Chimes in on Required Returns
From the NYT article:
Amid all the grim economic data and a chorus of warnings of a fresh recession, one group on Wall Street has remained remarkably optimistic despite the dangers that may lie ahead — the research analysts who track individual companies.
Typically bullish in the best of times, this group has barely budged on its expectations for earnings in the second half of 2011, even as the economists and strategists at the big brokerage firms have steadily ratcheted down their forecasts for overall economic growth.
That disconnect could prove painful for investors. On Friday, shares of Hewlett-Packard were punished after the technology giant reported results below analysts’ projections and warned them to bring down future numbers. Earlier in the week, similar shortfalls caused shares of Dell and Urban Outfitters to sink.
HP, Lenovo, and Required Returns
A big week in Silicon Valley.
Google buys Motorola Mobility for $12 Billion, HP shut down its WebOS hardware operation (shortly after purchasing Palm) and looks to sell off its entire PC hardware division (after purchasing Compaq), while at the same time purchasing Autonomy for the (insane) price of $10 Billion. Autonomy sells structured data search services — its clients are large firms. Autonomy is in the high margin monopolistic “space”, whereas PCs are in the commodity space.
The cited reason for HP wanting to divest itself of its (profitable) consumer hardware division is falling margins.
Sticky Expectations, Stock Returns, and Minsky Processes
Let’s measure short run returns from holding equities.
Continue reading “Sticky Expectations, Stock Returns, and Minsky Processes”
Low MRP Workers?
The market failures have been in the capital markets, not the labor market. The only thing wrong with wages is that we have allowed them to stagnate for so long.
At this rate, we would need to deliver 10% of GDP as corporate dividends before unemployment falls back to 5%.
windy anabasis 