Jonathan H. Todd

Finance, Investing, Economics

Tag: geopolitics (page 1 of 2)

BlackRock’s Isabelle Mateos y Lago on an unstable France, even if Macron wins the presidency

This result should lead to a material reduction in perceived political risk in Europe. We do expect some risk premium to linger until legislative elections in June. Both Macron and Le Pen are not part of the mainstream parties that have dominated French politics in the Fifth Republic for nearly 60 years. If Macron becomes France’s next president, he may struggle to implement his agenda without a stable parliamentary majority.

BlackRock: The market implications of the French vote

William Blair’s Brian Singer on the link between populism and asset allocation

Brian Singer, CFA, of William Blair discusses the linkage between geopolitics – especially populism – and asset allocation.

What are some of the main investment factors investment managers should consider in today’s environment?

Three primary factors: central bank behavior, geopolitics, and populism. Central banks have spent a long time building their balance sheets, and now we have to look at a long time unwinding the balance sheets. Geopolitics–the world now is geopolitically unstable. It wasn’t that way when I first got into the industry, but now we have to take account of those developments around the world. And then, finally, populism. Populism is a huge movement, and it’s a movement that stands for nothing. It stands against something, and that’s the existing elite.

When political consolidation hurts: Brexit version

Theresa May should get a full vote of confidence from the Tories, but will that actually result in real policy? Ask Donald Trump.

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Where Does the Dollar Go From Here?

The dollar has become the bellwether for the Trump administration’s economic policies, but it’s unclear where the greenback will go from here.

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Morning Minutes: December 20, 2016

Economic uncertainty is rising. Geopolitical tensions are churning. And the financial burdens of having young children (but we still love them).

Here’s what you need to know this morning.

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To Infuriate ISIS, Support Infrastructure Investment

Global terrorism and weak economic growth are two key themes in this election cycle. While these could seem like two totally separate issue, could managing both simultaneously could come in one neat, tidy package?

There is a 100% chance of a terrorism attack on a U.S. city in the future, Gillian Tett wrote in her piece, Resilience in a time of crises. She argues that there is no way to eradicate ISIS, but we can minimize the damage they can do. Tett notes, “‘The classic city today has one big water purification and distribution system, and one power station,’ Kilcullen told me. While this pattern might look efficient, it is disastrous if the water or power is compromised; in a crisis you need a second, back-up system, which is disconnected from the main platform.”

The idea that Tett is arguing is that by passing a large infrastructure investment bill, we can minimize the disruption and damage ISIS or any other terrorist group can inflict on our physical environment. By duplicating existing systems that deliver our water, power, or other vital utilities, we would be able to better manage any disruptions that a terror group could inflict. Destroy a part of the electrical grid? No problem, it’s been rebuilt as a nodal network so service is unaffected.

Source: American Society of Civil Engineers

Source: American Society of Civil Engineers

Terrorism is a huge motivator to the electorate these days, and – call me cynical – it just happens to be a good excuse to cut through the the partisanship. But whether or not we want to use ISIS as the catalyst for making this kind of investment happen, it needs to happen no matter what. In its 2013 Report Card for America’s Infrastructure, the American Society of Civil Engineers says that the U.S. will need to invest $3.6 trillion by 2020 to modernize our national infrastructure. Over four years (and we’ll call it four years, because nothing would happen until a new administration takes office in 2017), that’s $900 billion a year, or about 5% of GDP.

That’s a hefty price, but “Invest in America, defeat ISIS” is not a difficult political sales pitch. A large, multiyear infrastructure investment bill would immediately create a huge number of jobs and inject a huge amount of money into an economy that has suffered from a persistent output gap since the Great Recession. That is the kind of demand-side action many economists have been wanting for years, and it just happens to present itself at a moment when the candidates of both major parties are interested in both infrastructure spending and fighting terrorism.

The Puerto Rico Debt Default Probably Doesn’t Hurt Your Portfolio, But Don’t Ignore It

Investors may not take a hit directly from the Puerto Rico debt default, but there are still lessons to be drawn.
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Private Equity, Mitt Romeny, and Donald Trump: Lessons in Inconsistency

Watch any given night of coverage leading up to the Iowa Caucus, and you wish for those halcyon days of the Romney/Ryan tickets: two clearly smart people with quite different, yet relevant, skill sets, running as the GOP ticket. While one day Mitt’s dangerous streak was on full display – he could get pinpoint his message with full detail without seeming pedantic or professorial, like Obama – the next day, he seemed to have all the grace of a three year old petting a puppy.

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The Game Theorist and the Coal Miner: How Regulations Could Save America’s Coal Industry

The “War on Coal” isn’t a matter of government regulations. It is about an outdated energy source, and technology is its only hope for survival.

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Dilma Rousseff Must Imitate Enrique Peña Nieto, Or It Could Soon Be The MRICS

Mexico’s recent reforms should be the framework used by Dilma Rousseff for Brazil’s economy, or Mexico could soon become Latin America’s economic superstar

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