Here is how 3 different investors invest during the 2020 Covid Crisis. We track what they do and their results, and that can serve us as an example to invest in the next crisis. These are the 3 investors:

• The emotional investor (invests with FOMO and Panic)
• The constant investor (invests the same amount every month, DCA)
• The pirate investor (also the same every month, but in crises, when price and interest are down invests more)

They all have the same money available to invest monthly and the same savings.
Aside of these savings, they all hold at all times a minimal emergency cash fund, which is never invested. So they never invest "all their savings" but "a big part".

They all invest in the same product. An index fund. We have computed the numbers for both MSCI World and SP500. Here is the spread sheet with all the numbers and details:
https://docs.google.com/spreadsheets/...

• The emotional investor: -32%
• The constant investor: +13%
• The pirate investor: +42% from his savings and +13% from his monthly investments

The results are equivalent for both indexes. SP500 only includes the biggest companies of the US, but since the US is the lead economy, those are also the world's biggest companies, which MSCI World includes. Therefore, there is a big overlap between the two indexes.

We checked, and will share in other videos, that the pirate investor strategy is the best, at least in the last 10 crises, covering the last 70 years.

Will this strategy also be good for the next crisis to come?

Related YouTube: video

How to invest during crisis: 2020 COVID Crisis

​

May 2024 Economic Overview

The U.S. remains the lead economy and whatever happens in the U.S. greatly affects the global economy. The SP500 is at 5.064,20, only -3.6% below its all time high 5.254,35. The U.S. interest rate is 5.5%, and it has been like that for the last 9 months; flat. This is a high interest and a warning sign since it makes debts (loans, mortgages) more difficult to pay, and puts pressure on the economy.

SP500 [black], US interest rate [blue], and recessions [grey bar]

The GDP has been positive lately, so the economy is strong, despite the high interest rate.

US GDP

The unemployment rate is low 3.8%, and it has been around that for several months, since it came down after reaching its highs in the 2020 COVID crisis. This is also a good sign.

US unemployment

Finally, inflation is at 3.5%, an acceptable rate, after being as high as almost 9% back in 2022. The current rate is nearing the Fed target inflation rate of 2%. With both the unemployment rate and the inflation almost within the Fed targets, there is no need for the Fed to change the interest rate.

US inflation

In conclusion, the analyzed macroeconomic variables say that the economy is in good shape. The only warning sign is the high interest rate. No one can predict if that will lead to a crisis, but it puts pressure on the economy. Given this information, it is your turn to decide: Is now a good moment to invest?

The Pirate Investor will remain vigilant, and check again next month. Stay tuned!

I'm really bad at economy but I'm starting from scratch trying to educate myself. Could you guys give me insight on how to answer this question shortly, I have a feeling that it's trying to trick me because of how many factors can go into play with this, specially considering the Short-term:

To prevent the appreciation of the euro against the dollar, it is logical to think that the European Central Bank would increase the short-term official interest rates

Is this statement true or false? Thank you all very much.

US vs China

In terms of absolute GDP in USD, the US is still the leading economy. It alone represents 25% of the global economy. If we look at the world bank data GDP data from 1998 to 2022, we can see that clearly. Although China surpassed Europe around 2018, its growing phase is slower and the US advantage is holding.

GDP evolution of the top 3 economies

Here is the data source link.

With the power this leading positions gives, and with the dollar as the reserve currency, whatever the Fed does with the interest rate is what will affect the global economy the most.

I recently travelled to Germany from Greece. I saw a crushing difference in prices in every-day goods in groceries and super-markets. In Greece, the high prices in those goods are a constant discussion in the news and have been for many years now.

Looking at the CPI for those countries I see 118 for Germany vs 116 for Greece (Jan/2024). Shouldn't these differences in prices be reflected in the CPI? Why do I see similar points for the index when the difference in real-life is quite big?

In 2024, the macroeconomic landscape is poised for several key developments (yes, I understand I’m writing this nearly two months into the year. Get over it).

Here’s the TLDR of my four predictions:

1. The Federal Reserve will not lower interest rates until Q4 of 2024
2. The Stock Market will continue to grow throughout 2024
3. The Real Estate market will continue to go up as demand pressures increase
4. Bitcoin will surpass $100k USD

The Fed will not lower Interest Rates until Q4 of 2024

Currently, the federal funds futures is predicting five rate cuts of 25 basis points in 2024 starting around the April 30 - May 1 meeting. I believe this will prove to be too early as the market has been screaming for a rate cut since mid 2023 and has continually been wrong. This is Jerome Powell’s “Volcker moment” where he will keep rates higher for longer, which has been his mantra since the start of rate hikes in the not so distant past. Powell briefly mentioned that the Fed has begun discussions on when to begin the pull back and begin rate cuts, which had the pivot bros jumping for joy. Let’s make this clear: there has never been a question if Powell would ever cut interest rates. This seems obvious. But for some reason, the pivot crowd will continue to scream for a pivot and will eventually be correct as it is par for the course.

In my opinion, inflation is sticky. Prices are elevated and are not coming down. Student loan payments are now in full swing and housing affordability is at a new low of 15.5% percent according to Redfin, which is the lowest in a decade since Redfin started tracking it. The consumer cracks are beginning to surface, but as I will state later in this article, I believe the market delusion will continue throughout this year. This will cause Powell to have mixed emotions about the rate cut. The stock market, labor market and other indicators will show everything is more resilient than many with boots on the ground will believe. With all this being said, it will allow Powell to keep rates higher for longer, but not allow a cut to wait until 2025.

The Stock Market will continue to go up

Look, this prediction may be cheap because it is already 2 months into the year and companies like NVDA are just absolutely tearing it up year to date (see below), but as we are all well aware the market can make a turn in the opposite direction quickly.

​

https://preview.redd.it/03yxwk8roikc1.png?width=1440&format=png&auto=webp&s=047c7b4b10b700be08c9f8aa279e6ef4155d64e0

The stock market narrative has been that the market has been propped up by the “magnificent 7”, but I feel this delusion will continue. The stock market in 2023 was up 24% which was higher than 2020 when 40% of the current M2 money supply was printed. I believe we are heading towards an “Artificial Intelligence Boom”. The way I’ve seen these past two decades can be described as multiple cycles living on some hopium and delusion: the Dot Com Boom, Financial Crisis of 2008, the Crypto Boom of 2015 to 2020, the COVID-19 crash, and now the Artificial Intelligence boom. NVDA is a perfect example of what is currently going on: we are moving to a nearly entirely digital world in which we will need data centers, high power computer chips, storage, and efficient solutions. Artificial intelligence is just one arm of the developing digital landscape we are living in, but it will be a major player in efficiency. Right now companies like NVDA are profiting because of the growing need for data centers, Bitcoin miners, and stronger computer power. A. I. will be in need of stronger computers to solve more complex problems and issues. The efficiencies that A.I. can bring cannot be understated or even understood at this point. I believe there are some avenues that A.I. have yet to be explored, but at the end of the day majority of A.I. projects will fail. That is just the reality of the situation. Majority of start-ups fail and the majority of these projects that get funded will fail as well. It will be about the companies that can either afford to go through the ups and downs of development of the A.I. projects or the best projects rising to the top. In the end the hopium will last for the entire year and I believe we’ll see more companies fail at developing A.I. related projects in the coming years, therefore the delusion will live on for 2024.

Real Estate will continue to go up and get more unaffordable

As mentioned in the rate cut prediction above, housing affordability is the lowest it has been in a decade at 15.5%. This does not mean that housing will all the sudden slow down in my opinion. Housing will continue to go up as the underlying currency is getting devalued and assets, especially hard assets will continue to go up. Housing has always been interesting in the United States and will likely continue to be region based and you can find value in the market no matter the timing, but in general I believe it will continue to go up. Especially with interest rates going down towards the end of the year (if that prediction is correct or even if I’m wrong and the cuts come earlier) the mortgage interest rates will come down thus lowering the monthly payment for the price of the house. Housing in many areas has remained flat with increased mortgage rates and therefore it seems like the logical that once mortgage rates fall, housing prices will increase. With every crisis, asset holders (generally the wealthy or upper class) will see assets appreciate and the middle and lower class will lose purchasing power. This trend tends to kill the middle class over time, but how long will the charade continue? I believe the powers that be will continue this charade for the next 20 or so years, but slowly people are starting to wake up. The American dream of the white picket fence will shift to something about travel and being independent which will have an increase in short term stays whether it be in Airbnb or mid term rentals and homeownership will be something of the past.

The way I see this prediction become incorrect is if the trend to bring workers back into the office continues. I see there is a growing desire for remote work or to live in thriving cities but the reality is, those cities are becoming more unaffordable. With all of this being said, I believe in the short term (1 year time period) housing will generally increase.

Bitcoin price will surpass $100k

To the Bitcoin haters, of which there are many, will scoff at this prediction. To the Bitcoin maximalist, they will love this prediction. Price action is difficult to predict in such a young asset class and many will try to sway you with certainty, but there are many macro factors that I believe point to this. Interest rates will fall, the Bitcoin halving will occur in April, and the price action from the Spot Bitcoin ETF has yet to be realized. Since the inception of the Bitcoin Spot ETF we have seen the fund reach $3 billion (yes, billion) in the first 30 days (which has never been done which has been done by both the BlackRock and Fidelity Spot ETFs) and the buying flows are currently buying 12.5 times the amount of Bitcoin being produced by miners on a daily basis. The buying pressure is continually increasing all with the halving upcoming in April. For the newbies, the Bitcoin that is being produced by Bitcoin miners on a daily basis cuts in half every ~4 years and that occurrence is known as the halving and will occur in April.

There is less than 10% of Bitcoin left to be produced, so from a pure halving perspective I do not believe the halving is the only driver of price action. But, if the buying continues at this rate there is only one way the price in USD will go. Money will begin dumping into Bitcoin AND into companies building on Bitcoin. Many traditional finance venture capitalists will start to find a way into the Bitcoin space and consequently the crypto space as well. Another bull run is upon us but the biggest difference is I believe the regulation around shitcoin casinos (crypto exchanges for the kids at home) will drastically reduce the amount of “paper” Bitcoin issued that was previously issued by the likes of FTX, Celsius, etc. Buckle up boys and girls, we’re about to take off.

​

https://preview.redd.it/nb0ngebsoikc1.png?width=1440&format=png&auto=webp&s=6a49212df45f708784603f97a762db6d56a4947c

​

Seems the coin is flipping when it comes to recession expectations. The subject takes up less and less space in world wide financial news. Meanwhile SPX is on a rise which started mid March.

Check out the new video on dynamic CGE GTAP modeling at

https://www.youtube.com/watch?v=0aGT6qONEo4&t=63s

Hi guys,
I'm working on a video about Margaret Thatcher's reforms and I want to clarify this term. please let me know if the text below makes sense to you:

"GDP per capita is a way to find out how much money each person in a country makes on average. It adds up the value of everything produced in the country, takes out taxes on products (but adds back any subsidies), and then divides that total by the number of people in the country."

Thanks for your help.

Advanced CGE GTAP/GAMS online workshop- June 2023 over 3 days

Perfect opportunity to advance your macroeconomic modeling skills to learn how to set static and dynamic CGE models by combining GTAP with GAMS and R. The workshop's general content is structured as follows:

1- Working with GTAP slack variables

2- Target output change by violating zero profit condition

3- Introducing new conditions to GTAP through code modifications (in GEMPACK)

4-Introduce an exogenous tariff that targets a policy variable (e.g., real wages)

5- Linking GTAP with econometrics (R ) with a focus on reading outputs of a GTAP model (GEMPACK) using package HARr(R)

6- Setting up a dynamic GTAP

7- Calibrate and run a dynamic GTAP model

8- Linking GTAP with a GAMS model (Global Timber Model)

9- Linking GTAP with a PE model (poverty analysis)

Learn more, register, and redeem the 25% early bird discount until Feb. 10 at https://www.ms-researchhub.com/home/events/workshops/advancedcgeworkshop.html

Okun's law links the increase in employment rate with the growth in the GDP. An increase in both metrics is (to the best of my understanding) a goal of macroeconomics.

Consider two options for selling goods:

1. The manufacturer uses direct shipping and global logistic chains to sell directly to the consumer
2. The manufacturer sells to a long chain of dealers/distributors/resellers which finally sell to the consumer, albeit at a much higher price

Not being an economist, I prefer the first option which is more efficient and cheaper.

However, the second option involves more people (increases employment) and sells goods at higher prices (increases the GDP).

What am I missing?

If there is going to be a cdbc for Switzerland would it then be easier for non swiss people to hold swiss francs and have a savings account in CHF?

For a last mile logistics company having accurate forecasts is essential to managing supply and demand and ensuring a positive customer experience, but it was challenging to factor in hard to measure macroeconomic effects. My team at DoorDash was able to solve this problem by using causal inference and I have put together this blog post with 2 case studies. One case study is about measuring how IRS refunds affect order volumes and the other case study is about measuring the impact of daylight savings on different regions' demand.

Check out the article to get the details and let me know what you think about my method and methodologies.

Simple question, want to make sure I understand this concept.

Is the 2-year treasury a predictor of where fed funds rates will be in 2 years? Can that same logic be applied to treasuries further out in duration?

Interested in how the fed manipulate short rates (maybe through fed fund rates) and what would be done to affect long term rates more