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Bloomberg Markets Magazine

Bloomberg Markets Magazine August/September 2018

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in this issue

1 min
markets almanac

Aug 23–25 Check {ECO } for a full calendar of scheduled economic releases and {BIE } for insights from the economists at Bloomberg Economics. Kansas City Fed’s Economic Policy Symposium Jackson Hole, Wyo. 27 U.S. Open tennis tournament begins Flushing Meadows, New York City 2017 winners: Rafael Nadal, Sloane Stephens. Sept 9 Swedish general election Will the anti-immigrant Sweden Democrats make gains? 15 For an overview of how the Federal Reserve’s balance sheet changed over the decade, type {FED BAL }. {EBBSTOTA Index GP M } for the ECB. Lehman Brothers bankruptcy 10 years ago The S&P 500 Index closed at 1,192.70. 25 UN General Assembly debate opens Manhattan traffic slows to a crawl. 26 Bloomberg Global Business Forum New York City Oct 4–7 Frieze London London The biggest showcase of art in Europe. 7 Brazil is the second-biggest economy in the Americas, and this is the country’s most unpredictable election since it returned to democracy in 1985. Brazilian election…

13 min
yes, but do you know any   women?’

THERE’S A PARTICULAR telephone conversation that HSBC Global Chief Economist Janet Henry has down pat. Here’s how it goes: “You get a call from a headhunter,” she says. Then Henry inevitably finds herself saying, “No, I’m not interested.” But it doesn’t end there. “They always say, ‘Do you know anyone that might be?’ I give them men’s names because I’m always curious to see if they’ll say—and they do say—‘Yes, but do you know any women?’ ” As one of a handful of women leading economic research departments at global banks, Henry is well-positioned to observe the recent shift in demand for greater gender diversity within her profession. She looks back on her own experience as she sips tea from a disposable cup in a noisy cafe at HSBC Holdings Plc…

8 min
the ‘new keynesian’ fed

ABOUT 18 MONTHS BEFORE U.S. President Donald Trump nominated him to the Federal Reserve’s Board of Governors, Marvin Goodfriend told an audience that his own family had been the victim of bad economic policy. His father had accumulated most of his savings in the 1970s before retiring in 1984, the Carnegie Mellon economics professor recounted at the May 2016 panel discussion in Amelia Island, Fla. The savings dissipated so quickly, Goodfriend said, that his mother wondered if her husband had a secret family on the side. “He had all his money in government bonds, and the nominal value of government bonds was such that his savings were wiped out by inflation over a decade,” he said. “The reason it’s so hard for savers to get protection is because governments have been irresponsible…

3 min
this analysis uncovered rising ‘structural’ capital investment, a potential boon for growth

PRIVATE CAPITAL EXPENDITURE in Japan is on pace to increase for the eighth year in a row in 2018. What’s remarkable, according to our analysis, is that the current streak is being driven by investment in new facilities and technologies, not short-term spending to adjust to temporary shocks or inventory cycles. Companies, in other words, are making “structural” commitments to the economy. The implications are important: Capital expenditure may prove to be more sustained than many observers expect, and such capex could support durable growth in the world’s third-largest economy. What’s more, structural capex is less likely to be affected by marginal changes in funding costs. For the Bank of Japan, that could make it easier to raise its yield-curve targets when the time comes. Bloomberg Economics used a so-called spectrum analysis…

1 min
port in a storm

THE PORT OF LOS ANGELES, which covers 43 miles of waterfront in Southern California, has a lot to lose in a U.S. trade war with China. Last year the port handled about $145 billion in imports and exports between the two countries, more than half the value of all cargo moving through the facility, according to port statistics. As of the end of July, the Trump administration had enacted or proposed tariffs on more than $200 billion in Chinese imports—ranging from aluminum and steel to meat and poultry. The proposals have given domestic metal producers such as Pittsburgh-based United States Steel Corp. some reason to cheer. General Electric Co., on the other hand, says tariffs on Chinese goods may raise its costs by as much as $400 million. Despite the heated…

1 min
the economics issue

This issue of Bloomberg Markets is devoted entirely to economics. We joined forces with Bloomberg Economics, led by Senior Executive Editor Stephanie Flanders, to bring you stories and actionable insights that illuminate theory, data, and on-the-ground reality. For our cover Q&A (page 46), Flanders persuaded Bank of England Governor Mark Carney to open up about Brexit, post-crisis financial regulation, and managing a three-century-old institution. She also writes about how economists lost the ear of the world’s political leaders (“The Humbled Science,” page 15). Executive Editor Simon Kennedy compiled Bloomberg interviews with economists to provide some views on what they think their profession might be getting wrong now (“Surveillance,” page 11). In “Your Guide to the Next Recession” (page 40), Jonas Bergman in Oslo, Enda Curran in Hong Kong, and Rich Miller in…