Introduction: The intricate relationship between economic fears and political engagement is explored in various studies, demonstrating how financial insecurities, rather than motivating action, often lead to political apathy. Here’s a closer look.
● American Insecurity: Why Our Economic Fears Lead to Political Inaction
By Adam Seth Levine
Summary via publisher (Princeton University Press)
In today’s America, citizens grapple with numerous economic threats, including job and retirement insecurity, mounting healthcare costs, and rising tuition fees. While one might anticipate that these pressing concerns would trigger increased political engagement, the opposite is often true. This trend of inaction can have significant ramifications for political discourse and public policies.
Building upon studies that explore barriers to political mobilization, “American Insecurity” delves into how the language surrounding economic fears paradoxically undermines citizen participation. The rhetoric designed to engage people often serves as a reminder of their personal financial constraints, leading to demotivation and disengagement from politics.
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Earning a respectable return on investments is challenging, but retaining those gains is even more difficult. Numerous studies have examined the portfolios that investors build and manage, yielding unsettling yet perplexing insights. It’s alarming to note that many individuals have experienced frustratingly low returns over extended periods. The baffling part? Theoretically, the solutions to overcoming these performance pitfalls are straightforward.
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● ECB unveils massive QE boost for eurozone | BBC
● US Jobless claims off 7-month high, but oil layoffs a concern | CSN
● Oil jumps as Saudi king’s death feeds market uncertainty | Reuters
● U.S. Fears Chaos as Government of Yemen Falls | NY Times
● PMI: Eurozone Private Sector Growth Accelerates In January | RTT
● PMI: German private sector expands faster in January | Reuters
The three-month average of the Chicago Fed National Activity Index (CFNAI) is projected to slip to a +0.23 reading in the December update, set for release tomorrow (Jan. 23), based on forecasts from multiple econometric estimates. This prediction indicates a decrease from November’s +0.48 reading, which suggested a period of robust economic growth for the U.S. compared to historical trends. Only values below -0.70 imply an “increasing likelihood” that a recession has begun, as per guidelines from the Chicago Fed. Using the current estimate for December, the CFNAI’s three-month average is still anticipated to remain consistent with above-trend economic growth historically.
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Global economic growth has continued its deceleration into December, as indicated by business survey data. However, there are few immediate signs that the slowdown overseas is threatening the macroeconomic stability of the U.S. A broad array of indicators suggests that momentum remained firmly positive as 2014 came to a close. While it would be naïve to assume the U.S. can fully shield itself from international turbulence, particularly if Europe’s conditions worsen, current analyses signify minimal risks for the U.S. economy in the near term, bolstered by a recent acceleration in its expansion.
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● Anticipation grows as ECB prepares to reveal QE | Reuters
● Analyzing why Mario Draghi and the ECB could disappoint | Marketwatch
● What to expect from the ECB’s stimulus initiatives | NY Times
● One-family home improvements brighten the U.S. housing outlook | Bloomberg
● Will U.S. stocks maintain their momentum as global markets lag? | Barron’s
● Bank of Canada surprises with rate cut “insurance” against the oil slump | WSJ
Housing starts in December exceeded expectations, as per reports from the U.S. Census Bureau here. However, this optimistic news is tempered by a decline in new building permits in the last month of the year. Consequently, the overall outlook for these leading indicators is, at best, unclear. Year-over-year, the trend appears sluggish, contrasting with generally more favorable results from other key economic reports recently.
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In the past, the capital asset pricing model offered a singular perspective—the market. However, after decades of numerical analysis since the inception of CAPM, it appears we now face a myriad of new factors. As Professor John Cochrane noted previously, this “zoo” of factors presents opportunities for constructing superior risk-adjusted portfolios. Nonetheless, some industry professionals express concerns that this proliferation of factors poses significant risks. As research and analysis recently highlighted, the challenge lies in the fact that not all factors are created equal, and securing what appears to be a beneficial risk premium on paper may not yield the same results in practice.
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● U.S. homebuilder confidence dips slightly in January | Housingwire
● U.K. jobless rate drops more than anticipated between September and November | RTT
● Bonds, shares, and gold find support ahead of expected ECB measures | Reuters
● Brent crude oil surpasses $48.50, but outlook remains weak | Reuters
● Gold prices break $1,300 an ounce for the first time in five months | Bloomberg
● Analyzing the factors behind the recent drop in oil prices, including Washington’s involvement | NY Times
In tomorrow’s update for December, housing starts are anticipated to rise to an annual rate of 1.036 million, according to The Capital Spectator’s median point forecast drawn from various econometric estimates. This figure indicates a slight increase in residential construction compared to November’s 1.028 million units.
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Conclusion: The exploration of economic insecurities unearths a complex web of influences affecting political engagement and investment outcomes. Understanding the dynamics at play can empower individuals to navigate their financial landscapes more effectively, fostering both awareness and action.
