US Federal Reserve chair Jay Powell must emulate the tactics of Paul Volcker’s fight against inflation as well as “stagflation” as history seem to repeat itself

US Federal Reserve chair Jay Powell has expressed deep admiration for Paul Volcker, his legendary predecessor who defeated the high inflation that plagued The US economy from 1965 to 1982. Then, as now, Volcker was fighting more than a decade of loose monetary policy, combined with supply shocks stemming from geopolitical turmoil. But though...

The Venture Capital bubble is coming to its own terms

The venture capital bubble is facing a slow and messy unwinding. After a historic boom that puts even the tech bubble of the 1990s into the shade, and adjustment to more rational conditions has started. But structural factors and the psychology of private markets make it in our opinion hard to tell how long...

Looking at inflation – yesterday is not today!

Easy monetary policy, expansionary fiscal policy, rising inflation and then a surge in oil prices - we at Calvin • Farel have witnessed this before, therefore it is in our opinion very difficult to resist the temptation to draw parallels with the 1970s. We suggest, however, that the current circumstances are not a repeat...

Can Musk turn Twitter really into “a more honest” platform?

Please make no mistake: any time someone plops down 44 billion dollar without batting an eyelid to purchase an influential social media platform and take it private, it is going to cause concern - and in our opinion rightfully so. There is no point in pretending that Tesla chief executive Elon Musk’s acquisition of...

The old playbook for inflation does no longer apply

Post-pandemic inflation in major developed economies has reached levels we have not had to wrestle with in two generations. Unsurprisingly, this has led to widespread calls for central banks to tighten monetary policy aggressively. Financial markets have quickly repriced their monetary policy outlook and markets now expect in our opinion at least seven incremental...

The time has come for central banks to reduce their balance sheets – Now

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Central banks do not hesitate to expand their balance sheets when a crisis hits. They should also in our opinion not hesitate to reduce their balance sheets during recoveries-especially when inflation is high. In the past, the standard central bank playbook has been to wait for the recovery to solidify, then end any asset...

A New Year – A New Challenge – Regulating Low Earth Orbit

The first flight of Elon Musk’s Falcon 9 rocket back in 2010 launched a new space age. Since SpaceX developed its first reusable rocket, the costs of sending satellites into orbit have plummeted, opening up a multi-billion-dollar market for thousands of companies around the world. Arguably, Musk has done more than anyone since Neil...

Big Techs of the United States feel the heat of a Russian crackdown

Russia is increasingly pressuring Google, Twitter and Facebook to fall in line with Kremlin internet crackdown orders or risk restrictions inside the country, as more governments around the world challenge the companies’ principles on online freedom. Russia’s internet regulator, Roskomnadzor, recently stepped up its demands for the American companies to remove online content that it...

Inflation

While China may not play the role it did in the last period when commodity price surged, predictions of another supercycle are in our opinion not without foundation; attempts to reduce advanced economics’ fossil fuel emissions and rising US infrastructure spending will mean more demand for certain metals and other materials-copper, as well as...

Tech Wars are becoming the titanic struggle for supremacy

Technology has turned geopolitical. The US has blocked semiconductor exports to China. In turn, China has looked to limit US access to rare earth minerals, crucial to the manufacture of many tech products. Several countries have banned China’s Huawei from running their 5G telecommunications networks. India has also banned the Chinese-owned viral social media...

What Mark Zuckerberg and Tim Cook should have learned from Rockefeller

Big government is finally taking on Big Tech. In the most momentous antitrust lawsuit in a generation, The US Federal Trade Commission (FTC) accused Mark Zuckerberg's Facebook of unfair competition and asked a federal court to break it up. The EU proposed sweeping new rules forcing big technology companies to take more responsibility for...

The Fed Party Bonanza – The Only Game in Town

For Bitcoin investors, last year was a bonanza. The cryptocurrency started January 2020 at 7.194 dollar and surged above 34.000 dollar at the end of last year - a more than 360% annual return. Courtesy of the US Federal Reserve, asset buyers in general have had a stellar pandemic. Whether it was US treasuries...

US lawmakers finally join the EU approach and ask for breaking up Big Tech

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If the power of Big Tech is the problem, what is the answer? In Washington, members of the House antitrust committee have been pondering three possible responses: throw more resources at enforcing existing antitrust rules: tighten up the laws to give the enforcers more teeth; or design entirely new regulatory frameworks with the most powerful...

Big Tech Stocks’ current valuations make a grim prospect for the future

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Despite the deepest economic downturn since the Great Depression, the S&P 500 index is up 6.5% this year. Apple has a market capitalization of 2 trillion dollar, Facebook is worth 762 billion dollar and Tesla is valued at 394 billion dollar. Even Nikola, a maker of battery and hydrogen trucks that is yet to...

Which presidential candidate is the stock market looking for?

For months the S&P 500 rose this year - despite a deadly pandemic, the resulting economic devastation and the rise of a Democratic Party increasingly sympathetic to democratic socialism. Then, last month, with Joe Biden doing well in the polls, stock prices finally stumbled. It polls continue to point to a Biden victory in the...

Silicon Valley start – ups are losing the “cool” factor

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Fred Wilson, a venture capitalist at Union Square Ventures, recently published a blog post titled “The Great Public Market Reckoning“. In it, he argued that the narrative that had driven start-up hype and valuations for the past decade was now falling apart. His post quickly ricocheted across Silicon Valley. Other venture capitalists soon weighed...

Silicon Valley’s success formula will change

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The story of WeWork, Uber, and similar pieces larded with schadenfreude about a raft of companies backed by a mixture of venture, growth, Petro, hedge and mutual fund dollars, suggests that Silicon Valley has only one recipe for success. Like all soundbites, it is arresting but far from reality. The popular narrative is it straight...

4 tech giants, one virtual war: Power

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Amazon, Apple, Facebook and Google have been the envy of corporate America, admired for their size, influence and remarkable growth. Now that success is attracting a different kind of spotlight. In Washington, Brussels and beyond, regulators and lawmakers are investigating whether the four technology companies have used their size and wealth to quash competition...

Global Economies edge into downturn

As President Donald Trump intensifies his trade war with China, and as factories slow in major industrial nations, world commerce is deteriorating rapidly, a perilous development that threatens the health of the global economy. Most economists still predict that a global recession remains unlikely, even us growth slows. But in our opinion the dangers...

World Economic Growth – let’s say goodbye

Global markets were seized by fear last month that trade wars were slowing growth in Germany, China and the United States. But the story here in our opinion is far bigger than President Trump and his tariffs. The post war miracle is over - please do understand that. since the financial crisis of 2008, the...

Tech Titans act like banks and Trump’s misleading expectations

A few years ago, while I was trawling for information about financial risk and where it might be held, I had a fascinating conversation with an economist of the US Treasury’s office of Financial Research. The economist advised me to look at the debt offerings and corporate bond purchases being made by the largest, richest corporations, such as Apple...

How US banks took over the financial world during the last decade and how European national champions could regain vigour through mergers with rivals

After the fall of Lehman Brothers 10 years ago, there was a public debate about how the leading American banks had grown “too big to fail”. But that debate overlooked the larger story, about how the global markets where stocks, bonds and other financial assets are traded had grown worrisomely large. By the eve of the 2008 crisis, global financial...

Rising interest rates in the US and the impact of massive government debts might provide the path for the next global financial crisis – the introduction of possible three policy reforms which could help the GCC countries to be prepared in advance of the next financial crisis

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These are great times to be paid in US-Dollars. The world’s unofficial reserve currency is on a roll, beating all comers as the US economy grew at an annualize rate of 4.2% in the second quarter of this year. To put that into perspective, that is almost double the eurozone second-quarter growth of 2.1%. The US economy is now...