‘We’re At The Opposite End Of A Stock Super-Cycle’: Goldman

‘We’re At The Opposite End Of A Stock Super-Cycle’: Goldman

Earlier this month, while raising their year-end target for the S&P, BofA suggested US equities might be in for a lost decade. If that sentence sounds familiar, that's because it's verbatim from an article published here last week documenting one way the bank thinks investors might avoid languishing in equity purgatory for the next 10 years. I bring it up again Monday because Goldman was out with a new strategy paper outlining the bank's longer-term view for equities. It's a lengthy affair
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3 thoughts on “‘We’re At The Opposite End Of A Stock Super-Cycle’: Goldman

  1. We could rescue the the real economy from the 4 decades of the economically destructive “trickle down” and raise nearly every American out of poverty by introduce the UBI. The trial run over the past year has proven the economically positive effect a UBI would have. It has also proven that a steady rollout and proper guardrails would be needed to ensure the train doesn’t speed of the track. The American economy really struggled to handle consumers with the ability to spend, which is in and of itself a sad statement and further proves the need for a UBI.

  2. “… including and especially the almost total annihilation of labor as an economic actor …”

    When I was a lowly undergraduate economists (some of the most dangerous people in the world) told us there were three factors of production, land, labor and capital. Land was the primary actor until agricultural productivity began to rise in the late 1800s and farms required fewer workers and began to employ more capital. As this happened it became increasingly difficult to support government through just property taxes. Fortunately, the industrial revolution saw an increased demand for labor and capital, cushioning the reduced importance of farming to the economy. So in the early early 20th Century the US amended the Constitution to allow for the collection of taxes on income, as wages and corporate profits were the growing drivers of prosperity. Now, capital is replacing even more labor and last year 65% of all US citizens paid no income tax. As we move forward labor will continue to decline in value making it increasingly difficult for government to obtain needed cash flow without forcing business to carry more of the load. The most important factor of production is increasingly capital and labor force participation will continue to decline, threatening household consumption. How we cope with this next step in our economic evolution will be interesting to observe. I’m rather glad I’m old and won’t have to worry about that too much (although my daughter hates it when I point that out).

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