Tag: Profit (economics)

Stock Market at All time Highs! Are We In a Giant BUBBLE?

10/12/2016

With the stock market hitting all-time highs, everybody wants to know if we are in a giant bubble. You can’t trade and make money if you’re not in the market. If the fear that we are in a bubble is keeping you out, then you’re not making money. The honey badger doesn’t care. The honey Read More »

Trump Administration and Tariffs Versus Quotas

14/11/2016

Protectionist policies in the form of tariffs and quotas are coming from a Trump Administration. It seems appropriate then that we examine tariffs and quotas from a macroeconomics perspective. The two most common ways of restricting trade are with tariffs and quotas. From a political point of view and to prevent a trade war, a Read More »

Pharmaceutical Drug Pricing

3/11/2016

Pharmaceutical drug pricing is all over the mainstream financial media right now. Let’s examine the macroeconomics of what is happening. The demand for pharmaceutical drugs is inelastic. People that need a pharmaceutical drug prescribed by their doctor will demand that drug regardless of price. As the price of the drug goes up, demand mostly stays Read More »

Macroeconomics Of Rent Control

26/10/2016

California, New Jersey, and New York have the most cities with rent control. Sanctuary cities in California like San Francisco and Los Angeles have some of the toughest rent controls. Rent controls hurt the local economy and make rental unit availability worse. Aggregate deadweight loss from rent controls across the country negatively impacts the US Read More »

Microeconomics and Taxation

23/10/2016

Most government revenue comes from the taxation of transactions and labor. Taxes impact both the supply and demand curves. Taxes cause a buyer to pay more for something and suppliers to receive less. The loss of value for both buyers and sellers is called the deadweight loss of taxation. Taxation has an enormous impact on Read More »

A Macroeconomic Analysis of ObamaCare

16/10/2016

ObamaCare has created massive shortages within the healthcare sector. In cities, it is common to wait many hours before being seen as hospitals have a shortage of beds. Doctors have stopped taking new patients as they are overwhelmed by the numbers of people coming to see them. Let’s examine what happened from a macroeconomics perspective. Read More »

A FRED chart of labor costs (red) versus corporate profits (blue). A clear pattern emerges from the chart. Profits rise after a recession as labor costs fall. When the labor market reaches capacity, profits fall as labor costs rise. When labor costs rise, the Federal Reserve raises interest rates to tame inflation which causes the next recession.

Rising Wages Are What Will Cause The Next Recession

9/10/2016

We all love rising wages, but it is rising wages that will cause the next recession and Bear market. Below is a chart of labor costs (red) versus corporate profits (blue). A clear pattern emerges from the chart above. Profits rise after a recession as labor costs fall. When the labor market reaches capacity, profits Read More »