The Way Forward for Hedge Funds

Hedge funds should go back to hedging and also consider lower fees.

Equity hedge funds are under tremendous pressure, having underperformed their benchmark in nearly every year since 2008. But can it really be true that the average equity hedge fund is no better over the long run than granny’s passive indexed ETF or mutual fund that tracks the S&P 500?

On one side, hedge funds employ full-time cohorts of smart ambitious highly credentialed people who spend long hours and a lot of money visiting and analyzing companies to find the best opportunities. They sit in beautiful new offices and use the latest in real-time data feeds and state of the art technologies. Continue reading

Posted in Economy, Hedge Funds, Innovation, Investment, Stock Market, Taxation, United States, Wall Street | Leave a comment

Manhattan Ultra-Luxury ‘Battling the Serpent of Chaos’

The deceleration of China and resulting commodities crash have created a problem for developers of ultra luxury condominiums.

The ancient Egyptians believed that the sky was a solid dome, the belly of the goddess Nut who arched her body from one side of the horizon to the other. Every day, the sun god Ra emerged in the east and sailed in his boat across the sky until dusk when he disappeared in the west by dipping below the surface of Nun, the ocean upon which the whole flat earth floated. Continue reading

Posted in China, Commodities, Economy, Investment, New York, Offshore, Real Estate, Society, US Economy | Leave a comment

A Rough Estimate of GDP Growth in Africa and Asia

It is morally right that every child should be given the best chance to survive, eat well, stay healthy, and receive an education. Now we also know that it is among the best investments we can make. Healthy, well-educated kids grow into productive adults, capable of providing a better future for their own children, creating a virtuous circle that can help build a better, more prosperous world.   Bjorn Lomborg, Copenhagen Consensus.

In coming years, the global economy is going to need all the help that it can get. All countries of the West face a severe demographic challenge from the twin effect of an aging population and a large inflow of foreign migrants. Technology and innovation will continue to be powerful drivers of the economy but they will only partially offset the sluggish aggregate demand seen in richer countries. Continue reading

Posted in Africa, BRIC countries, Demographics, Economy, Education, Emerging Markets, Infrastructure, Kenya, Society, Sub-Saharan | 1 Comment

Would Reaganomics Work Today?

The key drivers that propelled the Reagan economy are now tapped out or out of favor.

The name of Ronald Reagan is frequently evoked by the current contenders to the GOP nomination. Donald Trump speaks admiringly of the 40th President of the United States and uses a truncated version of his 1980 campaign slogan “Let’s Make America Great Again”. Ted Cruz promises to implement Reagan’s solution of lower taxes, lower regulation and a stronger military. Before he bowed out recently, Marco Rubio was equal in his praise. And John Kasich stakes an even more tangible claim by reminding us that he is the only candidate who actually worked with Reagan. Continue reading

Posted in 2016 Candidates, Demographics, Dependency Ratio, Economy, Taxation, United States, US Economy, US Federal Budget | Leave a comment

The Relationship Between Fertility and National Income

We all heard that “demography is destiny”. But how many of us truly believe it? If demography was destiny, the world would look very different today. The two demographic giants China and India would be uncontested economic and military powers. The United States would be a regional power struggling to keep up. Larger European nations such as Britain, France and Germany would barely register on the economic map, while smaller ones such as Switzerland and Finland would be invisible. Nigeria and DR Congo would be African powerhouses. Brazil, Indonesia and the Philippines would be the shining stars of their continents. Continue reading

Posted in Africa, China, Communism, Demographics, Economy, Education, Health Care, India, Natural Resources, Oil, Society, Sub-Saharan | 2 Comments

MENA Economies: Trouble Ahead

The economies of the Middle East and North Africa (MENA) are ill prepared for the coming population boom.

War, terrorism, repression and poverty are all common features in much of today’s Middle East and North Africa (MENA). How are the region’s demographics changing in the next few decades? And what is the prognosis for improved living conditions? Continue reading

Posted in Africa, Demographics, Dependency Ratio, Economy, Emerging Markets, Iran, Iraq, Levant, MENA, Middle East, Saudi Arabia, Turkey, United Arab Emirates | Leave a comment

Rise of the Rest: A Vision Deferred

Changing demographics and the commodities crash have slowed down the development of poorer countries.

Perhaps it all started with a turn in China’s demographics. Demand growth for commodities has declined sharply from recent years and has resulted in a crash of global prices. Copper is down 54% from its post 2008 peak and down 25% this year alone. Crude oil is down 67% and 39% in the same time spans. In addition to softer demand, prices were negatively impacted by jumps in supply, most notably from shale energy producers in the United States. Continue reading

Posted in Brazil, BRIC countries, China, Churchill, Commodities, Demographics, Economy, Education, Emerging Markets, India, Investment, Kenya, Mexico, Natural Resources, Nigeria, Oil, Pakistan, Philippines, Russia, Society, Tanzania | 1 Comment

Architecture by Walking Around

Something a little different for our readers in this holiday season. Happy holidays to all!

The phrase “management by walking around” became popular in business circles in the 1980s and 1990s. Its import was that a corporate manager at any level, even the CEO, should not just manage from his distant marbled office at the top of headquarters but should walk around the office, the factory floor, the store, holding impromptu conversations with colleagues, suppliers, customers etc. Only then, the theory went, would he get a full picture of operations and only then would he adequately lead his organization. Continue reading

Posted in Architecture, Economy, Innovation, Society | Leave a comment

In One Chart: Achieving the Demographic Dividend

The experience of China provides a useful policy template for countries with booming populations in south and southeast Asia and in sub-Saharan Africa. The Chinese boom showed that a growing working-age population combined with a declining fertility ratio can result in a large demographic dividend if certain conditions are met. As noted in this recent post, two important drivers of lower fertility are an increase in female literacy and a decline in child mortality. Continue reading

Posted in Africa, BRIC countries, China, Demographics, Economy, Education, Family Planning, India, Investment, Nigeria, Society, Sub-Saharan, Trade, Urbanization | Leave a comment

How Many People Will Live in Africa in 2050 and 2100?

Large declines in fertility will depend on raising female literacy above 80%.

Every few years, the United Nations Population Division releases demographic projections for the entire world and for every country, region and continent. Although the UN’s database is the most used source on demographics, the data is not equally reliable for all countries.

Countries in the developed world conduct regular censuses and produce detailed numbers that are considered reliable. Less developed countries conduct censuses on an irregular basis or are completely unable to conduct them and have instead to rely on demographic sampling. In the poorest countries of the world, most of which are in sub-Saharan Africa, censuses are infrequent or nonexistent and even sampling can be irregular and unreliable. Continue reading

Posted in Africa, Analysis and Opinion, Asia, China, Demographics, Economy, Education, Emerging Markets, Family Planning, India, Investment, Kenya, Niger, Nigeria, Sub-Saharan, Uganda, United Nations, Urbanization, World Bank | Leave a comment