Tax cuts, investment, the strong dollar and the twin deficits. For economists, Reaganomics is a very unique economic experiment. Looking at the GDP and the stock market in 1980s, it seems that Reaganomics was successful, but it is not well understood what exactly drove the economy. This article aims to explain why Reaganomics failed in the first few years and led to the later success, and what the cause was.
Continue reading Explaining how Reaganomics failed to act against the effects of rate hikes →
It is not always easy to predict a collapse of a financial bubble, but there often is something that indicates it in advance.
In the case of the subprime mortgage crisis in 2008, some famed fund managers such as George Soros or John Paulson knew it could be as serious as it eventually happened to be. This article explains the economic situations during the crisis and shows the statistics that preceded to imply the timing of the collapse of the stock markets.
Continue reading How you could have predicted the financial crisis in 2008 →
Throughout the last hundreds of years, the essence of the financial markets has never changed, and the investors repeatedly experience absurd financial bubbles of the common root.
This perhaps gives this article some significance, as we explain here the cause of Black Monday in 1987. Many say there was no specific reason of the market crash, or it is difficult to identify the cause, but some great investors indeed predicted the collapse in advance, as there were the definite causes of the bubble we can explain here.
Continue reading Why did Black Monday happen in 1987: Reaganomics, the Plaza Accord and the German rate hike →
Analysis and Practice in the Global Markets