Contemporary Art: Eminent Domain - Intersectional Feminism Art

 

(Drivebycuriosity) - Last week - as I walked on 10th Avenue in Chelsea - a post caught my eyes. The image invited in an exhibition hosted by Art511 Magazine called "Eminent Domain. Intersectional Feminist Art (art511mag). The show displayed a variety of images including abstracts and photos of African men, all allegedly related to feminism. But anyway, some images found my interest and I display them here, a very subjective selection as usual.

The images above have a clear message.

These images are nice, feminist or not.

More nice images.

Some images are really funny

To be continued

Stock Market: Did The Summer Rally Already Start?

(Drivebycuriosity) - It seems that the usual summer rally on the stock market had already started. Last week the S&P 500, the gauge for the US stock market, gained 1.5%, about the same as in the first half of 2018 (plus 2%).

In the first half of the year stocks had been hold back by rising interest rates, climbing oil prices (which fueled inflation) and Trump`s trade war. But these negative impulses are now priced into stock aluations. In the first half Wall Street neglected the strong company earnings and ignored that US Companies had a stellar earnings season. In the first quarter of 2018 earnings for the big US companies, which are represented in the SP 500, grew about 25% from the same period last year - and 78% beat the  earnings estimates of the analysts (nasdaq). Stocks rose much less than earnings (plus 14%) so they have been getting cheaper in the recent months (falling P/E ratios).

Just a part of the earnings growth is the result of the recent tax cuts of the Trump administration, about 7 percentage points estimates LPL research. Even without tax cuts earnings grew about 18% (basic earnings growth rate). Company earnings are fueled by the global economy which is growing about 4%. But the earnings growth is also a long term trend. Corporations are getting more efficient & more productive over time - thanks to learning processes and the technological progress. They are learning organisms because they are managed by humans who are continuously improving themselves and their companies. During the recession 2008 companies had restructured and reduced costs significantly in order to survive. Now they are more fit & more efficient than before.

Company earnings are also boosted by automation.  Since the early 18th century (the first industrial revolution) the technological process has been enabling companies to produce more goods & services with the same amount of employees. More and better machines are doing the work of people which translates into lower costs, higher profit margins and climbing earnings.

It seems that this process is accelerating again and we are at the begin of new industrial revolution. We are experiencing a rapid advance of information technology, meaning combinations of computers, smartphones, Internet and other digital systems. Software - which is increasingly Internet connected and uses more and more the cloud (access to huge external data centers) - organizes the whole business: Creating new products, inducing machines to run more efficient, finding cheap suppliers, manage customer relations and so on. Car producers and many other manufacturers are increasingly using robots and similar machines to reduce their costs. Companies are also beginning to use 3D-printers to become more cost efficient and flexible-

We are now at the begin of a new earnings season and companies will report about Q2 in the coming weeks. I think that the strong earnings growth from Q1 will continue and may even accelerate. There is a high change that the earning growth will lift sentiment in the coming weeks and will overcompensate the headwinds from interest rates, trade war & oil prices. Welcome to the summer rally.

Economics: Why The China Pessimism Is Unjustified

(Drivebycuriosity) - If we believe the popular blog "Marginal Revolution" then the China pessimism is coming back. Was it ever away? Tyler Cowen, owner of the blog, who belongs to the China skeptics, refers to new pessimist articles in Western media (2015 2018). The China skeptics complain for instance that fixed-asset investment — a core driver of Chinese growth that includes spending on new buildings, machinery and infrastructure — grew at its slowest annual pace since at least 1995 and that the stock market in Shanghai reflects the negative sentiment and lost 17% in the first half of 2018.

I think that the China pessimism is unjustified. China`s growth changed just from red-hot to strong. The economy (BNP) is still growing 6-7% annually, the mentioned fixed-asset investment is increasing 6%, retail sales are climbing more than 8% & industrial profits are soaring 16% (calendar). So what?

The China skeptics miss the big Picture. China is still in the begin of a perpetual catching up process, which is fueled by extreme income & wealth differences to the US and other Western nation. In 2017 China had about $8,827 income per capita, the US number was $59,531 (worldbank).  China is following other countries which had caught up to the leading economies  (to the UK before 1920, since then to the US, graph below).

 

The country has a huge natural resource which is fueling the perpetual growth: A gigantic amount of human capital: There live 1.3 billion people who are intelligent, work hard and save money to achieve a better life and to adapt to the living standards in the US and Europe. The Chinese economy benefits from an education system which is more rigorous, competitive and success focused than the American and the British (chinese ). Wikipedia counted in 2014 already "2,236 colleges and universities, with over 20 million students enrolled in mainland China" (wikipedia). Fast expanding knowledge is driving science & innovation and fostering economic growth (washingtonpost). Chinese corporations, think tanks & administrations can employ a large number of highly dedicated & educated people - a strong driver of economic growth (scottsumner).

China`s growth is boosted by a rapid transformation process.  For decades the country has been changing from an agricultural economy into an industrial economy, following the role models of the US, Japan, South Korea and many other countries. Now China is entering another stage of the transformation process: Changing from an industrial country - which relies on exports - into a modern economy like the US which is dominated by services and focuses mostly on the domestic market.
For years imports & retail sales have been growing faster than exports & industrial production. Therefore a growing part of the national production is consumed in China, which reduces the country´s dependence from global markets.

China´s catching up process also benefits from historical lessons & the experience made by other countries. China does not need to reply the mistakes of other countries and is learning from them. Beijing`s central bank is doing a good job by avoiding inflation & recessions. China´s transformation also gains from the technological progress: Rapid advances in software & Internet (including cloud computing), robotics, 3D printing, nanotechnology, genetic engineering and other technologies are all lifting the productivity of the economy (byronwien).

The Internet - including the "cloud" - increases the flow of information and reduces the cost of data. New ideas can spread faster, encouraging discoveries and inventions and boost the technological progress & China`s transformation. A large part of the population uses already smartphones, tablets and other devices which allow them permanent access to the world wide web. These high tech devices help them to organize shopping, leisure time, traveling, dating, eating out and more and are so rising productivity & economic growth. "Although China’s internet penetration is just over 50%, its sheer scale means that there are 3x the number of smartphone users and 11x the number of mobile payment users in China than in the U.S" (china-internet-report). Chinese companies are using cloud services for organizing & reducing costs. China has already huge Internet companies like Alibaba, Tencent & Baidu which are growing faster than their Western counterparts and are becoming global power houses (visual). The government - and companies like Baidu - are investing massively into artificial intelligence which is boosting the transformation process & economic growth for years to come (economist).  

China´s megacities (there are at least 15 metropolises with a population of more than 10 million people wikipedia) are supporting productivity and the growth of the whole nation. History shows "that clusters of talented and ambitious people increase one another’s productivity and the productivity of the broader community, spurring economic growth" (citylab). "80% of economic output originates in cities: urbanization is the engine of economic growth" (project-syndicate). The migration to big cities fosters a fast rising affluent middle class, driving consumer spending & economic growth.

The China skeptics lament about the high debts. But they are wrong, China does not have a debt. The country is big creditor and loans money to the US which is highly indebted. China`s foreign reserve ( dollar holdings) are $3.11 Trillion! The Chinese save more than 40% of their income, the American just around 20% (worldbank). The high savings lay the ground for investments in infrastructure and other targets (capital accumulation) and are fueling the sustainable growth of China´s economy.

I get the impression that the permanent China skepticism is just a kind of racism.

PS For illustration I used an image from the China Fashion Week in Bejing 2017 displaying creations by designer Tom Dong as a symbol for China`s modernization  (xinhuanet).
 

Contemporary Art: A Glance Into Condo New York 2018

 

(Drivebycuriosity) - New York City is known for Wall Street & Broadway but the metropolis is also a mecca of art. Now 21 galleries in southern Manhattan are hosting shows from 47 galleries in foreign countries or other US cities. The program is called Condo New York 2018 ( condocomplex).

I checked about half of the hosts and I was disappointed. Some of the galleries were closed or didn`t exist on the announced addresses, others were just tiny places and showed mediocre works. But I collected some pictures anyway. Above images from Bodega, 167 Rivington St, hosting Galerie Crèvecœur Paris.

Above images from Bureau, 178 Norfolk St, hosting Hopkinson Mossman Auckland & Kristina Kite Gallery Los Angeles.

Above images from Rachel Uffner Gallery, 170 Suffolk St, hosting Cooper Cole Toronto & Night Gallery Los Angeles.

To be continued

Economics: Do Millennials Have A Grim Future?

(Drivebycuriosity) - "America´s Millennials will wake up to a grim future", claims Bloomberg (bloomberg). This is quite nonsense.  Every generation had a brighter future than their ancestors - and so will the Millennials
.

                                                      (data.worldbank )

The US economy is growing annually on average 2-3 %. This is a long term trend which has been keeping up over a century at least. As a result per capita incomes have been doubling every 30 years or so (thanks to the interest compound effect calculator). When the Millennials will reach retirement ages per capita income will have tripled.

Perpetual rising incomes are lifting household worth (stocks, bonds, real eastate ). The chart above shows the long-term trend of real net worth in the US, which has risen on average by about 3.5% per year over the past 66 years (scottgrannis).

There is no reason that the positive historical trend should stop or reverse its course. Humans have always found ways to achieve a better life - for themselves and for others. We all benefit from technological advances & entrepreneurship which have been boosting productivity, comfort and wealth. And the progress is still accelerating. Almost any day something new comes up which makes our life more comfortable: Self-driving cars will have fewer accidents; Internet connected watches will help to monitor out health; in 2013 the first kidney grew in vitro in the U.S. and the first human liver grew from stem cells in Japan (wikipedia).

Millennials will live even longer and healthier than their ancestors thanks to science and the ongoing technological progress (forbes). They will benefit from new medicine; nanotechnology will create new and better materials, including carbon fibers that are much stronger & less heavy than steel; 3D printing will make many things much cheaper; stem cell therapy will treat or prevent more and more diseases. And Internet is making life easier and more comfortable (Uber, E-commerce, Airbnb, more will come).

Millennials can participate in the perpetual economic growth if they save a part of their incomes (meaning a bit less smoke, booze, party and such) and invest the money into stocks. They can buy the US stock market, represented by the S&P 500 index, in one piece by purchasing index funds or ETFs (Exchange Traded Funds) on the S&P 500. These funds have very low costs because they don`t need a fund manager, they don´t have research and they don´t speculate with their customer´s money. These investments follow exactly the up-and-downs of the stock market. Yes there will be corrections (a loss of 10%+), bear markets (a loss of at least 20%) and crashes. But all these losses are temporary and they all got erased over the time as the recent all-time highs show.

The chart above shows that the US stock market, represented by the S&P 500, grew on average annually 6.7% since 1950, even that dividends are not included (annually 2-3%). Investors who reinvested their dividends got an even higher return. The University New York calculated that since 1928 the US stock market (S&P 500) created an average return of about 10% p.a (stock market gains plus dividends reinvested nyu.edu/ investopedia). So an investment into the stock market doubled its value every eight years, thanks to the interest compound effect (compound). That makes 4-times after 16 years and 8-times after 24 years. Even a small investment can grow into a fortune over decades, good for retirement.

Unfortunately such pessimist articles are a vogue. So Bloomberg gets more readers, more clicks and more advertising. But such scaremongering fawns defeatism and suicidal tendencies, it discourages savings and investments. Shame on Bloomberg!

Stock Market: Happy Second Half 2018

(Drivebycuriosity) - Yesterday the US stock market started the second half of 2018 with a gain. I think this is a good omen and the second half of 2018 will be better than the first half. In the first six months of the year the SP500, the gauge for the stock market, almost stagnated (just plus 2%). Rising interest rates, climbing oil prices & Trump`s trade war had spoiled the sentiment.

I think that these negative influences are now already priced into stocks and history shows that stock prices & interest rates can happily rise together: The Bank of America Merrill Lynch (finance) notices that “the 1950s was a period of higher stock prices and higher US interest rates. The US 10-year yield bottomed near 1.5% in late 1945 and the S&P 500 remained firmly within its secular bull market until yields moved to 5-6% in the mid 1960s. The S&P 500 rallied 460% over this period.”
 
Wall Street neglected the strong company earnings and ignored that US Companies had a stellar earnings season. In the first quarter of 2018 earnings for the big US companies, which are represented in the SP 500, grew about 25% from the same period last year - and 78% beat the  earnings estimates of the analysts (nasdaq). As a result stocks got cheaper (falling P/E ratios).

I think that the strong earnings growth will continue and will overcompensate the headwinds from interest rates, trade war & oil prices. Just a part of the earnings growth is the result of the recent tax cuts of the Trump administration, about 7 percentage points estimates LPL research. Even without tax cuts  earnings grew about 18% (basic earnings growth rate).

I assume that company earnings will continue to grow with double-digit rates because fast rising company earnings are a long term trend. Corporations are getting more efficient & more productive over time - thanks to learning processes and the technological progress. They are learning organisms because they are managed by humans who are continuously improving themselves and their companies. During the recession 2008 companies had restructured and reduced costs significantly in order to survive. Now they are more fit & more efficient than before.

Company earnings are also boosted by automation.  Since the early 18th century (the first industrial revolution) the technological process has been enabling companies to produce more goods & services with the same amount of employees. More and better machines are doing the work of people which translates into lower costs, higher profit margins and climbing earnings.

It seems that this process is accelerating again and we are at the begin of new industrial revolution. We are experiencing a rapid advance of information technology, meaning combinations of computers, smartphones, Internet and other digital systems. Software - which is increasingly Internet connected and uses more and more the cloud (access to huge external data centers) - organizes the whole business: Creating new products, inducing machines to run more efficient, finding cheap suppliers, manage customer relations and so on. Car producers and many other manufacturers are increasingly using robots and similar machines to reduce their costs. Companies are also beginning to use 3D-printers to become more cost efficient and flexible.

I assume that the new earnings season (company reports from Q2), which will start next week, will again a lot positive surprises which should lift the sentiment and so restart the stock market rally. 
 

Contemporary Art: Dyspopia @ GR Gallery New York

 

(Drivebycuriosity) - I like to go to art galleries. Visiting them is often very entertaining. Last week I enjoyed a look into the GR Gallery on Manhattan´s popular Bowery (gr-gallery). The art dealer presents an exhibition, called Dyspopia (through Jily 14 2018), "featuring avant-gardists artists from Spain, Italy and U.S: Belin (Miguel Ángel Belinchón Bujes), Tommaso Bet and Adam Lister" (dyspopia). The press release claims that "the artists are invested in pushing beyond the boundaries the research on figurative art experimenting with cutting edged techniques and bold composition always hype and up do date".

I like the playful images and show here my favorites, a very subjective selection as usual.

Above you can see images by Belin (Spain, born 1979)

Above an image by Tommaso Bet (Italy, 1980) followed by another Belin work.

Above two more images by Tomasso Bet.

To be continued