Economics: What Is Driving The Perpetual Stock Market Gains?

(Drivebycuriosity) - The US stock market reached new all-time-highs. The chart above shows that over time the stock market follows an continuous upwards trend and all-time highs are normal & frequent. Bear markets, crashes & correction are just temporary temporary aberrations. It is remarkable that the regimes of Regan, Bush Father & Son, Clinton, Obama and Trump (so far) did not harm, so the trend should continue even with Elizabeth Warren or Bernie Sanders

The chart below also shows that the trend of climbing stock prices exists for centuries and seems to accelerate - as everything. Obviously the perpetual climbing stock prices (with short interruptions) mirror two longtime trends: A growing global economy & rising company profits.

I claim that the favorable long term trends will continue and will maintain the perpetual stock market gains:

Companies are getting more efficient & more productive over time - thanks to learning processes and the technological progress. Companies are learning organisms because they are managed by humans who are continuously improving themselves and their companies. There is a permanent evolution process which is driving the productivity (output per worker) and the winners are getting fitter and more efficient than before. 

Global growth, climbing company earnings & rising stock prices are fueled by the ongoing 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 (robots) are doing the work of people which translates into lower costs, higher profit margins, climbing earnings & a growing global economy.

It seems that this process is accelerating 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.

Global growth is also fueled by the emerging markets which are getting stronger over the time. The catching-up process in China, India, Indonesia and a lot of other countries translates into high growth in large parts of the global economy that creates continuously rising revenues & profits for global companies like Starbucks, IBM, Caterpillar, Apple, Microsoft, Google and other members of the S&P 500.

To be continued  

Contemporary Art: Bernardo Siciliano @ Aicon Gallery New York

 (Drivebycuriosity) - Contemporary art is full of discoveries. Last weekend I spotted an amazing show with paintings by the Italian artist Bernardo Siciliano @ Aicon Gallery New York (through November 30, 2019  aicon   bernardosiciliano). They call the exhibition: "Pigs and Saints".

I love this huge canvases which remind me of Caravaggio and cinema scenes. According to the press release Siciliano also got influenced by Edward Hopper, Lucian Freud & David Hockney. But he found his own unique style and each painting seems to tell a story.

Above you can see my favorite, the wonderful "Monday Morning" (2019, Oil on canvas, 78 x 130.5 in). The painting is inspired by Johannas Vermeer’s domestic interior scenes of middle-class life (aicongallery). Similar to those scenes, Siciliano’s large-scale canvas is flooded with light pouring in through the window.

I also love this cozy painting, called "Social Network" (2019, Oil on canvas, 76 x 100 in). The image reminds me of young cats. It shows three of Siciliano’s young relatives on a couch engrossed with their phones, seemingly in another reality.

Above "Summertime" (2019, Oil on canvas, 76 x 100 in). It looks like an Italian dinner party

Above 2 glances into New York´s subways: "Pigs and Saints" (2019, Oil on canvas, 58 x 144 in.) followed by "Tender is the Night (Subway)" (2019, Oil on canvas, 94 x 71 in.)

Above  "Vincent Desiderio" (2018, Oil on canvas, 56.5 x 43 in.). This painting refers to an American realist painter who has a similar style, maybe he is Siciliano´s teacher (vincent-desiderio ) followed by "Selfie" (2019, Oil on canvas, 60 x 48 in.). Seems the artist frequents the gyms.

 

Above "Overlap #2" followed by "Overlap #3" (both 2017, Oil on canvas, 30 x 40 in.) I love how Siciliano caught the skin tones.

Above "Summer and Storm" & "Summer and Storm #2" (both 2016, Oil on linen, 20 x 28 in.)

 

To be continued

Economics: Monetary Policy - Enough Is Enough

 (Drivebycuriosity) - Last week the Fed cut again her interest rates - the third cut in just 3 months - but they declared that this should be the last reduction in foreseeable future. The announced pause is the right decision - there are no more cuts needed. Enough is enough.

Apparently the recent interest rat cuts serve as an insurance. The Fed wants to cover the risk that the trade war escalates and pushes then the global economy into a worldwide recession. But in the moment we get rather signs that the trade war could be confined and last Friday´s strong US job market report confirmed that the US economy is still doing well. There is rather the risk that the Fed already overshot and pushed her interest rates too low.

A too expansive monetary policy - by ulta-low interest rates - in combination with a tight labor market and climbing oil prices could easily restart the almost forgotten inflation. In this case the Fed would need to hit the brakes again which could cause the next recession.

Contemporary Art: Vik Muniz`s Pictures Of Paint @ Sikkema Jenkins New York

 

(Drivebycuriosity) - Contemporary art is a matter of taste. Some prefer paintings, others photographies. The Brazilian artist Vik Muniz offers an compromise. Gallery Sikkema Jenkins & Co. in Manhattan´s Chelsea district exhibits photographic images of paintings by Muniz (through November 16, 2019  sikkemajenkinsco). I display my favorites from the show here, a very subjective selection as usual.

To be continued

New York City: Halloween 2019 - Strange, Scary & Sexy

(Drivebycuriosity) - Halloween has an old tradition. According to Wikipedia "All Hallows' Eve" (English/Irish) is a Christianized feast initially influenced by Celtic harvest festivals with possible pagan roots (wikipedia). Today the event is a reason to celebrate in the public and many are wearing scary costumes and masks.

Yesterday my wife and I joined New York´s Halloween parade which went in Manhattan along 6th Avenue from Soho to Chelsea. As (almost) everything in the metropolis the procession was huge. There were thousands of participants who seemed to have a lot of fun. The event reminded me of the "Rosenmontagszug" in Köln, the huge carnival parade in Cologne, Germany. but there was a big difference - the Halloween Parade was a 0% tolerance for alcohol event. During the German carnival you can see a lot of alcoholized people instead.

Participating in the parade was fun, especially that the evening was unusually warm (70F/21C).  As in the previous years I enjoyed the variety of costumes and I spotted so many fascinating ideas again.

Here is a selection of the pics I took yesterday. Some were scary, some strange, others funny and sexy. Some had just fun with whatever they were representing.

There were a lot scary figures around of course.

But I also spotted really strange creatures.

Scary or not,  I saw lots of pretty faces as well.

There were angels, witches, delicacies, movie characters and more.

and some ambitious wagons.

The Halloween event seemed to rule the whole town, even the subway stations were full of monsters. And after the parade there were lines before many bars & clubs because people wanted to continue the party. I want to praise the organizers, the police and others who took care that this event was pieceful and fun. The organizers shaped the worm - the huge number of people who walked the 6th Avenue - into segments to avoid overcrowding and dangerous situations which usually accrue when big masses are gathering.

To be continued next year.