Your CIO had the pleasure of joining Devina Gupta and Colin Peacock on the BBC’s Business Matters radio show last night to cover several topics (Panda Diplomacy was on the list as well, but the hour was up before we could get to it).
My takeaways:
- US first-quarter GDP growth of 1.1% (annualized and seasonally adjusted) looks low relative to 2% expectations, but personal consumption expenditures rose 4.2% (credit card debt is at an all-time high; it’s hard for Americans to stop spending). I think we’ve got a K-shaped economic situation: Demand on the high end for purchases that communicate status, and demand on the lower end for Walmart-esque necessities, with the middle being the weakest spot.
- Impostor Syndrome is real (we talked quite a lot about this). Years ago, I wondered if I was the only one… until I read that it was a “thing” and learned that many of my friends had it, too. Funny. I take solace in the Dunning-Kurger Effect: those who are least capable at something tend to also be least aware of their incapability. However, this also means there are plenty of things I’m terrible at and have no idea.
- Japan is a 30+ year social experiment: Shrinking population, shrinking GDP, yet trying to keep GDP per capita consistent; per capita GDP is what really determines standard of living. An economist guest had a great point that real (inflation-adjusted) wages have been stagnant in Japan for 20 years. I found that they’ve actually dropped for 11 of the past 12 months. Japan will keep rates low for longer. They fear deflation as if their lives depend on avoiding it. This keeps their currency cheap (why buy negative-yielding or ultra-low yielding bonds in Japan when you can get real yield elsewhere, especially now?), but requires a lot of bond-buying by the Bank of Japan, and creates distortions. A big experiment. Japan is an experiment, as well as a wonderfully friendly country.
- GMO food: Apparently 80% of what Americans eat is genetically modified, including many pigs and salmon. The industry is growing at 7.5% per year, which is about double the overall world average GDP growth rate. A full 90% of corn, soybean, and something else (canola, maybe?) acreage is dedicated to genetically modified crops. The US is #1 in GMOs (72 million hectares) with Brazil #2 (52 million). They’ve been around for decades, and nobody has turned into Frankenstein yet. They’re banned or heavily restricted in much of Europe and New Zealand. The “pro” case for GMOs is that they’re more efficient – can help feed impoverished populations consistently, and because they’re less resource-intensive, don’t contribute as much to global warming. Given the length of time GMOs have been in consumption – and I don’t know enough to advocate an opinion – hopefully the debate can shift from ideology to data.
You can listen to the full hour (I’m one of the two guests, and the show has other interviews added in, so it’s not just yours truly rambling on) by clicking this link here.
