Bucas Econimc Activities: January 2017

Thursday, January 26, 2017

The Shut-In Economy

Angel the concierge stands behind a lobby desk at a luxe apartment building in downtown San Francisco, and describes the residents of this imperial, 37-story tower. “Ubers, Squares, a few Twitters,” she says. “A lot of work-from-homers.”

And by late afternoon on a Tuesday, they’re striding into the lobby at a just-get-me-home-goddammit clip, some with laptop bags slung over their shoulders, others carrying swank leather satchels. At the same time a second, temporary population streams into the building: the app-based meal delivery people hoisting thermal carrier bags and sacks. Green means Sprig. A huge M means Munchery. Down in the basement, Amazon Prime delivery people check in packages with the porter. The Instacart groceries are plunked straight into a walk-in fridge.

This is a familiar scene. Five months ago I moved into a spartan apartment a few blocks away, where dozens of startups and thousands of tech workers live. Outside my building there’s always a phalanx of befuddled delivery guys who seem relieved when you walk out, so they can get in. Inside, the place is stuffed with the goodies they bring: Amazon Prime boxes sitting outside doors, evidence of the tangible, quotidian needs that are being serviced by the web. The humans who live there, though, I mostly never see. And even when I do, there seems to be a tacit agreement among residents to not talk to one another. I floated a few “hi’s” in the elevator when I first moved in, but in return I got the monosyllabic, no-eye-contact mumble. It was clear: Lady, this is not that kind of building.

Global Economy Trends in 2017

EUROPE CONTINUES TO UNWIND - If the surprising Brexit vote were Europe's only problem, European policy makers and stakeholders in the continent's economy could rest easy. But Britain's exit from the EU could be the least of its worries, according to Carl Weinberg, chief economist with High Frequency Economics.
CHINA CONTINUES TO SLOW - President Xi Jinping will begin the final year of his first term in 2017, and the challenges he faces managing the world's second largest economy are manifold. China's government is aiming for growth rates of 6.5% over the next five years, but recent experience has shown that reaching or even exceeding these goals will not lead to a stable Chinese economy unless those targets are hit in a sustainable manner.
IT'S TRUMP'S ECONOMY NOW - Halfway around the world the new American president, Donald Trump, will be embarking on his own substantial reform projects. One such effort will be a program of tax cuts and infrastructure spending, which independent analysts say will balloon the federal government's deficit at the same time that spending on entitlements like Medicare and Social Security is on course to soar.
BUT ALSO JANET YELLEN'S - The one governmental institution that the Republican Party doesn't control is the Federal Reserve. The independent central bank will be tasked with managing the money supply in reaction to new fiscal policies. Already predicting an acceleration in the pace of interest rate increases, Fed Chair Janet Yellen may be forced to move faster in that regard if generous fiscal spending overheats the labor market and leads to inflation significantly above the central bank's 2% annual target.
TRADE WILL REMAIN AT THE FORE - The most stable global policy stance of the past 70 years has been the steady march toward ever-freer trade. But the low-hanging fruit of removing trade barriers has long since been picked. And 2016 showed us that the electorates in the wealthy world are no longer going to brook policies that they feel sap their potential income growth in return for imperceptibly cheaper products and much higher pay for a select few.