4 ms·

There really is no economic growth in Europe, outside of Germany. If you look at the largest market-cap companies in UK and France, for instance, they are all p

by mjfl 4y ago

There really is no economic growth in Europe, outside of Germany. If you look at the largest market-cap companies in UK and France, for instance, they are all petroleum based. Since these businesses have done poorly for the past 20 years, you get the phenomenon of their stock indices not growing even a little in 20 years[1][2][3]. This would be disastrous, but luckily there is the US stock market present for their citizens and institutions to invest in. [1] https://www.thisismoney.co.uk/money/diyinvesting/article-8101459/The-FTSE-100-15-20-years-invest-long-term.html https://www.thisismoney.co.uk/money/diyinvesting/article-810... [2] https://www.google.com/search?q=ftse+index https://www.google.com/search?q=ftse+index [3] https://www.google.com/search?q=cac40+index https://www.google.com/search?q=cac40+index (click max on the google searches and look at 20 year history).

mwint 4y ago
Genuine question from a non-economist: in the absence of the US stock market, what dynamics would make this disastrous?
- lotsofpulp 4y ago
  This is just a completely amateur opinion. Society has made promises decades ago about returns that would be delivered in the future, which would then translate to people being able to procure labor/services, especially in old age. Without those returns, actual quality of life will not meet expected qualify of life (which is and has been happening for decades for greater and greater portions of the population, hence all the political turmoil). Typically, this growth was easy to achieve due to almost all women having 3+ kids each. Then, advances in technology picked up some of the slack from decreasing birth rates. But seems like advances in technology are not able to make up for the decreasing birth rates since a while now, especially in non US countries.
- mjfl 4y ago
  Take the money in your retirement account and divide it by 10, and that's how much money you would have left. Your money wouldn't grow anymore, and it's growth due to stock appreciation is responsible for roughly 90% of its value. I would learn this stuff, pretty important for your retirement...
nicodjimenez 4y ago
- credit_guy 4y ago
  A good rule of thumb is that most Emerging Markets countries only export commodities. In Russia's case, oil, natural gas and some metals. That's not "economic powerhouse". Here's Russia's top 10 exports for 2021 [1]: Mineral fuels including oil: US$211.5 billion (43% of total exports) Gems, precious metals: $31.6 billion (6.4%) Iron, steel: $28.9 billion (5.9%) Fertilizers: $12.5 billion (2.5%) Wood: $11.7 billion (2.4%) Machinery including computers: $10.7 billion (2.2%) Cereals: $9.1 billion (1.9%) Aluminum: $8.8 billion (1.8%) Ores, slag, ash: $7.4 billion (1.5%) Plastics, plastic articles: $6.2 billion (1.3%) [1] https://www.worldstopexports.com/russias-top-10-exports/ https://www.worldstopexports.com/russias-top-10-exports/
  - sudosysgen 4y ago
    Russia isn't really allowed to export anything that's not a commodity even if they wanted it. Non-commodity exports are made possible by favourable position with regard to the international legal system (ie, financial systems, intellectual property frameworks, etc...). Russia will never be allowed into such a category as long as the US has a word to say, which is, in the foreseeable future. Can you imagine a world where the US agrees to have core technologies under ownership of Russia? How about Europe? If not these two markets, why would, say, a random African country decide to honour Russian intellectual property rights?
    - Scoundreller 4y ago
      > Can you imagine a world where the US agrees to have core technologies under ownership of Russia? I mean, the west had no issue with depending on China for almost everything. I doubt USA had a ton of Huawei gear in its networks, but plenty of other countries sure have.
      - 4y ago
wewxjfq 4y ago
The US will show you how bad it is if a country focuses too much on the stock market to measure economic success. The performance reflects monetary policy more than anything. In the end stocks going up doesn't mean people are getting richer. As your first article points out: The "stagnant" stocks pay dividends. That's how it's supposed to work. How is a system healthy and sustainable if you expect share prices to double every 5 years? Tesla's valuation has nothing to do with reality anymore, it's a wet dream.
- mjfl 4y ago
  returns being purely in dividends is not 'how it's supposed to work' that means there is 0 growth in your economy and you're probably in decline due to the accumulation of entropy in these cash returning companies.
samjmck 4y ago
Economic growth doesn't have to mean stock market growth. I don't think the stock market is the best measure for how a country is doing economically
Rexxar 4y ago
For information indices like cac40 are price of stock without dividends reinvested. If you want something that represent the gain of an investor you have to look at "cac 40 gross tr". The difference between the standard index and the reinvested index is less visible in USA because a lot of companies chose to buy stock instead of paying dividends. So using the mains indices like you do to compare economic growth or investor gains is meaningless.

by mjfl 4y ago

mwint 4y ago

Genuine question from a non-economist: in the absence of the US stock market, what dynamics would make this disastrous?

lotsofpulp 4y ago
This is just a completely amateur opinion. Society has made promises decades ago about returns that would be delivered in the future, which would then translate to people being able to procure labor/services, especially in old age. Without those returns, actual quality of life will not meet expected qualify of life (which is and has been happening for decades for greater and greater portions of the population, hence all the political turmoil). Typically, this growth was easy to achieve due to almost all women having 3+ kids each. Then, advances in technology picked up some of the slack from decreasing birth rates. But seems like advances in technology are not able to make up for the decreasing birth rates since a while now, especially in non US countries.
mjfl 4y ago
Take the money in your retirement account and divide it by 10, and that's how much money you would have left. Your money wouldn't grow anymore, and it's growth due to stock appreciation is responsible for roughly 90% of its value. I would learn this stuff, pretty important for your retirement...

nicodjimenez 4y ago

credit_guy 4y ago
A good rule of thumb is that most Emerging Markets countries only export commodities. In Russia's case, oil, natural gas and some metals. That's not "economic powerhouse". Here's Russia's top 10 exports for 2021 [1]: Mineral fuels including oil: US$211.5 billion (43% of total exports) Gems, precious metals: $31.6 billion (6.4%) Iron, steel: $28.9 billion (5.9%) Fertilizers: $12.5 billion (2.5%) Wood: $11.7 billion (2.4%) Machinery including computers: $10.7 billion (2.2%) Cereals: $9.1 billion (1.9%) Aluminum: $8.8 billion (1.8%) Ores, slag, ash: $7.4 billion (1.5%) Plastics, plastic articles: $6.2 billion (1.3%) [1] https://www.worldstopexports.com/russias-top-10-exports/ https://www.worldstopexports.com/russias-top-10-exports/
- sudosysgen 4y ago
  Russia isn't really allowed to export anything that's not a commodity even if they wanted it. Non-commodity exports are made possible by favourable position with regard to the international legal system (ie, financial systems, intellectual property frameworks, etc...). Russia will never be allowed into such a category as long as the US has a word to say, which is, in the foreseeable future. Can you imagine a world where the US agrees to have core technologies under ownership of Russia? How about Europe? If not these two markets, why would, say, a random African country decide to honour Russian intellectual property rights?
  - Scoundreller 4y ago
    > Can you imagine a world where the US agrees to have core technologies under ownership of Russia? I mean, the west had no issue with depending on China for almost everything. I doubt USA had a ton of Huawei gear in its networks, but plenty of other countries sure have.
    - 4y ago

wewxjfq 4y ago

The US will show you how bad it is if a country focuses too much on the stock market to measure economic success. The performance reflects monetary policy more than anything. In the end stocks going up doesn't mean people are getting richer. As your first article points out: The "stagnant" stocks pay dividends. That's how it's supposed to work. How is a system healthy and sustainable if you expect share prices to double every 5 years? Tesla's valuation has nothing to do with reality anymore, it's a wet dream.

mjfl 4y ago
returns being purely in dividends is not 'how it's supposed to work' that means there is 0 growth in your economy and you're probably in decline due to the accumulation of entropy in these cash returning companies.

samjmck 4y ago

Economic growth doesn't have to mean stock market growth. I don't think the stock market is the best measure for how a country is doing economically

Rexxar 4y ago

For information indices like cac40 are price of stock without dividends reinvested. If you want something that represent the gain of an investor you have to look at "cac 40 gross tr". The difference between the standard index and the reinvested index is less visible in USA because a lot of companies chose to buy stock instead of paying dividends. So using the mains indices like you do to compare economic growth or investor gains is meaningless.