The S&P500 is up by 26% for the year-to-date, despite the fact that employment growth is anemic, the labor participation rate is at its lowest point in thirty five years, and inflation-adjusted GDP growth is experiencing a long-term slowing (see chart below). GDP turns negative in recessions—this is the definition of a recession—but has historically recovered much faster than we have seen in the post 2008 years. Continue reading
Recently we found a fascinating lecture from Nobel prize winner Daniel Kahneman on the price — and nature — of happiness. His published work on the subject determined that $75,000 per year was the magic number. Below that we’re unhappy. There and up, relatively content.
The Financial Times has published a deep dive into the idea of creating national “happiness indexes”. A more touchy-fealy rival to Gross Domestic Product or other measures of national income.
The political value of understanding National satisfaction might be the chance to create policies that better serve what truly make us happy. Invest in road construction, for example, not just because it creates jobs, but also because we don’t like commuting and making it more pleasant would be a boon to quality of life and happiness. For investors, it might be trying to determine how happiness correlates to economic growth as they piece together a global asset allocation, or which industries or companies might benefit from a government push toward a national good mood. Continue reading