SLIDE 1
Economy & Fin. Mkts 2 Summary Intro Quote Econ Basics Role - - PDF document
Economy & Fin. Mkts 2 Summary Intro Quote Econ Basics Role - - PDF document
Economy & Fin. Mkts 2 Summary Intro Quote Econ Basics Role players Macro Indicators Forecasts Intro quote The economy is like raising children - everyone has an opinion but nobody is an expert 1 Econ Basics Econ
SLIDE 2
SLIDE 3
3
What makes you successful?
Country Ranking Land Area Ranking Economy 1970 2013 RSA 25 22 28 Germany 63 4 4 Production Factor Germany RSA
It is not what you own, but what you ….. know If you think education is expensive, try…. ignorance
Econ Basics
Econ Def Objectives/ Scorecard S factors/ Resources/ P factors Entrep/ Coordinator Human/ Labour Nat Resources Cap Goods (manmade) Ways to eke out S (Econ Systems) --> Objectives Traditions Mkt econ/ Priv. Sector/ Entrep/ Firms/ Capitalism Primary Sector Secondary Sector Tertiary Sector
Price -> Profit-> Prod
SLIDE 4
4
Econ Basics
Ways to eke out S (Econ Systems) --> Objectives Traditions Mkt econ/ Priv. Sector/ Entrep/ Firms/ Capitalism Primary Sector Secondary Sector Tertiary Sector Plan Econ/ Socialism/ Parastatals/ Gvt Same sectors Mixed – Comb Priv Sector & Gvt How do they compare – Europe vs. USA vs.
China?
Econ Systems -Advantages/ Disadvantages? Some calcs on RSA Sectors
Price -> Profit-> Prod
Role players
Simple closed economy Labour (HH) – sell labour to firm Firm (Entrepr) – sell g&s to labour Normal econ – add role players Gvt, Foreign Sector, FM
SLIDE 5
5
Macro Indicators
Example 2 Business Cycle
Macro Indicators – RSA Bus Cycle
SLIDE 6
6
Macro Indicators
Bus Cycle & Asset Allocation
Bus Cycle ->Asset Allocation
Phases of Econ Cycle
SLIDE 7
7
Bus Cycle ->Asset Allocation
Interest rates phases over the Econ phases
Bus Cycle ->Asset Allocation
Equities allocation over phases
SLIDE 8
8
Bus Cycle ->Asset Allocation
Cash allocation over phases
Bus Cycle ->Asset Allocation
Bonds allocation over phases
SLIDE 9
9
Bus Cycle ->Asset Allocation
All Assets allocation over all phases
Macro Indicators
Leading, Coincident, Lagging As FM drivers Assumptions! Ceteris paribus All known econ info in FM
(surprises move FM)
EMH
SLIDE 10
10
Macro Indicators
Interest rates Int rate central – determine asset mix for top-
down mnger
Inflation? R/$? Gold P? BoP CA deficit? Gvt bgt deficit? Oil P?
- Infl. Usually “last” link to int. rates
What is the link between int. rates &:
Macro Indicators
GDP – levels of econ activity
1970 - 1982 (12 yrs): +46% 1982 – 1994 (12 yrs): +12% 1994 – 2006 (12 yrs): +50%
SLIDE 11