Here's our summary of key economic events overnight that affect New Zealand with news markets seem to be ignoring current economic data releases, building higher risk settings.
First, oil prices have risen despite official fanfare that strategic oil reserves are being released. Secondly, 'risk-free' benchmark interest rates are rising despite US inflation coming in unchanged. And thirdly, the sudden twist in Aussie rate expectations has seen their currency appreciate significantly, up +2.5% from the start of the week, up almost +7% since the start of 2026.
But first in the US CPI inflation in February came in at the expected 2.4% rate, unchanged from January. But of course this survey was for a period that predates the current war impacts. Their core inflation rate rose slightly in February from January, to be 2.5% in February. In this data year-on-year petrol prices fell -5.6% to give these results, and we all know they have actually risen +22% in the past month. No doubt consumers there will be wonder why, if the US is a net energy exporter. But Trump's billionaire mates won't be turning down a grift.
US mortgage applications rose for a fourth consecutive week last week, up +3.2% from the prior week, driven largely by new home purchase activity, and in spite of rising interest rates. There may by FOMO operating here, fear of even higher rates locked in for the future.
Chinese new vehicle sales fell sharply in February from January. But that sort of seasonal shift isn't unusual. However, February sales were actually -15.5% lower than February 2025, and actually even lower than in February 2016. After a very strong run over the past three years, the Chinese car-making industry will be looking at the developing 2026 trends nervously. Beijing doesn't need this sector to repeat what went on in their residential housing sector.
In Europe, ECB boss Lagarde has been out emphasising that they will be redoubling their efforts to keep inflation under control with an active monetary policy in the face of oil price pressures, and "will take the necessary measures to control inflation".
In England, we should note that their central bank's prudential regulators have given on-line fintech Revolut a full banking license. This is expected to see them attack mainline banks in their most profitable sectors, lending, although Revolut will not be encumbered with branches or any broad requirements to provide full service offerings. Revolut has been a haven for crypto transactions.
And staying in Europe, we should note there is an election in three weeks in Hungary, and EU member state. Current polling shows Prime Minister Viktor Orbán is heading for defeat. The pressure is on Orbán, and he has called for Russian help to smear his opponents.
In Australia, there are more stories about panic buying of fuel, especially diesel, as farmers and fishers worry about availability to keep their operations going. They worry that food prices will be next.
And staying in Australia, Westpac among others are suddenly forecasting that the RBA will hike its cash rate target by +25 bps on March 17 to 4.1% and again in May to 4.35%. The sudden rise in inflation threats are behind the sharp change, with their central bank "feeling compelled to act".
The UST 10yr yield is now just on 4.21%, up +7 bps from yesterday. The key 2-10 yield curve is marginally steeper at +57 bps (+1 bp). Their 1-5 curve is much steeper +20 bps (+5 bps) and the 3 mth-10yr curve is now at just on +51 bps (+9 bps). The China 10 year bond rate is also unchanged at just on 1.81%. The Japanese 10 year bond yield is lower by -3 bps at 2.16%. The Australian 10 year bond yield starts today at 4.91%, up +6 bps from yesterday. But the NZ Government 10 year bond rate starts today unchanged at 4.60%.
On Wall Street, the S&P500 is lower in Wednesday trade, down -0.4% so far Overnight European markets were lower between Frankfurt's -1.6% and Paris's -0.2%. Yesterday Tokyo partially rose +1.4%. Hong Kong dipped -0.2% and Shanghai was up +0.2%. Singapore was little-changed, up +0.1%. The ASX200 rose +0.6%. But the NZX50 ended up a strong +1.5% and the best of the equity markets we follow.
The price of gold will start today down -US$58 from yesterday at US$5170/oz. Silver is down -US$4 at US$85.50/oz today.
American oil prices are up +US$3, at just under US$87.50/bbl, while the international Brent price is now just over US$91.50/bbl. The Straits of Hormuz remain essentially closed. But even if they reopened today, the status quo is unlikely to be restored. So the echo of this crisis may last a very long time. At least, that is what markets are pricing in.
The Kiwi dollar is down -40 bps against the USD from yesterday, now just over 59.1 USc. But against the Aussie we are down -50 bps at 82.7 AUc. We are up +20 bps against the yen. Against the euro we are unchanged at 51.1 euro cents. That all means our TWI-5 starts today down -30 bps at just under 62.7.
The bitcoin price starts today at US$70,706 and down -0.7% from this time yesterday. Volatility over the past 24 hours has been modest at just on +/- 1.6%.
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60 Comments
After a very strong run over the past three years, the Chinese car-making industry will be looking at the developing 2026 trends nervously. Beijing doesn't need this sector to repeat what went on in their residential housing sector.
Well, they've sort of treated it the same. Half a trillion dollars subsidizing an industry it turns out no one wants to lead.
Up next; the US spends the same or more on AI tech no one's worked out how to make a profit from.
We've worked out how to make a loss from it, though.
In Southland.
Mind you, they started with O R...
Re oil release - remember we go through 100 million barrels a day, so that's 4 day's worth. Whoopee. Of what distillates and from where? I note we're a signatory, but they ain't getting anything from us, and we ain't gonna get anything from South Korea...
We've worked out how to make a loss from it, though.
Oh well, I'm sure we'll make the money back somewhere else.
Right?
Fiat-levered exponential growth on a finite planet.
What could possibly go wrong?
Nvidias doing ok aren’t they?
I think some of those big US tech companies are stuck between a rock and hard place. If they don’t do AI their tech will be very outdated very quickly. So AI might be more about survival than profit. For now at least.
For example if google didn’t put the very handy AI result at the top of every search their search engine would die very quickly. But god knows how much that costs to do that for every single search, and I doubt it’s boosted their revenue, that’s probably heading down too as people go straight to ChatGPT etc.
They, like the majority of activities in specialised society, are parasitic.
On energy and resource flows. As we are witnessing; it ain't money on them thar tankers. It's energy.
Just as we can trace a landlord's parasitism to a tenant's income - and maybe that income is parasitic too; the tenant is a financial journalist, say - it can always be traced back to the energy/resource underwrite, staved-off by forward betting (the latter has been limit-pushed for decades; BNPL, in all its forms). AI has arrived at a time when the gap between total bets and dwindling underwrite, is widening. So they will have to compete but they're discretionary, not essential.
Yeah nah, it’s just that their tech is becoming outdated, just like owning a horse and cart business when the motor car was invented. You either adapt (and maybe make less profit) or die.
Why would we move to energy hungry AI if energy is everything and dwindling?
Blindness is strong in that one.
Because we are pre-programmed to GROW.
Just like them pesky bacteria in the petri-dish.
Economics is blind. Fact. Because if failed to - and then chose to continue to fail to - account for reality(ies). And those who are conditioned to see through its lens, I regard as I do those exiting steepled building of a Sunday...
We don't need to read the same stuff twenty times a day.
Apparently some still do
:)
So when do you think we should have stopped inventing/growing? Computers? Refrigerator? The motor car? Hand tools? Fire?
When should we have stopped growing? Probably about the time we realised it was unsustainable....1972. LTG.
In the big picture, fire.
Our first energy lever; it allowed us to divert digestion-energy which had been displaced by cooking. In essence, we started eating trees.
Go well
:)
Why would we move to energy hungry AI if energy is everything and dwindling?
Because people on the whole are lazy idiots that go for the new shiny thing that they are sold by a-holes with hidden agendas.
Most folk are optimism-biased, and subliminally status-driven (evolutionary mate-impressing, at core).
They will all be on some rung of the societal latter (the one which always appears with surplus energy; the more the surplus the more the rung-separation. Al crave being just one rung higher. Then, then, - because there is no 'enough' as J Paul Getty once so eloquently put it.
Growth has grown in lock-step with energy-use, and AI is no exception. But energy depletion will induce increasing triage (is already, I would argue) and AI is discretionary. As is much else.
Most folk are optimism-biased
I disagree. We're evolved to overlook all the good and instead seek out threats and wants.
And then when you have a society that's abundant and relatively safe, that wiring ends up creating problems. A population of scared hungry ghosts.
They're just not afraid of the same thing as you.
Nvidias doing ok aren’t they?
Well yeah, they're selling shovels in a gold rush.
The private credit gamblers piling into AI bets, that the banks won't touch.......
So then private credit fail....... as the AI bets fail......
No more bailouts, World Govts!! Let the gamblers burn!
Prime Minister Orban of Hungary solicits Russian help. Timely. This year being the 70th anniversary of previous Russian help.
Time Lord I've given an answer to your question in yesterdays stream. Bring your discussion over to this one if you want? I'm sure PDK and Jimbo will be interested.
Went back and read it - and thoroughly agree.
I get that the thought transition is hard, and for some uncomfortable; we're been conditioned all our lifetimes to consider money as a store of purchasing power (and we seem to ignore long-term inflation in that, even though we know). But at some point is wasn't going to continue. Made worse because we'd been telling ourselves a pretty story about those we were living at the expense of (taking the oil from under them, their resources of the use of their land).
It is also hard to acknowledge that one may have been backing a lame horse - there can be egos involved.
I'm bring the debate here TL;
"Yes the constant banging of PDKs limits to growth drum is near impossible to ignore.
But it doesn’t actually answer Jimbo’s question. He was asking about relative value and speculation in today’s economy. He’s comparing the price of gold to oil and big macs. Not how to survive total system collapse.
You’ve also avoided my question - if Jimbo had asked about term deposits would you have lectured him on the basics of survival and how you can’t eat a bank statement? Or would you accept it as a standard financial enquiry?"
Jimbo's question is more to the relative values of today's commodities. He's in effect comparing a barrel of oil (crude) to a Big Mac and/or gold. But that's about modern economics in a period of potential system collapse. If PDK is correct (different discussion) we are in the throes of a system collapse due to the near end of resources critical to the current economic and technological levels. Not just the mindless thrashing of an egotist at the head of the world's most powerful country. Those economics and relative values are simply demand based. I think people who want a Big Mac are simply hungry (yes I do understand that the Big Mac is used as analogy of relative values and costs of living) while those who want a barrel of oil are more about power and control. And the levels of demand will be in a state of constant change. It's the linkages that are more tenuous. I'd suggest the real answer to Jimb'os question lies in the politics behind those values as those in power seek to keep the masses at least a little happy, lest their power and control become threatened.
Sooooooo.... if Jimbo had asked about term deposits would you have lectured him on the basics of survival and how you can’t eat a bank statement? Or would you accept it as a standard financial enquiry?"
You're not getting it. Term deposits are a deflection. Politics today, has an impact on the value of anything and everything. I would go so far as to indicate that even inflation is driven by politics. Politics has shape the economic theories that drive today's economies. Human behaviour is affected by politics and that bleeds into how economic work, because economics is the science of how humans manipulate and use 'money' at all levels. So the values of different commodities, even Term Deposits will vary based on the politics of the day.
Worth pointing out that you’ve avoided answering that question 3 times now. Hilarious how you even mention deflection in your response.
And yes I understand your point that no asset has objective value because the rules can change at any time. Yes politics affects economics.
But you’re is using that broad truth to hide the fact that gold and term deposits are being treated with two completely different sets of responses:
- If someone enquires about gold you immediately go to survivalist basics, you can’t eat it argument.
- If someone enquires about term deposits you treat it as a standard financial enquiry.
I don't.
I see both as attempting to preserve purchasing-power - for stuff.
Although the latter involves a bet that there will be more something - to underwrite the 'return' (which of course, is the wrong word). I suggest that both are part of the current Ponzi; gold through speculative inflation, all money in all forms through the method of issuance.
I think you are one of the very few on this thread who actually get it, Time Lord.
As long as we choose to continue to measure "growth" in fiat monopoly tokens, we will measure nominal growth, not real growth.
When you add in the effect of the rampant financialisation of the key Western economies, their true output is actually shrinking in real terms, not expanding.
This is tantamount to goods, services, and the financial sector chicanery/lottery being thrown into a giant mixer, where "wealth" is redistributed, but where it merely gives the illusion of growth by using a faulty yardstick, in order that the fiat Ponzi can be politically brokered to the working classes.
Like it or not, we can expect gold, and increasingly silver as it is remonetised, to become increasingly important yardsticks for measuring wealth, the value of goods and services, and productivity.
This, in turn, is exposing the utterly farcical eCONomic mysticism that completely ignores how ~97% of the MS in the Western financial model is created as a debt-based instrument by a cartel of private banks.
The fiat system has seen the writing on the wall for some time, and various lunacy has been suggested as policy - and increasingly ever since the 2008 GFC, when there was yet another giant transfer of wealth from the real economy into the financial sector.
I commented on this subject almost exactly a year ago within a thread from my eCONomics sequel, which I had guest-written for a LatAm-based geopolitical website ...
https://sovereignista.com/2024/05/04/economics-part-vi-money-creation-a…
Quoted from this link...
"I was discussing this last night with Ellen Brown, and she reminded me of the trillion dollar coin theory that was kicked around back in 2013 as a novel way to ‘remedy’ the debt ceiling restraint.
https://ellenbrown.com/2013/01/18/the-trillion-dollar-coin-joke-or-game-changer/
"Minting Trillion dollar coins sounded like complete lunacy to most, but as Ellen pointed out, even this is still vastly preferable to allowing private banks to continue to thieve trillions from Mainstreet when we allow them to create 97% of the money supply out of thin air and charge interest on it.
I hear you guys loud and clear. I don’t see them revaluing upwards as it would immediately expose the pitiful purchasing power of the dollar and give the BRICS+ countries, that have been flat-out bullion stacking, a huge advantage.
I think these commentators grossly underestimate the huge amount of gold that has moved East. This fact alone IMO makes their proposal completely farcical or indeed flat out suicidal.
As you say, are TPTB deliberately trying to tank the entire fiat system in the vain hope that they can sneak IMF-centric, retail CBDCs alongside a Bretton Woods II replacement reserve currency system – also IMF-controlled, and based on the Keynesian SDR concept?
That is the wildcard, and quite frankly, the way the clueless ‘Janet has been Yelling’ complete idiocy lately, perhaps there is a grand takedown plan in the pipeline after all.
How else can we explain Yellen and Blinkey’s farcical recent demands during their recent trips to China?
Wild times
Col"
...end quote...
One year on, and thanks in no small part to Captain Chao$, the global financial system is in even more disarray.
If someone wants to hoard gold for their own personal beliefs that's fine.
But gold won't be a predominant form of trade for a number of reasons. Just as most FIATs fail, so do most asset backed currencies.
- value of gold is far more fluid than a Fiat. One day your bread is .1 gram of gold, tomorrow you could need .2 or half.
- there's no where near enough gold to cover the global economy
- it's counter productive to use as a form of money. I want something from Japan, I have to send my gold there.
value of gold is far more fluid than a Fiat.
Value of gold is based on supply and demand, and the only way to dilute the value of 100% pure 24ct gold is to physically dulite it with other metals. Fiat currency, as we saw in 2008 and 2020-2023, can and will be diluted at the stroke of a key given the known preference to do so in a crisis vs try and pay back the debt with real resources. Gold is a real resource, money is a concept.
Indeed. Hence the value is more fluid than something like a FIAT
We can say gold holds a relative value long term but it's short term fluctuations make it fairly hopeless for day to day commerce. So maybe ok to preserve wealth, but no good for an active economy.
So there's always going to be some sort of abstract form of money, especially in a world where most people need to use money (for most of human history, most people haven't needed money, at best they would trade physical items). Gold doesn't resolve this, and creates new problems.
It tends to become a bit of a red herring for how things are how they are. Far too many other variables involved.
Yet again, Pa1nter, you demonstrate that you have little understanding of the distinction between credit, which always carries a massive counterparty risk, and real money, which doesn't.
In the same way, you continually conflate the difference between transacting in physical gold or silver, and its use as a hard-backing for a currency - these are two totally different things. This is why this statement is nonsensical... "there's no where near enough gold to cover the global economy."
On a nation-state trial level, this system is already operational - it has been since June 2025, when China effectively backed the yuan with physically allocated gold for purchases of Saudi energy.
In effect, China has established an "oil for gold" agreement with Saudi Arabia, allowing Beijing to pay for Saudi oil in yuan. Under this arrangement, Riyadh can convert any trade surplus into gold through the Shanghai Gold Exchange (SGE).
Using this system, physical gold does not even need to be shifted, or for most transactions even to be used, other than as a hard backing where only the residual trade surpluses are balanced out.
This move is part of China's broader strategy to internationalise the yuan and reduce dependency on the US dollar in global trade. The agreement signifies a shift in how oil transactions may be conducted, and is already impacting the dominance of the dollar in international markets.
Remember too that with bilateral trade, goods-for-goods bartering, and many of these countries trading in their own currencies, this can vastly alter the make-up of these countries' individual reserve portfolios.
They also have the luxury of converting fiat currencies into both physical gold and silver, both of which are real money that involve no counterparty risk. They can hedge against the fiat currencies going up in smoke, in terms of their rapidly dwindling purchasing power. It appears that China is about to back its currency domestically with physical silver.
I shouldn't need to remind you that none of this is about gold or silver rising in value as market price discovery in the physical markets relentlessly takes over from the paper casino.
This is about the shocking revelation that very soon, fiat currencies will buy you next to nothing. Given that the average fiat monopoly token has already lost more than 98% of its purchasing power, there is not a lot left to lose.
The next few weeks will be interesting. Many countries have been very patient in holding off dumping their USTs in the hope of avoiding a global financial meltdown. I doubt that their patience will last much longer now that the Orange Oaf has taken it upon himself to implode the entire caboodle.
Watch for the shambles as holders of US-dollar-denominated treasuries make a last-minute dash for the exits.
In the same way, you continually conflate the difference between transacting in physical gold or silver
Well yeah, otherwise you're advocating some sort of asset backed currency, which is also very problematic - you still have counterparty risk, it's just in a different form.
You seem really good at finding problems in the status quo but very bad at seeing them in your proposed solutions.
This is about the shocking revelation that very soon, fiat currencies will buy you next to nothing
Ohh, hyperinflation u reckon? How soon is soon?
And how many people are capable of sorting a lifetimes worth of expenses in gold?
Thanks Colin, I always enjoy your insights. A few of us are certainly awake to these shifts and watching the signals. Wild times upon wild times upon wild times…
Appreciate the links, right up my alley!
CM is right re fiat - it's a Ponzi.
But so are most proxies, at this point.
The overshoot is - marked.
CM is right re fiat - it's a Ponzi.
We tend to use that term fairly willie nilly.
More of a pyramid scheme than a Ponzi.
Fair point
I haven't avoided answering it. I've given you an answer you can't see or accept because of your own paradigms. The value of anything is human concept, and can vary from person to person. That's where politics comes into the equation; from interpersonal politics to that at government level and everywhere in between. Jimbo talks about the cost of a Big Mac burger which is an oversimplification based on average incomes across the world. Does a Big Mac really cost the same in Moscow or Wellington as it does in Washington when the actual cost is converted to $US? I doubt it. A Big Mac would likely be worth more to a starving Ethiopian tribesman than a barrel of crude oil which he can't process into something that will feed him before he dies of starvation. The 'value' question is meaningless in the scheme of things.
Murray are you a politician? Let me replay back to you how your non-answer looks:
Question: If Jimbo had asked about term deposits would you have lectured him on the basics of survival? Or would you accept it as a standard financial enquiry? (Yes / No)
Your answer: The value of anything is human concept, and can vary from person to person. That's where politics comes into the equation; from interpersonal politics to that at government level and everywhere in between. Jimbo talks about the cost of a Big Mac burger which is an oversimplification based on average incomes across the world. Does a Big Mac really cost the same in Moscow or Wellington as it does in Washington when the actual cost is converted to $US? I doubt it. A Big Mac would likely be worth more to a starving Ethiopian tribesman than a barrel of crude oil which he can't process into something that will feed him before he dies of starvation. The 'value' question is meaningless in the scheme of things.
What Jimbo wrote;"
Even with the Straits of Hormuz closed, you can buy about 70% more crude with an ounce of gold than you could last year: https://www.longtermtrends.com/gold-to-oil-ratio/
For the people that say gold is the only real measure of value, how can this happen? Has oil decreased in value by 70% in one year? If so has demand reduced or supply increased?
Note that this has occurred not only for oil, but for almost everything. The number of Big Macs you can buy with an ounce of gold has doubled. Why has everything in the world suddenly reduced in value?
Or could it be that gold is actually a fixed supply speculative asset and hence a terrible measure of value? "
Where in my answers be it about Term Deposits or the value of a barrel of oil, have I not provided an answer? There is no firm answer. The value of your term deposit is between you and your bank and the value to you depends on your perception. That is the same as every other thing. There are some commonly agreed standards of values of commonly traded items but they vary too based on demand and other influences.
You have proven my point.
If Jimbo had asked about term deposits you wouldn’t have lectured him on the basics of survival, how you can’t eat or drink it. Or how someone with just enough food to feed their family might not be willing to sell it for a term deposit, no matter how much.
The original discussion morphed into a question about wealth, perhaps driven by PDK. But what is a measure of wealth. Is Elon wealthy as he nears having a net worth of $trillion, but the supermarkets have no food and he can't feed himself? Wealth and value have very similar meanings. Wealth is useless if you can't, or don't, use it to buy (trade) for what you really need.
The original discussion morphed into a question about wealth, perhaps driven by PDK. But what is a measure of wealth. Is Elon wealthy as he nears having a net worth of $trillion, but the supermarkets have no food and he can't feed himself? Wealth and value have very similar meanings. Wealth is useless if you can't, or don't, use it to buy (trade) for what you really need.
For the people that say gold is the only real measure of value, how can this happen?
Exactly.
The real problem we are facing is due to a globalised world with information parity (or near parity) where production just leaps from one emerging economy to the next.
Britain arguably came up with this industrialised economy.
Then they lost their place to the likes of France and Germany post war, who managed to reconstruct much of their infrastructure and industry, and with lower wages could out compete.
Then it moved to Asia, and the same thing occured. Even the likes of Thailand are struggling, because they were relatively peaceful in the region, and did most of their development in the 70s and 80s, now they're losing to Vietnam and others who developed later.
And in the vacuum, governments are trying to shore up the shortfall with monetary policy.
Did Kast get Russian help too? Or is there some other way to smear him?
"VALPARAISO/SANTIAGO, March 10 (Reuters) - Jose Antonio Kast was sworn in as Chile's president on Wednesday, ushering in the country’s sharpest shift to the right in decades as voters, alarmed by rising insecurity, backed a broader conservative turn sweeping parts of Latin America."
Knee jerkist swings to the right seem the order of the day for voters looking for answers as to why living standards are dropping. Of course the right don't have any answers apart from othering.
The right don't have a monopoly on othering:
"rich pricks"
"white cis men"
"the wrong sort of Maori"
etc
You’re right. Both ends are as bad as each other.
Bad as each other? I'd be interested in your evidence? The extreme left tend to cry in the corner, whereas the extreme right seem to start shooting people? Anyhow, I'm not really interested in the extremes, it's the character of those nearer a centre that's moved to the right over the decades. Orban, Fico, Trump, Putin, Melei, Meloni, Le Penn, Farage, Netanyahu? Are these people an answer, or problem?
Sure the ultra conservatives seem to have the upper hand at present but some one did shoot Trump and that other fella that did get murdered who I forget his name at the moment. So yeah, they both seem pretty pissed off with each other.
"In this data year-on-year petrol prices fell -5.6% to give these results, and we all know they have actually risen +22% in the past month. No doubt consumers there will be wonder why, if the US is a net energy exporter. But Trump's billionaire mates won't be turning down a grift."
A quick google and the mythology of the US net exporter meme becomes clearer. US production 13million barrels/day, US consumption 19million barrels/day. The US exports it's light oil produced by fracking, but needs to import heavy oil esp for diesel production.
Which will be a component for the Venezuelan adventure. Even so it is apparent that presently USA strategy in general ,is concocted rather than carefully conceived. Meanwhile the impact on oil supply and pricing from the adventure in the Gulf appears to have given Trump & Co a bit of a fright.
Indeed, but Venezuelan oil is apparently not the oil mine the Trump admin fantasises about.
"Venezuela’s oil production had an estimated break—even price between $42 and $56 a barrel in 2020, according to Rystad Energy, with the Orinoco region at $49.26 a barrel."
https://about.bnef.com/insights/commodities/venezuelas-oil-renaissance-….
Perfect time to start a war that hikes energy prices, then use this to justify expanding production into Venezuela. With the higher price, comes greater incentive for USA oil companies that they will get a ROI sooner. Naturally It's very costly to get rigs and wells up and running, but once they're there and operational they can dial up or down the extraction as needed based on supply and demand. Also consider break even costs may decrease with greater production levels.
Would you invest a couple of billion on a speculative payoff in 3-5 years, in a politically unstable country that currently depends on the whims of Donald Trump?
I think I'd sell my Woodside shares if they started sniffing around there.
"USA strategy in general ,is concocted rather than carefully conceived"
US policy is simple, find other peoples oil, point guns and bribe politicians, burn the oil.
"Bessembinder recently updated his findings across a global study of 64,000 stocks and found that this concentration has increased even further, with only 46 stocks now driving half of all wealth creation.
Staggeringly, 95.7% of the market barely matched the returns of Treasury bills—the safest, most 'boring' investment you can make."
https://www.stuff.co.nz/money/360949700/expert-studied-64000-stocks-onl…
Sign of the end of exponential economic growthism?
A lengthy Perplexity AI answer follows regarding the question has the profitability of individual stocks has systematically worsened over the last 50 years.
'No clear, long‑term decline in stock profitability shows up in the evidence; instead, what has changed is our ability to measure how extremely skewed stock returns have always been.
What the 64,000‑stock study actually shows
The article you linked summarises Bessembinder et al.’s global study of 64,000 stocks from 1990–2020. Key findings:
-
55.2% of US stocks and 57.4% of non‑US stocks underperformed one‑month US Treasury bills over their full lifetimes in that 1990–2020 window.
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Virtually all net wealth creation came from a tiny minority: the top 2.4% of firms generated all of the USD 75.7 trillion in net global stock‑market wealth over that period.
-
The median lifetime buy‑and‑hold return was negative in 21 of 43 markets, including several developed markets such as Australia and Germany.
Those results say “most individual stocks are poor long‑term bets; a few are spectacular,” but they do not show that this is a new phenomenon.
Evidence over longer horizons (50+ years)
Earlier work on US stocks back to 1926 finds essentially the same structure:
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In Bessembinder’s US‑only study, only about 4% of stocks over 1926–2016 were responsible for all the net wealth creation relative to Treasury bills.
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Over that 90‑year span, a strategy of buying one random stock and holding it for your whole lifetime beat Treasury bills only about 25% of the time, and beat the overall market only about 4% of the time.
The 1990–2020 global results are therefore a replication and extension of the older US pattern, not a deterioration from a previously broadly‑profitable era.
Has profitability per stock declined?
From these sources:
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We see persistent, strong positive skew in long‑term stock returns: means are high, medians are low, and most stocks underperform both bills and the value‑weighted market, across decades and across countries.
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The more recent global sample actually shows even stronger skewness outside the US than in earlier, US‑only data, but that’s cross‑sectional (US vs non‑US), not clearly time‑trend over 50 years.
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Neither the 64,000‑stock paper nor the earlier US work documents a secular down‑trend in the fraction of “good” stocks over successive decades; they characterize the distribution as a stable feature of how equity returns compound.
So, based on these studies, you can say:
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The fraction of genuinely wealth‑creating stocks has always been small, at least since the 1920s in the US and since 1990 globally.
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There is no strong published evidence in this research that the profitability of individual stocks has systematically worsened over the last 50 years; the pattern appears longstanding.
Practical implication
What has changed is that better global datasets and methods have made this concentration visible, which strengthens the argument for broad diversification or for being extremely selective (and realistic) if you try to pick individual winners.'
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