- 3 min
The economy, basically!
Every week brings a fresh batch of numbers and clarifications, inferences and analyses, as if the economy were constantly peering into the future. So does that mean the present is no longer interesting enough and we’ll have to constantly look to tomorrow and imagine what will happen afterwards? One US financial blogger actually said in one of his posts that we should stop consulting psychics and, instead, ask the economy to tell us what’s going to become of us.
This week the Organisation for Economic Co-operation and Development fine-tuned its forecasts and hailed the “collective” momentum underway in the euro area. It expects the area’s economy to expand 2.1% in 2017, compared with a forecast of just 1.8% even a few weeks ago. According to the OECD, the job market is now more dynamic and the July unemployment rate fell to 9.3%, the lowest for eight years. The figures are indeed heartening, but to fully understand the economy, look no further than an article by Philippe Escande on Norway’s sovereign wealth fund, published in the daily Le Monde. Escande’s piece puts the upheavals in the financial world into the context of this subterranean pool of wealth.
We learn the story of “the most profitable undertaking in the world. It’s not Apple, but a financial firm with a staff of 550 that’s now worth $1 trillion, equivalent to the GDP of Mexico. The fund is not, strictly speaking, a firm but a vehicle owned by the Norwegian central bank and “sometimes called ‘Norway’s pension fund’ or ‘sovereign wealth fund’”. The article underscores the power and influence of this extraordinary financial undertaking. “By itself, the fund owns 1.3% of all listed equities worldwide. […] This huge money pool is the main driver of the global economy”.
More than 9,000 companies on the planet are concerned by the fund’s investments, a fact that highlights its crucial role at heart of capitalism. The risk, however, is that the fund may shape the destinies of the highest-profile companies, and also that its assets might plummet in value should a crisis break out. The article concludes “This is the new face of global capitalism: powerful, influential and fragile at the same time”. Like the economy, basically. In its truths and innate tendencies, in its foundations and misgivings, the almost underground economy – which is totally legal and in some cases even ethical – is less visible than other schemes. But its movements are much more powerful.
Sources : Challenges, Harvard Business Review, Financial Times, Le Monde, Les Echos…
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