Redefining Irony: Goldman Unclear on Effectiveness of Capitalism
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I have to say this very short and to the point article made my morning.
Goldman wrote: “We are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism.”
It’s not the greatest analysis (and if there is more they haven’t presented it here) since it’s comparing corporate margins with global demand not which components or industries are contributing to high margins compared to whose demand is and isn’t growing. Margins can also be growing as activities become more cost-efficient and have very little to do with demand growth. But this was fun to see nonetheless.
