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Reading the right books?
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"The moment of critical mass, the threshold, the boiling point"
The tipping point is the critical point in an evolving situation that leads to a new and irreversible development. The term is said to have originated in the field of epidemiology when an infectious disease reaches a point beyond any local ability to control it from spreading more widely. A tipping point is often considered to be a turning point. The term is now used in many fields. Journalists apply it to social phenomena, demographic data, and almost any change that is likely to lead to additional consequences. Marketers see it as a threshold that, once reached, will result in additional sales. In some usage, a tipping point is simply an addition or increment that in itself might not seem extraordinary but that unexpectedly is just the amount of additional change that will lead to a big effect. In the butterfly effect of chaos theory , for example, the small flap of the butterfly's wings that in time leads to unexpected and unpredictable results could be considered a tipping point. However, more often, the effects of reaching a tipping point are more immediately evident. A tipping point may simply occur because a critical mass has been reached.
The Tipping Point: How Little Things Can Make a Big Difference is a book by Malcolm Gladwell, first published by Little Brown in 2000. Gladwell defines a tipping point as "the moment of critical mass, the threshold, the boiling point." The book seeks to explain and describe the "mysterious" sociological changes that mark everyday life. As Gladwell states, "Ideas and products and messages and behaviors spread like viruses do."
Gladwell describes the "three rules of epidemics" (or the three "agents of change") in the tipping points of epidemics.
PROCESS OF ABSTRACTION
SOVEREIGN DEBT & CREDIT CRISIS
FOOD PRICE PRESSURES
RICE: Abdolreza Abbassian, at the FAO in Rome, says the price of rice, one of the two most critical staples for global food security, remains below the peaks of 2007-08, providing breathing space for 3bn people in poor countries. Rice prices hit $1,050 a tonne in May 2008, but now trade at about $550 a tonne.
WHEAT: The cost of wheat, the other staple critical for global food security, is rising, but has not yet surpassed the highs of 2007-08. US wheat prices peaked at about $450 a tonne in early 2008. They are now trading just under $300 a tonne.
The surge in the FAO food index is principally on the back of rising costs for corn, sugar, vegetable oil and meat, which are less important than rice and wheat for food-insecure countries such as Ethiopia, Bangladesh and Haiti. At the same time, local prices in poor countries have been subdued by good harvests in Africa and Asia.
US STOCK MARKET VALUATIONS
SHRINKING REVENUE GROWTH RATES
PIMCO'S NEW NORMAL: According to PIMCO, the coiners of the term, the new normal is also explained as an environment wherein “the snapshot for ‘consensus expectations’ has shifted: from traditional bell-shaped curves – with a high likelihood mean and thin tails (indicating most economists have similar expectations) – to a much flatter distribution of outcomes with fatter tails (where opinion is divided and expectations vary considerably).” That is to say, the distribution of forecasts has become more uniform (as per Exhibit 1).
A billion here, a billion there, and pretty soon you're talking real money.
--Attributed to the late Sen. Everett Dirksen
With the kinds of numbers we are seeing nowadays, I reckon the good ole Republican Senator from Illinois might have been known for a slightly different quip if he had lived for another 40 years or so:
Not so funny anymore, however.
While the presumption may be that southern members of the eurozone are lazy, the evidence suggests otherwise, according to Societe Generale.
This chart shows the gaps in labor utilization and labor productivity eurozone members need to make up to catch up to U.S. GDP per capita. The labor utilization number measures hours worked, while the labor productivity rate measures what's produced.
According to this chart, Portugal and Greece are actually working more than enough (negative numbers) while Germany and France need to work more (positive numbers) to make up the GDP per capita gap with the U.S.
What this shows is that France and Germany work way more efficiently than Greece or Portugal, but don't actually work more hours. So it may not be laziness dragging Greece and Portugal down, but instead costs and other inefficiencies.