David Woo
| David Woo | |
|---|---|
| Alma mater | Columbia University Tufts University |
| Occupation | Head of Global Rates & Currencies Research at the Bank of America[1] |
| Years active | July 2010 – Present |
David Woo is the Head of Global Rates & Currencies Research at Bank of America Merrill Lynch, where he researches world business markets.[2] Woo has analyzed several areas of economics, including currency wars,[3][4] Bitcoin,[5][6] the renminbi,[7] the Federal Reserve System,[8] the future of the Euro,[9] the relationship between weather and the USD,[10] the American economic renaissance,[11] and the Fed rate hiking cycle.[12]
Contents
Bitcoin
David Woo has analyzed Bitcoin, stating that it "can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers", an opinion that Joe Weisenthal said "represents a top-fligh kappat mind at a major financial institution assessing it in a serious way, and coming to the conclusion that it could be the real deal."[5] Woo further stated that "As a medium of exchange, Bitcoin has clear potential for growth".[6] However, Woo put the upper bound of Bitcoin’s fair value at $1300,[13] stating that "Bitcoin is highly volatile, the result of speculation activities, and that's hindering its general acceptance as a form of payment."[13]
Economy of China
Work on Chinese equities has also been a major project of Woo's.[14] Woo has stated that "China’s rally has become so big" and "called it the world’s largest bubble since dot-com boom of the late 1990s".[14] However, he stated that "Chinese shares may drop as much as 30 percent", thus creating a "knock on effect on the whole world economy".[14] Woo also predicted a devaluation of the renminbi, holding that “China cannot allow for looser capital flows while maintaining its monetary policy targets, which include limiting the yuan’s moves against the US dollar.”[7] Woo maintains that "All roads lead to more currency devaluation from China... because the authorities' desire to have the yuan included in the IMF's basket of reserve currencies has and will continue to play a role in dictating monetary policy and foreign exchange management in the world's second-largest economy."[8] Moreover, David Woo has called the Shenzhen Stock Exchange as "the world’s largest stock market bubble since the dot-com boom of the 1990s."[15]
Economy of Europe
The future of the Euro is a field, which Woo has studied.[9] In a cost-benefit analysis of whether individual members of the Eurozone should stay with the euro, David Woo and Athanasios Vamvakidis concluded that “Italy and Ireland emerge as the countries with the greatest incentive to exit.” They argued that a much weaker euro was necessary to reduce the incentive of any country to exit.[16]
Economy of the United States
David Woo has hypothesized that "that rising U.S. crude and natural gas production will likely lift the American greenback against major currencies."[11] Woo has argued that "Rising energy production is helping the U.S. dollar in three ways":[11]
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- 1) Shrinking current account deficit, at 2.8% of GDP – the lowest since the 1990s.[11]
- 2) Energy production is boosting GDP growth. Mr Woo. estimates oil and gas extraction added around 0.3 percentage points to GDP growth last year.[11]
- 3) Reduce negative correlation between the American dollar and oil prices, easing inflation and making U.S. assets more attractive.[11]
Woo has also developed a "winter-weather index, based on state-level data going back to 1960" that allows him to predict the weakness of different global currencies, including that of the United States.[10] He also cautioned that "The U.S. today is only 15 percent of global GDP" and as a result, he has "stressed that monetary policymakers needed to keep a more international perspective."[12]
References
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