Economic Analysis

Promises, Promises, Pension Promises

Thoughts from the Frontline

July 24, 2016

You made me promises, promises
You knew you’d never keep
Promises, promises
Why do I believe?

Naked Eyes (1983)

The Bond Market: Beware of Junkyard Dogs

Outside the Box

July 20, 2016

It should come as no surprise that credit spreads are shrinking between what in theory are risk-free investments and other investments. Retirees and other investors are reaching farther and farther for yield, piling into all sorts of increasingly risky investments.

My friend Danielle DiMartino Booth, formerly at the Dallas Fed and now writing on her own at the eponymous website www.dimartinobooth.com, covers a wide range of topics that are affected by central-bank policies. Today she deals...

The Age of No Returns

Thoughts from the Frontline

July 16, 2016

“A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.”

– Robert Frost

“Money won’t create success. The freedom to make it will.”

– Nelson Mandela

Hoisington Investment Management – Quarterly Review and Outlook, Second Quarter 2016

Outside the Box

July 13, 2016

It has come to be a near truism that high levels of government debt and deficit spending suppress economic growth, but how exactly does that happen? In today’s Outside the Box, Dr. Lacy Hunt and Van Hoisington of Hoisington Investment Management give us a very detailed explanation of the dynamics involved.

On the deficit spending front, the authors state that the best evidence suggests that the US government expenditure multiplier is -0.01, which means that each additional dollar of deficit...

When the Future Becomes Today

Thoughts from the Frontline

July 10, 2016

“There are decades where nothing happens, and there are weeks where decades happen.”

– Vladimir Lenin

“However beautiful the strategy, you should occasionally look at the results.”

– Winston Churchill

Bill Gross at His Best

Outside the Box

July 6, 2016

I normally read Bill Gross’s monthly letter the day of or shortly after when it comes out. For whatever reason, I didn’t get around to his early June letter until a few days ago. It has been a few years since I have sent his letter out as your Outside the Box for the week, but I thought this one was so good that I needed to send it on. As it turns out, I went this morning to get it from his website and found that his July letter is out, and it is just as good. Since he writes relatively short...

Europe Is a Minefield

Thoughts from the Frontline

July 2, 2016

“Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”

– Donald Rumsfeld,...

Brexit Bombshell: EU Capitulates?

Outside the Box

June 28, 2016

This Is a Special Brexit Edition of Outside the Box.

As you may know, at Mauldin Economics we have a partnership with George Friedman of Geopolitical Futures. Today, I have two important Brexit stories George published over the weekend.

These two stories had an interesting origin. Last Saturday morning, I wrapped up Thoughts from the Frontline and then turned back to my packed e-mail inbox. There, I saw George’s latest Reality Check analysis, “The Surprise at Brexit and the Social Crisis...

Thinking the Unthinkable

Thoughts from the Frontline

June 25, 2016

If buttercups buzz’d after the bee
If boats were on land, churches on sea
If ponies rode men and if grass ate the cows
And cats should be chased into holes by the mouse
If the mamas sold their babies
To the Gypsies for half a crown
If summer were spring
And the other way ‘round
Then all the world would be upside down!

– 17th century English children’s song

“There are decades when nothing happens, and there are weeks when decades happen.”

– Vladimir Ilyich Ulyanov, alias Lenin

“For someone...

Update on Globalization

Outside the Box

June 22, 2016

Globalization is one of the dominant economic forces in the world today and given the politics of the world it is also one of the most controversial. Globalization has been one of the leading forces of overall global growth and is continuing to grow, albeit at a slower pace, yet the forces which would roll back or hinder globalization are increasing as well.

My friend Ian Bremmer, professor at New York University and founder of the Eurasia Group, is one of the foremost authorities on...