Economic Analysis

Hoisington Management Quarterly Review and Outlook, 3Q 2016

Outside the Box

October 26, 2016

By now, you are probably aware that the US budget deficit jumped to $590 billion for fiscal 2016. What you might not be aware of is that US government debt rose by $1.4 trillion last fiscal year. That difference between the deficit and debt increases is an enormous number, and I bet you’re just as curious as I was to know what in the heck we spent that additional $800 billion on.

In this week’s Outside the Box, my friends Dr. Lacy Hunt and Van Hoisington actually tell us the answer to that...

How to Rebuild Healthcare Right

Thoughts from the Frontline

October 23, 2016

“I reject the insurance model. I think we should have a free-market approach to healthcare.”
– Gary Johnson

“The goal of real healthcare reform must be universal coverage in a cost-effective way.”
– Bernie Sanders

“The fault, dear Brutus, is not in our stars, but in ourselves….”
Julius Caesar (I.ii.140–141)

“The numbers [referring to the growth in the aging population and its relationship to Alzheimer’s] point to a disaster that will be the real zombie apocalypse. Western societies simply...

Restoring America’s Economic Mobility

Outside the Box

October 19, 2016

I can remember writing in the ’90s and early 2000s that one of the great things about the United States was our economic mobility. By that term, economists mean the ability of people to shift around on the economic spectrum – to move from being a low-income family to being a high-income family, for example. Karl Marx, in the 1850s, even cited the US as an exception to his struggle-of-the-classes theory, because the economic classes in the US kept changing so much.

The last few years have seen...

Taking a Wrench to Healthcare

Thoughts from the Frontline

October 17, 2016

“The US has the most dysfunctional healthcare system in the world.”

– Elizabeth Holmes

“Healthcare is the cornerstone of the socialist state.”

– Monica Crowley

“You’ve got this crazy system where all of a sudden, 25 million more people have health care and then the people that are out there busting it – sometimes 60 hours a week – wind up with their premiums doubled and their coverage cut in half.”

– Former President Bill Clinton last week in Flint, Michigan

Cassius: “The fault, dear...

The Good Ole Days Aren’t Coming Back


October 13, 2016

Desperate Central Bankers

Outside the Box

October 12, 2016

I have been pounding the table over the mistakes made by central banks all around the world for some time now. When I started I was almost alone because markets were still going up and are no there were obvious market overvaluations. My argument back during QE3 was that over time an uber-dovish monetary policy would lead to excesses. We have now come to that point and I am no longer alone in my criticism. There is a growing concern from many corners of the globe that monetary policy, far from...

Federal Repression System

Thoughts from the Frontline

October 9, 2016

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

– Winston Churchill

And from “To a Mouse, on Turning Her Up in Her Nest with the Plough”:

Scottish version:

But Mousie, thou art no thy-lane,
In proving foresight may be vain:
The best-laid schemes o' Mice an' Men
Gang aft agley,
An' lea'e us nought but grief an' pain,
For promis'd joy!

English translation:

But little Mouse, you are not alone,
In proving foresight may be vain:
The best laid schemes of Mice and...

The Overlords of Finance

Outside the Box

October 6, 2016

We keep having to find inventive new ways to describe the ever more extreme antics of our central bankers. In today’s OTB, good friend Danielle DiMartino Booth draws an interesting historical parallel in a valiant attempt to place post-Great Recession central bank activity in a comprehensible context.

She takes us back to the 20th-century era of World Wars and draws upon the thinking of Liaquat Ahamed, whose seminal work The Lords of Finance is said to have been inspired by that unforgettable...

Start Moving Some Dirt

Thoughts from the Frontline

October 2, 2016

“Economic stimulants produce Bridges to Nowhere. Strategic investment in infrastructure produces a foundation for long-term growth.”
– Roger McNamee

“Our American ancestors prioritized growth and investment in our nation’s infrastructure.”
– Cory Booker

“There are two Americas – separate, unequal, and no longer even acknowledging each other except on the barest cultural terms.”
– David Simon

The Islamic Hatred of Modernity

Outside the Box

September 28, 2016

I have for you a very interesting and unusual piece for this week’s Outside the Box. It is not that I do not regularly send things by authors who see the world differently from me, but I rarely delve into the political and geopolitical world.

My friend Dr. Woody Brock is one of the most brilliant game theory specialists that I know. He studied with the most accomplished game theoreticians in academia, and he regularly applies game theory to economics and investing.

It is no understatement to...