Economic Analysis

Wages vs. Jobs

Outside the Box

August 16, 2017

In Outside the Box today, my good friend Gary Shilling draws some crucial distinctions with respect to wage and jobs and explains why our perplexing US labor market is actually quite rational. Gary shares with me a fundamental optimism regarding our prospects for long-term economic growth, and in this report he tells us why.

This kind of in-depth dissection of macro trends is what Gary is known for. You can learn more about subscribing to his monthly Insight report and take advantage of a...

What I Learned at (Economics) Summer Camp

Thoughts from the Frontline

August 12, 2017

All over America, kids who were fortunate enough to go to summer camp are busy telling mom and dad what they did. Their stories will be suspiciously incomplete, but that’s OK. We know they learned something.

Amazon and Walmart Battle for Retail’s Future

Outside the Box

August 9, 2017

In true Outside the Box fashion, my good friend Neil Howe has reconsidered the escalating war between Amazon and Walmart for the future of retail, and in true Neil fashion he has come up with some surprising insights. One of the takeaways here, he says, is that market “duopolies” can save consumers money – so you and I had better hope the battle isn’t resolved anytime soon. Did you know that one in five US consumers is now an Amazon Prime member? But don’t count Walmart out, Neil warns.

Neil...

Hot Summer Mailbag

Thoughts from the Frontline

August 4, 2017

Perhaps the best part of being a writer is the chance to interact with readers. I can’t tell you how much I’ve learned from you over the years. Whether it’s through our online comment threads or emails or conversations in the hallway at a conference, nothing pleases me more than to share thoughts with you. The exchanges are always stimulating, even when we disagree. Believe it or not, I make a special point to read those who disagree with me if they come armed with cogent thoughts. And I will...

Camp Kotok, Here We Come!

Outside the Box

August 2, 2017

Tomorrow I head for the backwoods of Maine and Camp Kotok – always one of the high points of my year. Most of my readers know by now that Camp Kotok is the annual fishing trip cum economics gab-fest hosted by David Kotok of Cumberland Advisors. It’s an invitation-only event that has been compared to Jackson Hole and even Davos – except that here you get to catch your own lunch.

David hatched the idea after surviving the attack on the World Trade Center, where he was attending a conference on...

Happiness Is a Normal Yield Curve

Thoughts from the Frontline

July 29, 2017

“I never liked quantitative easing. Flattening the yield curve is not stimulative; flattening the yield curve is anti-stimulative.”

– Ken Fisher

“There is a limit to how much the United States Treasury can borrow.”

– Alan Greenspan

“In other words, we have the models we have because of inertia and theology, but also because all we can do is all we can do.”

– Kit Webster

“[T]he specific manner by which prices collapsed is not the most important problem: A crash occurs because the market...

Hoisington Quarterly Review and Outlook, Second Quarter 2017

Outside the Box

July 26, 2017

I have often written about the Fed’s abysmal track record in managing the economy. In today’s Outside the Box, Lacy Hunt and Van Hoisington of Hoisington Investment Management give us an in-depth tutorial on the reasons for the Fed’s consistently poor record.

They start by considering the Fed’s “dual mandate,” which sets “the goals of maximum employment, stable prices and moderate long-term interest rates.” (And yes, that is actually three goals, not two.) But a problem arises, the authors...

Three Black Swans

Thoughts from the Frontline

July 22, 2017

“The world in which we live has an increasing number of feedback loops, causing events to be the cause of more events (say, people buy a book because other people bought it), thus generating snowballs and arbitrary and unpredictable planet-wide winner-take-all effects.”

– Nassim Nicholas Taleb, The Black Swan

Trade War Games

Thoughts from the Frontline

July 19, 2017

“We’re already in a trade war with China. The problem is we’ve not been fighting back.”

– Peter Navarro

“The battle for Helm’s Deep is over. The battle for Middle Earth is about to begin.”

– Gandalf the White

“You Look Like I Need a Drink”: Comments Before the National Association of Chain Drug Stores

Outside the Box

July 12, 2017

Today’s Outside the Box is a rollicking address to the National Association of Chain Drug Stores, delivered by my friend Richard Fisher, former President & CEO of the Dallas Federal Reserve Bank. Richard is simply one of the most entertaining and informative thinkers I know. I cherish his thoughts and the all-too-brief times I get to be with him. He is the source of a thousand stories, and you always learn something new. In this speech he makes all the points I just made in last week’s letter –...