Economic Analysis
Can Two Senators End “Too Big To Fail’?
Outside the Box
May 20, 2013
I am often on a panel or at dinner with Barry Ritholtz (The Big Picture), and he will remark, "I am going to have to rethink my position – I agree with John, and that can't be right." While I don't share that bias, I do agree with Barry about his recent take on legislation – which might actually pass – that would deal with too-big-to-fail banks in the US. Barry's latest take on that issue is this week's Outside the Box.
I have not written all that much on the topic lately, other than to say...
All Japan, All the Time
Thoughts from the Frontline
May 18, 2013
The evils of this deluge of paper money are not to be removed until our citizens are generally and radically instructed in their cause and consequences, and silence by their authority the interested clamors and sophistry of speculating, shaving, and banking institutions. Till then we must be content to return, quo ad hoc, to the savage state, to recur to barter in the exchange of our property, for want of a stable, common measure of value, that now in use being less fixed than the beads and...
Geopolitical Journey: Europe, the Glorious and the Banal
Outside the Box
May 14, 2013
Standing at the edge of the old world and the beginning of the new one, at the tip of Portugal, Stratfor's George Friedman is moved by the exploits of 15th-century European explorers and dismayed by the present fear pervading the Continent that "any decisive action will tear the place apart."
Europeans wreaked much havoc as they spread throughout the world, but they also "left as [their] legacy something extraordinary: a world that knew itself and all of its parts." But now, George asks,...
Skills, Education, and Employment
Thoughts from the Frontline
May 11, 2013
"The large shortfall of employment relative to its maximum level has imposed huge burdens on all too many American households and represents a substantial social cost. In addition, prolonged economic weakness could harm the economy's productive potential for years to come. The long-term unemployed can see their skills erode, making these workers less attractive to employers. If these jobless workers were to become less employable, the natural rate of unemployment might rise or, to the extent...
Is Abenomics Going to Put Japan Back on the Map?
Outside the Box
May 8, 2013
In a special Outside the Box today, Keith Fitz-Gerald, Chief Investment Strategist for Money Morning, dissects "Abenomics," the radical, not to say outlandish, fiscal moves that the newly installed government of Japan is making. And Keith has a ringside seat: he spends much of each year in Japan.
In an attempt to cut the Japanese a little slack, Keith comes up with four things that will have to happen for Abenomics to work – but when all is said and done, he says, Abenomics is a recipe for...
The QE Sandpile
Thoughts from the Frontline
May 3, 2013
Sell in May and go away? What about "risk off?" And ever more QE? Today's letter is a quick note and a reprise of a popular letter from yesteryear (with a bit of new slant), as I am at my conference in Carlsbad.
But first, I thought I would shoot you a few quick, interesting notes that crossed my desk in the last week. It is almost a ritual for me to mention at this time of year the old investment saw, "Sell in May and go away." It has been surprisingly good advice in most years. My good...
Debt, Growth, and the Austerity Debate
Outside the Box
April 30, 2013
Two weeks ago I wrote about the current debate over the 2010 paper by Ken Rogoff and Carmen Reinhart (hereinafter referred to as RR) on the correlation between debt and GDP growth. I said that the most important part of their work, which is the construction of an enormous database on debt and financial crises over the last few hundred years, was to be found in their book This Time Is Different and elsewhere. And their fundamental conclusion: debt is not a problem until it becomes one. And...
The Cashless Society
Thoughts from the Frontline
April 27, 2013
But Mousie, thou art [not alone],
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!
Robert Burns, To a Mouse, on Turning Her Up in Her Nest with the Plough
It is a common trope in science fiction novels. Economic transactions are handled seamlessly with a wave of a card or a physically imbedded chip, and whatever the author imagines money to be is transferred, far removed from the archaic...
Hoisington Investment Management-Quarterly Review and Outlook, First Quarter 2013
Outside the Box
April 23, 2013
Lacy Hunt and Van Hoisington launch into their first-quarter "Review and Outlook," this week's Outside the Box, with a statement that some may find eye-opening: "The Federal Reserve (Fed) is not, and has not been, 'printing money'…" But given the facts of life about how money is really created (and destroyed), they are of course right: it's all about the acceleration – or deceleration – in the M2 money supply.
But there are deeper currents here. For, as Van and Lacy say, "A review of...
Bulls Hit
Things That Make You Go Hmmm...
April 22, 2013
I am a seller of gold.
Just not yet — and certainly not anywhere close to this price.
One day, long into the future, it will be time to sell gold — or, more likely, to exchange it for something you want more; but it just ain't time yet, folks — no matter what you've been reading.
However, the past week has seen some truly amazing action in the gold (and silver) market, the kind of action that marks a shift in the status quo on a level so profound that it's hard to understand it at the...