Economic Analysis

Forecasting with Friends

Thoughts from the Frontline

January 14, 2017

“The best way to predict the future is to create it.”

– Peter Drucker

“Do not dwell in the past, do not dream of the future. Concentrate the mind on the present moment.”

– Buddha

Howard Marks on Expert Opinion

Outside the Box

January 11, 2017

In a week when I have once more gone out on the old limb, in last weekend’s Thoughts from the Frontline, to bring you my forecast for the new year, and when I’m also sharing with readers of my Over My Shoulder service the tea-leaf skryings of some of the boldest and brightest among my fellow economic prognosticators, I’m feeling a need to use today’s Outside the Box to redress the balance a bit.

Thus, I have for you today a piece by legendary investor Howard Marks, co-chairman of Oaktree...

2017 Forecast: Skeptically Optimistic

Thoughts from the Frontline

January 8, 2017

“Quantity is being confused with abundance and wealth with happiness.”

– Tom Waits

“The shift from sailing ships to telegraph was far more radical than that from telephone to email.”

– Noam Chomsky

Two Views on the New Year from Across the Pond

Outside the Box

January 6, 2017

In today’s Outside the Box we’ll continue with our traditional New Year’s forecasting theme, but we’ll look to a couple of European voices – or I guess, especially considering the Brexit vote, I should just call them English voices.

Ambrose Evans-Pritchard, writing in the London Telegraph, see a rather less optimistic 2017 than the one I’m hoping for, but we have to acknowledge that he may be correct. His title pretty much says it all: “Trump, interest rates and Chinese panic: Why euphoria...

What Could Go Wrong?

Thoughts from the Frontline

December 31, 2016

“Experience is simply the name we give our mistakes.”
– Oscar Wilde

“Mistakes are the usual bridge between inexperience and wisdom.”
– Phyllis Theroux

“Economists are often asked to predict what the economy is going to do. But economic predictions require predicting what politicians are going to do – and nothing is more unpredictable.”
– Thomas Sowell

Dalio on Trump

Outside the Box

December 21, 2016

I have never had the pleasure of meeting Ray Dalio, although I have talked with many people who work with him, and I make it a point to read everything he writes that I can get my hand on. (His outfit, Bridgewater Associates, is notoriously guarded about letting their writings out. I know for a fact that many folks at Bridgewater read my letter – which is admittedly free and certainly doesn’t come with the gravitas of running $150 billion – but in the spirit of the Christmas season I wonder if...

As the Fed Turns

Thoughts from the Frontline

December 19, 2016

“Monetary policy has less room to maneuver when interest rates are close to zero.”

– Ben Bernanke

“Many Americans rely on interest income from their savings to help cover their cost of living.”

– John Delaney

Italy’s Day of Reckoning Is Coming

Outside the Box

December 14, 2016

Italy has a new government, and Matteo Renzi is not in charge of it. The former prime minister kept his word and resigned following his constitutional reform plan’s crushing defeat at the polls. Is all now well in that beautiful land?

Not exactly, though we did see a glimmer of hope this week. Unicredit, Italy’s largest bank, announced job cuts and asset sales that may buy it some time. This does not, however, mean the crisis is over. At best, it means the beginning of the crisis is over. We...

The Trump Rally Will Morph

Thoughts from the Frontline

December 11, 2016

“Price is what you pay. Value is what you get.”

– Warren Buffett

“There is no safe store of value.”

 – Alan Greenspan

“In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long-run, the market is a weighing machine.”

– Attributed to Benjamin Graham by Warren Buffett in a 1993 Berkshire Hathaway letter...

Putting the Boot into Italy

Outside the Box

December 7, 2016

When Charles Gave, paterfamilias of Gavekal, chooses to express displeasure over an economic trend, an asset class, or what have you, he does not exactly mince words. If you happen to be in the room when he does so, he can sound like the Voice of God Himself, declaring from on high. And with his longish flowing white hair, he actually looks like central casting setting over to play the part.

Today Charles is exercised about Italy. He first reminds us that when Italy adopted the euro in 1999,...