Economic Analysis

Hoisington Quarterly Review and Outlook—4Q2016

Outside the Box

February 8, 2017

Longtime readers of Outside the Box know that I am a fan of Dr. Lacy Hunt of Hoisington Investment Management. Lacy and his partner, Van Hoisington, produce a quarterly letter that is a must-read for me, as it reliably informs my thinking in a world drowning in conventional economics – economics that seem to continually miss the mark.

It almost goes without saying that Lacy will be speaking at our Strategic Investment Conference again this year, and he’s just one of a long (and...

Tax Reform: The Good, the Bad, and the Ugly—Part One

Thoughts from the Frontline

February 7, 2017

Vizzini: He didn’t fall?! Inconceivable!
Inigo Montoya: You keep using that word. I do not think it means what you think it means.

– From The Princess Bride

“A tariff is a scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer.”
– Ambrose Bierce

“Vast possibilities matured into realities before their very eyes. Nevertheless, they saw nothing but cramped economies struggling with ever-decreasing success for their daily bread.”
– Joseph Schumpeter...

More on Complexity Economics

Outside the Box

February 3, 2017

In last weekend’s Thoughts from the Frontline, I talked about how the economics profession in general and central bankers in particular have consistently failed with their economic projections, and I pointed to the need to deepen our understanding of complex systems behavior. I said that we need to marry complex systems theory and information theory in order to establish a new basis for analyzing the economy and creating economic policy.

I couldn’t have been happier, then, when the new issue...

Post-Real Economics

Thoughts from the Frontline

January 29, 2017

“Too large a proportion of recent ‘mathematical’ economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.” 
John Maynard Keynes

“Simplicity does not precede complexity, but follows it.”
– Alan Perlis

“Stop trying to change reality by attempting to eliminate complexity.”
– David Whyte...

What I Learned in Washington DC

Thoughts from the Frontline

January 22, 2017

I have been in Washington DC for the last three days. The ostensible reason was to participate in a board meeting of a public company, Ashford Inc. (AINC). We manage hotel REITs that own three hotels here in DC, and the group decided to move our board meeting up a few weeks and hold it in DC during the inauguration. That gave me the opportunity to set up a few meetings to try to gain some insight into what the first 100 days, the first six months, and the first year of the Trump administration...

Is NATO Obsolete?

Outside the Box

January 20, 2017

Inauguration is in the air here in Washington. While we all wonder what Donald Trump will say in his first speech as President, I find myself thinking of other inaugural addresses in light of today’s issues.

One that comes to mind is Thomas Jefferson’s 1801 speech. In stating that peaceful relations with other countries were one of our “essential principles,” Jefferson spoke that now-famous line, that the US seeks “peace, commerce, and honest friendship with all nations, entangling alliances...

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...