Economic Analysis

Aah, Brave New World

Thoughts from the Frontline

October 7, 2005

Last week we looked at how technology has the potential to slow and possibly reverse aging within the next two decades. Marvelous cures for the main reasons of death like cancer, heart disease, dementia and Alzheimer's, not to mention the potential to manage weight, are in our future. Amazing innovations in communications are rapidly coming at us, as is an increased ability to process information. Hunger and malnutrition are in our sites, as we increase the ability to find harvests which...

Waiting For Average

Outside the Box

October 3, 2005

This week's letter is from my good friend Ed Easterling of Crestmont Research in Dallas. Ed helped co-author a couple of Chapters in my book "Bull's Eye Investing" and that inspired him to write his own book. Ed's must read book, in my opinion, is called "Unexpected Returns: Understanding Secular Stock Market Cycles."

In this article Ed lays out why boomers will not see the average market returns of the past in their future. The "Buy and Hold" crowd will point to Ibbotson...

Solving an Old Age Problem

Thoughts from the Frontline

September 30, 2005

What will the world look like in 10-20-30 years? What might future technological advances allow us to do? What will medicine look like? Can we solve the age old problems of food shortages and disease? How will we solve the problems of environmental clean-up? Where will we get our energy? How will we communicate? Travel? Research? Invest?

And speaking of investing, which is the usual subject of my weekly missive, is there an investment theme in all of this? Is there a way we can better...

Where Should We Put The Greenspan Put?

Outside the Box

September 26, 2005

This week we take a look again at my good friend Peter Bernstein, the venerable editor of Economics and Portfolio Strategy. Peter is the dean of economic writers. (Actually, he is more like the Pope of economic writers, except of course, that he is Jewish.) The first and long time editor of the prestigious Journal of Portfolio Management (now serving as a consulting editor), Peter has been observing the investment world for almost 60 years, after serving as a captain in the Air...

The Singularity Is Near

Thoughts from the Frontline

September 23, 2005

This week, after a few brief thoughts on central bank buying of the dollar, and a very interesting observation about dopamine addiction in the US from Jim Williams (this you absolutely must read!), we will start what will be a 2-3 week foray into the future. I am going to use Ray Kurzweil's new book "The Singularity is Near " as the launching point for our discussion. We are going to peer over the next few valleys and look into where technology is taking us over the next 20-30 years....

Hurricane Katrina

Outside the Box

September 19, 2005

This week's letter is from Paul Kasriel of The Northern Trust Company. Kasriel is Senior Vice President and Director of Economic Research, responsible for producing the Corporation's economic and interest rate forecasts. He advises the Bank's Assets-Liabilities Committee as well as the Corporation's Investment Policy Committee.

Paul looks at the effect Hurricane Katrina will have on the supply side and the effect the Fed is having on the demand side by raising rates. He thinks...

A Few Good Money Managers

Thoughts from the Frontline

September 16, 2005

This week I let you peek over my shoulder while I try to find some new money managers. Like the old army ad, I am looking for a few good men and women who have figured out some part of the investment world. How does one go about the task of finding and sorting? How can we figure out who deserves to get our money and who we should set aside? It's not as easy as you would think.

But first, a follow-up to my letters of the past few weeks. I think it is looking less and less like the Fed...

Pyrrhic Victory

Outside the Box

September 12, 2005

Readers know that Paul McCulley of Pimco, and his cohort Bill Gross, are two of my must read economic analysts. Pimco is in Newport Beach, California, and oversee more than $400 Billion in assets, predominately in fixed income.

This is Paul McCulley's August 2005 Fed Focus letter. Several weeks ago I talked about Greenspan's remarks that the Fed was targeting asset prices. There is nothing more he would like to see than the ten-year bond yield rise, but to this point it has been...

A Critical Juncture

Thoughts from the Frontline

September 9, 2005

This week we once again look at Fed policy, the economy and some very interesting statistics and commentary from some very thoughtful commentators. We are coming to a critical juncture. Future Fed policy making decisions are rather murky at this point, and we examine why, and why it is important to you.

Also, last week, in response to some ad hoc comments in my weekly letter about why it took so long to get soldiers into New Orleans, I received a thoughtful, articulate response from...

The Endogenous Oil Shock

Outside the Box

September 5, 2005

One of my favorite economists, Stephen Roach, of Morgan Stanley gives us an insight into what the latest economic shock may mean for the economy. Economic shocks often lead to a fairly predictable slowdown and recovery, but Roach argues that the Fed induced asset bubbles of the last few years may cause this current shock to prick "America's asset economy."

I hope Roach is wrong and that the imbalances in the economy work themselves out slowly rather than popping a bubble, but this...