Economic Analysis

The Coming Generational Storm

Thoughts from the Frontline

April 2, 2004

Today, we are going to look at a very important study by the always insightful James Montier on the Echo Bubble? Can we look at past bubbles and see a pattern? But first, we are going to look at a (frankly disturbing) new book, which I am going to encourage you to get and read.

"In 2030, as 77 million baby boomers hobble into old age, walkers will outnumber strollers; there will be twice as many retirees as there are today but only 18 percent more workers. How will America handle this...

China Syndromes

Thoughts from the Frontline

March 27, 2004

This week I have been struck by a wide variety of articles on China. Is it a boom getting ready to change the face of the global economic landscape, or is it a bubble looking for a pin? The answer may be a little bit of both, and as with everything Chinese, at least seen from our shores, can be confusing. Plus, we deal with the issue surrounding the revaluation of the renminbi.

The London Financial Times gives us this bold headline (in 72 point type): "The Chinese boom is bound to end in...

Peace in Our Time

Thoughts from the Frontline

March 19, 2004

This week's letter is going to be a little shorter than normal, for which some of you are probably grateful. We are moving our offices back into the Ballpark in Arlington overlooking right center field (see more below). With the normal list of things to do, plus packing plus moving decisions, time is just short.

We almost have to start with the events in Spain. There are economic implications that are less than subtle. When coupled with other stories from the US they reveal a deep-seated...

Is Someone Ringing A Bell?

Thoughts from the Frontline

March 12, 2004

This week we address the question of whether the stock market is forming a top, take further looks at Fed policy and the unemployment rate and see if there is a connection. I think there is. The relationship is less subtle than it might appear. At the end of the letter, I ask for some help from those in the media (or who have friends in the media) in arranging reviews (and interviews!) for my upcoming book. And in response to readers, I start the process of putting a gold information site and...

Those Magic Unemployment Numbers

Thoughts from the Frontline

March 5, 2004

That loud boom you heard Friday morning coming from the futures pits was the job report imploding the dollar and sending interest rates tumbling. The consensus estimate was for 125,000 new jobs and it came in at a meager 21,000. Most economists think that we need 150,000 new jobs created per month to actually gain ground with population growth.

This signals the potential for a weaker economy in the future, thus interest rates drop. A weaker economy also hurts the dollar, and thus the market...

Free Trade Wars

Thoughts from the Frontline

February 27, 2004

Free trade, jobs, fairness and the economy are all front and center in the coming political debate. As politicians respond to polls, we are going to hear a lot more about them in the coming months. Most of what you hear will be VPG - Verbalized Political Garbage. It will demonstrate that most politicians know very little about basic economics, or else do understand and simply wish to pander to voters in order to get elected.

Today we will wade into the core of this debate, hoping to give you...

Barbarians at the Fed

Thoughts from the Frontline

February 20, 2004

This week we are going to visit my Worry Closet, where things goes bump in the night. There are many writers who assure us that those sounds are imaginary and I should go back to sleep. But others suggest the sounds may emanate from some real substance, and that their corpus is growing in the dark. We will review the arguments while we take a quick peep into the closet.

The Bond Uncertainty Principle

Thoughts from the Frontline

February 13, 2004

One of today's trickiest investment questions revolves around interest rates and bond investing. We are in an economic environment in history like no other, so we have few direct parallels from which to draw wisdom. Should we keep our bond investments short-term and suffer pathetic yields, or move out the interest rate curve, getting more income but subjecting ourselves to the possible ravages of inflation should it rear its ugly head? Yet, even as there may be no direct historic repetitions,...

The Unemployment Quandary

Thoughts from the Frontline

February 6, 2004

This week we tackle some rather odd discrepancies in the employment numbers - are we adding jobs or losing them? Then is there a relationship between those numbers and the stock market? Are businesses getting ready to hire and spend money? All good questions, and I will try to shed some light on them as we see if we can fit some rather disparate pieces of the information puzzle together to form a picture that we can recognize.

The Super Trend Puzzle

Thoughts from the Frontline

January 30, 2004

I start this week's letter somewhere over Kansas on the way to Lake Louise outside of Calgary, Canada. I have been giving a great deal of thought to a speech I will do tomorrow and have decided to make the speech the subject of this week's letter. I have been given no particular topic other then to talk about something that I find of interest, but to keep it to 40 minutes and 20 minutes for questions.