Economic Analysis

Evans-Pritchard, McWilliams, and Luntz on the Implications of Brexit

Outside the Box

June 15, 2016

In the wake of Orlando, I feel somewhat ambivalent about dragging us back to the world of economics. As I write this note, it is still unclear what the reaction of the country will be to the largest shooting massacre ever on US soil. Everywhere I turn, it seems that people are trying to spin this in one direction or another, always filtered through their own worldviews.

My friend David Kotok of Cumberland Advisors frequently offers common-sense commentary on a wide variety of topics, and he...

Hot Summer Economic Weirdness

Thoughts from the Frontline

June 11, 2016

“A lost election can have the jolt of a drop through the gallows door, leading to a dark night of the soul in which the future presses down like a cloud that will never lift.”
– James Wolcott

 “Recession is when a neighbor loses his job. Depression is when you lose yours.”
– Ronald Reagan

Large Bank Risk: Liquidity Not Capital Is the Issue

Outside the Box

June 8, 2016

Today’s Outside the Box is a little bit different – which, considering that most Outside the Box pieces can be classified as a little bit different, is not that unusual; but this one needs to come with a warning label that you may find it a tad wonkish. It’s from my friend Chris Whalen of the Kroll Bond Rating Agency. When I want to understand something about banks, Chris is one of my go-to guys.

In Chris’s latest memo he talks about the push to increase the capital levels of the eight largest...

Your Portfolio Design: Assume the Fetal Position

Thoughts from the Frontline

June 4, 2016

Somehow in the last few months I found myself going from merely concerned about developed-world markets to outright advocating defensive positions. I thought some of the presentations at my Strategic Investment Conference would cheer me up. They did not.

Maximizing Your Social Security Benefits

Outside the Box

June 1, 2016

I mentioned a few weeks ago in Thoughts from the Frontline the statistic I read that 47% of Americans have less than $400 in savings to meet emergencies. Many of those people are elderly. When I was at Rob Arnott’s Research Affiliates conference a few weeks ago, we heard two presentations on the state of the Social Security system, and looked at two approaches to fixing the system. One presentation was by my friend and Boston University professor Dr. Larry Kotlikoff, who has contributed today’s...

Life on the Edge, Continued

Thoughts from the Frontline

May 28, 2016

At the conclusion of my conference yesterday, I did a number of interviews and then made my way a few miles home, collapsed into my favorite chair, and thought back over the myriad of ideas, the whirlwind of friends, and the just general all-around fabulous time I had experienced over the past four days.

Report from Abu Dhabi ... and Dallas

Thoughts from the Frontline

May 21, 2016

This week’s letter is going to be a little bit different in that, due to the pressures of time, the worst jet lag I’ve ever experienced, and working on my speech for next week’s conference, I really have not been able to do the proper research for a letter. So what I will do is send you a slightly expanded version of a letter that I have already sent to those who will be attending next week’s Strategic Investment Conference in Dallas. It covers the agenda in detail and will give you an idea of...

At Last, Someone Apologizes for Deflation

Outside the Box

May 18, 2016

Much of the world is in the grip of deflation and negative interest rates, with all kinds of negative consequences. Yet no one takes responsibility. Who do we blame? How do we get them to change their ways?

I’m happy to report that someone is finally stepping up. The New York Times reported this morning that Akagi Nyugyo, a Japanese ice cream company, is airing a televised apology for raising its prices. Grim-faced executives and workers face the camera as a subtly humorous folk song plays and...

Life on the Edge

Thoughts from the Frontline

May 14, 2016

“Where justice is denied, where poverty is enforced, where ignorance prevails, and where any one class is made to feel that society is an organized conspiracy to oppress, rob and degrade them, neither persons nor property will be safe.”

– Frederick Douglass

“I am for doing good to the poor, but I differ in opinion about the means. I think the best way of doing good to the poor is not making them easy in poverty, but leading or driving them out of it.”

– Benjamin Franklin...

Central Banks and the Rise of Extremism

Outside the Box

May 11, 2016

Do you feel as if you’re the rope in a tug of war? That’s the closest analogy I can come up with to describe what’s going on inside my own head – and in the world. And at the last few conferences where I’ve spoken, talking with the participants afterwards, I’ve found that my feeling is widely shared. Our sense of direction, the sense of knowing where we’re going, is gone. To analogize some more, I told a friend last night that I feel as if we have slipped our anchor and are adrift on the ocean...