Economic Analysis
You Can’t Be Serious
Thoughts from the Frontline
March 27, 2013
I admit to being surprised by Cyprus. Oh, not the banking crisis or the sovereign debt crisis or the fact that its banks were eight times larger than the country itself or even the fact that the banks were bloated with Greek debt that had been written down. I wrote about all that a long time ago. What surprised me was that all the above was apparently a surprise to European leaders.
While there is much to not like about what European leaders have done since the onset of their crisis some...
Is The Government Lying To Us About Inflation? Yes!
Outside the Box
March 22, 2013
In today’s Outside the Box, Gary D. Halbert (my old and very dear friend and former business partner of many years) reminds us about a few significant facts concerning the Consumer Price Index (CPI) that mainstream economists and the media tend to ignore. The central question is whether the CPI is really indicative of the actual inflation rate. Not likely, says Gary, since the US Bureau of Labor Statistics (BLS), which compiles the CPI, has engaged in methodological shenanigans over the past...
Will the Real Unemployed Please Raise Your Hands?
Thoughts from the Frontline
March 20, 2013
This week’s letter will be a very short part of a book I am writing with Bill Dunkelberg (the Chief Economist of the National Federation of Independent Businesses) on the future of employment. It has taken longer to write than I initially anticipated, for a host of reasons, chief among which is that the future is not as obvious as I originally thought. Diving into the data has brought a few surprises. It doesn’t help that I have (probably to the frustration of Dunk, although he is way too...
It’s All Relative
Things That Make You Go Hmmm...
March 18, 2013
On March 14, 1879, in Ulm, a tiny town on the banks of the river Danube in the German state of Baden-Württemberg, a boy was born to a Jewish electrical engineer and his wife.
Hermann and Pauline Einstein had no idea that their first-born son would one day change the way humans look at the world around them.
Albert was an average student who, in 1895, sat the entrance exam for the Swiss Federal Polytechnic Institute in Zurich. Sadly, he failed to attain the required standard in several...
Would the Real Peter and Paul Please Stand Up?
Outside the Box
March 15, 2013
As I sit here in Cafayate, surrounded by sumptuous beauty and enjoying a slower pace, I find myself reflecting on the magnitude of the human economic endeavor and our search for a path to sustainable investing in a world where central bankers seem hell-bent on changing the very nature of the medium of exchange. All in the name of helping us, to be sure, with the most positive of intentions; but if you are a retired person living on your lifetime of accumulated savings, you might be wishing...
Argentina on Sale
Thoughts from the Frontline
March 13, 2013
When I was younger, so much younger than today,
I never needed anybody's help in any way.
But now these days are gone, I'm not so self assured,
Now I find I've changed my mind and opened up the doors.
– John Lennon, the Beatles
(From Cafayate, Argentina) There are some who worry whether the path that Argentina has taken to monetary ruin on multiple occasions (and that it seems intent on taking again) is one that the US may also find itself on. That worry has crossed my mind a few...
Out On A Limb: An Investor’s Guide to X-treme Monetary and Fiscal Conditions
Outside the Box
March 8, 2013
I landed in Buenos Aires early this morning and have a day layover before heading off to Cafayate; but it is time to send you this weekend’s Outside the Box, and what a wonderful, powerful piece it is. I read John Hussman’s latest on the way down and had to review it several times. There is just so much meat here. And more than his usual quota of those wonderful graphs he comes up with. Did you know there is a 94% correlation between the price of beer in Iceland and the S&P 500? This is a...
An Infinite Amount of Money
Thoughts from the Frontline
March 6, 2013
The three major blocs of the developed world are careening toward a debt-fueled denouement that will play out over years rather than in a single moment. And contrary to some opinion, there is no certain ending. There are multiple paths still available to Europe and especially the US, though admittedly none of them are bright and carefree. There are very few paths available to Japan, as they have skipped too far down the yellow brick road of debt. None of Japan’s remaining paths have good...
‘It’s Just Bluefish’
Things That Make You Go Hmmm...
March 4, 2013
Out of the water! Everyone out of the water!
Get out of the water! Tell everyone to get out!
Now! Out of the water!...
Oh my god... What the hell is that idiot doing?...
Out of the water! Now! Everyone!...
Martin! No!...
No! Don't go in! Stay out! Stay clear!
Get out! Get out!...
It's bluefish! It's a school of bluefish! Chief! It's bluefish!
It's just bluefish.
— Dialogue, Jaws 2
Fifty Trades of Grey
Outside the Box
March 1, 2013
I get so much broker research that I must admit I don’t usually read it or do so really fast. But the headline above caught my eye, and the piece turned out to be such a fun read, as well as truly thought-provoking and insightful, that I’ve made it today’s Outside the Box. The personalization of a “relationship” with the Fed gives us a decidedly delicious way to think about QE!
Michael Cembalest walks us through the changes in his attitude toward the Fed, from the heady days of early 2009,...