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    Thoughts From the Frontline, October 2010

    Be Careful What You Wish For

    October 29, 2010

    People only accept change when they are faced with necessity, and only recognize necessity when a crisis is upon them.

    - Jean Monnet, father of the European Union

    This week we turn our attention to the elections and their aftermath. Long-time readers know I am a Republican, but I offer some sobering advice to my friends on my side of the aisle: Be careful what you wish for. It’s one thing to get a few votes. It’s quite another to live up to promises that simply can’t be kept. We...

    The Subprime Debacle: Act 2, Part 2

    October 24, 2010

    At the end of last week's letter on the whole mortgage foreclosure mess, I wrote:

    "All those subprime and Alt-A mortgages written in the middle of the last decade? They were packaged and sold in securities. They have had huge losses. But those securities had representations and warranties about what was in them. And guess what, the investment banks may have stretched credibility about those warranties. There is the real probability that the investment banks that sold them are going to have to...

    The Subprime Debacle: Act 2

    October 15, 2010

    Trouble, oh we got trouble, Right here in River City!
    With a capital "T" That rhymes with "P"
    And that stands for Pool, That stands for pool.

    We've surely got trouble!
    Right here in River City,
    Right here! Gotta figger out a way
    To keep the young ones moral after school!
    Trouble, trouble, trouble, trouble, trouble...

    - From The Music Man

    (Quick last-minute note: I think this (and next week's) is/will be one of the more important letters I have written in the last ten years....

    The Ride of the Keynesian Cowboys

    October 8, 2010

    To ease or not to ease? That is the question we will take up this week. And if we do get another round of quantitative easing (QE2), will it make any difference? As I asked last week, what if they threw an inflation party and no one came? We will take as our launching pad today's unemployment numbers, which serve to demonstrate just why the Fed may in fact be ready for some monetary shock and awe.

    The Morality of Chinese Growth

    October 1, 2010

    This week I am at a conference in Houston. I must confess that I don't attend many of the sessions at most conferences where I speak. But today, the guys at Streettalk Advisors have such a great lineup that I am there for every session. But it's Friday and I need to write. The solution? This week you get a "best of" letter. The best ideas I've heard and the best charts I've seen at this conference. Then we close with two short but very thoughtful essays from Charles Gave and Arthur Kroeber of...