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    Thoughts From the Frontline, July 2012

    Gambling in the House?

    July 28, 2012

    Rick: How can you close me up? On what grounds?
    Captain Renault: I'm shocked, shocked to find that gambling is going on in here!
    – From the classic scene in Casablanca, made in 1942

    The latest scandal du jour seems to be about what is now called LIBORgate. But is it a scandal or is it really just business as usual? And if we don’t know which it is, what does that say about how we organize the financial world, in which $300-800 trillion, give or take, is based on LIBOR? This is...

    The Lion in the Grass

    July 21, 2012

    The Seen and the Unseen

    "In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

    "There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist...

    The Beginning of the Endgame

    July 14, 2012

    "Come, Watson, come! The game is afoot. Not a word! Into your clothes and come!"

    – Sherlock Holmes

    About this time two years ago I began to seriously work with Jonathan Tepper on our book Endgame: The End of the Debt Supercycle and How It Changed Everything. It came out the following March. I remember vividly that in November of that year, as crisis after crisis hit Europe, and the first of about 20 summit meetings which were supposed to solve the crisis was convened, that...

    Into the Matrix

    July 7, 2012

    (Bull's Eye Investing Ten Years Later, cont.)

    What does the current environment of earnings and valuations tell us about the prospects for the US stock markets in general over the next 3-5-7-10 years? This week we have part two of "Bull's Eye Investing Ten Years Later," which we started last week. These two letters have been co-authored with Ed Easterling of Crestmont Research. We take a look at research we did almost ten years ago as part of my book Bull's Eye Investing,...