Outside the Box, July 2016

Crisis Actors and a Reichstag Fire

July 27, 2016

This week your Outside the Box is from my friend Ben Hunt, who writes his letter under the title Epsilon Theory. This edition is a little darker than usual, and certainly more of a think piece. A central argument that Ben makes in Epsilon Theory is that it is Narrative that is the driver of politics, economics, and social interaction generally. The Narrative is what we all (mostly) believe and act upon. Investors generally believe that quantitative easing is going to result in a rising stock...

The Bond Market: Beware of Junkyard Dogs

July 20, 2016

It should come as no surprise that credit spreads are shrinking between what in theory are risk-free investments and other investments. Retirees and other investors are reaching farther and farther for yield, piling into all sorts of increasingly risky investments.

My friend Danielle DiMartino Booth, formerly at the Dallas Fed and now writing on her own at the eponymous website www.dimartinobooth.com, covers a wide range of topics that are affected by central-bank policies. Today she deals...

Hoisington Investment Management – Quarterly Review and Outlook, Second Quarter 2016

July 13, 2016

It has come to be a near truism that high levels of government debt and deficit spending suppress economic growth, but how exactly does that happen? In today’s Outside the Box, Dr. Lacy Hunt and Van Hoisington of Hoisington Investment Management give us a very detailed explanation of the dynamics involved.

On the deficit spending front, the authors state that the best evidence suggests that the US government expenditure multiplier is -0.01, which means that each additional dollar of deficit...

Bill Gross at His Best

July 6, 2016

I normally read Bill Gross’s monthly letter the day of or shortly after when it comes out. For whatever reason, I didn’t get around to his early June letter until a few days ago. It has been a few years since I have sent his letter out as your Outside the Box for the week, but I thought this one was so good that I needed to send it on. As it turns out, I went this morning to get it from his website and found that his July letter is out, and it is just as good. Since he writes relatively short...