Economic Analysis

Free Trade Wars

Thoughts from the Frontline

February 27, 2004

Free trade, jobs, fairness and the economy are all front and center in the coming political debate. As politicians respond to polls, we are going to hear a lot more about them in the coming months. Most of what you hear will be VPG - Verbalized Political Garbage. It will demonstrate that most politicians know very little about basic economics, or else do understand and simply wish to pander to voters in order to get elected.

Today we will wade into the core of this debate, hoping to give you...

Barbarians at the Fed

Thoughts from the Frontline

February 20, 2004

This week we are going to visit my Worry Closet, where things goes bump in the night. There are many writers who assure us that those sounds are imaginary and I should go back to sleep. But others suggest the sounds may emanate from some real substance, and that their corpus is growing in the dark. We will review the arguments while we take a quick peep into the closet.

The Bond Uncertainty Principle

Thoughts from the Frontline

February 13, 2004

One of today's trickiest investment questions revolves around interest rates and bond investing. We are in an economic environment in history like no other, so we have few direct parallels from which to draw wisdom. Should we keep our bond investments short-term and suffer pathetic yields, or move out the interest rate curve, getting more income but subjecting ourselves to the possible ravages of inflation should it rear its ugly head? Yet, even as there may be no direct historic repetitions,...

The Unemployment Quandary

Thoughts from the Frontline

February 6, 2004

This week we tackle some rather odd discrepancies in the employment numbers - are we adding jobs or losing them? Then is there a relationship between those numbers and the stock market? Are businesses getting ready to hire and spend money? All good questions, and I will try to shed some light on them as we see if we can fit some rather disparate pieces of the information puzzle together to form a picture that we can recognize.

The Super Trend Puzzle

Thoughts from the Frontline

January 30, 2004

I start this week's letter somewhere over Kansas on the way to Lake Louise outside of Calgary, Canada. I have been giving a great deal of thought to a speech I will do tomorrow and have decided to make the speech the subject of this week's letter. I have been given no particular topic other then to talk about something that I find of interest, but to keep it to 40 minutes and 20 minutes for questions.

How to be a Top 20% Investor

Thoughts from the Frontline

January 23, 2004

This week we re-visit one of my favorite themes: Why Investors Fail. I am doing the final edits on my book, Bull's Eye Investing, and when I came to the chapters on the psychological hard-wiring we have as humans, which causes us to make the same investment mistakes over and over, it just reminded me how important it is to understand why we do the things we do, and then stop doing them!

The Supercycle of Debt

Thoughts from the Frontline

January 16, 2004

Debt and the dollar, employment and interest rates, the US economy and world trade, money supply and inflation/deflation, taxes, deficits, commodity prices, politics, war, regulation plus a host of other variables. They are all related in a very complex and dynamic fashion. Changing one of them may change each of the others in often unpredictable ways, which in turn affect all the others. Today, we start a series trying to understand how they fit together and what the implications are for our...

Forecast 2004: The Silver Lining Economy

Thoughts from the Frontline

January 9, 2004

For the last 10 days, I have been reviewing over 500 pages of forecasts, predictions, and data from a wide variety of sources. Some have been extremely bullish and others make you want to just slit your wrists and get it over with. But even ignoring the extremes, which are almost always universally wrong, never in all my years have I seen such a wide range of opinion and disagreement accompanied by an increased hardening of those opinions. With a few notable exceptions, there are a lot of...

The Outlook for the Housing Market

Thoughts from the Frontline

January 2, 2004

This is always a fairly intensive research time of the year for me, as I begin to format my thoughts about the possible trends for the coming year. Next week, I will sit down on Thursday and Friday to write my annual forecast edition. It will be a shorter letter this week, as I husband my energy for next week's marathon.

But today we will preview one part of the puzzle that will be 2004: the housing market and its implication for interest rates.

Oil, Stock Prices and the Dollar

Thoughts from the Frontline

December 19, 2003

This week we see what oil has to do with the price of tea in China, what they both have to say about the US stock market and the implications for the ongoing recovery. Plus, we travel a little far afield, from Rotterdam to Saudi Arabia, Iran to Venezuela, and then end up in your back yard to see what you can do to shed some light in Myanmar. It will make for a very interesting e-letter.