Thoughts From the Frontline, July 2005

India - The Next Big Player

July 29, 2005

Last week we looked at China, and this week we look at India, the next rising superpower in Asia. I have asked my friend (and fellow Texan) George Friedman of Stratfor to give us his insights on the political implications of what appears to be a closer US-India relationship. Stratfor has been described by folks like Barron's as being a private CIA. I find their daily letters plus his in-depth analysis to be as solid as anything I read. When George writes, I listen. George now thinks we...

Those Clever Chinese

July 22, 2005

Last week I said that for this week's letter we would look at the US trade deficit and China, and in particular the possible revaluation of the currency and its effect upon the trade deficit. China obliged by revaluing the yuan (Renminbi). This is both more, and less, than it seems. There is a lot to cover, so let's jump right in.

Let's first look at what China did. They allowed the yuan to rise by 2%, with a daily 0.3% trading band based on the price of the previous day. While in...

Mid-Year Forecast - More See-Saw Fed

July 15, 2005

Where will Treasury rates go? What about inflation/deflation? The dollar? The stock markets? Gold? We cover all this and more in this week's letter.

I normally do an annual forecast at the beginning of each year. In conversations with a number of clients and readers, I've come to realize it might be helpful to do a midyear forecast as well.

In January, I suggested that 2005 would be the year of the See-Saw Economy. So far, with one major exception, my forecast is in the middle of the...

Are There Too Many Hedge Funds?

July 8, 2005

At precisely what point can we say that there are too many hedge funds? Are too many funds the reason hedge fund returns were down in 2004? What does the answer say about the potential for future returns? And how large might the industry grow in the next ten years? We deal with this and more in this week's E-Letter.

This letter was originally sent to those who have subscribed to my free Accredited Investor Letter a few months ago. The Financial Times recently ran an edited version as...

Thoughts on the Housing Bubble

July 1, 2005

Looking at a recent magazine covers one is left with the impression that the whole world is concerned about US real estate prices. This is borne out by the fact that if you go to Google and type in sex you get 78,000,000 hits. If you type in real estate you get 110,000,000 hits, which makes housing about 40% more interesting than sex. Is there a greater sign of a bubble? But if you type in housing bubble you get "only" 1,120,000, so there is not much worrying going on. While the above...