Outside the Box, May 2005


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France and Leading Indicators

May 30, 2005

This week is we look at two short articles on different topics from some of my favorite writers. The first is by Anatole Kaltsky of GaveKal Research and looks at some of the recent political and economic problems in Europe and what must be done to help turn the EU around. Germany recently had state elections (big upsets), the French vote on the EU constitution was this weekend (expected to be a rejection). These and other issues will have interesting long term implications for Europe and the...

The Strange Tale of the Bare-Bottomed King

May 23, 2005

This weeks article comes from one of my must read economic analysts, Bill Gross of Pimco. Bill sits on top of the largest pile of bonds in the world and is often referred to as the Bond King. His latest Investment Outlook is called "The Strange Tale of the Bare-Bottomed King." Pimco had a Secular Forum in May and this is Bill Gross's take on some of the issues discussed.

Bill sees our current prosperity built not on productivity and technology but on finance-based consumption fed from asset...

How Japan financed global reflation

May 16, 2005

This week's letter is by Richard Duncan who is the author of one of my favorite books called The Dollar Crisis: Causes, Consequences, Cures. Richard is based in Hong Kong and is one of the more thoughtful financial analysts I know.

Many people have talked about Federal Reserve Governor Ben Bernanke's printing press speech in 2002, which created quite a storm with the media and financial writers. Richard notes that he repeated the theme of that speech while in Japan in 2003, but unlike us the...

Peering into the Next Ten Years

May 9, 2005

This week's letter is by Myles Zyblock, who is Chief Institutional Strategist & Director of Capital Markets Research at the Royal Bank of Canada. I have been reading Myles for a number of years, when he was first at another firm whose quality of work has dropped since he left.

Myles takes a look at what the next ten years might hold for investors in the equity markets. Using both PEs and an accounting based approach he concludes that investors will be very disappointed if they expect returns...

Original Sin

May 2, 2005

Last weekend I had my second annual Strategic Investment Conference in La Jolla, California. One theme that interested me was that several speakers, including Rob Arnott of Research Associates, Paul McCulley of PIMCO and Richard Russell of Dow Theory Letters, were all negative about Alan Greenspan.

One of my favorite economists, Stephen Roach, of Morgan Stanley gives us a similar opinion. Roach takes a look at the last 6-7 years and the effect that the U.S. Federal Reserve has had on interest...