Outside the Box, August 2006


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The Biggest Slump in US Housing in the Last 40 Years

August 28, 2006

Last week in my letter "Thoughts from the Frontline," I promised a more in-depth view into the housing market provided by the well respected Professor Nouriel Roubini. I also commented on how complexity theory plays into the markets with a culmination of individual events each contributing to a larger "finger of instability" that poses a recessionary threat. One such contributing variable is the U.S. housing market. This week's "Outside the Box" contains an excerpt from Mr. Roubini's blog....

Painting By Numbers: An Ode To Quant

August 21, 2006

What can baseball, wine pricing, medical diagnosis, university admissions and criminal recidivism teach us about the markets? My good friend James Montier thinks there is a lesson to be learned and explains it in his Global Equity Strategy newsletter.

James is the Director of Global Strategy at Dresdner Kleinwort Watterstein, a London and Frankfurt based investment bank. He is also a prolific writer and author of the book Behavioral Finance - Insights into Irrational Minds and Markets.

In his...

The Bond Yield Conundrum

August 14, 2006

This past week I sent a special edition Outside the Box titled "Breakpoint in Iraq." I hope that you found it to be both timely and insightful. Today's article should be equally interesting with a unique take on the behavior of bond yields. My good friend Richard Duncan thinks rates were acting a little funny over the past couple of years, and he sheds some light as to why that might have been.

Richard Duncan has worked as a financial analyst in Asia for more than 18 years, conducting research...

Breakpoint in Iraq: What Went Wrong

August 10, 2006

Today I am sending out a Special Edition of Outside the Box. My good friend George Friedman at Stratfor.com has posted a very powerful essay on the new situation in Iraq. I must warn you, it is disturbing for those who, like myself, want a positive and peaceful outcome in Iraq. But since our thinking and investing should reflect reality and not wishful thinking, I suggest you take the time to read this piece.

As I have said in the past, Stratfor is my main and favorite source for geo-political...

The Invisible Hand’s Impressive Work

August 7, 2006

Tomorrow the Fed will be announcing whether they will continue to raise rates or not and many investors seem to think that a pause is a highly probably outcome. Controlling inflation has been the reason for prior rate hikes and I believe it to remain the key variable. With this in mind, I thought that it would be a good idea to share with you the new GaveKal piece by Louis-Vincent Gave.

As my long term readers know, GaveKal produces some thought-provoking and highly intelligent research on the...