In the last six weeks, Congress has passed with broad support three separate pieces of legislation aimed at offsetting the devastating economic impact of the COVID pandemic. The $3 trillion price tag for these initiatives is three times what the federal government borrowed last year and more than four times the cost of the TARP […]
Anne Doremus
The Manufacturing Industry Hedges its Bets…
Between 1980 and 2011, the value of goods exported throughout the world increased from just over $2.0 trillion to $18.3 trillion, or just over 7% per year (see chart below). Over this period, falling transportation costs and improved communication tools allowed companies to source raw materials and components anywhere in the world for final assembly, […]
Climbing a Wall of Worry…
From an economic perspective, the last decade was remarkable. Unemployment declined steadily, inflation, which can heat up during the late stages of an economic recovery, remained muted and interest rates low. Investors also had a good 10 years. Between the end of 2009 and 2019, stocks in the S&P 500 returned just over 250% and […]
“A Good Forecaster is Not Smarter Than Everyone Else, He Merely Has his Ignorance Better Organized.” – Anonymous
January is almost upon us and in the investment business, that means a wave of forecasts are headed our way. After a year of so much uncertainty on everything from trade to the elections, many will find these prognostications soothing. But unfortunately, both the nature of forecasting and our own behavioral biases suggest that we […]
During a Gold Rush, Sell Shovels…
The people who made the most money during the Gold Rush of 1858 were not the thousands of prospectors hoping to strike it rich, but the merchants who supplied them with everything from pic-axes to wagon wheels. While gold was discovered, the basic laws of supply and demand (too little gold, too many people searching […]
“In Investing, What is Comfortable is Rarely Profitable.” Robert Arnott
The outlook for global economic growth is plagued by uncertainty today. Just how far will the U.S. and China go in their efforts to win the current trade war? Will the U.K. arrive at a solution to the ongoing Brexit impasse? Will central banks around the globe continue their easy money policies? At the industry […]
The Yield Curve as Recession Predictor…
Economists and policy makers are spending a lot of time talking about the yield curve these days. This bond market metric plots the yields investors receive for different maturity bonds. Because they demand more compensation for holding longer-term debt, the yield curve typically slopes upward to the right (see chart below ). On rare occasions, […]
5G, Not Just Another Phone Upgrade…
Industry experts expect great things from 5G, the latest generation of wireless technology. To understand why, it helps to know a bit about how cell phones function. Cell phones convert voice and data into electrical signals and then transmit those signals over radio waves to the nearest cell tower. The cell tower then passes the […]
Technologies That Will Change the World in 2019…
By all accounts we are living in a period of robust technological improvement. Innovations from smart phones to artificial intelligence are fundamentally changing lives and altering the way business is done across a wide range of industries. Historically, technological innovation has been the “secret sauce” that has fueled economic growth and the rising living standards […]
Rising Debt Levels Here and Abroad…
While the economic recovery has been slower than many would have liked, it has been fairly broad based and persistent. Investors can thank the expansive fiscal and monetary polices of central banks around the globe for much of the rebound. But unfortunately, the last decade of ever lower interest rates also has fueled a buildup […]
What to Watch…
Watching TV used to be a relatively straightforward affair. The U.S. had three dominant broadcast networks that offered up a set list of programs. True, your viewing choices were limited and there was a lot of advertising but ah…life was simple! Cable TV, first introduced in the 1970s, disrupted this lucrative business model. By the […]
Fighting the Last Battle…
There are some pretty big problems in the world today. But just as we tend to ignore the positive (see Eric’s first page article), we also tend to miss the fact that slowly and without much fanfare things can change. While none of the problems outlined below are fully solved, they are seeing improvement. Illegal […]
