Blog

This guest post is courtesy of my friend Edward Chancellor and was originally published on Breakingviews.com.

Just over 300 years ago, in early December 1718, a Parisian bank was nationalised by the French state. This marked the beginning of the Mississippi Bubble, which captivated France over the following couple of years. The aristocratic world of the “ancien regime” may seem impossibly distant to modern minds. Yet there are parallels between this saga and the modern age of quantitative easing, ultra-low interest rates and highly valued asset prices. As central bankers struggle to reverse their post-crisis monetary measures, the lessons imparted by the Mississippi Bubble are more relevant than ever.

Continue reading “A 300-year lesson in bubble inflation” →

Although most frequently attributed to the sinking of the RMS Titanic in 1912, the maritime tradition is that a sea captain is responsible for his ship and all those embarked upon it. In an emergency, his duty is to either save them or die trying.

Continue reading “Skin in the Game: the Tradition of the Captain and His Ship” →

This morning I awoke to front page tributes in the Wall Street Journal and the New York Times commemorating the life of an extraordinary man: Jack Bogle. Like his wife, Eve, and their children, I mourn the loss of a giant.

Continue reading “In the Company of Greatness” →

We keynoted our first blog post on May 31, 2017 with an inauspicious title, An Enterprising Thought: Cash Is an Option. From that point, the S&P 500 continued its seemingly endless advance, finishing the year up 10.8%. In May, the two-year treasury was yielding a middling 2.2%. Ever since the Great Recession, cash has been a dirty word. As a result, money flowed into every other asset class, with equities being the best-performing over the last 10 years.

Continue reading “Reflections On Cash As An Option” →

Paraphrasing a refreshingly perceptive Ben Sasse, first-term senator from Nebraska: Those of us in the investment management profession know people who appear to sincerely want our advice, but then resist when we tell them something they don’t want to hear. In all candor, I must admit to being on the receiving end as well. I have rejected sound advice from time to time, and I suspect you have too.[i] Such is the result of bias. 

Continue reading “‘Tell Me What I Wanna Hear’” →

Just two words uttered by Fed Chairman Jerome Powell during a mid-day speech on Wednesday, November 28 sent the S&P up 2.3% by the close. The S&P 500 went on to notch an overall 2.8% gain for the week—despite lingering uncertainty surrounding the G-20 Saturday, December 1 dinner meeting between Presidents Donald Trump and Xi Jinping on the ever-mercurial Sino-American trade war. Continue reading “Hitting the Pause Button” →

Our July 16, 2018, post “The Future of America’s Economy …” began with the phrase that headlined a Wall Street Journal feature on April 13. The Journal characterized Elkhart thusly: “From Bust to Boomtown: Life in a Comeback City.” The Midwestern city has risen from the ignominy of being singled out as having the nation’s highest unemployment rate of 22% in 2009 to having one of the lowest in 2018 at 2.7% in May of this year.

Continue reading “‘… Looks a Lot Like Elkhart, Indiana’” →

In our last post we alluded to the possibility that the technology-driven Fourth Industrial Revolution, for which many economists hope, will not be a panacea for enhancing productivity, in contrast to with earlier U.S. post-1870 industrial revolutions. Moreover, we addressed a complex structural factor, the slowing rate of increase in educational attainment, that insidiously depresses productivity growth. Continue reading “Productivity Growth II: Can the U.S. Economy Stay Airborne Without It?” →

In our September 21st post, “Whatever It Takes,” we examined today’s low growth in productivity,[1] which has accounted for about 50% of the substandard growth rate in GDP since the Great Recession of a decade ago.[2] During his September 2018 speech at the annual Jackson Hole Symposium, Fed Chairman Jerome Powell offered some optimism in his hope for a “Fourth Industrial Revolution.” This is a common refrain that assumes the next several decades will see advances in 3-D printing, autonomous vehicles, robots, artificial intelligence, and robotics that will rekindle productivity growth.

Continue reading “Productivity Growth I: Can the U.S. Economy Stay Airborne Without It?” →