Research & News
Weekly Geopolitical Report – The Return of AMLO (July 9, 2018)
by Thomas Wash On July 1, Andres Manuel Lopez Obrador, or AMLO for short, became Mexico’s first leftist president in over three decades,[1] running on anti-establishment and anti-corruption platforms. The 64-year-old activist won with over 53% of the vote, the most since Mexico moved to a multi-party system. For the first time in nearly a century,… Read More »
Asset Allocation Weekly (July 6, 2018)
by Asset Allocation Committee Over the past quarter, emerging market equities have weakened; the primary culprit was a strengthening dollar, although concerns about softer non-U.S. growth likely played a role as well. The dollar’s strength appears to be caused by one of two factors. The first possibility is interest rate differentials, which are partly due to… Read More »
Asset Allocation Weekly (June 29, 2018)
by Asset Allocation Committee With the recent narrowing of the yield curve, we have been receiving a number of questions about the impact of inversion. Defined, yield curve inversion is when short-duration interest rates rise above long-duration interest rates. The yield curve is arguably the single best indicator of recession. Therefore, with various calculations of the… Read More »
Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (June 25, 2018)
by Bill O’Grady (Due to the Independence Day holiday, the next report will be published July 9.) As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close. This report is less a series of predictions as it is a list of potential geopolitical… Read More »
Asset Allocation Weekly (June 22, 2018)
by Asset Allocation Committee Cycle studies are common in analyzing markets. Such studies can be quite useful in some markets that are affected by seasonal factors, such as commodities. We all know it gets cold in the winter and rains in the spring, and measuring the timing of when market participants discount these events can offer… Read More »
Weekly Geopolitical Report – China’s Foreign Reserves: Part III (June 18, 2018)
by Bill O’Grady This week, we will conclude our study on China’s foreign reserves. In Part I, we discussed the evolution of foreign reserves from gold to the dollar, with a historical focus. In Part II, we used the macroeconomic saving identity to analyze the economic relationship between China and the U.S. This week, using this… Read More »
Asset Allocation Weekly (June 15, 2018)
by Asset Allocation Committee The last topic in our series on secular trends is the dollar. It is arguable as to whether or not exchange rates are actually an asset class. In our asset allocation, we don’t treat it as one. On the other hand, the behavior of the dollar affects most of the other asset… Read More »
A Primer on Fiscal Policy, Government Debt and Deficits (June 13, 2018)
by Bill O’Grady & Mark Keller | PDF In our travels we are almost always asked about the government debt and deficits. If there is any area of confusion and misunderstanding, public finance could easily top the list. In response to these persistent questions, we are publishing this Frequently Asked Questions paper to address some… Read More »
Weekly Geopolitical Report – China’s Foreign Reserves: Part II (June 11, 2018)
by Bill O’Grady In the first part of this report, we discussed the evolution of foreign reserves from gold to the dollar, with a historical focus. This week, we will use the macroeconomic saving identity to analyze the economic relationship between China and the U.S. Next week, using this analysis, we will discuss the likelihood that… Read More »
Asset Allocation Weekly (June 8, 2018)
by Asset Allocation Committee This week, we examine commodities in our fourth installment on secular trends. Commodity prices challenge the notion of “secular.” This chart shows a trend model for real (inflation-adjusted) commodity prices, represented by the Commodity Research Bureau (CRB) commodity index, deflated by CPI. We prefer this commodity index for its long history (over… Read More »