Research & News
Weekly Geopolitical Report – Reflections on Trade: Part IV (May 22, 2017)
by Bill O’Grady (Due to the Memorial Day holiday, our next report will be published on June 5.) This is the final report of our four-part series on trade. This week, our discussion on trade continues with a look at the relationship between trade, employment and inflation. We will also conclude the series with market ramifications.… Read More »
Asset Allocation Weekly (May 19, 2017)
by Asset Allocation Committee One of the significant “known/unknowns” is the true condition of the labor market. The below chart highlights the issue. The blue line is the unemployment rate, while the red line is the employment/population ratio (scale inverted). From 1980 until 2010, these two series closely tracked each other. During the period since the… Read More »
Weekly Geopolitical Report – Reflections on Trade: Part III (May 15, 2017)
by Bill O’Grady This week, we continue our discussion on trade by examining the reserve currency issue. What is the reserve currency? When a country runs a trade surplus, it creates excess saving that must be either invested overseas or held as foreign reserves. If a gold standard is being used, the excess saving/foreign reserves can… Read More »
Asset Allocation Weekly (May 12, 2017)
by Asset Allocation Committee Slow economic growth has plagued the West. Although the concern has been acute since the Great Financial Crisis (GFC), worries about slowing growth predated that event. Perhaps the most important factor contributing to sluggish growth has been tepid productivity growth. This chart shows the five-year change in productivity; we use this longer… Read More »
Weekly Geopolitical Report – Reflections on Trade: Part II (May 8, 2017)
by Bill O’Grady In this multi-part report, we offer several reflections on trade that we hope can provide some insight into how to use macroeconomics to judge the veracity of certain claims. In Part I, we laid out the basic macroeconomics of trade. This week, in Part II, we will discuss the impact of exchange rates… Read More »
Asset Allocation Weekly (May 5, 2017)
by Asset Allocation Committee In our most recent quarterly asset allocation meetings, our analysis determined that emerging markets would not be added to the portfolios. Since this asset class has been this year’s best performer, some explanation is in order. One of the primary reasons we have refrained from adding emerging markets is the dollar’s strength.… Read More »
Weekly Geopolitical Report – Reflections on Trade: Part I (May 1, 2017)
by Bill O’Grady Donald Trump ran on a platform opposing free trade. Although Congressional support for free trade has been waning for some time, the general consensus among economists is that free trade makes the economy more efficient and supports global stability. However, the steady erosion of manufacturing jobs in the U.S. and the shrinking of… Read More »
Asset Allocation Weekly (April 28, 2017)
by Asset Allocation Committee Last week, we discussed the impact of reducing the size of the Federal Reserve’s balance sheet on stocks and bonds. This week we will discuss the effects of QE on monetary policy. The FOMC dropped rates to near zero by January 2009. Although European central banks (including the ECB) have since taken… Read More »
Keller Quarterly (April 2017)
Letter to Investors Perhaps you’ve heard it or felt it, but fear of financial market decline has become palpable among the public. It’s not just fear as reflected by TV shows or internet social media I’m talking about, but fear reflected by real people in conversation. I travel rather extensively, speaking to both advisors and… Read More »
Weekly Geopolitical Report – Between a Rock and a Hard Place: The Gibraltar Dilemma (April 24, 2017)
by Thomas Wash Days after Theresa May triggered Article 50 of the Lisbon Treaty, Brussels issued a nine-page document outlining its guidelines for Brexit negotiations. One of the guidelines gave Spain the authority to veto any deal between Gibraltar and the European Union (EU). The U.K. is currently recognized as holding sovereignty over Gibraltar and thus… Read More »