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September 23, 2018 | China for the Trade Win?

With all the trade war talk, we all ask the obvious question: Who will win? President Trump says the US will win. Chinese business leaders say no, we will win. Free-traders on both sides say no one will win. Few stop to ask, “What does a ‘win’ look like?” This makes discussion difficult. People are […]

September 16, 2018 | Chinese Growth Spurt

Economic reality isn’t black and white. At any given time, both good things and bad things are happening. Ignoring one side because it doesn’t fit your preferred outlook is an excellent way to go badly wrong. So it is with China. We hear a lot about that vast country’s problems and challenges. They are very […]

September 9, 2018 | China’s Command Innovation

Hardly a day passes without some sort of China news in the financial headlines. There’s a good reason, too. China is the global economy’s 600-pound gorilla, second in size only to the US. Yes, it was largely a copycat business economy up until the early 2000s, but Chinese entrepreneurs have really taken charge in the […]

September 2, 2018 | The Growing Economic Sandpile

“How did you go bankrupt?” “Two ways. Gradually, then suddenly.” ―Ernest Hemingway, The Sun Also Rises As you may have noticed, I’ve been in a pensive mood lately. I’m re-thinking a lot of things as I process economic developments, personal issues, and the clock ticking as I reach birthday number 69 in a few weeks. Many […]

August 26, 2018 | Revolutionary Future Ahead

Back in 1936, in Esquire magazine of all places, F. Scott Fitzgerald wrote something profound. “The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” As someone privileged to have met some of the world’s greatest thinkers, […]

August 19, 2018 | The Good News Economy

In my business, there is a fine line between standing by your conclusions and being unwisely stubborn. But no matter what I say, people will still label me a perma-bear or perma-bull—often at the same time. It’s an occupational hazard to which I am accustomed. It’s really a lot more fair to characterize me as […]

August 12, 2018 | The Maine Surprise Was Time

I’m back from Camp Kotok. As always, it was both rejuvenating and enlightening. The Maine woods, lakes, and general environment encourage more candor than I see most places. This, combined with David Kotok’s talent for assembling a diverse group and the always-marvelous Maine hospitality, made it another great success. It helps that David aggressively enforces […]

August 5, 2018 | The Distribution of Pain, Redux

This week I have something special for you: an update of “The Distribution of Pain,” one of 2017’s most popular letters. I say “popular” just in terms of feedback and reprint requests. It was thought-provoking but also sobering. I started with the original version, re-edited to clarify a few points, and added some new comments. […]

July 28, 2018 | Endgame Strategizing

We are all on a debt-filled train that is eventually going to crash, and if you are on it, it won’t stop to let you off first. Jumping at the last minute is not a good option, either. So what do you do? You take action now, while you have time. Last week I gave […]

July 22, 2018 | How to Dodge the Debt Train

Standing in front of a speeding train is rarely a good idea, but most investors are doing it right now. They survive only because the debt train is still way down the tracks. It is nonetheless coming, and you will want to move before then. But which way? – Bull or Bust? Limited-time special event […]

July 15, 2018 | The Debt Train Will Crash

We are approaching the end of the debt Train Wreck series. I’ve spent several weeks explaining why I think excessive debt is dragging the world economy toward an epic crash. The tracks ahead are clear for now but will not remain so. The end probably won’t be pretty. But there’s good news, too: we have […]

July 8, 2018 | An American Story

I hope everyone had a happy Fourth of July, whether it was a holiday for you or not. The United States’ birth as an independent nation was, among other things, an economic event that changed history far beyond our borders. We hope and believe it was for the better. This week will be a shorter-than-usual […]

July 1, 2018 | Unfunded Promises

In describing the global debt train wreck these last few weeks, I’ve discovered a common problem. Many of us define “debt” way too narrowly. A debt occurs when you receive something now in exchange for a promise to give something back later. It doesn’t have to be cash. If you borrow your neighbor’s lawn mower […]

June 24, 2018 | Europe Has Train Wrecks, Too

Italian dictator Benito Mussolini at least made the trains run on time, according to legend. But other sources say the nation’s railway system remained horrible under his rule (see here, here, and here). The same may be true of modern Europe’s (and Canada and Australia and…) vaunted social welfare programs. Certainly, they have helped many […]

June 17, 2018 | The Pension Train Has No Seat Belts

In describing various economic train wrecks these last few weeks, I may have given the wrong impression about trains. I love riding the train on the East Coast or in Europe. They’re usually a safe and efficient way to travel. And I can sit and read and work, plus not deal with airport security. But […]

June 10, 2018 | Debt Clock Ticking

Rather go to bed without dinner than to rise in debt. —Benjamin Franklin What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience? —Adam Smith There are no shortcuts when it comes to getting out of debt. —Dave Ramsey Modern slaves are not […]

June 3, 2018 | The Italian Trigger

Train wrecks and their financial analogues are a worldwide phenomenon. Europe, as I have written for several years, remains a giant accident waiting to happen—as Italy reminded us last week. You may have noticed the results when US trading resumed Tuesday. A wider crash may not be imminent but is certainly possible and will have […]

May 27, 2018 | High Yield Train Wreck

My still-unfolding Train Wreck series is getting a lot of attention. It’s not exactly good news, but people at least appreciate the warnings. Thanks to all who sent thought-provoking comments. I always consider them carefully. A few readers characterized the crisis I foresee as being a repeat of the 2008 fiasco. That’s partly right, in […]

May 20, 2018 | Train Crash Preview

Today we will summarize something I’ve been thinking about for a long time. Exactly how will we get from the credit crisis, which I think is coming in the next 12–18 months, to what I call the Great Reset, when the global debt will be “rationalized” via some form of nonpayment. Whatever you want to […]

May 13, 2018 | Credit-Driven Train Crash, Part 1

In last week’s letter, I mentioned an insightful comment my friend Peter Boockvar made at dinner in New York: “We now have credit cycles instead of economic cycles.” That one sentence provoked numerous phone calls and emails, all seeking elaboration. What did Peter mean by that statement? I vividly remembered that quote because it resonated […]

May 6, 2018 | Thoughts from the Mailbox

Since last week’s letter, I have flown enough to send me over 100,000 miles on American Airlines this year and make Executive Platinum. That is not necessarily a good thing. But wow, I learned a lot between all those flights. Today’s letter will be a little different. First, I want to relate some of the […]

April 29, 2018 | Economy with a Fever

Getting a fever is no fun. You likely get chills, you sweat, and you’re just generally uncomfortable. You get tired easily and need to rest. But here’s the weird part: Fever isn’t the real problem. It’s a symptom of something else. You must treat whatever that is to relieve the fever. Economic indicators are similar. […]

April 22, 2018 | China Plays It Cool

Photo: Getty Images China is the world economy’s elephant in the room. We can’t possibly ignore it, yet many try anyway. Admitting China’s influence forces us to admit the world is changing—and we all must change with it. This year, China is in the headlines because President Trump wants better trade terms. That’s important, but […]

April 15, 2018 | How to Get Your Tax Weekend Back

This weekend millions of Americans and/or their accountants are preparing to file income tax returns. Tax day is an annual event as significant as the Fourth of July – though far less fun. Photo: Getty Images My friends outside the US – and I have many – observe our ordeal with a combination of amusement […]

April 8, 2018 | Assumptions Equal Problems

The future is tantalizing because it is both unknown and unknowable. At best, we can make educated guesses about tomorrow or next year. Sometimes, it’s actually hard to understand what happened in the past, much less to chart how the future might unfold. The problem is that some guesses are more educated than others, and […]

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