- the source for market opinions


October 18, 2020 | Caught in a Debt Trap

We’re caught in a trap I can’t walk out Because I love you too much baby Elvis Presley’s rendition of Suspicious Minds topped the record charts in 1969. The lyrics portray a romance that couldn’t work, but was also impossible to escape. That’s also a good way to describe our relationship with government debt. We […]

October 11, 2020 | Timeline to the New Normal

Like everyone else, I am weary of this pandemic mess. I want to travel freely, enjoy dinner with friends, hug, and shake hands. And, of course, I want everyone who lost jobs and businesses to get them back. I wasn’t thrilled with the economy a year ago, but I’d take it again in a heartbeat. […]

October 4, 2020 | Debt Bugs and Windshields

“There is no means of avoiding the final collapse of a boom brought about by credit expansion.” —Ludwig von Mises Economic recovery is coming, we are told, because the economy has found a new equilibrium. We are supposedly adapting to the new-normal pandemic world, with monetary and (some) fiscal stimulus filling any gaps. Except that’s […]

September 27, 2020 | Great Reset Update: $50 Trillion Debt Coming

Amid all 2020’s new problems, it’s easy to overlook the old ones. Yet they are still there and, like a silently spreading virus, silently getting worse. One such problem is debt, and specifically government debt. All debt shares one common characteristic. A bill comes due at some point and, if the borrower doesn’t pay, the […]

September 20, 2020 | Stall Speed Economy

When Cornwallis surrendered to George Washington at Yorktown in 1781, tradition has it that the British band played an old English children’s folk tune, “The World Turned Upside Down.” Painting by John Trumbull If buttercups buzz’d after the bee, If boats were on land, churches on sea, If ponies rode men and if grass ate […]

September 13, 2020 | On the Question of Current and Future Lockdowns

Simply discussing COVID-19 will undoubtedly make this letter controversial and, in some circles, political. That is not my intent. I truly believe that something affecting all of us so deeply should be kept in the scientific realm to the extent possible, not the political. Sadly, that is not the case today in many countries. My […]

September 6, 2020 | Inflation Virus Strikes Fed

One little-noted aspect of central bank policy is how rarely “policy” happens. Officials at the Federal Reserve and elsewhere long ago learned how to achieve their goals without actually doing anything. Creating perceptions is often enough to modify people’s behavior. For instance, if traders simply believe the Fed will intervene should interest rates go above […]

August 30, 2020 | Light in the COVID Tunnel

If you ever think you just can’t win, I know how you feel. I’m labeled both a doomsayer and a Pollyanna—sometimes in reaction to the same letter. In fact, I am neither. I used to be the “muddle-through” guy who acknowledged difficulty but expected eventual success. Recently I modified that to “stumble-through,” acknowledging today’s more […]

August 23, 2020 | Business on the Frontline

I write this introduction from an all-too-short vacation in Montana (more below). This week I have asked my longtime associate Patrick Watson to step in and write Thoughts from the Frontline, offering his perspective as a small business owner. As you read this, realize his story is being played out hundreds of thousands of times […]

August 16, 2020 | The Second Great Depression… But Not Really

“It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.” —Harry S. Truman, 33rd US President In recent weeks, numerous commentators started to suggest the US and the world are entering a depression. For some areas of the economy, that is clearly true. But not every area. Today we […]

August 9, 2020 | Yellow Flag Jobs Data

As I file this letter Friday morning, people are reacting to the July jobs report. My own reaction: The headline report is absurd. I will explain further at the end of this letter. But first, I have another topic. Regular readers know I worry about debt, mainly that the world has too much of it. […]

August 2, 2020 | European Resurgence

One of COVID-19’s many less-than-obvious consequences is the way it makes us look inward. Facing mortality has always done that, of course. West Texas Judge Roy Bean reportedly said, “Nothing focuses the mind like a good hanging.” For the vulnerable and those of us of a certain age (ahem), this virus goes beyond the normal […]

July 26, 2020 | Valuation Inflation

In the short run, the market is a voting machine but in the long run, it is a weighing machine.” —Benjamin Graham You may have noticed a bit of manic activity in the stock market. You may have also noticed inflation (as measured by various government agencies) is quite low, despite a supply interruption in […]

July 19, 2020 | Small Business Blues

Politicians love saying small businesses are important to the economy. In this case, it isn’t just rhetoric. The millions of little companies with a handful of workers are, collectively, more important than the few hundred large enterprises we see in the news. That’s one reason the corona crisis has been so economically devastating. It hit […]

July 12, 2020 | Stumble-Through Jobs Market

Work has always been a fact of life. Paycheck-producing jobs are actually a recent development. Until the Industrial Revolution, most people lived on subsistence agriculture, sustaining themselves with whatever they could produce or working as slaves/serfs. The practice of producing something you wouldn’t personally use had been around but reached a new stage with the […]

July 5, 2020 | The Blacker Swan

“A similar effect is taking place in economic life. I spoke about globalization in Chapter 3; it is here, but it is not all for the good: it creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words, it creates devastating Black Swans. We have never lived before under the […]

June 28, 2020 | A Recession Like No Other

We just spent the better part of a decade wondering when the next recession would strike. The last two months we stopped wondering. It’s here and a grand council of esteemed economists has confirmed it. On June 8, the Business Cycle Dating Committee of the National Bureau of Economic Research found monthly economic activity had […]

June 21, 2020 | Where We Go from Here

Predictions are difficult, especially those about the future. That old proverb (often attributed to Yogi Berra) is right but you can’t live without making certain presumptions. You presume your car will start, your refrigerator will stay cold, the lights will turn on when you flip the switch. In fact, you could argue this “predictability” separates […]

June 14, 2020 | The Stumble-Through Economy

We are on the horns of a dilemma, caught between the Scylla and Charybdis, a rock and a hard place, the devil and the deep blue sea, the anvil and the hammer. The walls are closing in. We’re in a tight spot. All those metaphors (I could list more but will spare you) fit the […]

June 7, 2020 | COVID-19: A Data-Driven Analysis

Should you wear a mask in public? This seemingly simple question immediately generates emotional, political, and social anxiety. It is just one of many provocative questions COVID-19 is forcing upon us. They should be simple, data-driven policy issues but many are not. Today’s letter is in a different format from the usual Thoughts from the […]

May 31, 2020 | Economics in Orbit

  The history of humanity, at least as taught in most schools, is really about two seemingly opposite forces: human innovation and human conflict. The same intelligence that lets us accomplish great things also sets us against each other. But sometimes, we rise above it. Last week I saw on Twitter (where you should follow […]

May 24, 2020 | Rewinding the Tape

We finished the Virtual Strategic Investment Conference yesterday. I can honestly say it was simply the best conference I have ever attended or been privileged to host. The ability to bring together so many exciting speakers, something schedules would not have allowed if we were holding a physical conference, offered a constant stream of thought-provoking, […]

May 17, 2020 | Reflection Week

I knew this letter’s topic months ago. It was going to be a review of the Strategic Investment Conference, which would have just concluded fabulously in sunny Scottsdale. Well, something intervened. Coronavirus precautions kept us from having an in-person conference. No one was more disappointed than me. I often say SIC is the highlight of […]

May 10, 2020 | Five Viral Lessons

We live in truly historic times. “There are decades when nothing happens, and weeks when decades happen,” says a quote usually attributed to Vladimir Lenin. It certainly fits now. For thousands of years, people who lived through what we call “history” didn’t realize it. We are the exceptions. We’re seeing history and we know it. […]

May 3, 2020 | The Figure-It-Out Economy

Market sentiment reflects human sentiment, which lately has been quite negative—understandably so, given the great uncertainty surrounding the coronavirus pandemic. A month ago, we didn’t know where all this was going but it was potentially serious. I can almost begin to sense sentiment changing. New drug therapies are being announced and dozens of vaccines are […]

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