10 Economic Themes for 2010: Year-End Review Since we’ve now closed the chapter on 2010, we’d like to review our “10 economic themes for 2010” from last January, to see how well our ideas performed. We’ve graded ourselves using these symbols: Y Right N Wrong ? Not Exactly. ? We expect to see the US unemployment …
2011 Themes: These Go To Eleven Raise ’em sort of high: We expect the Fed to raise short-term interest rates towards the end of the year, in response to slow but steady growth and a more hawkish group of voting members. We expect rates to end the year in the 1% to 2% range. We think …
Dear Client, We hope you enjoyed a restful holiday season and have had a good start to the New Year. We’ve attached two documents to this quarterly letter, one reviewing our economic themes for 2010, and another outlining our themes for 2011. In the fourth quarter of 2010, risky assets (stocks, commodities) recovered sharply from …
Lou was quoted in an article on Bankrate.com today on the subject of what to do with year-end bonuses. Worth a read.
Last week, the New York Times published an interesting article about the economic challenges currently facing the renewable energy industry. While renewable energy has seen strong growth in the US over the past several years, the onset of the global recession has severely curtailed that growth. There are several factors that have contributed to this …
Bonds and Bubbles Over the course of the summer, various market commentators have put forth the idea that we are in the midst of a “bond bubble”. Since we advise substantial allocations to bond or fixed income investments, we thought it would be worthwhile to weigh in on this theory. Since we are fully aware …
We noticed an editorial by Andy Grove in Bloomberg a few weeks ago titled How to Make an American Job Before It’s Too Late. Andy Grove, a founder of Intel, makes a number of very important points in the piece, chief amongst which is the link between production and future innovation. Mr. Grove makes a powerful …
For some time now, we have been concerned about the medium-term impact of persistent high unemployment in the US. Not only does unemployment weaken consumer sentiment, it can cause workers’ skills to become obsolete. That is of particular concern in this recession, as aggregate unemployment and the number of long-term unemployed (over six months), remains …
The Mojave desert boasts some of the largest utility-scale solar power facilities in the world and it will soon get another one. This week, the California Energy Commission approved the licenses required to begin construction on the Blythe solar power project. When the facility’s four phases are online, it will generate 1,000 MW making it the …
Carmen Reinhart and Vincent Reinhart write in today’s FT about the recovery time-lines from large scale banking and real-estate crises. The Op-Ed considers the impact of a major disruptive economic event on real-estate prices, credit, human capital and productive capacity. It is a sobering assessment.
Today, the non-partisan Congressional Budget Office (CBO), published a report estimating that government stimulus raised real GDP (Gross Domestic Product) by anywhere from 1.7% to up to 4.5% in the second quarter of 2010. The report is 20 pages long, but is worth a look. Reuters put out a piece this afternoon that summarizes the …
In our view, the biggest financial market story of 2010 has been the unfolding sovereign debt crisis. The crisis started with Iceland and Greece, moved on to Ireland Spain and Portugal and is now approaching American shores. It’s fitting that the debate should shift to the US, since in many ways a debt crisis in …
Below are links to an article, pod cast and blog post we found interesting this week. In his article Banking Needs More Robust Stress Tests Than These, John Kay writes in the Financial Times about the inadequacy of the European Bank stress tests. He argues that while the language of “stress tests” is borrowed from …
A couple of news articles on the topic of China caught our attention last week. In an article titled Cooling Property Market Tests Beijing’s Nerves, the Financial Times reported on the sudden, marked slowdown in apartment sales within mainland China and the potential government response to this phenomenon. What stood out amongst all the anecdotal information …
Congress passed the Dodd-Frank Financial reform bill last week. The following articles provide a good synopsis of what is included in the final bill: NYT: Finding a Good Financial Bill in 2,300 Pages FT: Bill Lays out route map for Wall St. WSJ: Law Remakes U.S. Financial Landscape