Research & News
Asset Allocation Weekly (May 1, 2020)
by Asset Allocation Committee The policy response to COVID-19 has been mostly favorable for gold. Our gold model uses the balance sheets of the Federal Reserve and the European Central Bank, the EUR/USD exchange rate, and the real two-year T-note yield. The only variable that has been bearish for gold is the dollar, but the massive… Read More »
Weekly Energy Update (April 30, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Here is an updated crude oil price chart. The oil market is showing signs of trying to consolidate in the mid-teens. Oil prices continue to be affected by ETPs. The most popular ETP for crude oil, the United States Oil Fund, (USO, 17.91), has changed its… Read More »
Weekly Geopolitical Report – Revisiting Scheidel’s Horsemen: Part II (April 27, 2020)
by Bill O’Grady In Part I, we introduced Walter Scheidel’s four horsemen and examined the impact of COVID-19 using his framework.[1] This week, we introduce the equality/ efficiency cycle and discuss the first issue that would be affected by the reversal of this cycle. COVID-19 and the Equality/Efficiency Cycle We postulate that economies pass through… Read More »
Asset Allocation Weekly (April 24, 2020)
by Asset Allocation Committee As the COVID-19 pandemic continues to evolve, we are watching to see how the disease will affect the economy longer term. Of course, projections of this sort are highly probabilistic; factors could and will likely emerge that could render these projections irrelevant. At the same, ignoring potential long-term consequences of the virus… Read More »
Weekly Energy Update (April 23, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Given the remarkable events of the past week, we are adjusting the usual format of this report. We[1] have been covering energy for over three decades and never imagined that we would see prices for actively traded futures fall into negative territory. The sharp drop in… Read More »
Keller Quarterly (April 2020)
Letter to Investors Today I write this quarterly client letter in the midst of a recession, one that three months ago I did not see coming. As noted in our January letter (and even italicized): We cannot predict the future. I suspect we have proved that by now. Successful long-term investing does not depend on… Read More »
Weekly Geopolitical Report – Revisiting Scheidel’s Horsemen: Part I (April 20, 2020)
by Bill O’Grady Although we do cover current events in the Weekly Geopolitical Report, we also try to anticipate changes that may be a consequence of current situations. The COVID-19 crisis is just such an occasion. We regularly update the current path of the virus in our Daily Comment, but we will consider the longer-term… Read More »
Asset Allocation Weekly (April 17, 2020)
by Asset Allocation Committee The Federal Reserve’s aggressive expansion of its balance sheet has been in response to fears of systemic risk. The experience of the 2008 Great Financial Crisis has made it clear that systemic risk can occur from a myriad of different parts of the financial system, so the Fed has broadened its support… Read More »
Weekly Energy Update (April 16, 2020)
by Bill O’Grady, Thomas Wash, and Patrick Fearon-Hernandez, CFA Crude oil inventories rose 19.2 mb compared to the forecast rise of 11.6 mb. In the details, U.S. crude oil production fell 0.1 mbpd to 12.3 mbpd. Exports rose 0.6 mbpd, while imports declined 0.2 mbpd. Refining activity fell 6.5%, well more than the 2.2% decline… Read More »