Research & News
Asset Allocation Weekly (November 3, 2017)
by Asset Allocation Committee The 10-year Treasury yield has recently been trending upward. Since early September, yields have risen from 2.06% to 2.46%. What’s behind this rise and do we expect it to continue? We use our 10-year T-note model for guidance. It estimates the fair value level of the 10-year T-note yield based on the… Read More »
Weekly Geopolitical Report – North Korea and China: A Difficult History, Part III (October 30, 2017)
by Bill O’Grady In Part I of our report, we reviewed the Minsaengdan Incident and a broad examination of the Korean War. In Part II, we completed our analysis of the war, discussed the Kim regime’s autarkic policy of Juche and outlined the impact of the Cultural Revolution on North Korean/Chinese relations. This week, Part III… Read More »
Asset Allocation Weekly (October 27, 2017)
by Asset Allocation Committee It is expected that over the next two weeks President Trump is going to appoint a new Federal Reserve Open Market Committee (FOMC) chair and vice chair. In this report, we will build scenarios of how policy could change depending upon whom the president appoints. This spreadsheet details our estimate of policy… Read More »
Asset Allocation Quarterly (Fourth Quarter 2017)
Our inflation outlook remains benign and economic data continues to be modestly positive. We do not anticipate a recession in the near term. Though the composition of the Fed will change over the next four months, we expect policy to continue toward tightening through increases in the fed funds rate and a reduction in the… Read More »
Weekly Geopolitical Report – North Korea and China: A Difficult History, Part II (October 23, 2017)
by Bill O’Grady Last week, we examined the Minsaengdan Incident and the onset of the Korean War. This week, we will discuss the final phase of the Korean War, the ceasefire, the introduction of Juche and the impact of the Cultural Revolution. The Korean War: The Latter Stages of the War and the Ceasefire Among the… Read More »
Asset Allocation Weekly (October 20, 2017)
by Asset Allocation Committee The Financial Accounts of the United States (formerly known as the Flow of Funds Report) is published by the Federal Reserve and provides data on the level of financial assets and liabilities by sector. Using this data, we can approximate the average asset allocation of American households over different periods. This accounting… Read More »
Weekly Geopolitical Report – North Korea and China: A Difficult History, Part I (October 16, 2017)
by Bill O’Grady The U.S. and North Korea have had a difficult history. The two countries were the primary combatants during the Korean War and still have not established a peace treaty. However, in the late 1970s, the Kim regime and the Carter administration considered normalizing relations. Carter’s national security team concluded there was little value… Read More »
Asset Allocation Weekly (October 13, 2017)
by Asset Allocation Committee With the S&P making new highs almost daily, it is probably a good time to look at long-term trends to build some parameters. This is a simple trend chart of the S&P 500 Index. We have log-transformed the weekly Friday closes of the index data and regressed it against a time trend. … Read More »
Keller Quarterly (October 2017)
Letter to Investors In my last letter I wrote of the tendency of investors to think of the economy and the markets as linear phenomena, rather than cyclical phenomena. In other words, an inclination to think that a good economy will continue its upward path forever unless some villain intercedes and causes a recession. However,… Read More »
Weekly Geopolitical Report – The Four Horsemen of Leveling: A Book Review (October 9, 2017)
by Bill O’Grady Occasionally, we find a book that has such an interesting message that we dedicate a Weekly Geopolitical Report to reviewing it. This week, we will look at The Great Leveler by Walter Scheidel.[1] The book is an extensive historical analysis of inequality and the factors that reduce it. In this report, we will… Read More »