Research & News
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 »
Asset Allocation Weekly (October 6, 2017)
by Asset Allocation Committee The latest FOMC meeting and subsequent comments from Chair Yellen have increased the likelihood of a December rate hike. This chart shows the implied likelihood of a rate hike compared to steady policy from fed funds futures for the December meeting. In early December, the projected odds of a hike were just… Read More »
Weekly Geopolitical Report – The 19th Party Congress (October 2, 2017)
by Bill O’Grady On October 18th, the Communist Party of China (CPC) will meet for the 19th Party Congress. China’s leadership for the next five years will be determined at this meeting. In this report, we will offer a background on China’s government, focusing on the difference between de jure (what is the official structure of… Read More »
Asset Allocation Weekly (September 29, 2017)
by Asset Allocation Committee The Financial Accounts of the U.S. was released last week by the Federal Reserve. The report is a treasure trove of data about the economy. This report shows the flow of funds and the balance sheet of the American economy. Although there is much to look at, here are a few charts… Read More »
Weekly Geopolitical Report – Using History (September 25, 2017)
by Bill O’Grady Geopolitics is the study of the exercise of power within a specific geographic area. Geopolitical analysis is a multi-disciplined examination that starts with geography and includes economics, sociology and, of course, history. Geopolitics is generally used for two purposes. First, it offers a multi-faceted way of looking at how nations behave. Second, it… Read More »
Asset Allocation Weekly (September 22, 2017)
by Asset Allocation Committee In a recent speech,[1] New York FRB President Bill Dudley made the case that the FOMC should continue to reduce monetary stimulus even though inflation remains below target. His contention is that benign financial conditions in the face of tighter policy are creating distortions in financial markets, resulting in the need for… Read More »
Weekly Geopolitical Report – North Korea: An Update (September 18, 2017)
by Bill O’Grady The Kim regime has become increasingly belligerent, launching a number of ballistic missiles and testing what appears to be a hydrogen device. It is also claiming it has miniaturized a warhead, meaning, if true, North Korea is a nuclear power. The U.S. has indicated this development is unacceptable. Although the Trump administration still… Read More »
Asset Allocation Weekly (September 15, 2017)
by Asset Allocation Committee In our most recent asset allocation rebalancing, we added foreign allocations to our portfolios. Over the past few years, we had generally avoided allocations to non-U.S. markets in asset allocation portfolios due to two primary concerns. First, the dollar had been appreciating as a result of an improving U.S. economy and policy… Read More »
Weekly Geopolitical Report – Reflections on Nationalism: Part III (September 11, 2017)
by Bill O’Grady Three weeks ago, we began our series on nationalism. In Part I, we discussed social contract theory before and after the Enlightenment. We examined three social contract theorists, Thomas Hobbes, John Locke and Jean-Jacques Rousseau. In Part II, we recounted Western history from the American and French Revolutions into WWII. From there, we… Read More »
Asset Allocation Weekly (September 8, 2017)
by Asset Allocation Committee As the FOMC prepares to reduce its balance sheet, it’s a good time to update our views on long-term interest rates. The chart below shows our current estimate of fair value for the 10-year Treasury. The model uses fed funds, the 15-year moving average of CPI (an inflation expectations proxy), the yen/dollar… Read More »