Research & News
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 »
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 »