Research & News
Keller Quarterly (January 2017)
Letter to Investors 2016 was full of surprises, and we expect that 2017 will be just as surprising. As we discussed in last quarter’s letter, the job of an investment manager is to navigate the world that is, not the world that we would like to have. Thus, rather than try to correctly predict what… Read More »
Weekly Geopolitical Report – War Gaming: Part II (January 23, 2017)
by Bill O’Grady Two weeks ago, we began this two-part report by examining America’s geographic situation and how it is conducive to superpower status. This condition is problematic for foreign powers because it can be almost impossible to significantly damage America’s industrial base in a conventional war with the U.S. In addition, it would be very… Read More »
Asset Allocation Weekly (January 20, 2017)
by Asset Allocation Committee After a short foray into emerging markets, we exited that position in our latest allocation. Prior to the Trump victory, we had expected the dollar to weaken which would have supported emerging markets. However, the dollar’s resurgence is a bearish factor for emerging markets, leading the Asset Allocation Committee to look elsewhere… Read More »
Asset Allocation Weekly (January 13, 2017)
by Asset Allocation Committee Last week, we reviewed Sebastian Mallaby’s recent biography of Alan Greenspan.[1] This week, we will focus on the issue of financial crises and financial stability. As noted in last week’s review, the financial system has evolved from a disjointed and diffuse system where banks could not establish themselves across state lines to… Read More »
Weekly Geopolitical Report – War Gaming: Part I (January 9, 2017)
by Bill O’Grady (Due to Martin Luther King Jr. Day, Part II of this report will be published on January 23.) One of the key elements of global hegemony is the ability of a nation to project power. Ideally, this means a potential hegemon needs local security. In other words, a nation that faces significant proximate… Read More »
Asset Allocation Weekly (January 6, 2017)
by Asset Allocation Committee Over the holiday, I had the pleasure of reading Sebastian Mallaby’s recent biography of Alan Greenspan.[1] The book was thoroughly researched and well-written, and I recommend it to our readers, albeit with fair warning—it’s long and the endnotes are critical to fully understanding the points of the work. Here are the key… Read More »
Asset Allocation Quarterly (First Quarter 2017)
The November elections have had a significant impact on the financial markets. It is important to watch how policies from the new administration unfold. We don’t expect new policies to rapidly accelerate economic growth. However, we do expect growth to improve modestly in 2017. Our equity allocations are entirely domestic. We shift allocations toward large… Read More »
Quarterly Energy Comment (December 30, 2016)
by Bill O’Grady The Market Oil prices have broken above their $44 to $52 per barrel trading range in the wake of the recent OPEC output agreement. OPEC In a reversal of recent policy, Saudi Arabia spearheaded an agreement to cut oil production. OPEC has agreed to cut production by about 1.3 mbpd and select… Read More »
Asset Allocation Weekly (December 23, 2016)
by Asset Allocation Committee Due to the upcoming holidays, the next edition of this report will be published on January 6, 2017. The Fed gave us a modest hawkish surprise last week, calling for three rate hikes in 2017 rather than two. The news has boosted Treasury yields and lifted the dollar. Equities mostly absorbed the… Read More »
2017 Outlook (December 21, 2016)
by Bill O’Grady & Mark Keller | PDF Key Points: The economy will avoid a recession in 2017. GDP growth is expected to average 2.8% with core PCE inflation approaching the Federal Reserve’s target of 2.0%. Fixed income markets will be challenging: We expect three rate hikes of 25 bps each by the FOMC; Due… Read More »