Research & News
Weekly Geopolitical Report – The Geopolitics of Helicopter Money: Part 2 (May 9, 2016)
by Bill O’Grady Last week, we described in some detail the process of “monetary funded fiscal spending” (MFFS). Part 1 of this series included a discussion of why MFFS might be implemented, how it would work and the potential problems that come with using it. In this week’s report, we will examine two historical examples where… Read More »
Daily Comment (May 9, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] There were five major news items over the weekend: Saudi Oil Minister al-Naimi sacked: Al-Naimi, who has been oil minister since 1995, was unceremoniously fired over the weekend, replaced with another Saudi Aramco official, Khalid al-Falih. Al-Naimi was considered a good administrator and was the de… Read More »
Asset Allocation Weekly (May 6, 2016)
by Asset Allocation Committee In our latest adjustment to the asset allocation portfolios, we added to the REIT positions in three of the four models. One of the reasons we remain friendly to this asset class has been the steady increase in rental income. This chart shows rental income from the National Income and Product… Read More »
Daily Comment (May 6, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It’s employment data Friday! We will update all the numbers below but the short summary is that the data was a bit soft. Non-farm payrolls disappointed, and the unemployment rate fell only because the labor force contracted less than employment did in the household survey. Global… Read More »
Daily Comment (May 5, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Oil prices moved higher overnight on the Canadian oil sands wildfire and escalation of fighting in Libya, both leading to speculation of supply contraction. The Fort McMurray oil sands wildfire has spread to five times its initial size, leading to the evacuation of the entire town… Read More »
Daily Comment (May 4, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] We will keep our opening comments short as quite a few economic indicators were released this morning. Risk markets are trading lower this morning, with equities lower globally and Treasuries trading higher. As the earnings season continues, equity fundamentals have not changed much, thus the pullback… Read More »
Daily Comment (May 3, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] After a rally in risk assets yesterday, we are seeing a reversal this morning. Although China’s official PMI data came in a bit soft (see below), we suspect the real story continues to come from the forex markets. Overnight, the Reserve Bank of Australia (RBA), the… Read More »
Weekly Geopolitical Report – The Geopolitics of Helicopter Money: Part 1 (May 2, 2016)
by Bill O’Grady Since the 2008 Financial Crisis, developed economy central banks have been implementing a series of unconventional policy measures, including quantitative easing (QE), zero interest rate policy (ZIRP) and negative interest rate policy (NIRP). Although these measures likely prevented a deeper financial calamity, such as a repeat of the Great Depression, these actions by… Read More »
Daily Comment (May 2, 2016)
by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] May Day is being celebrated in much of the world today. This holiday is “Labor Day” for most of the rest of the world. Most notably, British markets are closed today. The global PMI data is out (see below). The numbers today are the official ones… Read More »
Asset Allocation Weekly (April 29, 2016)
by Asset Allocation Committee We recently completed our quarterly rebalancing process in our asset allocation models. One of our key assumptions is that the economy will avoid recession but growth will remain sluggish. Recently, two reliable recession indicators, one from the Philadelphia FRB and the other from the Chicago FRB, have confirmed our expectations. First, shown… Read More »