ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
January 19, 2025 | A Possible Storm
Rain can be either refreshing or destructive. It can make plants grow or produce devastating floods. But in all cases, it’s largely outside human control. Or is it? True, we have little control over whether rain will fall. We have a lot of control over how it affects us, though. Sturdy homes and good infrastructure can keep […]
January 12, 2025 | A Partly Cloudy Year
Weather forecasters tell us what kind of weather we should expect. They can be wrong, but their short-term outlooks are generally reliable. The old joke that economists exist to make weathermen look good is funny because it has a ring of ironic truth. Other things aside, though, we usually prefer moderate weather. Most of us would be […]
January 5, 2025 | A Controversial Start
It was an amazingly short week, punctuated by making 20 gallons of chili, serving almost 300 of my neighbors, and then recovering the next day, which didn’t leave a lot of time for in-depth analysis and forecasts. I’m sure you will be happy with the shortened letter as we cover some of the main events […]
December 29, 2024 | Live Free and Don’t Die
As I said last week, I am working on a book outlining five different theories on historical cycles and how they all seem to “climax” around 2030. I’m also very concerned that around that time (if not before), we will see the bond market begin reacting to the increasingly large national debt. I came across […]
December 22, 2024 | Quantum Supremacy
As longtime readers know, I am working on a book outlining five different theories on historical cycles and how their predicted “climaxes” all occur around 2030. I’m also very concerned that around that time (if not before) we will see the bond market react badly to the fast-growing national debt. While my poor editors at […]
December 15, 2024 | Demanding Energy
Energy is everything. Or, if Einstein was right, you and I are just energy in material form. Accelerate us to lightspeed squared and we might become something else. All economic activity involves converting energy from one form to another. This requires harnessing sufficient quantities of usable energy. That task is becoming more difficult, to the point economic […]
December 8, 2024 | Homes for Christmas
Ever notice how “home” is so important to our holiday traditions? It’s hard to imagine Christmas without images of a fireplace, a tree, some food, and rooms with festive decorations. Families gather in such rooms to form lifelong bonds and memories. My neighborhood here in Puerto Rico really goes all out on Christmas decorations. There […]
November 24, 2024 | Waste, Fraud, and Abuse
Politicians and think-tank wonks of all stripes love to condemn government “waste, fraud, and abuse.” But saying it isn’t hard. Who is the opposition? No one says we need more waste, fraud, and abuse. We’re all 100% agreed all three are bad. It’s when you get specific—saying this agency or that program isn’t accomplishing what it should—that […]
November 17, 2024 | The Trump Inflation Problem
Two weeks ago, I opened this letter by noting the election uncertainty, once over, would give way to a different uncertainty about what comes next. That’s where we are now. I fully expected a closer outcome that would take some time to resolve. Instead, we have an undisputed president-elect moving full speed ahead. And what […]
November 10, 2024 | Dogs Catching Cars
I went to bed “early” on election night, around 10:30 pm. We are in the five months of the year where Puerto Rico is one hour ahead of Eastern time, and nothing I was seeing made me think it would be an early night. And by that I meant 3 or 4 am. I woke […]
November 3, 2024 | One-Way Road to Crisis
Anyone else ready for the election to be over? This uncertainty is exhausting, no matter how you want it to end. But sadly, it won’t really end. We will just transition to a different uncertainty over what will happen next. I will offer my thoughts on the election at the end of this letter, after […]
October 28, 2024 | Broken China
Here in the US, people are obsessed with the impending election. It is perhaps the World’s Largest Guessing Game. We can look at polls and make our best guesses, but no one really knows what will happen. We just have to wait for more data which will (hopefully) be forthcoming November 5 or soon afterward. […]
October 20, 2024 | Frozen Homes
Official inflation data, while imperfect in many ways, at least has the advantage of being consistently imperfect. This lets us make comparisons across time. The magnitude may be off, but the direction is usually right (except at unusually sharp turns like 2020). Currently it shows most prices moving back toward “normal” with one prominent exception: housing, which […]
October 6, 2024 | The Crisis of Free Speech
“Freedom of speech” is a beautiful phrase, strong, optimistic. It has a ring to it. But it’s being replaced in the discourse by “disinformation” and “misinformation,” words that aren’t beautiful but full of the small, pettifogging, bureaucratic anxiety of a familiar American villain: the busybody, the prohibitionist, the Nosey Parker, the snoop. “…The end game […]
September 30, 2024 | The Revolt of the Public, Part 2
Two weeks ago, I began reviewing Martin Gurri’s important book, The Revolt of the Public, with this framework: “In my cycles book I’m reviewing the forecasts of Neil Howe, Peter Turchin, George Friedman, and Ray Dalio. For different historical reasons and patterns, all see a crisis culminating at the end of this decade. Some readers have […]
September 22, 2024 | Late Summer Sandpile
Last week, I said I would continue writing about Michael Gurri’s important book, The Revolt of the Public. It turns out giving a proper review of not just the book but all of the comments about the book will require more than a few days’ writing. I am going through almost 100 pages of new comments […]
September 15, 2024 | The Revolt of the Public
“All over the world, elite institutions from governments to media to academia are losing their authority and monopoly control of information to dynamic amateurs and the broader public. This book, until now only in samizdat (and Kindle) form, has been my No. 1 handout for the last several years to anyone seeking to understand this […]
September 8, 2024 | The Time Has Come
I remember traveling as a young boy on long trips and asking my parents, “Are we there yet?” I was later punished for this annoying behavior by having my own children ask me the same question over and over. On a national scale, we have been asking the same of the Fed. Now I think […]
September 1, 2024 | Your Portfolio and the Election
Labor Day weekend finds me in far northwest British Columbia, fishing with 29 of my readers. The conversations are deep and fascinating, and it should be no surprise that politics and markets are brought up more often than not. Labor Day is traditionally when most Americans, other than us political junkies, actually begin noticing politics. […]
August 25, 2024 | Unemployment, Inflation and The Fed’s Choice
There was an historically large revision to the unemployment data this week, which was even worse than the headline when you dig into the actual numbers. On top of that, there is some “behind the numbers” data on inflation, which is typically not talked about, that will have a big impact on the Fed decision, […]
August 18, 2024 | A Head Fake, Maybe
In basketball and other sports, a “head fake” means the player moves their head as if they are about to turn left or right, but then doesn’t do so. This can fool an opposing player into moving the wrong way. Head fake is a trading term, too. Some bit of information convinces investors a market […]
August 11, 2024 | 25 Years and Counting
I can’t let this month pass without noting a significant anniversary: This is the 25th year I’ve been writing Thoughts from the Frontline. The first few issues were lost to the electronic gods and my lack of technical prowess back then. That quickly changed. You can visit the archive and see every issue since January 2001 (including, trust […]
August 4, 2024 | The Hunger Games: The Fed Version
I am just a poor boy Though my story’s seldom told I have squandered my resistance For a pocket full of mumbles Such are promises All lies and jests Still, a man hears what he wants to hear And disregards the rest… -Paul Simon, The Boxer, 1969 Let the wise hear and increase in learning, […]
July 28, 2024 | A Sticky Last Mile
“Alice laughed. ‘There’s no use trying,’ she said. ‘One can’t believe impossible things.’” “’I daresay you haven’t had much practice,’ said the Queen. ‘When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things before breakfast.’” ―Lewis Carroll This week we find our […]
July 21, 2024 | Going, Not Gone
The ability to choose our goods and services is fundamental to economics. The freer we are to make choices, the more the economy should prosper. That’s because our choices tell producers what works. Modern science muddies this pleasantly clear water. Behavioral economists talk about a phenomenon called “decision fatigue.” It turns out we humans would […]