Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Mauldin’

Assumptions Equal Problems

Posted by hkarner - 9. April 2018

April 6, 2018

The future is tantalizing because it is both unknown and unknowable. At best, we can make educated guesses about tomorrow or next year. Sometimes, it’s actually hard to understand what happened in the past, much less to chart how the future might unfold.

The problem is that some guesses are more educated than others, and even the best are often not good enough. This fact of life matters because we use those guesses to make important decisions about, for instance, government tax and spending policies. Mistakes can have terrible consequences.

These are subjects on which it is hard for any of us to be truly neutral. Most people want to lower their own taxes and simultaneously see more spending on whichever services they think government should deliver. The politicians we elect know this, so they try to give us what we want. The charade never ends well, but we and they keep at it.

Today we will look back at what economists thought the federal budget and tax policy would be in 2001 and thereafter. Let’s just say the government projections were a tad optimistic. Den Rest des Beitrags lesen »

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SIC Perspectives

Posted by hkarner - 20. März 2018

March 18, 2018

It’s been a week and I’m starting to recover from my post-SIC high. It’s a weird feeling. I love SIC, yet processing it all takes time. Imagine one of those brain maps that shows the neurons opening new pathways. That’s what SIC does. It opens connections that I didn’t previously have.

Mapping these new connections takes time, so I’ll have more to share over the next few weeks. What I’m going to give you today is a rather short letter covering my overall impressions – my sense of feel of what I took away – and a few of the great lines that really impacted me.

 

The Basic Questions I Wanted Answered at SIC

This was my 15th Strategic Investment Conference. Each year I walk away wondering how we can make the next one better, and so for we seem to have been able to do that. We set an incredibly high bar this year, according to the feedback we’re getting. Den Rest des Beitrags lesen »

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Inflation and Honest Data

Posted by hkarner - 5. März 2018

March 3, 2018

I’m going to wrap up our series on the problems of collecting and analyzing data in the first half of this letter, and then I’ll quickly comment on the Trump tariffs. I think both topics will feature in this week’s Strategic Investment Conference.

I strongly urge you to follow me on Twitter, because I will be very active during and after the conference, sharing my real-time thoughts. My Twitter handle is @JohnFMauldin. Do it now! Now let’s look deeper at the problems with data.

Coming up with the right monetary and fiscal policies is hard even if you know the outcome you want, and even if everyone else agrees. Neither of those conditions is normal. We’re often unclear on our policy goals, and we certainly don’t even agree on them.

We could all argue less if we could trust and use the same data, but that’s not happening, either. I’ve been discussing this vexing problem in recent letters. It’s a multiplex challenge to define what data is relevant, to collect it accurately, and then to analyze it correctly. A weakness anywhere in that chain will compromise the whole effort. Den Rest des Beitrags lesen »

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The Middle of an Era

Posted by hkarner - 1. März 2018

By George Friedman, Mauldin Outside the Box, Feb. 28, 2018

I have written in several places about a paradox. On the one hand, if you take a snapshot of the world every 20 years or so, the reality of how the world works and what matters will have shifted dramatically compared with the previous snapshot. On the other hand, at any point in time there is a general belief that the world as it is at this moment will remain in place for a long time. It is not just the public but also experts and those who govern who tend to fail to see how transitory the present reality is. As a result – and this is what makes it important – as the geopolitical system shifts, there is a tendency to see the shifts as transitory, a temporary disruption caused by unfortunate events, until they are well entrenched, and so we tend to align ourselves with the shift far too late.

In 1900, Europe was peaceful and prosperous, and it dominated the world. It was assumed that this was a permanent reality. Den Rest des Beitrags lesen »

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Where Will We Get the Cash?

Posted by hkarner - 12. Februar 2018

We already knew interest rates were rising. Recent data suggests they could rise significantly more than many expected just a few weeks ago. If so, that will be a big problem for bonds, stocks, and many other assets – not to mention taxpayers who will bear the cost of swelling government debt, consumers who may face inflation, and everybody who will be hurt by a recession.

The combination of a falling stock market and rising interest rates is historically and statistically rare. Normally, when the stock market goes through a correction, interest rates fall. Looking back through history, we see that 1987 and 1994, two years I have been writing about in connection with 2018, were the other unusual years.

I’ve been relatively optimistic on the economy this year, and I still think the year can end well. But given recent events, the path is more challenging now – and the odds of a rough 2019 are growing.

Burn Rate Den Rest des Beitrags lesen »

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Enjoy It While You Can

Posted by hkarner - 5. Februar 2018

So it is with economic cycles. Rarely do we move directly from boom to bust; but when the shift comes, it can develop quite quickly, even though the transition isn’t usually obvious in real time. As I look at the data and talk to my contacts, I’m beginning to conclude that we’re approaching one of those transitional phases. I think we’ll look back at 2018 as an in-between year… from good times to something eventually not so good.

Now, let me stress that I’m not predicting imminent doom. As you’ll see below, I think the party can last another year, maybe even longer. But I do see storm clouds on the horizon, and they’re blowing our way.

That ominous horizon means that some strategy adjustments are probably in order. You need to be aware that the volatility we have seen in the stock market the past few days will become more the norm. I’ll get to that later. Let’s start by considering where we are now.

Y2K Relief Den Rest des Beitrags lesen »

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Gross Domestic Problems

Posted by hkarner - 30. Januar 2018

Fictitious Wall Street villain Gordon Gekko famously declared, “Greed is good.” I think actual Wall Street titans would mostly disagree. They would change one word. Instead of “greed,” they would say, “Growth is good.” That is Wall Street’s real mantra. Growth is the magic elixir we all need.

The question, if we define growth as good, is how do we measure it? Presently we use gross domestic product, or GDP. But GDP is showing its age in the 21st century. The measure was actually invented in the late 1930s when President Roosevelt needed some way to prove that his policies were working. And at 85 years old, the old formula may be nearing time for retirement.

The only way for Roosevelt to show that his policies were working was to put government spending inside the GDP number. There was vicious fighting among economists over whether he should be allowed to do so. Many economists even argued that military spending should not be included in GDP because it didn’t produce anything. And it’s true that overreliance on GDP has often sent policymakers and business owners in wrong directions. We need a better yardstick.

First, we must next decide what, specifically, a newly formulated GDP should measure and how – and that’s a thornier question than you might think. Today we’ll wrestle with that question and with some of the implications of changing how we measure growth. Den Rest des Beitrags lesen »

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A Fly in the Economic Ointment?

Posted by hkarner - 22. Januar 2018

The stock market is off to a rip-roaring start. For the first time ever, the Dow Jones Industrial Average has spent an entire quarter above its upper Bollinger band. That is, it’s more than two standard deviations above its 21-day moving average. You can click on the link for more detail. This might be a little technical for some of you, but it does demonstrate that there’s a great deal of exuberance in the market.


Tony Sagami

Further, Howard Silverblatt at S&P just came out with his forecasted earnings for 2018 (hat tip Ed Easterling for sending this to me). He revised 2017 earnings down by a few dollars to $110 as S&P analysts realized that companies are going to have to take write-downs for their deferred tax losses. Den Rest des Beitrags lesen »

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Year of the Octopus, Part 2

Posted by hkarner - 15. Januar 2018

Only two weeks in and 2018 is already breaking records – mostly in a good way. But that leaves 50 potentially less enjoyable weeks to go. So rather than focus on promising current events, I think I’d better dip back into my annual forecast bag and share a few more highlights with you.

 

Last week I called 2018 “the Year of the Octopus” because it has so many tentacles. There are many more than eight, so I should probably have made it the Year of the Centipede. In any case, let’s run through a few more projections from my still-growing pile.

Optimism and Hong Kong

Two years ago, when I was at the same Bank of America Merrill Lynch investment conference that I attended last week in Hong Kong, the mood in the room was quite somber, even bearish. The sentiment, shared by many at that gathering, turned out to be wrong.

Last week (while still suffering mightily from jet lag) I had a good conversation with my host, Ajay Kapur (who could not have been more delightful), in which we noted the mood of this year’s conference, which was almost universally upbeat. There was a clear consensus among these very seasoned and powerful traders. Given how wrong the mood was last time, Ajay and I wondered whether we should perhaps be a little trepidatious about the Chinese, Hong Kong, and other Asian markets. I’m not sure what to make of the mood this year, but I just thought I would share that experience. Now let’s move on to the forecasts of some of my other friends. Den Rest des Beitrags lesen »

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Year of the Octopus, Part 1

Posted by hkarner - 8. Januar 2018

In last week’s letter, “Economy on a Roll,” I gave you my own fairly upbeat 2018 forecast. I think the US economy and markets will probably hold up well, thanks to tax cuts and deregulation – assuming the Federal Reserve gets no more hawkish than it already has. That assumption may be a stretch, given the Fed’s changing composition, but I’m feeling optimistic anyway.

The one real potential wrench in the works that I did not mention last week was Trump’s actually enacting significant tariffs or tearing up NAFTA, which would cost millions of jobs and cause significant backlash. I am hopeful that mistake won’t be made.

This week and next we’ll look at forecasts from some of my most trusted friends and colleagues. I have so many that our project may even stretch into a third week. Some disagree with my own views – and that’s perfectly fine. I want you to see all sides so you can make good decisions for your own family and portfolio. I’ll let these forecasters speak for themselves in longer quotes than I usually allow, then add my own comments. Den Rest des Beitrags lesen »

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