John Mauldin

  • Geopolitics and Markets

    Growing geopolitical risk is on everyone’s mind right now, but in today’s Outside the Box, Michael Cembalest of J.P. Morgan Asset Management leads off with a helpful reminder: the only time since WWII that a violent conflict has had a medium-term negative effect on markets was in 1973, when the Israeli-Arab war led to a Saudi oil embargo against the US and a quadrupling of oil prices. And he backs up that assertion with an interesting table of facts labeled “War zone countries as a percentage of total world… [population, oil production, GDP, etc.].”

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    Posted to John Mauldin's Outside the Box by John Mauldin on 07-25-2014
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  • Hoisington Investment Management: Quarterly Review and Outlook, Second Quarter 2014

    This week’s Outside the Box is from an old friend to regular readers. It’s time for our Quarterly Review & Outlook from Lacy Hunt of Hoisington Investment Management, who leads off this month with a helpful explanation of the relationship between the US GDP growth rate and 30-year treasury yields. That’s an important relationship, because long-term interest rates above nominal GDP growth (as they are now) tend to retard economic activity and vice versa.

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    Posted to John Mauldin's Outside the Box by John Mauldin on 07-18-2014
  • Poverty Matters for Capitalists

    Every US recession that I can recall was preceded by a fall in long rates, and I doubt the next will be much different. As such, do not expect the next US downturn to arise from the Federal Reserve pushing rates higher, an overvalued dollar or even mal-investments. Expect it to result from a decline in the income of the working poor. Early warning signs are likely to show up in the shopping aisles of stores such as Walmart, average driving miles, and the price of houses at the cheaper end of the market. I suspect the lesson that will eventually be learnt is that in a modern industrialized economy there are few worse things a central bank can do than deliberately attack the spending power of the poor.

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    Posted to John Mauldin's Outside the Box by John Mauldin on 07-10-2014
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  • Central Bank Smackdown

    The term “smackdown” was first used by professional wrestler Dwayne Johnson (AKA The Rock) in 1997. Ten years later its use had become so ubiquitous that Merriam-Webster felt compelled to add it to their lexicon. It may be Dwayne Johnson’s enduring contribution to Western civilization, notwithstanding and apart from his roles in The Fast and The Furious movie series. All that said, it is quite the useful word for talking about confrontations that are more for show than actual physical altercations.

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    Posted to Thoughts From The Frontline by John Mauldin on 07-07-2014
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  • The New Normal of Healthcare Spending

    Last year I was one of the very few who suggested that the implementation of Obamacare could cause a recession (see more below). Such a suggestion was universally dismissed by all right-thinking economists, and for very good reasons based in sound economic theory, I might add. But sometimes the real world neglects to adhere to our models and theories, and that was my concern.

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    Posted to Thoughts From The Frontline by John Mauldin on 07-03-2014
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  • Italy: When Hope Is a Strategy

    I came back from Italy this week, and one of my guilty pleasures was being able to sit down and watch the last three episodes, including the season finale, of Game of Thrones. For those readers who are not enthralled with the fantasy epic from HBO or have not read the first five books (will he ever finish?), author George R.R. Martin has written one of the most complex fantasy series ever, about a world where everyone is occupied with who will sit on the Iron Throne.

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    Posted to Thoughts From The Frontline by John Mauldin on 06-23-2014
  • Musical Chairs at the FOMC

    “You can’t tell the players without a program. Get your program here!” yelled the stadium vendors of my youth. In today’s Outside the Box I bring you an excellent piece of Fed watching by Nouriel Roubini and colleagues, a “program” of the new Fed members and where they rank on the hawk-dove scale. They point out that, with a new chairperson (Janet Yellen) and vice-chair (Stanley Fischer), and with higher than normal turnover on the Federal Open Market Committee (FOMC) – over the past year, 75% of the FOMC’s membership has changed – the Fed’s need for clear communications with regard to monetary policy and forward guidance is greater than ever.

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    Posted to John Mauldin's Outside the Box by John Mauldin on 06-20-2014
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  • The Age of Transformation

    One of the many luxuries that my readers have afforded me over the years is their willingness to allow me to explore a wide variety of topics. Not all writers are so blessed, and their output and responses to it tend to stay focused on specific, often quite narrow topics. While this approach allows them to dig very deep into particular subject matter, it can reduce the total scope of their research, vision, and advice. But don’t get me wrong; these types of letters are very important. I benefit greatly from being a subscriber to a number of letters that give me detailed analysis for which I simply don’t have the time to do the research. There’s just too much going on in the world today for any of us to be an expert in more than a few areas.

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    Posted to Thoughts From The Frontline by John Mauldin on 06-16-2014
  • Networks and Hierarchies

    I have a big-picture piece for you today from a big-time thinker, my good friend Niall Ferguson. This is a little bit different for Outside the Box, but then isn’t that what this letter is supposed to be? Something to make us think and to come at a problem with a little bit different viewpoint?

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    Posted to John Mauldin's Outside the Box by John Mauldin on 06-11-2014
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  • Can Central Planners Revive China’s Economic Miracle?

    For years, when asked whether I thought China would experience a hard landing, I would simply answer, “I don't understand China. Making a prediction would be pretending that I did, so I can’t.” The problem is that today China is the most significant macroeconomic wildcard in the global economy. To understand both the risks and the potentials for the future you have to reach some understanding of what is happening in China today. Last week we started a two-part series on what my young associate Worth Wray and I feel is the significant systemic risk that China poses to global growth.

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    Posted to Thoughts From The Frontline by John Mauldin on 06-09-2014
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  • Breakfast with Dave

    David Rosenberg and I have been friends and colleagues for years, but he never ceases to amaze me. I mean, a 10- to 15-page letter covering every significant development in global markets, delivered to clients’ mailboxes every single morning of the work week?! Breakfast with Dave is legendary in our business.

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  • Looking at the Middle Kingdom with Fresh Eyes

    One of the few consensus ideas that I took away from the Strategic Investment Conference is that China has the potential to become a real problem. It seemed to me that almost everyone who addressed the topic was either seriously alarmed at the extent of China’s troubles or merely very worried. Perhaps it was the particular group of speakers we had, but no one was sanguine. If you recall, a few weeks back I introduced my young colleague and protégé Worth Wray to you; and his inaugural Thoughts from the Frontline focused on China, a topic on which he is well-versed, having lived and studied there. Our conversations often center on China and emerging markets (and we tend to talk and write to each other a lot). While I’m on the road, Worth is once again visiting China in this week’s letter, summing up our research and contributing his own unique style and passion. I think regular TFTF readers are going to enjoy Worth’s occasional missives and will want to see more of them over time. Now, let’s turn it over to my able young Cajun friend.

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    Posted to Thoughts From The Frontline by John Mauldin on 06-02-2014
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  • A Bubble In Complacency

    I and many others are still trying to digest the massive amount of useful and original information that was offered at last week’s Strategic Investment Conference. In this week’s letter I want to recap some of what I learned but do so in a little different manner. I find it quite instructive to listen to and read what other people have to say about their takeaways from the conference. I have come across several very good summaries and reviews that I am going to excerpt rather liberally, along with sharing some of my own thoughts.

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    Posted to Thoughts From The Frontline by John Mauldin on 05-26-2014
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  • Gave & Gave … and Hay

    I am back in Dallas trying to absorb what I learned at the conference. There were a very wide range and an overwhelming number of new and newly conjoined ideas. I hope to be able to get into a few of the more prominent themes in this week’s Thoughts from the Frontline. Every year we say it can’t get any better, and every year it seems to. And those who have attended for many years have been emphatic in saying that this year’s conference was the best ever. They wonder, along with me, how we can possibly make it better next year. We’ll have to see. I have a few ideas, and I expect to solicit a few more.

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  • Special Updates from the Strategic Investment Conference

    Day 1 started off with the king of modern-day economists, David Rosenberg, who goes on ruffling a lot of feathers. Rather than obsessing over whether the state of the global economy is good or bad, Dave challenged us to see beyond the deflationary headwinds and focus on how things are changing at the margin. Markets move as things get better or worse; and at the margin, Dave argues, inflation pressures are building. I know this sounds odd to a lot of us who are still worried about deflation; but Dave notes that out of 140MM workers in the large, insulated US economy, roughly 40MM higher-skilled workers have the bargaining power to push wages higher and turn the inflationary dial… even as low- and medium-skilled workers see their wages decline.

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