February 2009 - John Mauldin's Outside the Box

John Mauldin reads hundreds of articles, reports, books, newsletters, etc. and each week he brings one essay from another analyst that should stimulate your thinking. John will not agree with all the essays, and some will make us uncomfortable, but the varied subject matter will offer thoughtful analysis that will challenge our minds to think Outside The Box.

John Mauldin's Outside the Box

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  • Saving Capitalist Banking and a Speech by Paul Volker

    This week I came across two items that I think are worthy of being in Outside the Box, so I am going to give you both. The first is an essay by good friend Paul McCulley, Managing Director of PIMCO, called 'Saving Capitalist Banking from Itself.' The second is a recent speech by Paul Volker, former Fed Chairman and a (hopefully very) influential member of President Obama's economic advisory team. This speech is a must read. Taken together they provide a cautionary tale of what the world of banking will need to look like when we get to the end of the process. This OTB is a little longer than most, but I think it is important reading. If you don't know where we are headed, it is hard to imagine the journey....
  • Obama's Energy Plan: Trying to Kill 3 Birds With 1 Stone

    As a boy with a slingshot, killing two birds with one stone meant I was either the best shot in the land or the luckiest -- and rewarded by neighborhood fame and the good fortune of the affection of the girl next door. As I read a piece sent to me by George Friedman, founder of STRATFOR, entitled 'Obama's Energy Plan: Trying to Kill 3 Birds With 1 Stone,' it dawned on me that reading STRATFOR is the same maximization of my opportunities: not only am I getting information about three important aspects of global affairs -- economics, politics, and military movements -- but I’m getting information I can use to invest, to make business decisions, and to share at cocktail parties. I’m getting neighborhood fame and that girl’s affection all over again. At a time when your investments are earning less and less, getting more and more for your money is more important than ever. STRATFOR continues to give you more intelligence, analysis, and forecasts on more countries, regions, and continents but for the same low price. In the piece I’ve included below, STRATFOR’s expert analysts lay out how Obama plans to address three energy issues with one ten-year plan. It’s more in-depth than anything else out there, offering a clear-cut explanation of complicated energy policies and projects spanning the next decade....
  • Weakness Unmatched in 35 Years

    One of the best gauges of an economy is tax collections. No one pays taxes unless they have to, so collections are a real-world, real-time analysis of the US economy. And the best source I know of for tracking taxes is The Liscio Report, by Philippa Dunne & Doug Henwood. Tax collections are down. Philippa and Doug give us the actual numbers, which are not pretty. Bottom line? 'What does this all mean? It suggests that the consumer retrenchment in this recession will be deep and long, and will probably continue into any recovery. The American consumer is no longer the world consumer of last resort, and that's an enormous change for both this country and the rest of the world to get used to.'...
  • Where Will the Growth Come From?

    Today we read a piece sent to me by my friend Louis Gave of GaveKal (and who will be at my conference in April). It is entitled "Where Will the Growth Come From?" It reminds us of the lessons that Harry gave me. Each person and company is responsible for their own part of the recovery. You can't rely on mass statistics, or you miss the important lesson in individual responsibility. I don't think anyone can accuse me of being bullish the past few years. Interestingly, I get a lot of emails from people telling me the end of the world is coming, and deriding my longer-term optimism. They are convinced we are going into some deep national morass worse than the Great Depression (and such deflationary times will somehow make their gold go to $3,000!?!?). Yet they are working to make sure their own personal worlds are covered. I get no letters from people who are simply giving up. What company will keep a CEO who does not work hard to figure out how to keep the company alive? If you lose your job, do you not try and get another one or figure out how to make ends meet? Do you not put in extra hours to try and make your personal life or business or job better? Even if it is terribly difficult, the very large majority of people don't throw in the towel. Each of us, in our own way, gets up every morning to fight the good fight, even when the swamp is full of more alligators than we ever counted on. We just pick up a baseball bat, wade into the swamp, kill as many alligators as we can in one day, and then go home to get ready to fight the next day....
  • Global Trend: The Russian Resurgence

    If the Russian Bear has indeed emerged from its post-Soviet hibernation to regain global prominence, that means big things for your portfolio. From the punishingly obvious war with Georgia last summer, to the more subtle - but equally powerful - shut off of natural gas to Ukraine and Europe, Russia is making it abundantly clear that they want to be global players again. To get a read on how this is all going to play out, I turn to my friend George Friedman, the founder of global intelligence firm Stratfor....
  • Can The Euro Survive?

    Milton Friedman famously predicted that the euro would not last past their first economic crisis. This week we look at commentary by Niels Jensen that explores the news from Euroland. Can the euro survive? He explores a number of options which are most definitely not on the radar screen for most investors. It is good to get a perspective from those outside of our own back yard. Note that when he says "our country" he is referring to Great Britain. Niels is the Managing Partner of Absolute Return Partners based in London (which is my European partner). I work closely with Niels for years and have found him to be one of the more savvy observers of the markets I know....