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New Publishing Schedule for Thoughts from the Frontline Jumping into the Suicide Pool Probability Theory and Retirement Portfolios Obsessing on Risk, Ignoring Uncertainty An Uncertain Spain Orlando, Portland, Atlanta, and South America “By ‘uncertain’knowledge, let me explain, I do...
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There Is Gambling in the House? I Am Shocked… Opacity and Credit Default Swaps No Access for Spain Denver, Maine, and Carlsbad Rick: How can you close me up? On what grounds? Captain Renault: I'm shocked, shocked to find that gambling is going on in here! – From the classic scene in...
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In today's Outside the Box, the ever-philosophical Grant Williams introduces us to the ancient and profound art and science of alchemy – "the original 12-step program," as he calls it, the avid pursuit of übernerds from Hermes Trismegistus to Isaac Newton to (believe it or not...
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I was on the ground in Spain a few weeks back, and then I ran into this piece in Spiegel Online about a small, struggling town on the Spanish border with (British) Gibraltar. This essay resonates in some of the same ways as the Michael Lewis piece on Greece. This is just one town, and Spain has many...
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We woke up this weekend to a €100 billion "rescue" of Spanish banks, and the initial reaction of the market was relief. But did we not just see this movie, but with Greek subtitles rather than Spanish? Was this another of those "necessary but not sufficient" plot lines that Europe...
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A Dysfunctional Nation One Minute to Midnight? The Triumph of Hope A Quadrillion Here, A Quadrillion There New York, Chicago, Italy, and Singapore dysfunctional [dɪsˈfʌŋkʃən ə l] adj 1. (Medicine) Med (of an organ or part) not functioning normally 2. (especially of a family) characterized by a breakdown...
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It really does seem to be All Spain All the Time, but there is a reason. Unlike Greece, Spain makes a difference to the eurozone. It may be both too big to allow to fail and too big to save. Last week I came across a very informative 50-page PowerPoint on the situation in Spain from Carmel Asset Management...
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The War for Spain Spain Goes “All In” “We Are Not Greece” The New Labor Force A Little Blue Suede Shoe Trouble I fully intended to ignore Spain this week. Really, truly I did. I had my letter all planned, but then a few notes drew my attention, and the more I reflected on them...
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All Spain All the Time Structural versus Cyclical Dilemmas The Mother of All Housing Bubbles Spanish Banks en Bancarrota Meanwhile in the Rest of Europe And Two More Leaked Documents The Fat Lady Has Not Sung San Francisco, New York, and Philadelphia Last Monday I was in Paris and was asked to do a spot...
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This week we look at a report called “Working Out of Debt,” about debt and deleveraging, from the McKinsey Global Institute. This is a well-done summary of their longer paper, which has been updated, called “Debt and deleveraging: Uneven progress on the path to growth.” I discussed...
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This is a special Outside the Box. I got this letter from my good friend Greg Weldon last night and got permission to pass it on to you. I think it illustrates the problems that the world is facing from the sovereign debt crisis that is building in Europe. There are no good solutions here, only very...
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Let's start with the conclusion to today's Outside the Box: "The underlying principle flows from the financial balance approach: the domestic private sector and the government sector cannot both deleverage at the same time unless a trade surplus can be achieved and sustained. Yet the whole...
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Germany, Greece, and Spain Two Views on the Euro The Pain in Spain How Much Is Too Much? Tampa, Austin, and California Last week we talked about Greece. But the problems are more than just Greece. We look at two very different views of the euro, and then opposing thoughts on Spain. Is Spain a problem...
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I wrote about Greece in last week's letter. Then I ran across this column in the Financial Times by my friend Mohammed El-Erian, chief executive of Pimco, and someone who qualifies to be introduced as one of the smartest men on the planet. It is short and to the point. ( www.pimco.com ) Then, somehow...
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Today's offering for this week's Outside the Box starts off with a quote from Titus Maccius Plautus: "I am a rich man as long as I don't pay my creditors." Even 2200 years ago, it seems that problems of credit were an issue. I talked last Friday about the US being faced with a number...