Inflation Week!

Inflation data updates (like shark TV programming) come in weekly spurts. Recently (April 9), we received the updated data for the Producer Prices Index, which tracks inflation for the cost of inputs for businesses. Then last Tuesday, April 13, we … Read More

Start Worrying: The Case Against The Case Against Inflation

Ramesh Ponnuru and David Beckworth recently took to the New York Times op/ed page to clip the wings of inflation hawks. I certainly have no problem with ruffling the feathers of the perma-hawks — I’ve spent much of the past two decades … Read More

Not-So-Great Expectations: Why Treasuries Don’t Tell The Whole Inflation Story

Ramesh Ponnuru recently took up the case against inflation… well, more like the case against predictions of inflation. If I’m reading him correctly, he is making the case for policies in pursuit of higher inflation. To his credit, he does not … Read More

CBO: Our New Debt Projections Are Already Obsolete

In March, the Congressional Budget Office released its Long-Term Budget Outlook. In a recent presentation, the CBO director warned that the report did not take into account the recently signed American Rescue Plan Act, and that things will very likely be worse than the … Read More

Audit The Fed? We Just Did

Paulists have long demanded that we “Audit the Fed!” By Paulists, I mean the acolytes of former congressman Ron Paul, not the saint, though I suspect that he too might have been skeptical of quasi-public entities with enormous wealth and … Read More

The Next Crises: Debt And Debasement

We’re getting a little tired of using the word “unprecedented,” but no other word captures the recent trends in both deficit spending and money supply expansion. Also unprecedented are the stratospheric prices for cryptocurrencies. And there are good reasons to … Read More

What The Fed Really Said

The Fed recently released its regularly scheduled statement following its regularly scheduled meeting. While it was possible to read the entrails as being those of either a dove or a hawk, the markets came down squarely on the side of … Read More

EM Capitulation Was A Foreseeable Investor Error

Last spring we wrote a lot about the history of Emerging Market (EM) overperformance. That historically it tends to overperform developed markets; that it does not always overperform; the conditions under which it does overperform.

First, the tendency towards overperformance:

This chart … Read More

Biden Spending Leak Triggers Inflation Trade

On Monday, the New York Times ran a piece reporting that unnamed sources were indicating the Biden administration was about to release a gigantic spending proposal, one costing at least 3 trillion dollars.

“President Biden’s economic advisers are preparing to recommend spending as … Read More

Oil Rises

Remember early last year when oil prices ‘went negative’?

Well, despite scary headlines, the actual prices themselves didn’t go negative, but there certainly was a major drop in the value of oil. Markets often get the direction of the economy … Read More

Copper Shines

We’ve been looking at various surveys and market valuation-based statistics that have a track record of being able to generally get the direction of the U.S. economy right. Now we’re going to take a look at a few indicators … Read More

No, Mr. Bond Does Not Expect Us To Die

Forgive the levity of the title, but the sad passing of Sean Connery does call for a bit of a break from formality.

The villainous Goldfinger in the eponymous film captures Bond, straps him to a table, and points a … Read More

What The Stock Market Thinks About The Recovery

Investors have skin in the game. That means that when we are wrong and make the wrong allocations according to our error, we get punished. This does not logically imply that investors are always right. Bubbles seem to be … Read More

Weird Recovery, Part 2: Where Are The Profits?

We’ve seen that the recent recession and current recovery are different from anything we’ve seen in most of our lifetimes, and we’ve seen that the nature of this recession and recovery cycle has been that business did not slow down … Read More

What This Supply Chain ‘Mood Ring’ Tells Us About The Recovery

I wrote previously about how business surveys, such as the Purchasing Manager’s Index Survey (PMI), are good at showing not just the mood of supply chain managers but also what kinds of business conditions are actually occurring. Their sentiment … Read More

This Data Shows How Weird This Recession Was

First, let me introduce the most important economic statistic that you’ve (probably) never heard of, Gross Output. It was invented by economist Mark Skousen and was adopted by the federal government, which now reports it quarterly. Unlike GDP, Gross … Read More

GDP Bounced Back, Sort Of

GDP is the most popular general measure of economic output. It started its contraction in the first quarter of the year, rapidly accelerated its fall in the second quarter, and came roaring back in the third quarter. We don’t … Read More

The Global Stock Market Decompression

In the most recent quarter, global stock markets continued to reverse the valuation compression which occurred in the first quarter.

In the first quarter of the year, during the worst of the COVID crisis, global markets collapsed in value. What … Read More

How Companies Pay Shareholders: High Earnings Quality Companies Do More Buybacks

In our ongoing series about stock selection which has first focused on how companies pay their shareholders, we’re going to take a slightly deeper dive into buybacks.

Reminder: We are referring to situations in which a company reduces the number … Read More

Back To Buybacks: Is It More About Dilution Than Concentration?

We mentioned previously in this series that buybacks may not capture everything (or even the most important things) when it comes to the question of whether companies should be concentrating (by taking shares off the market) shareholder ownership or … Read More

How Companies Pay Shareholders: Total Shareholder Payout A Better Approach?

Is there a metric or series of metrics which captures the best of what we learn from looking at the buybacks factor, but avoids some of its shortcomings? Net Payout of Profits just might fit the bill. This metric looks … Read More

How Companies Pay Shareholders: What Do The Data Say?

We took an independent look at the data to see whether buybacks were additive to return or not. The answer seems to be “sometimes.” Which then raises the question, “When?”

First, let’s talk about how we approached the problem. … Read More

How Companies Pay Shareholders: Are Buybacks Good For Shareholders In The Long Run?

Click here to read part 1 of this series.

Click here to read part 2.

Click here to read part 3.

Given the dynamics we’ve discussed earlier regarding buybacks, it should be no surprise to see that they tend … Read More

How Companies Pay Shareholders: Buybacks Discourage CEO Empire Building

Click here to read part 1 of this series.

Click here to read part 2.

It’s important to remember that reinvestment is a matter of trade-offs, not an unalloyed good.

“Importantly, the number of value-creating investment opportunities a company … Read More