The Trade that Led to the Demise of PIMCO Total Return

In a great piece over the weekend Josh Brown goes into some detail on the situation with Bill Gross leaving PIMCO.  He asks the important question – what does an owner of the Total Return Fund do now that Gross is gone?   I’m not going to answer that question,…

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Not All Bonds Are Created Equal

Here’s some really long-term perspective for you – this chart via Deutsche Bank shows the nominal yields for several government bond markets at present.  The trend is generally the same in all of these charts so they don’t actually look all that different, but I’d argue that there’s a big…

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Rail Traffic and Jobless Claims Still Point to Expansion

Just a quick update here on some of the near real-time economic indicators I track.  Rail traffic and jobless claims are among the better macro indicators we see with some regularity.  They’re obviously not a perfect reflection of the economy, but when taken in accordance with the broader picture they…

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What is the Purpose Of Interest?

“Can you explain what actually is the reason/purpose of interest in our modern day monetary system?”


When Exotic Devices Create Exotic Problems

Vanity Fair has a fascinating article in the latest issue on airplane safety and how it affects pilot error. To make planes safer these days, engineers have designed automated systems that basically allow the planes to fly themselves.


Government Job Cuts are Driving Down the Labor Force Participation Rate

One point that doesn’t get a lot of airtime in current economic discussions is just how much the US government has cut back on its worforce in recent years.  Government employees are still off by 491,000 since the start of 2008.   This is an unprecedented cut in total government…

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The Great Gold Debate

I went back on Boom/Bust today to discuss the merits of gold in the economy.  Regulars know my position here: Gold is an unproductive asset that shouldn’t be the center of a portfolio. Gold can serve as a hedging or insurance component of a portfolio. Going back to the gold…

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Some Thoughts on Risk Parity

This is a very good piece by Cliff Asness on his new blog.  If you don’t follow it then add it.  Cliff is one of the smartest dudes around.  Anyhow, his firm AQR runs a strategy called “risk parity”.  I am not positive where this idea originated, but it was…

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Why We Need Robots to Win the Technology War

“Spiralling demand for resources of which our world contains a finite supply is the great long-term threat posed by globalisation. That is why we need new technology to relieve it.” – Peter Thiel


The Influential Indicator Pointing to Easier Fed Policy

Very good insight here from Sober Look – inflation expectations are falling fast again: “The 5-year real rates in the US have recently turned positive, which some would suggest represents tighter monetary conditions. With real rates on the rise, the Fed will have a great deal of room to “slowroll”…

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Boom/Bust Appearance: Macro Thoughts

I joined Erin Ade today on Boom/Bust to talk about some macro events.  The video can be found here, but here’s a brief rundown.  Oh, also, I’ll be joining a Boom/Bust roundtable discussion tomorrow to debate the merits of gold – Peter Schiff will be on the panel so that…

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“The Passive/Active Distinction is About Cost”

I really liked this interview with Joel Dickson of Vanguard.  In the interview he cuts to the chase on the active vs passive debate: “The active/passive distinction is really more about costs than it is about the intelligence or the randomness of active management.  It is about costs” I keep…

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2 & 20 is Dead – 1 & 15 is on the Way Out….

The recent uproar over high fees is not a mere fad.  I think it’s here to stay and I think it’s going to get much worse for high fee financial firms who don’t adapt.  The problem is multi-faceted, but there are two huge headwinds coming for the high fee financial…

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Fed Rate Policy: Crafting a Game Plan

Capital markets could get a jolt if the US Federal Reserve raises interest rates faster and farther than expected. But we don’t think there would be a major sell-off in risk assets, and there are several ways for investors to play the possibilities.


“Deactivated User Account”

This is the message you will receive if you tell the Bogleheads that their approach is misleading – you’ll get censored by their moderators.  I didn’t think I was doing anything all that insulting.  Yes, I was on their site saying that the idea of “passive indexing” is misleading.  But most of…

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