I noticed this story on Owners Equivalent Rent on the Atlanta Fed’s blog today.  It discusses the rationale behind using what the Bureau of Labor Statistics calls “Owners Equivalent Rent” in their CPI calculation.   Specifically, they say: “This begs the question: In light of the recent strength seen in the housing market—and notably the nearly 10 percent rise in [...]

Last October I wrote an important Orcam Research piece that described why recession forecasting can make a big difference.  Not only are recessions important in understanding future policy (since high unemployment tends to result of recession, but from the perspective of portfolio management, recessions tend to be when the worse loss of capital occurs. Now, if one is able to [...]

I saw this story over at Josh Brown’s site about an “apple only hedge fund” that has apparently imploded.  These sorts of stories are nothing new, but it does get frustrating to see how people keep falling for these sorts of investment schemes.  And yes, they are schemes because they can’t deliver what they promise.  This doesn’t mean the fund [...]

It’s been difficult to escape discussion about the “great rotation” in recent weeks. In case you’ve been hiding underneath a rock, the idea of the “great rotation” is that investors will rotate out of bonds and into stocks. There are three big misunderstandings being made behind this thesis:

One of the core understandings of MR is the endogeneity of money.  That is, almost all of the money in our monetary system is created by banks almost entirely independent of the government.  It is created INSIDE the private sector.  The government has essentially outsourced the creation of money to a private oligopoly of banks who compete for business.  This [...]

Just when you think the word might be spreading….It was interesting that Barrons ran this great quote from a regular reader here at Pragcap last week:  We must be careful comparing the federal government with a household (or state or business) because Washington has no solvency constraint. The federal government can’t run out of money (unless Congress decides it should), [...]

Targeting nominal stock prices puts the cart before the horse and is very very bad policy…..