New heights of consensus-ness have made idiots of thoughtful analysts, investors and allocators. Investors at all levels are being deceived on an epic scale and most of the investor class will suffer. It never pays to bet against nature for too long, which presents a wonderful opportunity for free thinkers.
Many Americans who have wrestled with a 1040 form, or who have paid someone to prepare their taxes, no doubt cheered the news that Congress will soon resume working on tax reform. However taxpayers should temper their enthusiasm because, even in the unlikely event tax collection is simplified, tax reform will not reduce the American people’s tax burden.
"If we’re in one of those periods now, if 2016 is like 1932 or 1979 - then you not only have to change your portfolio, you have to change your lifestyle. That’s one of the things we’ve been telling clients. If this is a major shift to populism, nationalism, greater state involvement, and less globalism, then you really have to rethink almost everything in your life."
"Markets don’t have a purpose any more - they just reflect whatever central planners want them to. Why wouldn’t it lead to the biggest collapse? My strategy doesn’t require that I’m right about the likelihood of that scenario. Logic dictates to me that it’s inevitable..."
"Yes, the parallels [with Reagan] are certainly there... I’ve been in touch with the Trump team. I’ve even written a book about Trump.... But those guys are going to be surprised. They just have no idea what they’re up against....I’ve seen it happen. There are alligators in that swamp."
"We are experiencing deep economic problems and it is the fault of the economics discipline. Their macro theories suck... But, there is no mechanism forcing it to alter its models when they don’t appear to work."
"The hubris of central bankers who somehow believe they will know the precise time to alter easy money policies in order to prevent a monetary disaster is only exceeded by the foolishness of Congressional oversight in granting that authority."
"Even if he’s as bad as he sometimes projects to be, he’s not as bad as Hillary’s policy-record already is." Sometimes, things in politics are the opposite of the way they seem. The Presidential contest between the ‘liberal’ Hillary Clinton’ and the ‘conservative’ Donald Trump is perhaps the most extreme example of this - for these ten reasons...
To the economic and political detriment of the Western world and those economies beyond which have adopted its precepts, 2016 marks the eightieth anniversary of the publication of one of, if not, the most influential economics books ever penned. Despite its outlandish theoretical flaws and nonsensical economic jargon and the catastrophic empirical evidence of its failure to prevent financial downturns or “stimulate” sustainable growth, Keynesianism remains the ruling paradigm of economic thought... Why?
The bigger picture narrative, according to BofAML's Michael Hartnett, is that the policy baton is passing from Monetary to Fiscal stimulus in 2016/17. Simply put, central bank rate cuts are ending; and new policies to address the populist desire for a "War on Inequality" are emerging. This 'fiscal flip' - as Hartnett describes it - means rotation from 'deflation' to 'inflation' assets... from 'financial' to 'real' assets.
It is a little-understood historical fact that each nation has a shelf life. After a nation has peaked and a majority of the people have traded in their work ethic for the undeliverable promise of ever-increasing governmental largesse, the decline is set in stone. When this has taken place, it’s not only the work ethic that’s in a terminal decline. The nation heads inexorably downward in other ways...