Commentary On the matter of China-U.S. trade, there is one item of bad news and two of good news. The bad news is that China has failed to meet its commitments under the first phase of the trade agreement signed in January 2020. This is hardly a surprise to anyone who has followed the data,…
US Capital Pours Into China, Posing Risks
Commentary The unraveling of Chinese property giant Evergrande, the world’s most indebted developer, has prompted an unusual intervention by a U.S. investor. Los Angeles-based Oaktree Capital Management seized control of “Venice,” a massive apartment complex near Shanghai, after the project defaulted on a secured loan that Oaktree provided late last year, according to reporting in…
This is What it Would Look Like if We’re Wrong About Inflation and Interest Rates
Commentary One of the most interesting and valuable experiences of my investing career was the eight years I spent managing Silver Arrow Investment Management with Raji Khabbaz. Raji is currently the Portfolio Manager of ArcanX and a member of the Deep Knowledge Investing Board of Advisors. An important part of our investment process together was…
Why Diversification is Overrated
Commentary I am a firm believer that conventional wisdom leads to conventional results. Whether it is in areas of science, mathematics, or the arts I think a convincing argument can be made that no one ever did anything truly spectacular by following conventional wisdom. There is a reason for this and that is because conventional…
The Avocado Ban Shows the High Cost of Non-Tariff Protectionism
Commentary Last Sunday, U.S. regulators suspended avocado imports from Mexico after a U.S. inspector in Michoacán allegedly “received a threatening message on his official cellphone.” The U.S. government claims this alleged threat was the catalyst for the ban, since, according to the U.S. embassy, “facilitating the export of Mexican avocados to the U.S. and guaranteeing the…
Will Inflation Turn Into Stagflation?
Commentary Will inflation turn into stagflation? With inflation hitting 40-year highs, it’s the question of the hour. Currently, Wall Street and the Fed are saying no, forecasting a respectable 3.7 percent real for 2022, 2.7 percent for 2023, and 2.3 percent for 2024. These aren’t epic prints, but they’re also nowhere near recession. Of course, that same…
Canada Nice No Longer: Trudeau’s Totalitarian Response to Trucker Protests
Commentary On Feb. 14, Canadian deputy prime minister and minister of finance Chrystia Freeland announced a government crackdown on the now-infamous “Freedom Convoy 2022.” Freeland stated, “If your truck is being used in these illegal blockades, your corporate accounts will be frozen, the insurance on your vehicle will be suspended.” The announcement follows Canadian prime minister Justin Trudeau’s declaration…
Money and Savings Are Not the Same Thing
Commentary In the National Income and Product Accounts (NIPA), savings are established as the difference between disposable money income and monetary outlays. Disposable income is defined as the summation of all personal money income less tax payments to the government. Personal income includes wages and salaries, transfer payments, income from interest and dividends, and rental…
Federal Reserve Set To Raise Rates To Fight Runaway Inflation
Commentary There is no question the federal reserve will raise rates this year, with most analysts expecting the first rate increase in March. Goldman Sachs estimates the Fed will raise rates seven times in 2022 and prices in nearly all categories are surging to 40-year highs. Recently, the producer price index rose 9.7 percent from…
The Federal Reserve Will Not Be Saving The Democrats
Commentary Americans have a great sense of smell when it comes to lies. Just when President Joe Biden’s negatives hit the cellar, newly minted, transparently dishonest assertions from him reveal that—like the five underground floors of the nearly century-old landmark Federal Reserve Bank of New York Building in lower Manhattan—there are actually basements beneath the…
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