At a conference in Chicago this week, following up on last week’s letter, Keep Dancing but with a Sharp Eye on the Tea Leaves, an advisor client asked me what my favorite “tea leaf” might be. When one of the greatest investors of our time, Ray Dalio, tells us to keep an eye on the exit door we should take note. But how? And when?
Ray Dalio, chairman of Bridgewater Associates, wrote last week that the global economy is heading toward a new stage where markets won’t get the same level of support from the global monetary policy makers. “The directions of policy are reversing,” he noted.
Raising the federal funds rate is just one part of the Fed’s plan for higher interest rates. Another part, according to Steve Malin, investment strategist at Allianz Global Investors, is the somewhat tricky process of purging $2 trillion in US Treasury and agency securities from the Fed’s balance sheet.
To a large extent, the U.S. financial crisis was actually made by the Fed… It was ultra-low rates that fueled the search for higher yield that enabled creatively engineered mortgage products (CDOs, CDOs of CDOs, adjustable rate and no-doc mortgages and AAA-rated garbage).
I listened to Bob Farrell several times a week. Bob was the chief stock market analyst at Merrill Lynch. Do you remember those old “squawk boxes?” On my desk sat a small speaker box. It was the firm’s way of communicating to the thousands of brokers.
This week, I’d like to draw to a conclusion my series of notes from Mauldin’s 2017 Strategic Investment Conference. The topics ranged from geopolitical to global macro to specific investment ideas. One of my all-time favorite economists is David Rosenberg. Today I offer my high-level bullet point notes from his presentation.
As I listened to a number of the presentations at last month’s Strategic Investment Conference, silver and gold kept coming up. As did the industrial metal, copper. Make new friends but keep the old… today’s On My Radar continues the sharing of my high level conference notes with you. I walked away with some actionable ideas. Gold and silver were high on the list. The new friend is copper.
Today, you’ll find my high level notes from Mark Yusko’s presentation at the Mauldin Economics 2017 Strategic Investment Conference.
The initial conditions or the starting point conditions, mean to me that a small degree of monetary restraint has a very quick and strong impact on economic activity.
Over the next two to three weeks, I’m going to share with you my high level notes of the 2017 Strategic Investment Conference and some investment ideas (e.g., India looks great). There was bullish discussion on China and emerging markets, but the developed markets are a different story. The Fed and central bankers must remain on our radars.