Italians are headed to the polls this Sunday (and thus this letter is reaching you a little earlier than usual) – but no one is quite sure what is on the ballot. On the surface, the voters are considering whether to approve constitutional reforms that should make the government operate more effectively (or not, depending on your point of view). But many people think the real question is whether the current government should stay in power and whether Italy should remain yoked to the Eurozone.
Last week’s letter with my thoughts on what Trump should do generated more responses than any other letter had in the last 17 years. As you might suspect, with a topic so controversial, not everyone agreed with me.
I’m going to depart from the normal format of my letters, where I talk about the economic realities we face and how we should invest, and instead offer my view of what I think the Trump administration and the GOP-led Congress should do.
I think many of my readers are in the same boat I’m in: we are still sorting out the implications of last Tuesday’s election. My style is generally not to shoot from the hip but to think about things before I start to write. When I have adopted the “ready–fire–aim” style of writing, I have usually found myself going back and asking, “What was I thinking?” And the answer is that I wasn’t doing enough thinking.
It is quite conceivable that we could be approaching $30 trillion in national debt by the time the president is inaugurated in 2021. Make whatever assumption you want to about interest rates, the level of taxable revenues in current models suggests that interest could easily be consuming more than 15–16% of revenues by then. And growing… That is not a sustainable model.
It turns out most companies are doing well, but a small group shows results so dismal that they weigh down the entire market. Worse, that group may not recover nearly as fast as some analysts think. We will see why in a little bit.
Today we’ll look at the remarkable results the Cleveland Clinic has already achieved with its 100,000+ employees and dependents and with numerous corporations they work with. They are making people healthier and reducing medical costs. It is a model that I think could work on a much broader scale.
This week we are going to look at the US healthcare system, not simply to critique Obamacare, but to explore the deeper problems. Warning: this letter will print much longer as the latter half of the letter has a lot of charts and graphs.
In today’s letter we are going to look at the FOMC’s decision-making process for monetary policy and survey the unpalatable future that our leaders are cooking up for us. But we won’t be living in the fantasy world they have created for themselves; we are going to have to live in the real world instead, where investment portfolios make a difference to our lifestyle and retirement, not only for ourselves but for our families and clients.