Germany’s Fiscal Austerity: An Impediment to Economic Growth
June 30, 2019
Although the eurozone has enjoyed continuously declining unemployment in recent years, both economic growth and inflation remain stubbornly low. With negative interest rates over the last five years and a...
Another Look at China – The Social Credit System
March 31, 2019
In the United States, personal credit scores and corporate credit ratings establish trust that is easy to take for granted. Individuals trust that if they pay their credit card bills...
Euroscepticism Offering Deep Discounts
December 31, 2018
Stock market returns in the eurozone as measured by the MSCI EMU1 index fell 19% in 2018, pulling back on the 26% gain in 2017. Primary drivers for the lagging...
U.S. Economic Strength Pressures Emerging Markets
September 30, 2018
Historically‐low unemployment, growing wages, and other positive economic signals led the Federal Reserve to raise interest rates in recent years. This prevents the United States economy from accelerating too rapidly....
The Euro Will Survive (and Thrive)
June 30, 2018
For the fifth time since 2012, I was invited to participate with a select group of European and American economists at a symposium hosted by the National Association of Business...
The Law Deficit
March 31, 2018
In 1990 the Nobel Prize winning economist Robert Lucas wrote a paper entitled “Why Doesn’t Capital Flow from Rich to Poor Countries?”. Lucas noted that investment returns are lower in...
Japan – Improving Trends in the Land of the Rising Sun
December 31, 2017
Japan’s Prime Minister, Shinzo Abe, took a political gambit by calling a snap election in October. This decision appeared to pay off in spades as his ruling coalition won a...
Economic Strength in Germany Implies Rising Interest Rates for Us
September 30, 2017
The European Central Bank (ECB) could face a thorny problem in the coming quarters. On one hand, German economic performance is robust. On the other hand, economic fundamentals in the...
Is MSCI Leading the World Astray?
June 30, 2017
Like the Dow Jones Industrial Average or the S&P 500 Index for American stocks, the MSCI Emerging Markets Index (EM) is the leading stock market benchmark for less developed countries....
Foreign Stocks: From Dogs to Darlings?
March 31, 2017
Foreign stock markets are very inexpensive. A good indicator of value – particularly for international comparisons – is the Price-to-Cash-Flow (P/CF) ratio. Right now, the P/CF for the S&P 500...
Our Economic Relationship with Mexico
December 31, 2016
President-elect Trump’s protectionist attack on Mexico appears to be more than rhetorical. He blames the North American Free Trade Agreement (NAFTA) for enabling companies to freely move manufacturing jobs to...
Developing Country Chaos Climaxing
September 30, 2016
In 2015 world Gross Domestic Product (GDP – the estimated value of all goods and services produced during the year) was $74.7 trillion. For a frame of reference, U.S. GDP...
June 30, 2016
Voters in the United Kingdom shocked the world by voting to leave the European Union (E.U.) after 43 years of membership. Exiting the E.U. has profound financial, economic, and political...
Global Stock Markets Lag the United States…but are Inexpensive
March 31, 2016
The financial crisis and Great Recession of 2008 – 2009 were global events. Unlike the American stock market, however, most international stock markets have not yet fully recovered to their...
Global Complexity Requires a Strong Analytical Framework
December 31, 2015
In an earlier less globalized era, American investors could ignore a debt default in Greece (population 11 million). Similarly, European investors could disregard subprime mortgages in the United States. We...
How Overbuilt is China?
September 30, 2015
In our March 2014 GHPIA Global Markets letter1, we analyzed the sources of slowing economic growth in China, with particular emphasis on the property boom turning bust. China’s economic growth...
Structural Reform and the Future of Europe
June 30, 2015
In recent years I have had the honor of joining a small delegation from the National Association for Business Economics (NABE) on several trips to meet European economists, policymakers, bankers...
Structural Reform and Institutional Convergence in Europe
March 31, 2015
The Greek election on January 25, 2015 brought the extreme left wing Syriza party to power. During the campaign Alex Tsipras – Syriza’s leader and the new Prime Minister –...
Is International Diversification Still Worthwhile?
December 31, 2014
Foreign markets performed poorly in 2014 and were a drag on our client portfolios (see Figure 1). What patterns can we decipher and is it wise to maintain our allocation...
A World of Opportunity, Despite Weak Markets in 2014
September 30, 2014
Every four years the U.S. Department of Energy conducts its “Residential Energy Consumption Survey”. The most recent published results are from 2009, but they give us tremendous insight into the...