WWI warns us about markets’ ability to see the future

Forecasting with models

Summary: Confidence rules America, with US markets at or near record high valuations and Team Trump expanding our wars. Time for a reminder that our ability to predict events is small, which means these moments of great confidence are periods of high risk. This is a revised post from 2014. “We seem to be living … Continue reading WWI warns us about markets’ ability to see the future

Today’s mythbusting: the Fed is not suppressing interest rates

Summary: Here's another in my series of economic myth-busting articles, explaining that the Fed is not suppressing rates. It is a follow-up to Ignore The Bond Bears, The Fed Will Not Raise Rates. Part of the magical, even divine, powers attributed to the Federal Reserve is their ability to set interest rates -- both short- … Continue reading Today’s mythbusting: the Fed is not suppressing interest rates

Advice for us from the financiers who built the British Empire

Summary: Andrew Odlyzko, one of our top polymaths and futurists, gives us a new perspective on the economy and markets of our time by comparing them with those of Victorian England. We can learn a lot from this. "What would surprise early Victorian market players if they came alive today?" By Andrew Odlyzko in the … Continue reading Advice for us from the financiers who built the British Empire

Playing The Bubble Game: Investing In The 21st Century

Summary: Investment commentary these days overflows with mentions of bubbles. The concept is vital to understanding our economy yet encrusted with myths in the minds of most investors. This post cuts through those to the known history and theory of bubbles. As usual with economics, this gives us clues about the future – but only … Continue reading Playing The Bubble Game: Investing In The 21st Century

Effects Of The Coming Market Crash On The Economy – And Perhaps On You

Summary: For the past year I've warned that the economy is slowing. For the past three months I've warned that a recession is coming. Now let's consider the likely effects, and how you can prepare. The odds of a stock market crash are high. Are you at or near ground zero, to be hurt by … Continue reading Effects Of The Coming Market Crash On The Economy – And Perhaps On You