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Latest Observations, March 2017




The Basis For The Changing Basis
It is simply the nature of modern Economics to get most things backward. Positive Economics particularly in the form of econometrics has been like a declaration of ignorance, where Economists have formally decided to try and understand as little as possible.
Jeffrey P. Snider, Alhambra Investment Partners, 28.03.2017


Global Demographic Trends Shape Policy Environment
"Demographics are key determinants of what is economically feasible at both the global and national levels. Demographics also have important implications for monetary policy. Slower population and labor force growth in the coming decades will have a depressing effect on real interest rates." 
Mark A. Wynne, Economic Letter, Federal Reserve Bank of Dallas, July 2016

An Interesting Forecast for Interest Rates
"While inflation expectations do influence long rates, as lenders demand a higher return to compensate for the loss of purchasing power, we don’t think the logic supporting the outlook for rising rates holds. From a high level, markets often go against the consensus and do what few anticipate."
Fisher Investments Editorial Staff , Fisher Investments MarketMinder, March 17, 2017


Reality May Soon Overtake Post-Election Equity Rally
The reality of politics collides with the optimism of the campaign
Krishna Memani, Oppenheimer Funds, February 28, 2017


Positive Feedback Loop
"Good luck being bearish on humans for any extended period of time."
Jared Dillian, Mauldin Economics, The 10th Man, March 16, 2017





on the Fly

“Many of the jobs that AI will destroy – like credit scoring, language translation, or managing a stock portfolio – are regarded as skilled, have limited human competition and are well-paid. Conversely, many of the jobs that AI cannot (yet) destroy – like cleaning, gardening, or cooking – are relatively unskilled and are low-paid.”

Dhaval Joshi, The Inflation Paradox, BCA Research, Feb 23, 2017


The Coffee Chronicles

"What production would you absolutely not like to participate in? Oh, accounting, or anything with numbers, anything where you can't know what I mean, you can't lie, the figures don't lie!"
Inside the Actors Studio with Jay Leno, March 19, 2015


Stock Market Provides Imperfect View of Real U.S. Economy
"The stock market—through measures such as the Standard & Poor’s 500—is often thought to be an economic bellwether. However, market volatility compromises the reliability of such indexes."
Julieta Yung, Economic Letter, Federal Reserve Bank of Dallas, May 2016





on the Fly

“It turns out 2007 may in time be understood as the single greatest technological inflection point since Gutenberg invented the printing press. And we completely missed it, because of 2008."

Thank you for being late: Remarks by Thomas L. Friedman on December 15 2016, the Brookings Metropolitan Policy Program


Fake News: Yellow Ain't Mellow
Fake news isn’t new. It was around over 100 years ago. Back then, they called it “Yellow Journalism.”
Michael Hanson, Fisher Investments MarketMinder, March 2, 2017


The Coffee Chronicles

"What does space smell like?

Astronaut Chris Hadfield answers your questions"

PBS NewsHour, 13.11.2013


A Possible Leadership Rotation in 2017?
"While investor sentiment has been slow to warm in America in this bull market, Europe (and, specifically, the eurozone) is even further behind."
Fisher Investments Editorial Staff, Fisher Investments MarketMinder, March 1, 2017



The History of Zero: How Ancient Mesopotamia Invented the Mathematical Concept of Nought and Ancient India Gave It Symbolic Form

“If you look at zero you see nothing; but look through it and you will see the world.”
Maria Popova, Brain Pickings, February 2017




on the Fly

“The fact that models can deliver only an approximation of the truth means that conducting monetary policy is not a mechanical exercise. It is a complex blend of art and science—in effect, it is an exercise in risk management." Building the next generation of economic models is a priority for the Bank of  Canada, Governor Poloz says, 31 January 2017


They say nothing beats a home-cooked meal
Comparing price inflation of food at home and away from home
Christian Zimmermann, The FRED® Blog, February 2, 2017


Benjamin Harrison and the Terrible Tariff
"The Smoot-Hawley Act of 1930 is blamed for intensifying the Great Depression, and the lesser-known McKinley Tariff of 1890 provides an instructive lesson on how protectionist policies can impact the stock market and politics."
Dr. Brian Taylor, Global Financial Data, January 25th 2017



The Master and his Knives

You can probably tell me what brand coat you have on, but can you tell me what brand of knife you used to prepare dinner last night? According to Jay Patel, owner of London-based Japanese Knife Company, the knife is humankind’s most valuable and underrated tool.

Aiste Miseviciute, 31 January 2017



The FOMC policy rate projections versus reality



James Bullard, FRB-St. Louis, Jan. 12, 2017


The Future of Energy Prices: Lessons from 750 Years of History
"... for most of history, commodity prices stayed the same for periods of several centuries. It was mainly in the 1500s and the 1900s that the world experienced irreversible increases in commodity prices."
Dr. Brian Taylor, Global Financial Data, January 5th 2017



The Coffee Chronicles

"In the past quarter-century liberalism has had it too easy. Its dominance following Soviet communism's collapse decayed into laziness and complacency.  (...) The experts recruited to help run large parts of the economy marveled at their own brilliance."
The Economist, December 24th 2016


The Priceless Parable of Price Discovery
“Gentlemen prefer bonds.” So quipped Andrew Mellon in 1929 as stocks fell and investors rushed into bonds, pushing their yields down and prices up. Historians recount that the flight to safety had anything but a smooth landing.
Danielle DiMartino Booth Money Strong, December 21, 2016


Donald Trump on Wall Street
There are so many different aspects of Donald Trump’s life that we could talk about, but the focus here is on Trump’s two publicly traded companies, Trump Hotels & Casino Resorts Inc. and Trump Entertainment Resorts, Inc.

Dr. Brian Taylor, Global Financial Data, October 12th 2016



Pension Funds Switzerland 2016

For institutional investors only



Public Pension Funds


Corporate Pension Funds


Industry-Wide Pension Funds


Multi-Employer Pension Funds




Global pension assets
Evolution 2005-2015 - USD billion

Willis Towers Watson and secondary sources



Global pension assets vs. GDP in local currency
2005 to 2015

Willis Towers Watson and secondary sources



Asset Class Returns in Swiss Francs since 1950

Dr. Alex Hinder, Hinder Asset Management, September 2016



Teacher Retirement System of Texas Diversification Framework

TRS is the largest public retirement system in Texas in both membership and assets.

Teacher Retirement System of Texas TRS, 2015


Illustrative breakdown of ATP assets into risk factors

The ATP Group is Denmark's largest pension and social security provider.

ATP, 2016


The Coffee Chronicles

NASA’s interest in documenting its missions was not always so strong; Mercury astronaut John Glenn, for example, was forced to buy a cheap 35mm camera at a Cocoa Beach drugstore in 1962 because he alone felt that America’s first orbital spaceflight merited some historical snapshots.
Jonathan Cape, Full Moon, 1999


"The Bond Rally Of A Lifetime"
The Cause of Inflation, Lock Up For Infinity? Treasury Haters, Media Bias, Lonely Bulls, Maturity Matters, Three Sterling Qualities, Sovereign Shortages, "The Bond Rally of a Lifetime", and Finally Facing Reality.
Gary Shilling, Gary Shilling's INSIGHT newsletter, August 2016


Balanced Portfolio Strategies since 1986
December 1986 to June 2016

Lipper, July 2016


The Callan Periodic Table of Investment Returns

Annual Returns for Key Indices Ranked in Order of Performance (1996–2015)

Callan Associates Inc., 2016



The Coffee Chronicles

""Being wrapped up in breakfast, lunch, dinner came from an agricultural society and the industrial revolution. We don't work on farms, we don't work on assembly lines and I don't think we should eat like we do. I think people will switch to eating when hungry rather than eating on schedule.""
Lunch with the FT: Rob Rhinehart, July 2016


Salt in Their Veins
"The social structure of the inland Maine community is unlike anything you might meet with anywhere else. The kids never move out of the town they were raised in, there is no theft, the center of town is the fish store, or the post office."
Victor Niederhoffer, Daily Speculations, July 19, 2016


Are You Ready for the Bubble of the 2020s?
"If you look back at the stock market over the past 350 years, you’ll find that in each Century, the Twenties have always enjoyed bull markets in equities; this rings true for the 1720s, the 1820s and the 1920s."
Dr. Brian Taylor, Global Financial Data, July 14th 2016




on the Fly

"The British have achieved, accidently, what every central bank is trying to achieve, a fall in one’s domestic currency. What wouldn’t Bank of Japan governor Kuroda sacrifice to achieve the same thing?"

Michael Howell, CrossBorder Capital, July 2016



Total Pages in the Code of Federal Regulations (1950 - 2014)



Columbian College of Arts & Sciences, Regulatory Studies Center


Dividends Tell a Better Story than Corporate Earnings
"Given the confusion that can be created from the two different ways to calculate earnings, we think an old saying among investors perfectly applies: “profit is an opinion, cash is a fact.” "
Oppenheimer Funds, July 5th 2016


Germany versus ECB: How Dangerous is the Dispute?
Careful what you wish for. For decades, Germans strongly believed in price stability and an independent central bank. Fate and the European Central Bank (ECB) have granted them both wishes.
Holger Schmieding, Berenberg, 20.04.2016



The Coffee Chronicles

"You know what, it’s rare when you get to see somebody get stupider before your eyes, but he’s really working at it. So you’ve got to give him credit, it’s not an easy thing to do, but he’s accomplished it!"
Mark Cuban on Donald Trump, Extra TV, June 21st 2016


La vraie signification du débat sur le BREXIT
"Les Anglais n’ont aucun problème avec les réalités. Ils ont de grosses difficultés avec les idées". Winston Churchill
Charles Gave, Institut des Libertés, 20 juin, 2016



on the Fly

"As noted, when investors buy bonds for capital gains and equities for yield, something looks wrong!"

Michael Howell, CrossBorder Capital, June 2016



German 10-year Benchmark Bond: 1807 - 2016

Source: Global Financial Data

Low rates now the problem, not the solution
"Although in relative terms the US has had a good recovery, in absolute terms it has not. (...) Whether we look over the past five years, or whether we look over the past ten years, US productivity growth is close to as weak as it has ever been."



Fathom Consulting, June 10th 2016



The Demise of the Zero Yield Bound
"The asymmetry of bond markets was often used to differentiate the performance potential of fixed income and equity investments. Bonds, we were told, had significant downside potential, while their upside was limited by a purported zero yield bound."
Tim Haywood, GAM, June 10th 2016


The Death of Equities
"Could the 21st century be reverting back to the condition of stock markets in the 18th and 19th centuries when the capital gains on stocks were minimal or non-existent? Unfortunately, the answer to this question could very well be yes."
Dr. Brian Taylor, Global Financial Data, June 2nd 2016


A Third Major Bubble That Looks Set to Finally Burst
"As noted, when investors buy bonds for capital gains and equities for yield, something looks wrong!" 
Michael Howell, CrossBorder Capital, June 2016


By this metric, bonds have never been more valuable
"Return is the most salient feature of any asset class, and it’s hard to get happy about 0%. In an asset allocation framework, however, return has different dimensions."
Joe Davis, Vanguard, May 26th 2016




Alice in Quantumland: A Charming Illustrated Allegory of Quantum Mechanics by a CERN Physicist

This book is an allegory of quantum physics, in the dictionary sense of “a narrative describing one subject under the guise of another.”
Maria papova, Brain Pickings, January 2014



Japan: in search of a virtuous cycle
"But perhaps the usefulness of Abenomics will have been to provide a workable game plan for a managed economic decline, in which bond investors pay the Japanese government to borrow."
Lombard Odier, Investment Strategy, 2nd quarter 2016


All that fun for nothing!
"With surprising regularity, financial markets provide the opportunity to drop that phrase as a deadpanned summary of recent events."
Jeffrey Knight, Columbia Threadneedle Investments, April 25, 2016


Cyprus versus Greece: a lesson in Eurozone reform
Holger Schmieding, Kallum Pickering, Berenberg, April 1st, 2016


The Coffee Chronicles

Did you ever notice how sometimes all day Wednesday, you keep thinking it's Thursday? And it happens over and over all day long. And then the next day, you're all right again..

Do you ever find yourself standing in one of the room in your house, and you can’t remember why you went in there?
George Carlin, Little Moments



Health Care Stock Returns Outpacing Rise In Health Care Expenses
Bob Carey, First Trust Advisors L. P., April 21, 2016


Traffic jam of executive aviation

Phoenix Sky Harbor airport in Arizona Super Bowl 2015


China’s monthly investment data provide first concrete evidence of ‘doubling down’
"Official data published last week confirmed that investment by state-owned enterprises surged during the first three months of this year, with the scale of the turnaround strongly reminiscent of the early 2009 period. "
Fathom Consulting, News in Charts, April 21, 2016


A Snapshot of Growth vs. Value Investing

Bob Carey, First Trust Advisors L. P., April 19, 2016


The People in Your Neighborhood: Social Interactions and Mutual Fund Portfolios
Veronika K. Pool, Noah Stoffman, Scott E. Yonker, The Journal of Finance, December 2015


The Global Liquidity Trap Turns More Treacherous
The adoption of negative interest rates will do little to stimulate growth. 
Scott Minerd, Chairman of Investments and Global CIO, Guggenheim Partners, April 07, 2016


United States 10-year Bond Constant Maturity Yield

1790 to 2010

Global Financial Data


Who you think the best candidate for the economy would be?

“Bernie Sanders”

"Without a doubt? Why is that?"
“No question.”

Asher Edelman, on whom the Gordon Gekko corporate raider character was based in the 1987 movie, Wall Street , interview on CNBC’s Fast Money, March 12, 2016




Cheats and Deceits

How Animals and Plants Exploit and Mislead.


"Many early naturalists, including Charles Darwin and his contemporaries, were all too aware that the natural world is not a harmonious place. While we often see instances of apparent cooperation, selfishness and exploitation rule the day." Read more

Martin Stevens, Oxford University Press, February 2016




on the Fly

"A severe depression such as 1920-21 is outside the range of probability. We are not facing a protracted liquidation"

Harvard Economic Society, a few days after the 1929 crash, the society closed its doors in 1932.



The Panic of 1792

The first attempt at a stock corner in the United States came at the birth of the American stock market, occurring even before the New York Stock Exchange had been established.

Dr. Brian Taylor, Global Financial Data, February 28th 2016


The Global Economy Didn’t Change Last Year, Views of QE Did
The stock market is still viewed as if it were a discounting mechanism, a system where information is processed and priced to deliver insight about the fundamental state of liquidity, markets, and the economy. That view has always been debatable, but never more so than the whole of this century so far. Read more
Jeffrey P. Snider, Alhambra Investment Partners, April 11th 2016



Asset Management Switzerland 2015

 For professional investors only





Pension Funds Switzerland 2016

 For institutional investors only



Pension Funds Guide
Switzerland 2015

 For institutional investors only

pdf Version






Bubbles and Crashes

Business Cycles
Central Banks




Creative Destruction
Credit Crunch


Current Account


Financial Crisis
Fiscal Policy


Gloom and Doom

Government Debt

Historical Patterns

Household Debt

Interest Rates


Market Timing


Monetary Policy

Real Estate


Sovereign Bonds
Systemic Risk


Tail Risk


Tipping Point
Trade Balance