The Outlook


Welcome to The Outlook archives, where you can view several past issues featuring our investment and economic thinking. The Outlook is available in both PDF* and HTML format. We recommend that you review the PDF format, as it is closer in appearance to our printed version.

October 2014

Help Wanted: Smart Fiscal Stimulus

“No one in society remains untouched by a situation of high unemployment. For the unemployed themselves, it is often a tragedy which has lasting effects on their lifetime income. For those in work, it raises job insecurity and undermines social cohesion. For governments, it weighs on public finances and harms election prospects. And unemployment is at the heart of the macro dynamics that shape short- and medium-term inflation, meaning it also affects central banks. Indeed, even when there are no risks to price stability, but unemployment is high and social cohesion at threat, pressure on the central bank to respond invariably increases.”

Excerpt from Jackson Hole speech by
Mario Draghi, President of the ECB, 8/22/14

August 2014

Investment Strategies for an Unprecedented Business Cycle

The market has reached record levels this year in the face of geopolitical events in Ukraine, the South China Sea and throughout the Middle East, which in other economic cycles would have likely led to a significant pullback. Clearly, the current market is being driven by other forces. Russia’s aggressiveness in Ukraine and conflict in the Middle East now pose major risks to political stability. While the term “complacency” has been used to describe the stock and bond markets this year, we believe that today’s market reflects a more complex set of dynamics resulting from the combination of a prolonged low-growth economic expansion, a lack of sensible alternatives available for investors (given the low and declining yields on fixed income) and the deflationary forces which exist in the global economy. The disequilibrium present in the global economy continues as the major economies struggle with muted growth due to excess capacity and debt in the system.

March 2014

The Virtues of U.S.-centric Investing in the Current Geopolitical and Geoeconomic Environment

“The major powers have yet to undertake globally cooperative responses to the new and increasingly grave challenges to human well-being – environmental, climatic, socioeconomic, nutritional, or demographic. And without basic geopolitical stability, any effort to achieve the necessary global cooperation will falter… As China’s influence grows and as other emerging powers – Russia, India or Brazil for example – compete with each other for resources, security, and economic advantage, the potential for miscalculation and conflict increases.”

- Zbigniew Brzezinski – excerpt from “Strategic Vision”

December 2013

Time to taper the tapering talk: Why interest rates and inflation rates matter more

“Making monetary policy is sometimes compared to driving a car, with policymakers pressing on the accelerator or the brakes, depending on whether the economy needs to be sped up or slowed down at that moment. That analogy is imperfect, however, for at least two reasons. First, the main effects of monetary policy actions on the economy are not felt immediately but instead play out over quarters or even years. Hence, unlike the driver of a car, monetary policymakers cannot simply respond to what lies immediately in front of them but must try to look well ahead–admittedly, a difficult task. Second, the effects of monetary policy on the economy today depend importantly not only on current policy actions, but also on the public’s expectations of how policy will evolve. The automotive analogy clearly breaks down here, for it is as if the current speed of the car depended on what the car itself expects the driver to do in the future.” Federal Reserve Chairman Ben Bernanke 11/19/13