GR-NEAM Reflections: 07/31/2014 - Leviathans' Debate

Link to: Leviathans' Debate

Even among central bankers, there is sharp divergence of opinion about their responsibility for asset prices. Unfortunately, experience does not seem to be illuminating the discussion.

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John Gilbert also recently wrote an article entitled "Flowing into the Cracks" published in the spring issue of Intelligent Insurer magazine, which you can find HERE.

GR-NEAM Reflections: 07/01/2014 - Mammoth in a Tar Pit

Link to: Mammoth in a Tar Pit

The view that deleveraging in the U.S. is complete misses the point. Repeated bouts of government-supported credit creation are colliding with each other and declining in effectiveness.

GR-NEAM Reflections: 06/01/2014 - Waiting for the Dog That Didn't Bark

Link to: Waiting for the Dog That Didn't Bark

Inflation is too low, say central bankers. But there are reasons that this may solve itself.

GR-NEAM Reflections: 05/01/2014 - The Coming Education of Janet Yellen

Link to: The Coming Education of Janet Yellen

Janet Yellen's recently expressed sentiments are praiseworthy but do not make for good monetary policy. This is likely to increase the odds of financial volatility.

GR-NEAM Reflections: 04/01/2014 - Beware Epiphany

Link to: Beware Epiphany

Financial markets' behavior is entering central bankers' field of vision after long being ignored. This has the potential to change the rules.

GR-NEAM Reflections: 03/01/2014 - Flowing Into the Cracks

Link to: Flowing Into the Cracks

Central bank policy has been successful, if judged by its intent of promoting risk taking. But the resulting distortions turn up in unexpected places.

GR-NEAM Reflections: 01/31/2014 - Wrong, the Question of Structural Unemployment, and the Problem of Beer Goggles

Link to: Wrong, the Question of Structural Unemployment, and the Problem of Beer Goggles

Ideology explains a lot, and central bankers' belief in suspension of market forces is an unprecedented experiment. Its unwinding has begun in the U.S., and in the long run that is a good thing. How it works out in the nearer term remains to be seen.

GR-NEAM Reflections: 01/01/2014 - The Power of Belief

With their choices limited, the U.S. central bank has effectively made stock market inflation an instrument of monetary policy. The gleeful response of investors has produced valuations that are unattractive. The central bank already lost control of the bond market in 2013. Such an event in the stock market becomes more likely, the more elevated prices become.

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Market valuation update:

GR-NEAM Reflections: 12/01/2013 - History Ignored, Again

The Federal Reserve’s largesse does, in the words of its own Jeremy Stein, “flow into all of the cracks”. The result is elevated valuations, from Twitter to emerging market debt. This film has been run before.

GR-NEAM Reflections: 11/01/2013 - Old Hickory Rides Again

The debt ceiling fracas astonished the world, understandably. But the philosophy of the radicals in the Tea Party radicals is not new.

GR-NEAM Reflections: 10/01/2013 - Physics Envy

The Federal Reserve’s decision in September to continue quantitative easing at its current level was a surprise, inconsistent with experience, and even with the recent observations of one or more of its prominent members. It is also a mistake.

GR-NEAM Reflections: 09/03/2013 - First-Time Homebuyer Assistance 2.0

Private equity’s entrance into the single family home market coincided with the acceleration in home prices over the last year and a half. Early returns were impressive, but rising values and cut-throat competition for properties has had a self-limiting effect on returns. The early results of such investment activity are mediocre.

GR-NEAM Reflections: 08/01/2013 - Illusions of Control

The Federal Reserve's strategy has been to support consumption by inflating asset values. But the results are less predictable than those of conventional monetary policy. Recent events suggest that central banks may not be omnipotent after all.

GR-NEAM Reflections: 07/02/2013 - Mandarin Snow Globe

Central bankers are talking more about the unintended consequences of their actions. Ebullient risk takers beware.

GR-NEAM Reflections: 06/01/2013 - Growth and Debt, Revisited

The discovery of an error in a seminal paper exploring the consequences of high debt levels has placed supporters of fiscal austerity on the back foot. But similar findings on the costs of high levels of indebtedness remain, at least so far, undisturbed.

GR-NEAM Reflections: 05/02/2013 - Inflation: Nescience, or "Nobody Knows Nothing"

Standing national stereotypes on their heads, the Japanese government has taken the mantle of lead risk taker. Neither they, nor anybody else, has any idea how this will turn out.

A.M. Best Webinar: Asset Management Perspectives (video)

John Gilbert, Chief Investment Officer, GR-NEAM and Hugh McCutcheon, Senior Portfolio Manager, GR-NEAM Limited, lead a one hour examination of the economic outlook for insurance investment managers and related professionals.

GR-NEAM Reflections: 10/02/2012 - The Adolescent Centenarian Should Heed Advice From China

This month's piece from John Gilbert was especially good.

The Federal Reserve has made the capital markets an instrument of monetary policy with QE3 announced in September. But no consideration is given to the possible consequences of doing so.

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John Gilbert will also be one of the participants in the European Investing Summit 2012. To learn more or to sign up for that event, go HERE.

GR-NEAM Reflections: 12/01/2011 - Resilience, Insouciance or Denial?

Thanks to Matt for passing this along.

The resilience of risk asset prices is admirable but tentative. The dollar suggests that markets have not yet capitulated.

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John Gilbert also led a webinar for AM Best titled "Asset Management Perspective: Financial Crises - Danger and Opportunity" that can be accessed from HERE.

GR-NEAM Reflections: Investing With Leviathan

The monthly publication written by John Gilbert, CIO, GR-NEAM (General Re-New England Asset Management).

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Summary: The scale and complexity of governments' responses to the financial crisis is very large. While it is early to tell, it may increase the role of policy anticipation in investment analysis. Participants in the Chinese stock market have behaved that way all along.

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Link to past issues: HERE

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