A must read every month, Bill’s signature piece this month takes the form of a letter to President Obama. I thought I would summarize here as I enjoy his conjecture as much as any Wall Street expert. His style and substance speak to the economist/fund manager dwelling somewhere within.
Coming from Republican-ville (Newport Beach) and from a guy who runs billions of dollars for the largest bond investment house on the planet…an interesting slant. His take-aways are always amusing, always “food for thought” and somewhat alarmist.
– Laffer Curve (oh how I remember sophomore year Econ!) I question his premise that a real marginal tax rate of close to 50% wont have a dampening effect on consumption for those earning at the top end of the bracket?
– The rich are eschewing McMansions? The new new thing is “LEED” certified homes?
– The next administration is going to produce the first ONE TRILLION dollar deficit (by 2011)?! Wow, scary on the surface…even more quixotic on the side effects of that potent bill? Hope my kids and their friends understand the power of saving better than my generation?
– True to form, he predicts rising yields and bottom basement bond prices. That tune hasnt changed over the past few years from his “Investment Outlook” thesis that purports that as we continue to lever up, save little and our consumption continues unabated, dark storms await. Interesting to see how this plays out?
Add in a “black swan” of an event (another war, another financial meltdown, etc) and you have the makings of a movie! Oh yeah, and what about that social security liability problem and deflating dollar?
Anyone an optimist out there? I am. Short Treasuries (whole curve – at least the longer durations) and go long Euro? Strap in!