CFA Conference: Kaletsky, Ritholtz, Rosenberg, Mauldin

If you don’t read The Big Picture, by Barry Ritholtz, you should. Breakfast with Dave is a terrific daily email economic report by David Rosenberg. The day it became a pay-for service was truly sad. I worked with him at Merrill — he’s an excellent economist.  Anatole Kaletsky was  a columnist and Principal Economic Commentator for The Times (London). He now runs GaveKal full-time and is also the author of Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis.  And if you don’t read John Mauldin‘s weekly email, Outside the Box, you should. His books are worthwhile too. That’s the opening panel at the CFA Institute Conference today.  It’s a very good one.

My session notes follow.  As always, these are at-the-time notes.  I make no guaranty as to their accuracy or completeness.


  • “Lots I can’t control.”
  • Focuses on what he can control.
  • Secular bear market since 2000, should end sometime between now and 2018 or so; trying to be ready when the next secular bull starts.
  • Analysts generally wildly wrong — we’re bad forecasters.
  • We miss a lot today by focusing so much on the future.
  • Why is anyone surprised that the French elected a socialist? — European banks have not had to suffer austerity; their debts have been covered.
  • Tech and other start-up stuff coming are astonishingly positive and bullish (once we get past the current valley).
  • Fed is already involved in bailing out Eurozone banks; expect it to continue (even if the appetite isn’t strong).


  • “In these markets, I pray a lot.”
  • “Austerity” is a dirty word, but it hasn’t really been tried.
  • Principal concern in Europe — political cohesion is unravelling (that was a key hopeful point).
  • Expects more velocity and volatility.
  • Eurozone, China and USA all in trouble.
  • “Fiscal cliff” is real and dangerous (the results of kicking the can down the road).
  • If if the can keeps getting kicked, GDP growth still poor.
  • Global deleveraging cycle — central banks will keep rates down and the yield curve will stay steep.
  • Fed tightening cycle probably 5-10 years out.
  • Once the credit card is maxed out, how can one get on a “growth path”?
  • The only monetary union that has succeeded historically is the U.S.
  • Gold now trades less like a commodity and more like a currency; thinks it will peak at around $3,000.
  • Fiscal crisis will hurt emerging markets (Mauldin thinks it will help — more self-sufficiency).


  • “The world out there looks very grey to most, but it looks pretty bright to me.”
  • Lots of focus on “somewhere else.”
  • Volatility between pretty defined parameters.
  • Eurozone has problems, but the U.S. is the driver, and the U.S. outlook is pretty positive (pulling out of the recession) even though expectations are highly negative.
  • The U.S. bond market is the most dangerous asset class in the world.
  • Expects the (steep) yield curve to steepen further (long-bonds could lose 20% cash without the Fed doing anything).
  • The main (and most relevant) uncertainty is the situation in the U.S.
  • Not that worried about Europe — economically untenable situation is becoming politically unsustainable, so it will have to change and either the Euro will break up or something else (perhaps a bank bail-out scheme on a Euro-wide basis), but that is the road to recovery, previously thought not-do-able.
  • Germany will not allow itself again to become the pariah of Europe.
  • Euro countries and entities may not be able to borrow from the capital markets, but can go to their central bank.
  • The dollar is the least ugly in an ugly contest (all panelists agree).
  • Thinks we’re in a secular bull market (since 1989 — Berlin Wall, internet, Tiananmen Square, Euro invented).


  • “The only good thing that will come out of the debt crisis is that the French will get theirs.”
  • Today it’s all Greece all the time; it will adjust to all France all the time.
  • Countries will leave the Euro because they are tired of (untried) austerity.
  • “Europe is a tinderbox looking for a match.”
  • French banks are crucial but capital is imploding.
  • “Japan is a bug in search of a windshield.”
  • Terrified by the JOBS Act, even before FINRA and the SEC writes the rules.
  • Japan is imploding and dying.