Pragmatic Capitalism

Practical Views on Money & Finance


Why Recession Forecasting Matters….Still

Last October I wrote an important Orcam Research piece that described why recession forecasting can make a big difference.  Not only are recessions important in understanding future policy (since high unemployment tends to result of recession, but from the perspective of portfolio management, recessions tend to be when the worse loss of capital occurs. Now,… Read More

Lessons From a(nother) Fund Collapse

I saw this story over at Josh Brown’s site about an “apple only hedge fund” that has apparently imploded.  These sorts of stories are nothing new, but it does get frustrating to see how people keep falling for these sorts of investment schemes.  And yes, they are schemes because they can’t deliver what they promise.… Read More

Is A “Great Rotation” Underway?

It’s been difficult to escape discussion about the “great rotation” in recent weeks. In case you’ve been hiding underneath a rock, the idea of the “great rotation” is that investors will rotate out of bonds and into stocks. There are three big misunderstandings being made behind this thesis:

Did Keynes Understand Endogenous Money?

One of the core understandings of MR is the endogeneity of money. Endogenous money is based on the understanding that the money supply is high powered money + broad money and that these variables are determined by the private sector’s demand for money. That is, almost all of the money in our monetary system is created… Read More

“Loans Create Deposits” – In Context

Loans create deposits. We’ve heard it many times now. But how well is it understood? The phrase is typically invoked accurately, in conjunction with a rejection of the ‘money multiplier’ fable found in economic textbooks.