Investing has become more fraught with danger as policy attempts to do what policy has never done before. New ways of thinking about asset allocation need to be developed. We begin with prospects for a few economies and how they should be expressed under these new regimes. Prospects for the US economy: GDP is comprised

A peek at the future seen through a cracked and hazy crystal ball… The US economy is in recession. The US economy had been supported in the past year by large scale debt monetization and concomitant Fed balance sheet expansion. The absence of monetary expansion has exposed the fragility of the recovery. That the economy

Just as the transition from QE to QE2, the purchase of MBS to the purchase of US treasuries was a seamless exercise, so too the transition to QE3, the funding of banks to purchase US treasuries will be seamless and this time if done right, done without fanfare. The US economy cannot survive higher interest

Investors have short memories. While the reasons for the 2008 financial crisis have not gone away or been adequately addressed, markets have recovered nicely.

Strong commodity markets create winners and losers. For example, cotton prices remain 100% higher than a year ago even after a 30% correction. Companies like Carters which make baby clothes and ladies underwear and sell mostly through Walmart will struggle to pass on costs. Abercrombie and Fitch and Ralph Lauren will find it easier to