CGU Lecture: Far From Equilibrium Economics

Dr. John Rutledge “Tuesday Lunch Series” 2-14-12 from CGU School of Politics & Economics on Vimeo.    Read More →

Migrant Worker Schools

I did a spot on CNBC Squawk Box this morning to discuss the impact of the recent unrest in China. Much of the news surrounds stories about migrant worker protests. As I wrote yesterday, the drivers for the protests making the news is not ideology–it is practical life issues like pay, jobs, work practices, discrimination, and corrupt local government officials. Wen Jiabao recently said that corrupt... [Read more]

Saper Vedere

When people asked Leonardo da Vinci the secret of his creative and inventing genius, he replied “Saper Vedere,” to know how to see. Our objective is to help people see the link between government policy, capital formation, and growth, then help them see strategies for growing their businesses, increasing the value of their investments, and improving their economic lives. Back to How We... [Read more]

Growth is the Answer

Thirty years of traveling the world have convinced me that growth is the answer. Economic growth is the only reliable engine for lifting people out of poverty and improving their lives. Access to capital, along with the people’s focused productive energies, are the principal drivers of growth. Capital comes in many forms; modern equipment, efficient factories, new technologies,... [Read more]

A Real World Framework

As a young economist I taught graduate and undergraduate students in macroeconomics, monetary theory, international trade and finance, and econometrics. Like other academics, I taught students how to build and manipulate all the textbook models of economic behavior. I did so for three reasons. The models were mathematically elegant, which made them both beautiful and easy to teach. Publishing journal... [Read more]

Stuff Matters

The first pillar of our thinking is also the simplest: Stuff Matters. No macroeconomic analysis is complete without accounting for people’s multi-trillion dollar holdings of Stuff. Stuff describes the items on our balance sheets, including tangible assets (land, office buildings, collectibles, used cars, and other claims... [Read more]

Shift Happens

Government policies influence our lives in many ways. Their biggest and longest-lasting impacts on the economy happen when they drive a wedge between the returns on some assets relative to others. These balance sheet effects dominate all other events in driving economic change. In the late 1970′s, for example, rising inflation added an... [Read more]

Intrinsic Value (and Intrinsic Risk)

Our valuation approach is simple. Investors own securities for one reason-to get paid. Stocks and bonds are simply claims on the future cash flow generated by the underlying assets. The present value of those future free cash flow streams is the Intrinsic Value of the securities. Intrinsic Value estimates will only be as good as the estimates... [Read more]

Thermo-Economics

In physics, when two objects are brought into contact heat flows from the hotter to the colder object until the temperatures are equal, after which point there is no further change. This is known as the Second Law of Thermodynamics the most inviolable law in science. Thermodynamics explains the weather, where temperature and pressure ... [Read more]

The Weather Map Theory of Global Investing

Major economic change is almost always the result of a change in government policy that drives a wedge between the after-tax return on one type of asset relative to others. This leads to a SHIFT in asset demands as investors attempt to rebalance their portfolios to take advantage of the return differential. The rebalancing drives asset price changes, and ultimately shows up in the creation or destruction... [Read more]