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In the art of research, the question is often more important than the answer.  For obvious reasons, the answer will be a reflection of what and how the question is asked.  We always find it fascinating, the questions that our exclusive network of clients are asking.  Yesterday we held our Fourth Quarter theme call with a Q&A session afterwards.  Below, for your interest, I’ve outlined some of the questions that were asked from some of our subscribers during the session.

  1. Will you please comment on the owner equivalent rent component of CPI.  My understanding is that it constitutes 30% of the CPI read, will this have any impact in terms of your inflation view into the next quarter?   Could this component keep a lid on CPI allowing the Fed more room to keep their loose policies for even longer than warranted?

  2. What are your thoughts on commodities in Q4?

  3. Would you say that the “better/surer” play for the quarter (trend duration outlook)  is commodities/gold/oil over equities?

  4. Can you reiterate your inflation views when M2 has stabilized, and compare that to China, which you like, yet has M2 growth has spiked.

  5. As the weak dollar benefits exports and consumer saving increases, can the purchase of treasuries by domestic sources offset the exodus by foreigners?

  6. As we start comping on CPI, do you think that higher headline inflation levels will be a strong headwind to the market?

  7. What’s your near-term outlook for China – it’s been a central theme all year – now where do we go?

  8. And do you think there is a level where treasury buyers abandon their buying?

  9. Understanding that you are bullish the S&P while the USD continues to weaken, is there a level to which the USD could fall that will spell trouble for US equities?

We will not guarantee that we have all the answers, but starting with the right questions will get us closer to the answer to be sure.


Daryl G. Jones
Managing Director