Knowledge Center

Drawing from over 32 years of in-depth research, Grant’s Interest Rate Observer offers you free access to selected articles via our Knowledge Center. Browse our topics and select an article to enjoy and share.


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Feature Article

Gyro Gearloose redux .

The arc of monetary evolution is the subject at hand. A question for the dollar-holding subscribers of Grant’s: What’s really in your wallet?

Topics

Please click on a topic below to read individual stories

Articles of Interest:

Gold

"The road to confetti "

April 15 comes and goes but the federal debt stays and grows. The secrets of its life force are the topics at hand...

APR 22, 2016

Gold

"Monetary action agenda"

With respect to the radicalization of monetary policy, investors en masse resemble the sleepy frog in the warming saucepan. They don’t jump out while the jumping’s good.

NOV 14, 2014

Gold

"Let's bury the gold"

Consider Echo Bay Mines

SEP 21, 1987

Financial History / Cycles

"Gyro Gearloose redux ."

The arc of monetary evolution is the subject at hand. A question for the dollar-holding subscribers of Grant’s: What’s really in your wallet?

FEB 26, 2016

Financial History / Cycles

"Inside ACE Securities’ HEL Trust, Series 2005-HE5"

The nation is running out of magazine covers on which to announce the coming collapse of house prices. From which fact it could be inferred that . . .

SEP 8, 2006

Financial History / Cycles

"The slowest asset"

In Houston, office rents are falling again, fully a decade after the Texas energy business stopped inflating and began deflating. Rents continue to fall in New York, too...

APR 24, 1992

Global Macro Stories

"The balance sheet that ate Switzerland"

Like a celebrity in flight from the paparazzi, the Swiss Confederation demands protection from its pesky admirers.

SEP 19, 2014

Global Macro Stories

"Beijing to Sydney"

Herewith an update on China (sinking), Australia (sympathetically sinking), and a handful of Grant's short-sale names (also sinking, except for the one that soared).

JUN 14, 2013

Global Macro Stories

"Nikkei put warrants"

The wonderful Herbert Stein remark about patience--"If something can't go on forever, it won't"--has been as good a motto as any to lose money by in this epic bull market.

JUL 7, 1989

Equity Longs

"The thrifts are coming! The thrifts are coming!"

A discussion of newly converted thrifts coming to the market.

OCT 29, 2010

Equity Longs

"Certifiably formerly toxic "

A discussion of the transformation of Innospec.

SEP 17, 2010

Equity Longs

"Pariahs’ club "

The stock market is, by our lights, absurd, but it is becoming slightly more symmetrically absurd. There is a growing list of cheap valuations to complement a considerably larger number of extravagant ones.

FEB 4, 2000

Equity Shorts

"Anticipating Mr. Friedman "

history, a man so driven as the chief curator of Restoration Hardware might have led a revolution. As it is, he seeks to revolutionize the high end of furniture and décor trades.

DEC 11, 2015

Equity Shorts

"Generation ZIRP"

Lenders and borrowers may be reasonable people, but they periodically miscalculate. There is feast, then there is famine, world without end. It’s the credit-related business models that come and go.

JAN 23, 2015

Equity Shorts

"Drug dealer"

A financialized age has at last produced a financialized pharmaceutical company. Herewith, a long look at an enterprise that does its compound-hunting not in the laboratory but in the stock market.

MAR 7, 2014

Fixed Income Longs

"For the un-meek"

If something can’t go on forever, it won’t. Now under way is a bullish speculation on a bearish set of circumstances. Anticipating the joyous relief imparted by the lifting of bankruptcy fears.

MAR 11, 2016

Fixed Income Longs

"Introducing the Grant’s Supermodel Credit Portfolio"

Credit is what we are bullish on--cast-off residential mortgage-backed securities, senior bank loans, convertible bonds and corporate...

DEC 12, 2008

Fixed Income Longs

"Klarman baits a hook"

Seth A. Klarman, an investor of private capital in Cambridge, Mass., is now, and has been for some weeks, buying junk bonds--a few issues--with conviction.

FEB 16, 1990

Fixed Income Shorts

"Yield to worst"

"The food is terrible," to quote the famously ambivalent restaurant review--"and the portions are so small." Much the same can be said of today's junk-bond market.

APR 4, 2014

Fixed Income Shorts

"Napoleon advances on Moscow"

Although opulent, the 1987 Campeau Corp. annual report is dated. On April 1, two months after the close of the Campeau fiscal year, Federated Department Stores entered the corporate fold...

JUN 24, 1988

Fixed Income Shorts

"Junk debunked"

SEP 24, 1984

Alternative Assets

"Soil erosion"

Farmland values climbed with rising corn prices and tumbling interest rates. Now the cycle turns. We write for urbanites, suburbanites, exurbanites and agriculturalists alike.

AUG 8, 2014

Alternative Assets

"Zero-coupon trees"

While Wall Street has disavowed extreme leverage since the crisis of 2008, foresters practice it as a matter of course. Dig a hole, plant a seedling and wait 25 or 30 years.

JUL 13, 2012

Alternative Assets

"Trump for the bid"

A coincidence in the latest Playboy: Donald J. Trump, the subject of the Playboy interview, and Miss March, Deborah Driggs, share the same basic philosophy of life.

FEB 2, 1990

Grant's Archive

Subscribers may download whatever they wish. Non-subscribers may search the archives and download past issues at the cost of $115 per issue.

To license individual articles for reprint, please email us at reprints@grantspub.com

March 24, 2017, Vol. 35, No. 06

Price war for Warren Buffett

“There are just way too many assets chasing the sales,” says a man as wise—in this particular instance—as the Sage of Omaha himself. Ultra-low interest rates, high price/earnings ratios and credit markets fitted out with red carpets share the blame. No profits? No problem.

Excess lingers long

“The hedge fund isn’t an asset class. It is a compensation scheme.” It became an over-compensation scheme. Tracing the rise and ongoing pratfall of the modern-day hedge fund.

‘Yes, but’ they said

Bullishness dominated, though they did not quite monopolize, the day’s proceedings. A vision of 20 years on the investment equivalent of an exercise bicycle.

$1 billion a day

“Indexing doesn’t need any help. It is growing at an astonishing rate and, for someone who never intended to build a colossus, a kind of frightening rate.”

Rejoice, mediocrities!

Where in life can a sub-par performer achieve average results with a light tap on a computer key? Investment indexation, attested a preeminent active investor, is “incredible.”

The Age of Trump

The text of your editor’s early-morning remarks: “The Age of Trump will go down as the Age of the Consequences of Radical Monetary Policy.”

Whence D. Trump?

A long and a short for a Trump Market where “what has worked so well in investing will fade or stop working.”

Four letters unspoken

The word “gold” went unmentioned at the Plaza, except in the context of an unassailable rule for living: “Never stand in line to buy an asset.”

Last to first

Yes, buying low and selling high is hard to do, but there are ways. “Trailing three-year performance is very predictive.”

The great escape

To close the era of extraordinary monetary policy, the Federal Reserve must open its mind. “There is no wealth effect, only a wealth illusion.”

Narendra Reagan

A pair of stocks in a country poised on the brink of capitalist emergence.

Mentioned at the Plaza

Other investment ideas presented by our speakers at the Spring 2017 Grant’s conference.

Where’s that boom?

While the S&P 500 is near an all-time high, the much-vaunted wealth effect does not seem to be working its magic.

Undoing Extraordinary Monetary Policy

Remarks of Peter R. Fisher Tuck School of Business at Dartmouth *** Grant’s Interest Rate Observer Spring 2017 Conference New York, New York *** March 15, 2017

March 10, 2017, Vol. 35, No. 05

Scraping up inflation

American consumer prices registered a year-over-year rise of 3.6% in February, according to the Web-scraping inflation detectives of the Billion Prices Project. More inflation is what the central bankers say they want. Cue the Disney cartoon classic, "The Sorcerer's Apprentice."

Risk-parity screenshot

Never--at least not since the time of the Napoleonic Wars--has the bond market served up anything like the gains that risk-parity portfolios have earned these recent decades. Is it so farfetched that something new and different awaits us all?

You only get par

Take a plunging VIX and a resurgent S&P. Add tight credit spreads, rock-bottom sovereign yields and a world-wide income famine. Voila: today's not so high-yield bond market. The worst of all fixed-income worlds.

Laddered oil play

Everyone is bullish on oil, though not so bullish as to lift the valuations of drillers whose survival depends on a $60 crude price. Nigeria on the cheap, the Arctic for a pittance. Widows and orphans, please avert your eyes.

Many happy returns

Whom to thank for the magnificent returns in the post-2009 stock market? We furnish a mailing address.

On the other hand, FOMC

A higher funds rate is all but in the books. What the central bankers may regret.

February 24, 2017, Vol. 35, No. 04

All about the headquarters

A pair of big, profitless, stockholder-defying American companies are building shiny new glass corporate offices with a common theme of sunshine. What the "fake moon landing guys" are demanding from Steve Mnuchin.

Disabled vehicles

For long-range worry, imagine a Detroit that produces not 17 million new vehicles a year but three or four million (who needs a car in the Age of Autonomy?). For a timelier set of concerns, observe today's falling used-car prices, decaying credit metrics and at-risk auto lease market.

White flag at Fortress

Last week, the first private alternative asset manager to go public became the first public alternative asset manager to declare its intention to go private--at less than one-half the 2007 IPO price. Could the business model use a tweak?

How long's 'secular'?

Only 43% of money managers believe in a future of persistently low growth and chronically droopy prices, just half as many as the year before. What ever happened to long-term investing?

So long for now

A favorite Grant's income play has progressed from reasonably cheap to fully valued. While there are better examples of excess in the beautiful Trump stock market, "fully valued" is the amber light of investment.

Making better facts

The Trump administration is casting a creative eye on more than the trade data. Not so easily amendable is the flattening trend in bank lending and Federal Reserve credit.

February 10, 2017, Vol. 35, No. 03

Bankers' White House koffee klatch

In the 91st month of a business expansion comes a push to liberate the banks to lend and their customers to borrow. A speculation on the consequences of the possible liberation of $2 trillion. "Larry did a great job for me. He managed a lot of my money."

Spin cycle

Ingenious humans can produce better products at lower prices. They can likewise transform low GAAP earnings into high non-GAAP earnings. Such intellects make their home at a certain iconic American manufacturer. But whither free cash flow?

When tongues lashed

Nowadays, Democrats and Republicans seem to hurl insults rather than arguments. Then, again, the delicate ears of the 21st-century partisans were never exposed to the blistering rhetoric of William Darrah Kelley (R., Pa.).

Mine disaster

We return to a low-cost, option-laden play on the mismanagement of the world's monetary system. So much potential, yet – in the moment – such disappointment. A speculation on lemonade.

Bid wanted, eh?

Credit constriction in China ripples far and even, even to the northern fringe of NAFTA-land.

January 27, 2017, Vol. 35, No. 02

‘DJT’ on the New York Stock Exchange

President Trump resembles a heavily shorted common stock. The analysts despise the ticker and the company it stands for, yet the shares go up and up. Rallying, too, are the battered shares of sea-going shippers, the administration’s anti-trade agenda notwithstanding. A theory of unscripted events.

Onward and upward

When you see colleague Evan Lorenz at the March 15 Grant’s Conference, kindly address him by his new title: Deputy Editor.

REIT numero uno

“Investors Bolt Mexico as Peso Enters Free Fall,” a Wall Street Journal headline of Jan. 11, is our journalistic call to arms, a 55.9% too-cheap peso our value observation. On a certain developing opportunity behind the projected Trumpian wall.

Not Joseph Schumpeter

Should a disrupting enterprise be more efficient than its targeted disruptees? Spotlight on the consequences of uber-cheap capital.

Changing places

In which we journalistically cover one short-sale candidate, propose another in its place. Since when did the technology industry become cycle-free?

Rah, rah, debt!

Now that the economic expansion is passing the 91-month pole, the president of the Federal Reserve Bank of New York urges Mr. and Mrs. America to borrow more money against the collateral of their home equity. Live and don’t learn.

January 13, 2017, Vol. 35, No. 01

2017 in money -- a sneak preview

A vision of the next tumultuous 12 months in 140 characters or less. For Janet Yellen and Jared Kushner there’s good news, bad news—and good news all over again.

Sell a non sequitur

The asset-allocation votes are in for 2017, and the results are confounding. You can defend one big idea or the other big idea, but hardly both at once. What coal owes to Chinese speculators.

Horrible to bad

In investing, timing is said to be everything. In value investing in far-away places, solvency—in fact—is everything. Kind words for a pariah.

Luther the disrupter

Cometh the man (or the woman), cometh the hour. No worldwide web required.

Mushroom cloud parts

Returning to the scene of an error in judgment, we are bullish all over again. Why a lift is in store for the Earth’s heaviest naturally occurring element.

Smiling Contest

Rages a new bull market in equanimity.

Credit Creation • Cause & Effect

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