POINT OF VIEW


In the mid-1990s, a distinct species infested the suburban world: the mallrat. Fast becoming extinct, these once-great bipeds wasted hours of their lives looking for love, piercing ears, and scooping up compact discs in the great halls of commerce known as malls. Today’s world of online shopping appears to spell the end for mallrats. However, lost in the foreboding headlines are pockets of opportunity.
Fall 2017
Is top-down government action the only way to address global environmental issues? Not at all. In fact, despite the focus on one global power’s exit from a key climate accord, a burgeoning, bottom-up movement is taking shape, with the bond market—yes, you read that right—leading the “green” charge.
Fall 2017
A few years ago we wrote about bitcoin. Since then, the price of a bitcoin soared to more than USD 4,500. But the media and many investors focus too much on bitcoin’s price, betraying little understanding of more fundamental institutional developments. We write to help catch investors up on “cryptoeconomics” and urge them not to dismiss bitcoin’s rise so easily.
Fall 2017
Has the world reached peak globalization? Whether it is the election of Donald Trump or the Brexit vote, people seem to think that the progress towards and benefits of an increasingly interconnected world have ended. The way most people view these connections is via trade, but we argue that the nature of globalization has changed dramatically since 1870. Fears of peak globalization may be overdone. Also, a more interconnected world is a more prosperous one as seen by the rise in per capita output.
Fall 2017
A generation of homeowners will soon retire. For whom savings consist mostly of their home, “reverse” mortgages appear to be a convenient way to access cash in retirement. But buyer beware! We explore the underlying mechanics of reverse mortgages and remind readers that houses are best lived in, not used as piggy banks.
Summer 2017
The Fed’s balance sheet unwind is all the rage in the media and the markets. Policymakers have committed to begin the process sometime later “this year.” We expect a gradual unwind to begin by fall, but we aren’t worried. Dire economic and market consequences from the Fed’s balance sheet will prove more imagined than real. And the big balance sheet is here to stay along with anew role for the Fed in money markets.
Summer 2017
Earth is a planet teeming with life. Often when we think of life we think of our pets, livestock, insects, birds, fish and, of course, the 7+ billion homo sapiens scattered around the globe. However, taking stock of everything around us reveals a surprising picture. Estimating the weight—in million tonnes of carbon—of animal life on Earth and you find that the organisms we cannot even see with the naked eye comprise most of life on earth.
Summer 2017
You may have read about India’s recent campaign to remove high denomination bills from circulation, so-called “demonetization.” What you haven’t read about is IndiaStack. Or the 1 billion Indians who, since 2009, have been officially registered as citizens. Or the modernizing banking system. We look at the changes underway in India and explore the consequences of the Modi-nization of the world’s largest democracy.
Summer 2017
Cities were left empty by a flight to the suburbs in the mid-to-late 20th century. However, in the last decade, a return to cities reshaped the housing market. Will the trend continue? We find that one key factor—demographics—explains much of the shift into and out of cities. A fresh look at demographic trends provides clues to the fate of cities as well as housing’s future. We don’t know what comes next with certainty, but we feel safe proclaiming “Peak Hipster.”
Winter 2017
Stories about the Chinese renminbi’s inclusion in the International Monetary Fund’s Special Drawing Rights (SDR) basket made headlines in 2016. According to some, China’s currency is destined to be a major rival to the U.S. dollar and the euro on the global stage. Not so fast, we say. Thinking about what an SDR is and why it came to be may help investors understand the architecture of the global financial system today and its future. proclaiming “Peak Hipster.”
Winter 2017
Many shook their heads in disbelief when Disney agreed to purchase Lucasfilm, the creator and owner of the Star Wars franchise, for $4 billion in 2012. Today, Disney might shake their heads at the naysayers. Four years and two mega-blockbusters later, the world’s most successful movie studio appears to have struck gold. proclaiming “Peak Hipster.”
Winter 2017
Outrageous tuition costs. Mountainous student debt. Without help, higher education seems increasingly unattainable for many. Or is the future so dim? We contend that whether you are a farmer in Kenya, a dancer in Delhi or a software programmer in Berlin, learning something—anything—is cheaper, easier, faster, and more customized than ever before.
Winter 2017
“If only our politicians could get their act together, we’d do the obvious: rebuild bridges, airports, and roads with public funds.” So goes the battle cry of investors and citizens around the world, frustrated with years of slow global economic growth and low interest rates. We are all for better roads and airports, but spending money and creating wealth are not the same thing.
Fall 2016
Millennials are different—they don’t want to own homes, they want to live in densely-populated urban areas near their friends, they have too much debt, and they don’t like responsibility. Or so go the feverish claims of many observers. We put the millennial generation under the microscope and find, contrary to homespun wisdom, they aren’t so different from prior generations.
Fall 2016
It may not be the story you learned in school, but by tracking the most populous cities throughout world history we see that the West barely makes it on the global map.
Fall 2016
Kids wanting to be the next Tom Brady or Steph Curry start practicing at a young age. They spend hours on the field or court. But tomorrow’s Brady or Curry will more likely be found at home, tapping their keyboards to stardom. The future of sports lies in eSports, where a recent League of Legends tournament had more viewers than the Stanley Cup Final.
Fall 2016
A Tony Award-winning Broadway play, Hamilton, has wooed theatregoers and critics alike with Alexander Hamilton, the man and his battles, presented in hip hop form. What was he seeking to achieve as a Founding Father and later as Treasury Secretary of the United States? We focus on his ideas and argue that Hamilton remains relevant to modern economic policy and institutions.
Summer 2016
In 1979 the National Basketball Association (NBA) debuted a three-point line. Early on, most three-point attempts were last second heaves toward the hoop rather than strategic scoring attempts. By 2016, NBA teams shot nearly 30 three-pointers per game. What explains the rise in popularity of the long-range jumper and why did it take so long?
Summer 2016
Next time you gaze up at the stars at night, remember that just above you, more than 500,000 man-made objects circle the Earth at 17,000 miles per hour (faster than a speeding bullet). Most of these are vestiges of old satellites. Today, there are almost 1,400 active satellites orbiting the Earth.
Summer 2016
Big department stores stocked with shelves of expensive inventory once dominated retail. Today the traditional “big box” department store business model is on thin ice as a growing share of purchases occur online or in smaller stores. We think through the problems confronting the mall mainstays and offer up visions of retail's future.
Summer 2016
US consumers spend more on Spot and Garfield than they do on automobile insurance. That’s right. We detail the rise of pet spending and what it tells us about the American standard of living and retail marketplace.
Spring 2016
In 1850, New Bedford, Massachusetts, was the richest city in the world. In 1960, Detroit, Michigan, boasted the highest per capita income in the US. The tale of two cities and two industries (whale oil in one, motor oil in the other) is the topic at hand. For a time each commanded an unassailable market position. But the good times weren’t eternal. Here follows the story of why and how.
Spring 2016
Most people can’t imagine life without their smartphones. But, in many parts of the world, smartphones are far more than mere luxury items. For users in developing nations, where most of the future smartphones will be sold, the “mobile internet” is the internet. The availability of mobile web and computing will continue to revolutionize world commerce more than any other technology in history.
Spring 2016
With four European central banks and one Asian central bank using NIRP (or “negative interest rate policy”), economics textbooks that teach that interest rates can’t go below zero are out of date. What did our professors get wrong, where is the real floor on interest rates and what does it all mean? (oh, and why did I have to pay $120 for that relic of a textbook?) We inquire.
Spring 2016
Payden’s economics team members are big Taylor Swift fans. When we learned that she removed her music from online streaming music giant Spotify, we penned a letter to her (no response yet). We explore the future of the music industry, the impact of technology and argue streaming is here to stay. Press play and read on.
Winter 2016
In the American TV comedy Curb Your Enthusiasm, comedian Larry David highlights the difficulty of getting a table reservation when he tries to bribe the maître d’ with a $20 bill, but instead accidentally hands over his wife’s crumpled medicine prescription. We explore the economics–and taboos–of restaurant reservations and how things might be changing.
Winter 2016
The human species has the will to survive and explore. With the recent release of The Martian, starring Matt Damon, we examine the challenges of colonizing the Red Planet.
Winter 2016
Paranoia runs deep about central bankers and politicians, but it’s really the algorithms that run our lives. We take the example of a recent elevator renovation at Payden’s global headquarters in Los Angeles as a segue into thinking about algorithms and how they are changing the global economy.
Winter 2016
Discussions about China often sound like lectures on how the up-and-coming economy ought to behave. But, in at least one area, China is far ahead of its developed world peers: mobile payments. What can the West learn?
Fall 2015
The days of burning wood to provide our energy are no more. Today the world depends on fossil fuels to power our homes, drive our cars, and even wrap our children’s sandwiches. But some think the era of fossil fuels is coming to an end as we harness new energy sources. Will solar power finally flip the switch on the world’s energy landscape?
Fall 2015
Your lifestyle would not be possible but for scores of silent giants slowly traversing the earth’s oceans. Swollen ships, up to 1.5 times as long as the Titanic, are responsible for transporting 90% of everything that you use.
Fall 2015
Economist Friedrich Hayek mused, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” We might draw the same lesson from a market index. From the dusty desks of newspaper men and academics to center stage in the global financial markets, market indices have become essential – if controversial – features of our modern investment landscape.
Fall 2015
Peeking into the financial statements of the Manchester United Football Club we see that elite sports teams are among the organizations best positioned to profit from rising global wealth and interconnectedness.
Summer 2015
The Fed is Not Magical…Unless You Think REITs Are Magical
Summer 2015
The world is seeing a skyscraper boom spurred by technological breakthroughs, the growth of global wealth and the shifting of economic power from the West to the East. Here we explore how tall buildings have changed over time and if this means anything for the global economy.
Summer 2015
“This Is Your Captain Speaking, It Is Now Safe to Move Around the Globe.” Air Travel and the Myth of Stagnation
Summer 2015
For years pessimists have worried that American living standards have stagnated. We dig deeper into the data underlying the argument and discover there is more than meets the eye. Cheer up, you may be better off than the statistics make you think.
Spring 2015
Does India, under new leadership, face a new dawn? Prime Minister Narendra Modi brings new economic policies and a wave of optimism to India.
Spring 2015
University of Oxford researchers found that 47% of American jobs risk being replaced by computers. From loan officers to economists, your job (yes, you!) is probably next. But this has always been the case. Let us explain...
Spring 2015
Think high speed, techy traders seeking out information and trading faster than the average Joe are new to the financial markets? Think again. The quest for speed and near riskless profit has been with us for centuries.
Spring 2015
The most famous economist of all time was also the chief investment officer at King’s College, Cambridge for 25 years. Apart from producing 16% annual returns, Keynes’ work as an investor tells us that the keys to investment performance often reside outside of economics.
Fall 2014
Drought doomsayers and deniers are both wrong. Despite the record levels of drought in California, understanding where water comes from and how it is used puts the historic dryness in perspective. We respond to questions from a local resident “Hal,” and leave him hopeful for our water future.
Fall 2014
We look across a wide array of human sporting endeavors, from sprints to the grueling Kona Ironman, and conclude: human progress has slowed. But have we reached the limits of human athletic potential?
Fall 2014
A fleet of vehicles ready at a moment’s notice to ferry passengers anywhere they desire? It used to be such luxuries were reserved for Kings and American Presidents. Now an ordinary person like me enjoys the services.
Fall 2014
Person-to-person borrowing, lending, giving and investing will alter the capital-raising landscape. We look forward to the day when we no longer must rely on big, centralized banking organizations to finance new ventures.
Summer 2014
The world awoke on April 30, 2014 to discover that China would become the largest economy by year end, dethroning the United States from the top spot it has held since 1872. But, how do economists measure the size of economies for cross-country comparison?
Summer 2014
The average Chinese citizen today boasts a higher standard of living than the average Briton did in 1980. Don’t believe us? Take a look at the evolution of per-capita income across the world and find out which countries have boomed and which have faltered.
Summer 2014
A recent book by French economist Thomas Piketty has the world abuzz about inequality. Before arriving at conclusions, we examine how economic inequality measured and how has it changed over time. How worried should investors be?
Summer 2014
Deflation fears grip the globe. One central banker called deflation the “ogre stalking the world economy.” Should you be afraid? We say no. Deflation is more common than you think and far more desirable than you might imagine.
Spring 2014
A troubling chart floating around the internet portends a 1929-style stock market collapse. Will it happen? Perhaps, but not because this chart says so.
Spring 2014
Two groups continue to battle over the answer to the most important macro question of 2014: how much slack is there in the US labor market? Who is right? How can we decide? Perhaps a Martian could help...
Spring 2014
While regulators fight the last war, other beasts lurk in the global financial system: big asset managers. But are they too big to fail? What are the consequences for asset markets? We inquire.
Spring 2014
Bitcoin, the fledgling digital currency, may not unseat the US dollar as the world’s currency of choice, but we think its rise provides a glimpse into the future of money and financial markets.
Winter 2014
Janet Yellen is set to become the most powerful woman in world history. As she ascends to the helm of the world’s most important central bank her every word will command the undivided attention of politicians and ?nancial market participants.
Winter 2014
In 1981 more than 50% of the world lived in extreme poverty. By 2010, only 21% of earth’s inhabitants faced such a circumstance.
Winter 2014
Interest rate volatility in 2013 had more in common with aeronautical turbulence than with economic fundamentals.
Winter 2014
September-October 2013
Despite worries about a new bubble in housing, the real story is a classic supply and demand mismatch.
September-October 2013
Economies and financial systems are a bit like rivers. Restrict and constrain them you might, but contain them you will not. What does this suggest for China?
September-October 2013
In 1986, the sum total of the world’s information capacity could be stored in two newspapers for every person on Earth. Today, a vast array of devices create and store information. We think this will ignite a new era of economic prosperity.
September-October 2013
Imagine living 150 years. Impossible? Until recently, yes. But in bioscience, science fiction is becoming reality.
September-October 2013
Can economies grow in a time of debt? Yes, they can.
June-July 2013
At the heart of human progress lies automation. The driverless future is closer than it appears.
June-July 2013
The burgeoning Federal Reserve balance sheet and what it means.
June-July 2013
The rapid growth in ETFs has transformed the financial landscape-but investor scrutiny is needed now more than ever.
June-July 2013
Is the “shale revolution” built on economic hope or unrealistic hype?
January 2013
At the heart of human progress lies automation. The driverless future is closer than it appears.
January 2013
Gutenberg’s most recent moment: why higher education will never be the same.
January 2013
The “miracle” of South Korea’s rise and what it means for other emerging market economies.
January 2013
The money multiplier is at the heart of global monetary machine—and yet the money multiplier is missing. Or, as we argue in this text, it never existed.
Third Quarter 2012
With the passing of Neil Armstrong and shuttering of NASA’s space shuttle program, we must wonder at the future of extra- Earthly travel. Does NASA’s retreat entail a dark age for space travel?
Third Quarter 2012
In a rapidly changing world, has coffee kept up? We brew up a look at the evolution of the coffee market.
Third Quarter 2012
Japan. We hear “basket case,” we hear “lost decades,” we hear a nation “on the verge of implosion.” But, is all the apocalyptic rhetoric misplaced?
Third Quarter 2012
Second Quarter 2012
The eurosystem is like a plate of scrambled eggs. Let us explain.
Second Quarter 2012
Despite the animating force employment statistics have on financial markets, there is much more to the unemployment rate than meets the eye.
Second Quarter 2012
Two titans of economic thinking square off in a bare-knuckle brawl of wit and wisdom that defined modern economics.
Second Quarter 2012
How the wonderful world of modern trade and production distorts statistical reality or what the iPhone tells us about the trade deficit. Among the hidden elements of the energy world lay Master Limited Partnerships (MLPs), an instrumental, though frequently unnoticed piece in the US energy puzzle.
Second Quarter 2012
Why the probability of a eurozone breakup is not a roll of the dice. Proceed with caution when predicting societal events.
First Quarter 2012
The US economy faces a Great Restructuring. There is no reason to think that the restructuring will be rapid nor is there reason to think it will be permanent. Invest accordingly.
First Quarter 2012
The GDP also includes cigarettes, air pollution and broken windows repaired. So is it still a useful gauge of our well-being?
First Quarter 2012
How the wonderful world of modern trade and production distorts statistical reality or what the iPhone tells us about the trade deficit.
First Quarter 2012