Exploring Alternatives To The US 60/40 Benchmark: Part II

In the first installment of kicking the tires on alternatives to the standard 60/40 US stock/bond asset allocation, I reviewed three relatively tame possibilities. The results, based on adding various flavors of foreign equities and fixed income, were less than impressive, albeit in part because US markets have been on a tear in recent years. Let’s take another dive into the possibilities with a more radical approach with a volatility ETF.

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Macro Briefing: 22 September 2021

* House passes spending bill, setting up showdown in Senate over debt limit
* Biden addresses UN, says ‘the world must wake up’
* Iran says it’s ready to restart nuclear talks
* Biden plays down odds for post-Brexit US-UK free-trade deal
* Taper timetable in focus for today’s Fed meeting
* Fed will wait till November for taper announcement, CNBC survey reports
* Former China central bank advisor: Evergrande crisis will slow economic growth
* Cracks in China’s growth engine raise risks for emerging markets, analysts warn
* Is the US losing the race to decide the future of money?
* US housing starts rebounded in August to slightly above-average level for 2021:

China Stocks Continue To Weigh On Global Equity Strategies

If you hold a diversified portfolio of world stocks and give China more than a trivial weight, you’re feeling the pinch this year. Shares in the world’s second-largest economy continue to tumble, exacerbated in recent days by the liquidity crisis in Evergrande, a large Chinese property developer with a deepening liquidity crisis that’s roiling global markets lately.

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Macro Briefing: 21 September 2021

* Delta variant prevents a full recovery for the US economy
* Dems see risk of implosion for Biden’s domestic agenda
* World leaders return to UN after two years, facing multiple crises
* Canada’s Prime Minister wins re-election but without majority in parliament
* Rising Haitian migrants at US border is new challenge for White House
* US death toll for Covid-19 exceeds 1918 flu fatalities
* Higher inflation is risk for global economy, OECD warns
* Evergrande crisis in China isn’t expected to be another Lehman moment
* Will Evergrande be able to pay bond interest this week?
* China may accelerate military efforts in response to U.S.-Australia sub deal
* US homebuilder sentiment increases in September–first gain in three months:

Macro Briefing: 20 September 2021

* Liquidity crisis at Chinese property developer Evergrande is a global threat
* Evergrande is a ‘too big to fail’ risk, says Ed Yardeni of Yardeni Research
* Delta variant weighs on global economic growth
* US Treasury Sec. urges Congress to raise or suspend the nation’s debt ceiling
* US begins flying Haitian migrants from Texas border to Haiti
* United Russia party, which supports Putin, retains parliamentary majority
* German producer prices surged 12% y-o-y in August, a 45-year high
* US consumer sentiment up slightly in early September but still near-decade low:

Book Bits: 18 September 2021

Rule of the Robots: How Artificial Intelligence Will Transform Everything
Martin Ford
Review/excerpt via IEEE Spectrum
A few years ago, Martin Ford published a book called Architects of Intelligence, in which he interviewed 23 of the most experienced AI and robotics researchers in the world. Those interviews are just as fascinating to read now as they were in 2018, but Ford’s since had some extra time to chew on them, in the context of a several years of somewhat disconcertingly rapid AI progress (and hype), coupled with the economic upheaval caused by the pandemic. In his new book, Rule of the Robots: How Artificial Intelligence Will Transform Everything, Ford takes a markedly well-informed but still generally optimistic look at where AI is taking us as a society. It’s not all good, and there are still a lot of unknowns, but Ford has a perspective that’s both balanced and nuanced, and I can promise you that the book is well worth a read.

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The ETF Portfolio Strategist: 17 September 2021

  • Another (mostly) down week for global markets
  • Across-the-board declines for our strategy benchmarks this week

Losses continue to weigh on the global markets this week. But not entirely. Another recurring feature this week: Japan stocks continued to lead the small set of winners for our global opportunity set through Friday’s close (Sep. 17).

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Research Review | 17 Sep 2021 | Financial Shocks And Crises

Banking-Crisis Interventions, 1257 – 2019
Andrew Metrick and Paul Schmelzing (Yale)
September 7, 2021
We present a new database of banking-crisis interventions since the 13th century. The database includes 1886 interventions in 20 categories across 138 countries, covering interventions during all of the crises identified in the main banking-crisis chronologies, while also cataloguing a large number of interventions outside of those crises. The data show a gradual shift over the past centuries from the traditional interventions of a lender-of-last-resort, suspensions of convertibility, and bank holidays, towards a much more prominent role for capital injections and sweeping guarantees of bank liabilities. Furthermore, intervention frequencies and sizes suggest that the crisis problem in the financial sector has indeed reached an apex during the post-Bretton Woods era – but that such trends are part of a more deeply entrenched development that saw global intervention frequencies and sizes gradually rise since at least the late 17th century.

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Macro Briefing: 17 September 2021

* FDA will review evidence for recommending Covid-19 booster shot
* Economists expect Fed will announce bond taper in November, survey finds
* IMF chief criticized for favoring China as head of World Bank
* China seeks to join trans-Pacific trade pact that US rejected
* Will Putin’s authoritarianism strengthen after Russia’s elections?
* Population of migrants surge temporary camp in Del Rio, Texas
* Invesco in talks to merge with State Street’s asset-management division
* Jobless claims in US picked up last week but remain near pandemic low
* Philly Fed Mfg Index: strong acceleration in business activity in September
* US retail sales rose in August, beating estimates for decrease by wide margin: