Leo Haviland provides clients with original, provocative, cutting-edge fundamental supply/demand and technical research on major financial marketplaces and trends. He also offers independent consulting and risk management advice.

Haviland’s expertise is macro. He focuses on the intertwining of equity, debt, currency, and commodity arenas, including the political players, regulatory approaches, social factors, and rhetoric that affect them. In a changing and dynamic global economy, Haviland’s mission remains constant – to give timely, value-added marketplace insights and foresights.

Leo Haviland has three decades of experience in the Wall Street trading environment. He has worked for Goldman Sachs, Sempra Energy Trading, and other institutions. In his research and sales career in stock, interest rate, foreign exchange, and commodity battlefields, he has dealt with numerous and diverse financial institutions and individuals. Haviland is a graduate of the University of Chicago (Phi Beta Kappa) and the Cornell Law School.


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AMERICA: A HOUSE DIVIDED © Leo Haviland December 7, 2015

Before Abraham Lincoln became President and the outbreak of the American Civil War, he stressed regarding the slavery issue: “A house divided against itself cannot stand.” (Speech, “A House Divided”; Springfield, Illinois, June 16, 1858). He added: “I do not expect the house to fall—but I do expect it will cease to be divided.” Lincoln’s “house divided” metaphor traces back to the Bible. Jesus warned (Matthew 12:25; see also Mark 3:24-25): “Every kingdom divided against itself is brought to desolation; and every city or house divided against itself shall not stand.”


From colonial times to the present, America always has had political divisions. History reveals that such differences- whether based on political ideology, economic viewpoints and interests, religious or other social opinions, “human nature”, overseas events, or other phenomena- can vary in substance and intensity. Although sharing of the American Dream culture helps to unite Americans, diverse visions regarding the Dream’s content exist, evolve, and are debated. Political wars, battles, fights, feuds, quarrels, squabbles, and disagreements never disappear entirely even though that rhetoric can differ in quantity, severity, scope, and quality.

Doomsday or other terribly bleak scenarios have appeared within American political discussions. However, nowadays “civilization as we know it” is not ending (even if it arguably has deteriorated), economic growth continues (though often fitfully), and so-called “core values” expressed by the American Dream remain (in various fashions) shared. America nowadays obviously is not as divided as it was during its long and bloody Civil War. The American scene did not banish physical violence as part of the process of resolving notable national or regional disagreements. Recall wars with Indians, labor (union) fights, and the civil rights movement. Yet significant internal national conflicts, especially after the Second World War, increasingly have been resolved within a comparatively peaceful political process, including the passage and interpretation of laws.


However, a brief survey of the United States political realm from the national perspective nowadays suggests that America’s political house over the past several years probably has become more divided than usual. It probably will remain so for quite some time, and at least through the 2016 election campaign.

Political fights often can express (reflect) economic phenomena, including diverging doctrines and competing practical interests. What does the recent picture display? Political battles and resultant significant legislative gridlock within the American political realm has coincided with sluggish real GDP growth, weak average household income, an elevated poverty level, and increasing economic inequality.

Is increasing political conflict confined to the American domain? Political (as well as economic, social, and religious) divisions of course exist around the globe. Reasons for fights over power within the United States are not necessarily the same as those inspiring political conflicts elsewhere. And cultural analysis must beware of overgeneralization and oversimplification. The world as a whole is not completely falling to pieces. Yet it nevertheless seems that political hostilities within and between many nations (and between groups with different views and aims) around the globe, as in the US, have increased in the past few years. This trend, especially if it worsens, arguably endangers international (and American) economic expansion. Severe and heated political divisions not only often reflect economic problems, but also can create or magnify economic (and political) risks. World history (for example, after the First World War) reveals that substantial and widespread economic distress and fears can greatly assist the rise of rather extreme political (economic) views, whether far left, far right, ultranationalist, fringe, and so forth.

In recent years, in the United States and many other advanced nations, insufficient economic output, political divisions, or both increasingly have encouraged faith in and reliance on central banks to spark and sustain economic growth.

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America- a House Divided (12-7-15)

SHOW ME THE MONEY! © Leo Haviland, September 19, 2011

In various forms and fashions, accounting greatly matters in cultural domains. Economic realms employ professional accountants and other measurers and judges of accuracy (and compliance, responsibility, and virtue), but money meadows are not the only field involving accountability. In financial playgrounds- as in politics, war, romance, and elsewhere- it’s important to carefully evaluate the truth, quality, and implications of accounts and other storytelling.

Despite the ongoing excitement of the European sovereign debt crisis, European banks are not the only ones facing significant challenges. Thus some gloomy bystanders perhaps want to avoid renewed scans of America’s banks in the context of real estate and derivatives.

Sometimes the titanic numbers of billions and trillions mask the crucial importance of what’s going on in the provinces of smaller quantities. US real median household income in 2010 was about $49,400, a 2.3pc slide from 2009. Since 2007, real income has tumbled 6.4pc. It is 7.1pc under the median household income peak in 1999, back to the 1996 level of $49.1m.

According to the US Treasury’s recent TIC statistics (9/16/11), major foreign holders (official and others) of Treasury securities (these include bills, notes, and bonds) held about $4.48 trillion of them in July 2011. This is down slightly from June 2011’s $4.50tr and May’s $4.51tr. They held $4.45tr in January 2011. In sum, they’ve essentially not been net buyers for several months. Even relative to July 2010, they’ve been mediocre net buyers. Foreigners held $4.13tr in July 2010; July 2011 thus represents a meager add-on of only about $353 billion to the year-ago month.

Though money supply data are only one variable relevant to inflation, they have started to hint that the future inflationary picture will be less pretty than ardent Fed professors proclaim. Even in a sluggish or recessionary economy, and even if some deflationary forces at home or overseas are strong, that does not prove that inflation will not increase. And inflation perhaps will float considerably higher than many predict.

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Show Me the Money! (9-19-11)