Fixing What’s Wrong with the Taylor Rule

I see four problems with the original Taylor rule:

1. It’s not really a rule at all. The Taylor rule depends on an estimate of potential output. In practice, most of the discretion that goes into central banking is in the estimate of potential output. Even “discretionary” central bank policy is effectively constrained by the consensus of what would be considered reasonable policy actions, and any of those actions can be rationalized by changing your assumption about potential output. Usually, a central bank that has committed to following a “strict” Taylor rule has roughly the same set of options available as one that is ostensibly operating entirely on its own discretion.
   
   
2. It doesn’t self-correct for missed inflation rates. Since the inflation rate in the Taylor rule is over the previous four quarters, the rule “forgets” any inflation that happened more than four quarters ago. This is a problem for four reasons:
   
   
   
   • It leaves the price level indeterminate in the long run, thus interfering with long-term nominal contracting and decisions that involve prices in the distant future.
     
     
   • It leaves the central bank without an effective tool to reverse deflation when the expected deflation rate exceeds the natural interest rate.
     
     
   • It reduces the credibility of central bank attempts to bring down high inflation rates, because the bank always promises to forgive itself when it fails.
     
     
   • It aggravates the “convexity” problem described below, because the central bank effectively ignores small deviations from its inflation target, even when they accumulate.
     
   
   
3. It doesn’t allow for convexity in the short-run Philips curve. If the estimate of potential output is too low, for example, and the coefficient on output is sufficiently low, then, if the short-run Philips curve is convex, the central bank will allow output to persist below potential output for a long time before “realizing” that it has made an error. In the extreme case, where the short-run Phillips curve is L-shaped, the central bank may allow actual output to be permanently lower than potential output. More generally, the convexity problem can be aggravated by hysteresis effects, in which lower actual output leads to lower potential output, so that the central bank’s wrong estimate of potential output becomes a (permanently) self-fulfilling prophecy.
   
   
4. It can prescribe a negative interest rate target, which is impossible to implement. This appears to have been the case for at least part of 2009 and 2010, although there is disagreement about the details.
   

So how do we fix these problems? I suggest the following solutions:

1. Adopt a fixed method for estimating potential output. (One might allow future changes to the method, but they should be implemented only with a long lag: otherwise, they’ll interfere with the central bank’s credibility, since they can be used to rationalize discretionary policy changes.) Since I like simplicity, I suggest the following method: take the level of actual output in the 4th quarter of 2007 (when most estimates have the US near its potential) and increase it at an annual rate of 3% (the approximate historical growth rate of output) in perpetuity.
   
   
2. Replace the target inflation term with a target price level term. In other words, express it as a deviation from a target price level that rises over time by the target inflation rate. To be clear what I mean by the “target inflation term,” take Taylor’s original equation
   r = p + .5y + .5(p - 2) + 2 (where p refers to the inflation rate)
   and note that I am referring to the “p – 2” term but not to the initial “p” term, which is not really a target but part of the definition of the instrument (an approximation of the real interest rate). In my new formulation, “p – 2” becomes “P – P*,” where “P is (100 times the log of) the actual price level and P* is (100 times the log of) the target price level (i.e., what the price level would be if the inflation rate had always been on target since the base period).
   
   
3. Increase the coefficient on output. If you wish, in order to avoid a loss in credibility, you can also increase the coefficient on the price term by the same amount. What we have then is a more aggressive Taylor rule. It doesn’t solve the convexity problem completely, but it does assure that, when output is far from target, the central bank will take aggressive action to bring it back (unless the price level is far from target in the other direction). That way at least you don’t end up with a long, unnecessary period of severe economic weakness. (John Taylor claims that, according to David Papell’s research, there is “no reason to use a higher coefficient, and…the lower coefficient works better.” But that research only looks at changing the coefficient on the output term without either changing the coefficient on the inflation term or replacing it with a price term, as I suggest above. Having a too-small coefficient on the output term, as in the original rule, is only a second-best way of achieving the results that those other changes would achieve.)
   
   
4. “Borrow” basis points from the future when there are no more basis points available today. In other words, if the prescribed interest rate is below zero, the central bank promises to undershoot the prescribed interest rate once it rises above zero again, such that the number of basis-point-years of undershoot exactly cancel the number of basis-point-years of (unavoidable) overshoot. This method will only work, of course, if the market knows what rule the central bank is following, hence (among other reasons) the need for a rule that really is a rule. If the rule is well-defined, the overshoot will be well-defined, the market will expect the central bank to “pay back” the “borrowed” basis points, and the central bank will be obliged to do so in order to maintain its subsequent credibility.
   

OK, let’s look at the big picture. What have I proposed? I have proposed nominal GDP targeting (along with a specific method for how to implement it). When the price level term and the output term have the same coefficient and both are specified as a deviation from target, the Taylor rule can be simplified by combining the price level target with the output target. Combining Taylor’s original 2% inflation target (re-expressed as a price level path target as per my suggestion) with my suggested method for estimating potential output, we arrive at a 5% nominal output growth path as the target.

If you wish, you can go further by making the rule forward-looking (using a forecast of nominal GDP instead of a lagged observation) and increasing the coefficient to a very high number. And you can enforce the credibility of the forecast by requiring the central bank to use the forecast implicit in a publicly traded nominal GDP futures contract, so that the market is putting its money where the central bank’s mouth is. You end up with the proposal that Scott Sumner has already made. People seem to think that Scott Sumner’s ideas about monetary policy are far out of the mainstream. But I’m not proposing anything radical here, just trying to fix some problems with the very orthodox Taylor rule.




DISCLOSURE: Through my investment and management role in a Treasury directional pooled investment vehicle and through my role as Chief Economist at Atlantic Asset Management, which generally manages fixed income portfolios for its clients, I have direct or indirect interests in various fixed income instruments, which may be impacted by the issues discussed herein. The views expressed herein are entirely my own opinions and may not represent the views of Atlantic Asset Management. This article should not be construed as investment advice, and is not an offer to participate in any investment strategy or product.

Inflation Target Debate at The Economist

I have been featured as a guest expert in an online debate about inflation targeting on The Economist's website. The topic: "This house believes that a 2% inflation target is too low." The debate is between Brad DeLong and Bennett McCallum, with Ryan Avent as the moderator.

Not Inflation

I’m sick of hearing people complain about inflation. Unless your income comes from long-duration fixed-income investments, inflation has nothing to do with how much groceries and gasoline you can afford. Inflation is a pattern of increase in the general price level. What matters for affording stuff is a relative price, not the general price level. Specifically in this case it is the price of groceries and gasoline relative to the price of labor. And whether or not you like to eat iPads, the broader problem (for people with jobs) is not that the nominal price of groceries and gasoline is going up but that the real price of labor is going down.

In fact, when measured in terms of how much that labor can produce, even the nominal price of labor is going down, as illustrated by the last part of this chart from the Bureau of Labor Statistics:


Look at the last two years compared to the rest of the chart. As someone who thinks people are more important than gasoline, I’d say this looks a heck of a lot more like deflation than inflation.

And people are more important than gasoline – not just in the ethical sense implied by my snide suggestion, but in a cold, economic sense: labor is more important than energy as an input to the goods and services that get produced. Therefore if the price of labor is falling while the price of energy is rising, the pressure on the prices of goods and services is likely to be downward rather than upward.

Not that I’m expecting the prices of goods and services to start moving dramatically downward in the immediate future. After all, the price of energy has been rising faster than the price of labor has been falling. And the value of the dollar has been falling, while many of the goods Americans consume are produced abroad. And the price of labor is not necessarily going to continue falling. I will say, though, that I think the price of labor provides a strong anchor for the general price level: just as the gold standard provided assurances against runaway inflation, so the “labor standard” provides such assurances. In fact, the labor standard provides better assurances, because labor is the most important input into the production of many useful things, whereas gold is – well, just gold.

(You might object that we really aren’t on a labor standard, because unit labor costs could start rising at any time, and there is no guarantee that policymakers would resist such increases. All I can say is, if you think the gold standard provides a guarantee against changes in the whims of policymakers, you need to read about what happened in 1933 and 1971.)

I’m going to go further and say that I think the falling real price of labor is a good thing, at least in the short run. I’ll even say that rising food and energy prices, while not good in themselves, are symptomatic of something good that is happening and that I would like to see accelerate rather than decelerate.

The flip side of falling real wages is rising profit margins. In a simplified closed economy this would be trivially true: the profit margin for businesses in aggregate would be the difference between the prices they charge and the wages they pay, i.e., the inverse of the real wage. It’s also true to a lesser extent in the real world, although the situation is more complicated because there are imports and exports, and labor and capital are not the only inputs.

What we experienced in 2008 and 2009 can be seen as a dramatic decline in the willingness of aggregate business to produce more for any given level of the aggregate profit margin. (Obviously, the phrase “aggregate business” hides a lot of critical details: part of the problem was with banks’ willingness to lend; part was with hoarding of cash by large corporations; part was with investors’ preferences over public vs. private sector assets; and so on.) What we need to do to fix this problem (and what we are doing, to some extent) is to make profit margins so high that businesses are willing to expand despite their newfound conservatism.

And it should be noted that there is a continuum of price flexibility. At one end, wages are perhaps the least flexible; at the other end, commodity prices are the most flexible. But there is a whole range in-between. When demand picks up, commodity prices rise first, product prices rise more sluggishly (with varying degrees of sluggishness), and wages rise most sluggishly. If the objective is to raise profit margins, then product prices have to rise more quickly than wages, and an inevitable side effect is that commodity prices will rise even faster than product prices. To the (limited) extent that rising commodity prices represent domestic US demand, they are a sign of a process that needs to be encouraged, not discouraged.

In the intermediate run, the evidence is clear that real wages are procyclial. When a recovery really gets going, real wages eventually rise, presumably because the economy as a whole becomes more efficient and “a rising tide lifts all boats.” In the short run, though, we need to get the recovery going before this can happen, and the way to get the recovery going is to let real wages fall – or at least rise more slowly than productivity. Say what you like, I’m cheering for rising prices.


DISCLOSURE: Through my investment and management role in a Treasury directional pooled investment vehicle and through my role as Chief Economist at Atlantic Asset Management, which generally manages fixed income portfolios for its clients, I have direct or indirect interests in various fixed income instruments, which may be impacted by the issues discussed herein. The views expressed herein are entirely my own opinions and may not represent the views of Atlantic Asset Management. This article should not be construed as investment advice, and is not an offer to participate in any investment strategy or product.

There Is No Such Things As Monetary Policy

In my last post, I argued that bank reserves, if they pay interest, are essentially a form of government debt. They’re issued by a different institution and have a different maturity than most government debt, but in their essential nature, they’re just a special case of government debt.

In that post, I was agnostic about whether bank reserves should be considered “money.” If bank reserves are government debt, then, to be consistent, we should either consider all government debt to be money or consider bank reserves to be something other than money. In particular, Ben Bernanke’s use of the phrase “printing money” is consistent if you consider all government debt to be money, in which case QE2 only exchanges zero-maturity money for high-maturity money whereas QE1 exchanges money for private sector assets. If you take the second option, however, then neither QE1 nor QE2 was “printing money.”

I want to explore that second option, which seems pretty reasonable in terms of the way I learned liquidity preference theory in school. In the simplest version of liquidity preference theory, money (1) pays no interest and (2) is controlled by policymakers. Obviously bank reserves no longer meet the first criterion, and bank deposits (as we learned painfully during the policy experiment of the early 1980’s) do not meet the second criterion. I’m increasingly coming to believe that the most reasonable definition of “money” is simply “cash” (negotiable central bank notes plus coins).

But the Fed does not attempt to control the supply of cash. Banks can withdraw reserves from the Fed, or deposit them, whenever they choose, and the Fed will normally compensate for aggregate net withdrawals or deposits by adjusting the total level of reserves to bring it back to where it was before the net withdrawals or deposits took place. Moreover, the amount of cash outstanding, as determined by the demand for cash, is not a significant factor in the setting of Fed policy. If “money” simply means cash, then the Fed’s “monetary policy” is unlimited accommodation. And moreover, nobody cares, or should care, about how this policy is going. For practical purposes, there is no such thing as monetary policy.

The Fed does do something active, and they call it monetary policy. But what is it really? The Fed does several things that usually come under the heading of monetary policy, but they can all be reasonably classified as something else. For one thing, it manages the level of bank reserves through open market operations. But this is really government finance policy, not monetary policy: it consists of substituting zero-maturity government debt (bank reserves) for higher maturity government debt (Treasury securities), or vice versa.

The Fed also sets the interest rate on reserves. This is also government finance policy. Suppose that, instead of auctioning off fixed quantities of securities, the Treasury were to sell as much as it could at a given interest rate and leave any excess cash in a vault. If we’re talking about, say, one-month T-bills, which have only slightly higher maturity than bank reserves, then the effect would be essentially the same as when the Fed sets the interest rate on reserves. (In particular, imagine that, starting from today’s near-zero interest rates, the Treasury were to start selling T-bills with a fixed 1% yield. That would be just like an increase on the interest rate on reserves, except that others besides banks could participate. That difference is really irrelevant except for the arbitrage opportunity provided to banks when the IOR rate exceeds the T-bill rate. If the IOR rate were to rise, banks – being in competition with one another for funds – would have an incentive to let others participate indirectly.)

Granted, this doesn’t work in reverse: the Treasury needs to borrow a certain minimum amount to finance its expenditures, so it can’t set an arbitrarily low interest rate. But it doesn’t work in reverse for bank reserves either. If the Fed sets the IOR rate far below the T-bill rate, it becomes irrelevant: banks will simply hold, for emergency purposes, a tiny amount of reserves over and above what is required, and the rest of their reserve assets they will hold as T-bills, which can easily be sold or repoed for federal funds if necessary.

The Fed also sets the reserve requirement, thereby compelling a demand for reserves, but this is not monetary policy either; it is regulatory policy. There is a regulation that requires banks to hold a certain quantity (set by the Fed) of zero-maturity government debt (reserves). There are other regulations that effectively require banks to hold certain quantities of more broadly defined safe assets to satisfy capital requirements. All these regulations create an increased demand for government debt; it’s only the maturity of the debt that is different. To the extent that such policies are used for macroeconomic demand management, they are essentially a form of taxation: the Fed can pay a lower rate of IOR than it otherwise would because it is compelling banks to hold reserves instead of using the money for profitable activities; it could achieve the same effect by raising IOR until those activities are no longer profitable (in risk-adjusted opportunity cost terms) and taxing the banks an amount equal to the difference in the interest they pay. To the extent that regulatory policy is used for macroeconomic demand management, it is just a form of fiscal policy.

Finally, the Fed lends (or purchases the assets from those who have lent) to the private sector, via its discount window, via various emergency programs in times of crisis, and in particular via QE1. But this isn’t monetary policy; it’s fiscal policy. It’s no different than what the TARP did: an exchange of government debt for private debt. Anything the Fed does through such programs could also be done by the Treasury, which could issue T-bills to obtain funding, and it would surely be considered fiscal policy. The Fed issues bank reserves instead of T-bills: a slight difference of maturity, not a fundamental difference of substance.

So there you have it: there is no such thing as monetary policy. There is “central bank directed stabilization policy,” and, for convenience, you can refer to that as monetary policy if you want. If so, recognize that you are using the term loosely, and let’s not get into arguments about whether some particular Fed action is “really” monetary policy. None of it is really monetary policy.


DISCLOSURE: Through my investment and management role in a Treasury directional pooled investment vehicle and through my role as Chief Economist at Atlantic Asset Management, which generally manages fixed income portfolios for its clients, I have direct or indirect interests in various fixed income instruments, which may be impacted by the issues discussed herein. The views expressed herein are entirely my own opinions and may not represent the views of Atlantic Asset Management. This article should not be construed as investment advice, and is not an offer to participate in any investment strategy or product.

What Does “Printing Money” Mean?

When I heard Ben Bernanke on 60 Minutes Sunday, I was initially taken aback when he said that QE2 did not constitute “printing money.” Obviously it’s not physically printing money, but nobody ever uses that phrase literally. If creating bank reserves is not “printing money,” then what is? My first thought, maybe he means that the increase in base money is not expected to lead to an increase in bank deposits. But if that’s the case, why would they be doing it? It’s hard to imagine QE2 being effective without causing bank deposits to increase. Sure, they may not increase via the textbook money multiplier process, given that reserve requirements are not currently binding and reserve ratios are not expected to be stable. But that’s a cop out: the Fed is increasing bank reserves; it hopes this action will lead, by whatever process, to an increase in bank deposits. How is that not printing money?

Apparently it gets worse. I had forgotten what Bernanke said on his earlier 60 Minutes appearance, but Jon Stewart has a clip where, in reference to QE1, Bernanke essentially acknowledges that the Fed is printing money. Naturally, Jon Stewart was amused by this seeming inconsistency, as was I.

But I’ve been thinking about this a bit more, and I no longer think Bernanke’s statements are inconsistent. The problem is that the definition of the word “money” is not as clear cut as it seems. Indeed, one might argue that the whole concept of “money” is no longer useful (at least to economists) in a world where bank reserves pay interest and people pay bills with credit cards and with checks drawn on bond mutual funds.

Long, long ago, before I started graduate school, I used to think that the concept of money was fairly straightforward. There was cash (Federal Reserve notes, as well as coins), and there was money in the bank, and those were money. And OK, there were money market mutual funds, and those were “sort of” money. When I really started to think about it, I realized this framework was inadequate, especially given the concept of liquidity preference that I was trying to use, where the cost of holding liquid money was supposed to be the interest rate. (Money market funds pay interest, and they’re almost just like money, and even some bank accounts pay interest, so apparently you can hold liquid money without giving up the interest, so where’s the cost?)

At the time I had a solution: stop thinking of bank accounts and such as money and instead just think of “outside money,” money created by the central bank. This approach sort of seemed to work. If you wanted to hold “money” in this sense, you had to give up the interest, and a bank’s willingness to pay interest on deposits (no longer considered money) was influenced by the amount of actual money that the bank needed to hold in order to maintain that deposit. And policymakers actually had control over this kind of money, so the concept fit well with the simple assumption that the quantity of money is determined by policy.

But in 2008, the Fed started paying interest on bank reserves. (Some other central banks had already been doing so for a while, but, being a provincial American, I hadn’t really noticed.) To be honest, it didn’t occur to me at the time, but this change totally destroyed my concept of money. If bank reserves pay interest, then they aren’t money, because you don’t have to give up the interest in order to hold them. But surely they are money, because monetary policy consists primarily of manipulating the quantity of bank reserves. Epistemological fail!

So are bank reserves money or not? I don’t know. But here’s something to think about: what is the difference between bank reserves and Treasury securities? They both pay interest. They’re created by different institutions, but so what? They’re both ultimately obligations of the government: the interest paid on reserves comes out of the Fed’s profits which would otherwise go into the Treasury.

You might say that Treasury securities have to be paid back, while bank reserves don’t, but that’s merely a function of the banks’ willingness to hold reserves: if the banks (and their customers) want cash instead, the reserves have to be “paid back” to the banks/customers. And if Treasury security holders want to roll over their securities, then Treasury borrowing doesn’t have to be paid back. So there’s no real difference there. The maturity is different, it’s true: bank reserves have zero maturity, while Treasury securities have maturities ranging from one month to 30 years. But that’s not a fundamental difference: it just means that bank reserves are a special case, not that they’re a different kind of entity.

OK, bank reserves can be used to fulfill reserve requirements, and Treasury securities cannot, but again so what? Banks are subject to a number of regulatory requirements, which depend on various aspects of their asset structure. There’s really nothing special about the reserve requirement. Today capital requirements are closer to being a binding constraint than reserve requirements, so for most banks Treasury securities are just as good as reserves when it comes to fulfilling regulatory requirements. Maybe someday in the future banks will once again have a particular need for Fed-issued zero-maturity assets to fulfill a regulatory requirement, but I don’t see how that makes such assets a fundamentally different type. Show me junk bonds, T-bills, and bank reserves, and it seems to me that, if anything, the bonds are the fundamentally different type of asset.

I submit that bank reserves are essentially just zero-maturity government debt. You can call them “money” if you want, but the application of the term is pretty arbitrary. And if you’re going to call bank reserves money, why not call T-bills money as well? And for that matter, T-notes and T-bonds: those are just long-maturity money.

So back to Ben Bernanke. What is QE2? It’s an exchange of bank reserves for longer-maturity Treasury securities: both forms of government debt; the only substantial difference is the maturity. QE2 is not, in any important sense, “printing money” but merely a restructuring of the government’s debt.

And what was QE1? It was (largely) an exchange of bank reserves for private sector assets, essentially an exchange of government debt for private debt. It’s very important that QE1 involved “printing” substantial quantities of government debt that would not otherwise have existed. That government debt happens to be “money,” though, rather than what we usually think of as government debt. So, rather than go through a whole explanation of how bank reserves are really government debt, the simple and substantively correct way of explaining QE1 is that it constituted “printing money” in exchange for private sector assets.


DISCLOSURE: Through my investment and management role in a Treasury directional pooled investment vehicle and through my role as Chief Economist at Atlantic Asset Management, which generally manages fixed income portfolios for its clients, I have direct or indirect interests in various fixed income instruments, which may be impacted by the issues discussed herein. The views expressed herein are entirely my own opinions and may not represent the views of Atlantic Asset Management. This article should not be construed as investment advice, and is not an offer to participate in any investment strategy or product.

Profits, Interest, and Inflation

US corporate profits set a record in the third quarter. As Matthew Yglesias points out, that’s not as impressive as it sounds: profits are measured in nominal dollars, and they normally rise during times of economic expansion, so there’s nothing at all unusual about seeing them make new highs. After taking a closer look at the data, Justin Fox is even less impressed: as a fraction of the national income, domestic nonfinancial corporate profits are nowhere near a new high; the big numbers are coming from financial corporations (which are bouncing back strongly from the losses they had a few years ago) and from foreign earnings of US corporations. Kevin Drum is not quite so unimpressed, though: he looks at the data and sees domestic nonfinancial corporate profits recovering nicely in any case.

Count me with the unimpressed, but for different reasons. It’s really not appropriate, in my view, to look at profits in isolation from the rest of the national income. Profits are a form of capital income. Capital income can be roughly divided into profits and interest, depending on how the capital was financed. If we’re interested in the general profitability of business activities, rather than the narrow question of whether current stockholders are getting rich, we should be looking at total capital income. You might have noticed that interest rates are way down from where they were a few years ago, which probably means that there has been a substantial decline in the interest portion of capital income. So total capital income from domestic nonfinancial operations is almost certainly lower than it was before the recession.

It’s true that, even if capital returns are not very high, they can still be conducive to a recovery if the required return on capital has fallen. Indeed, the lowness of interest rates partly reflects attempts by the Fed to reduce the required return on capital. To that extent, we can be impressed by rising profits.

But the lowness of interest rates also reflects a decline in the expected inflation rate. This factor is not reflected in the raw profit statistics, and it does make them less impressive. In nominal terms, before the recession, corporations were expecting to see rising product prices, so, for any given nominal rate of profit, they were more likely to invest in new projects and more likely to hire. Today, product prices are not expected to rise very much, so today’s nominal profit has to “stand on its own,” as it were, as an indicator of how profitable any new project will be. So, by comparison, things are not going as well today as they might appear. As Justin Fox says, members of the domestic business community “have every right to be cranky.”

I do, however, concur with Matthew Yglesias’ conclusion that the trends are in the right direction. An increasing number of indicators suggest that things are improving, but I don’t expect the improvement to be rapid.




DISCLOSURE: Through my investment and management role in a Treasury directional pooled investment vehicle and through my role as Chief Economist at Atlantic Asset Management, which generally manages fixed income portfolios for its clients, I have direct or indirect interests in various fixed income instruments, which may be impacted by the issues discussed herein. The views expressed herein are entirely my own opinions and may not represent the views of Atlantic Asset Management. This article should not be construed as investment advice, and is not an offer to participate in any investment strategy or product.

I Didn’t Realize How Influential I Was :)

I noticed this chart in David Beckworth’s blog. Here’s what I see. On June 16, I warned of the danger of deflation. The expected inflation rate immediately began to fall, and it fell by a total of about 50 basis points over the next two-and-a-half months. Then on September 1 (with the expected inflation rate near its low), I urged the Fed to take quick action as bond yields were getting dangerously low, leaving increasingly little margin for the potential effectiveness of monetary policy. The Fed then began hinting at policy changes (partly realized in the QE2 announcement), largely as a result of which the expected inflation rate has since risen by about 40 basis points.

OK, I can see I’m going to have to start writing some more blog posts, so you all will know what to do next. (By the way, Mr. Bernanke, I second what David Beckworth said in the post where the chart appeared.)




DISCLOSURE: Through my investment and management role in a Treasury directional pooled investment vehicle and through my role as Chief Economist at Atlantic Asset Management, which generally manages fixed income portfolios for its clients, I have direct or indirect interests in various fixed income instruments, which may be impacted by the issues discussed herein. The views expressed herein are entirely my own opinions and may not represent the views of Atlantic Asset Management. This article should not be construed as investment advice, and is not an offer to participate in any investment strategy or product.