Interview with John Tamny - Real Clear Markets - Zing Talk (BKS, BGP, AMZN)

John Tamny is the editor of RealClearMarkets, a senior economic adviser to H.C. Wainwright Economics, and a senior economic adviser to Toreador Research and Trading.

John was nice enough to give Benzinga's Alex an interview.

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Could you start off by just telling us a little bit about yourself and what you do at RealClearMarkets?

What we're trying to do there is we realized people were interested in the market more broadly, and they are busy. We try to get the interesting content for them so that they can have a concise snapshot of how the market is doing

How did you get involved there?

RealClearPolitics was the original site, around 2002 and then in 2006 they decided they were going to do RealClearMarkets - I was writing a lot about economics at that point, so they felt I was the right choice for it.

As I alluded to in our intro, you're also a private-sector economist for H.C. Wainwright and also an advisor to Toreador Research and Trading . What do you do for them?

For H.C. Wainright Economics - that's a quantitative research firm that was really founded in Boston in the '70s. Mainly what we try to do there is people want research on the economy, but they don't want bias to seep into it. So we essentially use market factors to predict markets. That's the price of gold, the yield on the ten year treasury, etc.

Toreador is a mutual fund firm that is small, has about $30 million under management. The basic goal there is to combine - we're neither value or growth. What we look for are companies that are not destroying their capital on the way to earnings. Companies that are circumspect with their capital.

You know it's funny I've actually heard a lot of different perspectives on whether economists make successful investors. How has your experience in economics influenced the way you interact in the financial markets?

Well, I've had successes and failures. What I try to do at Toreador is give them a macro perspective. Mainly I follow the dollar and the dollar price of gold specifically in giving a snapshot of the economy more broadly. Depending on where the dollar is, if the dollar is strong, you'll see a lot of the more intellectual sectors, if the dollar is weak you'll see a lot of money flowing towards the commodity producers, basically assets that are least vulnerable to inflation.

Are there any money managers, traders or other finance people that you follow in particular?

Cliff Asness, AQR Capital

How do you get your news and information on the market?

I get it from the same places as everyone else. I read the Wall Street Journal, USA Today, New York Post, New York Times (NYSE: NYT), obviously RealClearMarkets. What I try to do in my writing is explain what's going on in the economy.

Your Forbes column is called Political Economy, and that intersection has been your main focus. It seems that nowadays, politics and economics are more intertwined than ever. Could you elaborate on how that's happened and what it means for the markets?

Well it means bad things for the markets, if politics and markets are more intertwined. It means you have the best and brightest producers spending time in Washington trying to seek favor with over-reaching politicians instead of producing a specific product. The problem with government is that once they're formed, they tend to grow.

With that in mind, where should people be putting their money? Do you see any stand-out sector or asset class to thrive in the years ahead?

It began in the early part of this decade with the diasterous Bush presidency - that explains why all commodities went up. When Presidents devalue currency, Americans tend to buy houses. Even with the collapse, those who were in housing did far better than the market.

With the devaluation of the currency, you want to have hard assets, like copper and oil. It's a way of protecting yourself from inflation. It's a terrible sign, because in history whenever a currency is debased, the economy doesn't do well. We just have to live with it, though.

One of my favorite articles of yours was about what Blockbuster teaches us about economics, where you talked about the creative destruction inherent to capitalism. Do you see any companies or sectors out there as the next victim of this concept, and what will take their place?

I don't know if you remember probably 10-20 years ago, bookstores like Barnes & Noble (NYSE: BKS) and Borders (NYSE: BGP) - a lot of people saw them pushing out the Mom & Pop bookstores - but look what happened - Amazon (NASDAQ: AMZN) was created and other online purveyors of goods. Now you have Barnes and Noble it is struggling.

That's the beauty, they can go bankrupt, and another company will take their place.