Dave Wrixon

Supply, Demand and the U.S. Dollar

And what is 7.5% spread over 30 or even 10 years worth in faced of annual inflation that could be approaching 20%?


On Nov 22 08:55 AM Old Trader wrote:

> "Holding to maturity won't solve anything if inflation has rendered
> your principal, which is denominated in dollars, worthless."
>
> David,
>
> I'm not certain that's true, because if the market anticipates interest
> rate increases, the value of an existing bond will drop to reflect
> the anticipated rate. So it depends at what point the bond is bought.
> If a bond is trading at 93, and is bought and held to maturity, the
> purchaser would receive par, resulting in a 7.53% return in ADDITION
> to the coupon of the bond, which would naturally be a below market
> rate.
>
> As the article points out, this is less likely to happen in a fund,
> since they typically trade securities, rather than holding to maturity.
> The only way a fund can mitigate the damage is moving into the short
> end of the yield curve to take advantage of increasing rates.

Supply, Demand and the U.S. Dollar

Holding to maturity won't solve anything if inflation has rendered your principal, which is denominated in dollars, worthless.

Toward an Exit Strategy for the Federal Reserve

The other big question is does anyone actually want these Mortgage Backed Securities or are they going to have to sell at a considerable discount to book value?

U.S Treasuries: Heading for a Rally or an Implosion?

If you wanted me to buy Treasuries I would be looking for a yield in excess of 30%, and even then I would not sleep nights.

David Einhorn: Break Up Too Big to Fail Institutions

They are only two big to fail if the Federal Government has the resources to save them. It is not yet clear that point has been proven.

The Dow: Ominous Parallels to the 1929-1930 Era

The real problem is that figures are graphs are meaningless because the underlying value of the currency is falling but not as fast as its fundamentals would suggest. It might make sense to do inflation or currency adjusted plots, but the problems is that neither of the movements is currently explicit in the markets. Everything is being rigged even company profits. But the smoke will clear and then we shall see the true extent of the fire damage.

Tough Decisions Loom for the Fed

The Fed doesn't do tough decisions.

The last time it did that was when Volker was in charge.

It seems he has just about been silenced.

Report from Europe for Friday, Sept. 4

Nup, until you start to address the Federal Deficit you are firmly stuck in the Denial Phase.


On Sep 05 08:31 AM Bruce Krasting wrote:

> There are a number of videos out there of angry people. In a way
> it is humor but it is not. There is nothing funny about it. There
> are many people out there that are as mad as this guy. They may not
> be doing Utube videos, but they are just as hot under the collar.
>
>
> My guess is that something else is going to happen. Not sure what.
> My guess is that shortages of certain things is going to take us
> over the top. No sugar, no gas, no health care, no police, rising
> crime another recession. Something is going to give. We just have
> too many wobbly legs for us to miss the next bullet.
>
> When 'that' happens we will have real anger and it just might spill
> over to the street.
>
> The net result will be a wave of debt repudiation. It will become
> an avalanche of "no pays". Hang on, we are just starting the anger
> phase of this in America.

Where Are We in This Rally's Lifecycle?

Not sure Lifecycle is the term you were looking for?

Looks more like Death Throws to me.

While Citigroup Jumps on John Paulson's Investment, AIG Jumps on Anything

Does this John Paulson carry the same regressive genes as his name sake Henry? Seem to remember he made similar investments.

While Citigroup Jumps on John Paulson's Investment, AIG Jumps on Anything

The one that is killing me is that now Bank failures are accelerating again, they are now being referred to as a Lagging Indicator. Excuse me for being a little slow but didn't all this start with Bank Failure? So the Government intervened to stop them all imploding but unlike the little Dutch boy simply does not have enough fingers to stem the flow of failures. So rather than admit failure the underlying causes are now being reclassified as latent symptoms. Just how stupid do they think the American Public actually is? And more important, are they right?

Four Reasons We're Headed Even Higher

In an economy where spending cuts and raising taxes are so politically unacceptable to effectively rule them out for the foreseeable future ratios of debt to GDP are almost meainingless. Add to this that GDP gives little very little indication of wealth generation and Debt/GDP ratios are not very meaningful.


On Aug 28 06:51 AM Clive Corcoran wrote:

> While I might agree with you that there will be a lot of clairvoyant
> pundits that are likely to be premature in calling the top I think
> you should not be quite so cavalier in the claim that "Financial
> armageddon is in the rear-view mirror"
>
> With a debt/GDP ratio approaching 100% (and that's on a benign view
> of the size of the debt) and with a lackluster recovery at best,
> imho, there are still a lot more twists and turns to the rolling
> financial crisis ahead.

Today May Be Markets' Turning Point

Well you might not be right but you will be close, and having the balls to put down a marker should earn you respect, provided you are not miles out.

Exit Strategy: An Argument Against Bernanke's Reappointment

Over? Dream On!

Can We Insure Against Systemic Risk?

Try asking your insurance broker if he has a policy for victims of Ponzi Schemes.