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.

Citigroup: Market Gains to Continue Until Individuals Jump Back In

Well, it has been obvious that the banks have been trying to Game the markets for a while.

Seems like the bigger fools are reluctant to show.

Watch out below!!!

Weak Currencies, Stagnant Economies Weigh on U.S., U.K. Investors

Good article.

Profit from Weak U.S. Balance Sheet: Short Government Debt

Basically what you are saying is the US is in a Lose-Lose situation, so yes Shorting is Win-Win. But is not just the debt that is going to hell. It is also the currency in which the debt is denominated. However, their could still be severe gyrations as confused investors still talk about the US currency being a safe haven. Nothing will crystallize until this ridiculous illusion is shattered once and for all.

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.

Real Cause of This Financial Crisis? Global Hunger for Savings Instruments

AAA is simple. It simply means Made in the USA. Everything else was regarded as sub-prime.


On Oct 22 08:16 AM Andrew Butter wrote:

> You are absolutely right, I remember having the game explained to
> me in 2000 by someone from CSFB when I started to work on a toxic
> asset assembly line, he said:
>
> "Demand for AAA is hugely more than supply".
>
> What went wrong though was a quality issue, there was no quality
> control on what AAA was, notwithstanding that the US regulators insisted
> that pension funds and insurance companies held a proportion of their
> assets in AAA.

Real Cause of This Financial Crisis? Global Hunger for Savings Instruments

So the problem is the channeling of a disproportionate amount of World resources into the US economy. The solution therefore is clearly to channel much of it back out again. Don't worry the markets are already on it. Even Ben cannot hold back this dyke.

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.

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.

Can't Stop the Market Bulls

So if a stronger currency is good for Japan, why might it not also be good for China?

The Chinese will be watching the Japanese very closely.

One Year Since the Banking System Collapsed. Has Anything Really Changed?

Yes, and people still have yet to realize that Ford is a dead donkey!


On Sep 08 04:41 PM Mr. Big wrote:

> I know what's changed. Lots have changed:
>
> 1) America is another couple of trillion dollars in debt
> 2) The fiscal deficit is ballooned to epic proportions
> 3) The legs of the USD has been amputated.
> 4) Americans are set to pay a lot more taxes.
> 5) There's only one American car company left.
> 6) More than 5 million additional Americans are out of work.
>
> I'd say that's change....big time.
>
> What hasn't changed:
> 1) The funding of social security and health care in America (or
> more precisely...the lack of funding).
> 2) Energy reform
> 3) Bank executive bonuses.
> 4) American politics
> 4) National security

Citigroup: A Simple Analysis of a Terribly Complex Company

The simple analysis is that without Government support the bank would have folded. Even now it is probably insolvent and the shares are probably worth nothing. It is only still afloat because Uncle Sam has been cooking the books and rigging the markets. If further direct support is needed then no doubt the current shareholders will be further dilute. Frankly, I think your entire analysis just misses the point. The only reason that the bank is not 100% percent Government owned is US dogma.

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?