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Negative Carry  

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  • Unsustainability, High Beta, and Liquidity Risk Pervade Capital Markets [View article]
    Small businesses that rely on short-term financing from CIT would go bankrupt. I have no idea what you are talking about.
    Jul 23, 2009. 02:55 AM | Likes Like |Link to Comment
  • Unsustainability, High Beta, and Liquidity Risk Pervade Capital Markets [View article]
    Rising rates Q2 lead me to believe mortgage volume and decreased foreclosure rates may not have indeed prevented big losses in banks or allowed big revenues from new mortgages.

    We will see.

    On Jul 14 10:31 AM greedcanbgood wrote:

    > Your analysis is pretty good. Watch for the commercial banks to
    > report good, even outstanding, Q2 earnings primarily due to mortgage
    > volume. The bottom falls out in Q3 when mortgage volume has waned,
    > the consumer "hunker-down" gets even more serious (e.g. consumer
    > spending) and unemployment hits existing mortgages harder.
    Jul 14, 2009. 11:19 AM | 1 Like Like |Link to Comment
  • Goldman Sachs Is Toast [View article]
    i still laugh at this article.
    May 14, 2009. 08:00 AM | 1 Like Like |Link to Comment
  • A Summary of Q1 Bank Earnings: World, You Just Got Hustled [View article]
    I see lots of broad and general assertions, I would love some insight as to how one determines the "fair value" of bank stocks when they have trillions in depreciating assets that have yet to be marked to any realistic price and are still overlevered > 15-20x.

    As per those who trivialize this as just another permabear ultrashort article, I invite specific responses to specific parts of my article. Also please keep in mind I have been repeatedly stating the market will place a nominal bottom this year (though not inflation-adjusted for several years), so I'm not exactly a permabear.
    May 10, 2009. 06:10 PM | 21 Likes Like |Link to Comment
  • A Summary of Q1 Bank Earnings: World, You Just Got Hustled [View article]
    AIG is on the losing end. which means taxpayers, since we provide all of the funding. that's why it's such a scandal, AIG is being used as an intermediary for basically an unlimited cash stream from taxpayers to banks under the guise of "systemic risk" even though no haircuts are being taken and CDS trades are being settled at face value close-outs.

    banks win, taxpayers lose.
    May 10, 2009. 12:01 PM | 27 Likes Like |Link to Comment
  • A Summary of Q1 Bank Earnings: World, You Just Got Hustled [View article]
    I made enough money going short energy stocks on July 4 and going short the rest of the stock market September 2 to worry too much about being whipsawed since April 20.

    The banks will recover, yes. But you have to understand HOW. Looking at current bank balance sheets, many are on the point of technical insolvency. Just absurd TCE/TA. To assert banks will just "turn arond" is a very generalized claim.

    Banks will turnaround this year because of the government's capital infusions. The stock market will bottom (in nominal terms) this year. But it's all just blatant credit expansion. No rally in stocks is to be trusted unless it goes with a rally in gold.

    Until the Dow can buy less than two ounces of gold, this will be the case.
    May 10, 2009. 11:48 AM | 18 Likes Like |Link to Comment
  • Why This Rally Is Unsustainable [View article]
    Market is up about 2.5% since April 9.

    On May 01 11:02 AM Wise Golden wrote:

    > Sideways market since April 9th? You lost me there -- you must have
    > been talking about April 9th of some other year. April 2009 was
    > the second best month in stock market history.
    May 1, 2009. 02:07 PM | 31 Likes Like |Link to Comment
  • 3 Reports That Should Indicate Continued Firming of Oil Prices [View article]
    Oil isn't a good play until the Fed has printed enough money to fill in all the deleveraging/deflationary holes in the economy. Only when rates once again rise (as the Treasury bubble deflates) will inflation really become a real issue again and will oil be a worthy candidate for big gains.

    Crude is headed for February lows in the next several weeks. GDP in the US contracted 6.1% Q1 2009. That is horrendous. And with the swine flu outbreak, you can bet transportation will be halted to a bare minimum. Supply/demand.
    Apr 30, 2009. 12:51 PM | 3 Likes Like |Link to Comment
  • The Imminent Equity Implosion [View article]
    here we go
    Apr 20, 2009. 09:59 AM | Likes Like |Link to Comment
  • The Imminent Equity Implosion [View article]
    i don't suggest precious metals are a barometer for economic growth-- they're a barometer for asset depreciation being socialized into currency depreciation by government spending, however. if we truly are turning around in credit markets, precious metals should be surging because last time i checked, spending money you don't have doesn't bring back real growth, it just transfers losses to other people (taxpayers).

    yes, yes, i got stopped out very quickly everytime i tried shorting Goldman. maybe this prediction will make up for it.
    Apr 13, 2009. 04:17 PM | 9 Likes Like |Link to Comment
  • Goldman Sachs Is Toast [View article]
    Clearly I was wrong about the timing (got stopped out very soon after article's publication) but I believe the thesis remains and I'm back in GS short. Watch for statements coming soon from banks about equity issuance at inflated prices from the recent scam-financed rally.
    Mar 31, 2009. 03:18 AM | Likes Like |Link to Comment
  • Profiting From Bernanke's Super-Fed and Obama's Newer Deal [View article]
    $2T of treasuries becomes a lot once it's exposed to fractional reserve. I think any further intervention in Treasury markets (which the Fed is clearly still doing, with printed money) will be to micro-manage the debt bubble collapse.

    Price inflation will show up first and foremost in precious metals (which are all breaking out of important bear trends) and next in equities, which the Fed seems to be putting a price floor under at Dow 8000. This is the outside force you speak of, and it's here.

    On Jan 07 07:07 PM Nelson_Lai1975 wrote:

    > I agreed that Fed Carry Trade (as mentioned in your article) is what
    > keeping demand for Treasuries artificially high.
    > However, I don't believe that the tide will shift as we speaks. The
    > Fed has not acquired enough debt as of yet. The Fed will want to
    > be gold price low (via Gold Carry Trade) so there can continue selling
    > 30 years Treasuries at around 2%.
    > Think about it, if you are the Fed, will be satisfied with selling
    > only 2 trillions of treasuries ? No, 2 T is like a big drop of water
    > in the bucket, but that is not Fed ultimate goal.
    > With all the anticipated spending that are needed in the short future,
    > Fed will want to continue the Fed Carry Trade as long as possible.
    > The tipping point will be outside force from the Fed That outside
    > force will be inflation.
    > It may take at least until after June before signs of inflation show
    > up.
    > Let wait and see.....
    Feb 5, 2009. 06:18 PM | Likes Like |Link to Comment