Raymond Micaletti

How The Federal Reserve Is Monetizing Debt

Given the recent sentiment survey in the dollar that revealed only 3% of traders were bullish on the dollar (a level that has marked major lows previously), I have two questions:

1) Is there anyone left to sell the dollar?
2) If it *is* revealed that things are not as rosy as they seem, might that not set off a stampede for the relative safe haven of the dollar as the world is still pretty much dependent on the U.S. consumer to drive growth?

Equities Are Likely Heading Lower: Resist the Temptation to Short Them

If inflation is, say, 10% and the Fed funds rate is, say, 6% (and rising), and the short rebate is Fed funds less a small spread (call it 25 bps), and the stock market rises less than inflation--assume it rises at 6% annualized, how does one beat inflation by being short the market while it is rising (even if it rises less than inflation)? One would lose 6% on the stock market short, gain 5.75% from the short rebate, so one would essentially be flat (down 25 bps), whereas inflation is 10%--so one would be down 10.25% relative to inflation, no?

I get what you're saying in the sense that the stock market would be underperforming inflation, but in that case, one would not want to be long or short equities, if one wants to keep pace with inflation. Or so it seems.