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PragCap takes apart David Einhorn's U.S.-is-Greece argument piece by piece, lambasting...
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Friday, May 28, 2010, 6:15 PM ETPragCap takes apart David Einhorn's U.S.-is-Greece argument piece by piece, lambasting "inflationistas" who refuse to see that the "price action in markets" makes it clear that there is no inflation and that deflation is the bigger worry. His greatest fear is that "we are talking ourselves into a depression and articles like [Einhorn's] only compound that fear."
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This news story has 14 comments:
They generally all write under a collective name: like PragCap. There are numerous publishing in here. It seems to me that if you have a valid point of vue, a creditable argument, you should put your name forward and state your position.
These guys are all hiding behind acronyms or collective groups.
Without an individual profile, available to everyone, I say get lost.
I am not multiple people and my website is only anonymous because it was never intended to be so widely read. Regardless, it is only anonymous to those who don't know how to Google....
I have no agenda. I am not pushing a product or company. I am not raising money. I am not pushing positions. I am just another frustrated citizen who feels that we have been failed by our leaders....The website is my outlet....
My 'take home' from your blog TPC, is one of a Keynesian slant that tends to gloss over some hard truths. Just IMHO.
Like you, I think that our leaders have failed us and betrayed us. They are disrespecting us because they don't realize that we can figure it out.
Sometimes I get frustrated because people speak from ignorance related to facts; when someone tries to explain the facts, they freak. Earlier this weak people were waxing eloquent about getting rid of SS/Medicare. They had no idea even what the benefits from SS/Medicare were or how they were administrated. When I explained the financial allocation facts, they went balistic. Go Figure.
I don't get upset if someone puts me down for my comments. I have been in here since 2006. If I really respect them, and I know the good guys/gals, then I am pulled up and rethink my position, but that is what this is all about.
SA has been a real source of information for me....favorite commentors?...Joe Schaefer, Trader mark, Phil Davis, MBKelly, Old Trader, Edward Harrison
to call my investing skills limited would be overstating my ability but I'm hear to learn...great site.
btw....i too have grave concerns about the direction our "leaders" and captains of industry&Wall st. are steering us....doesn't bode well
Listen to the shorts, argue with them, but respect their freedom of speech and don't accuse them of making things worse.
Or as Warren Buffet once put it: "don't ask a barber if you need a haircut."
The truth is probably lying somewhere in the middle: US and European debt is also Chinese, Japanese, and Russian problem.
The debtors cannot afford to their largest customer and borrower to fail. Just think what would falling dollar and falling US treasury do Chinese economy and its reserves. So some sort of Greek style liquidity crisis is highly unlikely here. This is pure Game Theory: US cannot become illiquid because it can always print more money, the buyers of US treasuries will have to keep on buying because should they stop, US will monetize their existing debts.
Therefore, the likely scenario is a some sort of pretend and extend work-out, slower growth, and gradual inflating the debt away. It is worth to point out that US debt after the war was 150% and UK was about 300% of GDP and both countries are still around, Japan has over 200% debt and is still deflating. So having your own currency does not hurt.
The situation is not dire but we may not see the same level of prosperity we had in the 90's for a couple of generations.
Interestingly enough, the key to the US future is population growth and immigration, two things that should prevent us from becoming another Japan.
Here's my position. Stay long US equities - especially big caps - that is where the quality is. The world is not ending.
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Spain and Portugal's problems (high private debt, rising public debt, with negative GDP), compounded with the inflexible structure of the Euro and austerity, is what scares me more than anything right now. I have my fears about a Eurozone depression based on that.
I agree with TPC on the Fed's monetary policy. Admittedly, I'm no expert on the subject, but I don't like the 0% Fed funds rate deal. If you look at Japan vs. South Korea after the '97 Asian crisis, it seems like we are going more in the direction of Japan than South Korea. 0% seems to create bubbles. I'd rather see the Fed use inflation targeting with a 2% - 4% target, which is more similar to S. Korea's approach.
For anyone looking at money supply figures for the past year, they would notice that the actual trend is down, down, down. Deflation is the real concern ... not hyperinflation.
I will bet on inflation showing up soon. I have little faith that the Fed can muddle thru and keep it under control.