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Bo Peng
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I run a fund based on automated trading and technical analysis. But my favorite pastime is thinking and talking about political economy. I guess I'm George Soros. Writing helps clarifying my thinking. All opinion expressed here is mine, wholly mine, nobody's but mine. And all trading/investment... More
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  • The Moment Of Truth Shall Pass, and I'll Be Baaaack 1 comment
    Dec 2, 2010 5:01 AM | about stocks: FXE, EUO, UUP, UDN, GLD, DGP
    Wow. If it's up to me, I'd include the following opening words of The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform, by the Bowles-Simpson Deficit Commission, in textbooks right along side of Gettysburg and Martin Luther King.
    Throughout our nation’s history, Americans have found the courage to do right by our children’s future. Deep down, every American knows we face a moment of truth once again. We cannot play games or put off hard choices any longer. Without regard to party, we have a patriotic duty to keep the promise of America to give our children and grandchildren a better life.

    Our challenge is clear and inescapable: America cannot be great if we go broke.
    I've been pretty cynical about the Congress (among many other institutions) but it is the once-in-a-century gem like this that keeps my lingering respect and hope alive. A bi-partisan congressional commission recommending cutting debt and deficit in the TBTF Era? This is too good to be true (much like the original Volcker Rule), even though it has precisely zero chance for any serious implementation (much like the original Volcker Rule).

    This, together with the original Volcker Rule, shows that the conscience and wisdom in our society are desperately and heroically trying. But, much like the Volcker Rule, this one shall also be molested beyond recognition by the time it gets codified, if at all. Our democracy is not strong enough to fight the special interests. Our democracy is not good enough for Bowles-Simpson.

    Still, I applaud it with every cynical fiber of my being.

    As to trading, I expect the pending ECB meeting to be mostly a non-event, but perhaps serving as an excuse to end the Euro contagion fear (I mean, Belgium? Are you fucking kidding me?). As I said earlier, the Euro will die, but not yet. I expect EUR to rebound and USD to drop, gold to continue surging, equities to rise due to lower USD but continue lagging gold, compression of CDS in Euro and financial names, and perhaps some selling pressure on US treasuries. In short, it's Risk-on Party time again, baby.

    Just don't forget this, along with the heavy German accent: I'll be baaaaack.


    Disclosure: Long calls on GLD
    Themes: Currencies, commodities, macroview Stocks: FXE, EUO, UUP, UDN, GLD, DGP
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  • Author’s reply » I don't know how I managed to miss this, but David Stockman's NYT OpEd piece on 7/31 was simply awesome.

     

    www.nytimes.com/2010/0...

     

    Now I'm very hopeful and optimistic. One more bubble bust and crisis, there's actually a good chance for some real fixes.
    4 Dec 2010, 11:56 PM Reply Like
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