dieuwer

Japanese Investors Saying 'No Thanks' to Government Bonds

Local deflation should be meaningless to local Japanese investors.
So what there was deflation from 1990 - 2000? Japanese could have invested in NASDAQ stock and make a 10-fold gain.
So what there supposedly is deflation since 2000 again. Japanese could have invested in gold and commodity stocks and make a fat gain.

Bank failures in 2009 roll over to 100 - for the first time since 1992 - with the closure of Partners Bank of Naples, Fla. The estimated cost to the Deposit Insurance Fund is $28.6M. Time to revisit the WSJ interactive timeline of two years of failures.

No bank failures in New England?

ETF Securities Plans a Physical Palladium ETF

Let's take the hype out of Palladium investment:

Price of Gold, Silver, and Palladium in January 2001: $255, $4.50, and $1079, respectively.
Price of Gold, Silver, and Palladium on October 21, 2009: $1058, $17.70, and $342, respectively.
Gain/Loss of investing in Gold, Silver, and Palladium over the period 2001 - 2009: 415%, 390%, and -68%, respectively.

YEAH, Palladium is a great investment...(not).

Global Markets in Review: Risky Assets Disconnect from Fundamentals

That is why it is a joke to call US Treasuries "safe". What's so safe about losing purchasing power?
Read what Einhorn has to say and LEARN: www.marketwatch.com/st...


On Oct 19 09:00 AM Moon Kil Woong wrote:

Certainly safe assets like US Treasuries don't even cover for dollar devaluation, let along current inflation and future inflation.

Global Markets in Review: Risky Assets Disconnect from Fundamentals

Yup, prices of risky assets such as 30Y T-Bonds are indeed disconnected from reality.

Banks and Delinquent Borrowers: The Chickens Are Coming Home to Roost

For example: Short SHY, buy GLD. Or use short SHY to get cheap loan.


On Oct 14 03:52 PM Mark Anthony wrote:

> Dieuwer:

> I am not a big fan of shorting anything nowadays. When you short,
> you hold a negative position of the equity you short, and a positive
> position of US dollar cash. Your cash holding should be NEGATIVE,
> not positive. Assume you short $1M worth of something and that something
> goes to zero, your initial $1M investment becomes $2M. But by then
> your $2M could only buy you a loaf of bread, on top of that you still
> need to pay the US government your "capital gain". So do you make
> money or lose money in such a case?
>
> Why would any one short anything in a hyper-inflation environment?
>
>
> On Oct 14 03:42 PM dieuwer wrote:

Banks and Delinquent Borrowers: The Chickens Are Coming Home to Roost

I'm not so sure about house prices going up. Besides, people always "conveniently forget" that it is not just the mortgage payments that have to be made. You also have to pay SKY HIGH property taxes, upkeep and insurance.
Here in Boston where I live, property taxes, upkeep and insurance is sometimes MORE than the rent! And don't forget: cash strapped local governments will INCREASE taxes on your home to pay for their lavish programs.

With respect to a cheap loan: shorting SHY would do the job?


On Oct 14 02:19 PM Mark Anthony wrote:

> Dieuwer:
>
> Good question you asked. Both answers are affirmative. Banks did
> lend $500K to people with no money down and no income. They are not
> that foolish any more. But there are still the equivalent. Let say
> I do put 20% down, it does not change my argument.
>
> Second question, who is going to lease $500K worth of gold to me?
> Gold is being leased at ridiculously low lease rate. That is a fact.
> I use my house as mortgage to lease the gold, so it is secured loan
> there is no reason why they are not willing to lease it to me. Particularly
> if I do put 20% down on the house.
>
> Your final question: "> Why would anyone lend $500K if he/she knows
> the money will be repaid with depreciated dollars? You think people
> are that stupid??"
>
> The answer is ABSOLUTELY YES. People ARE that stupid. 99% of people
> are that stupid and it is even worse than that. Look at all these
> people who buy US treasury bonds at ridiculous low yield. They know
> they will be paid back in depreciated dollar, but they put trillion
> dollars to lend the money to the US government any way. At least
> the people who lend money to allow me to buy a house at 6% interest
> rate and 20% down payment are smarter. They get paid more interest
> rate and their loans are secured by the physical house. But they,
> too, are paid back in depreciated dollar. So they too are foolish.

Banks and Delinquent Borrowers: The Chickens Are Coming Home to Roost

1) Who would be willing to lend you $500K with no money down?
2) Who would be willing to lease you $500K worth of gold?

Why would anyone lend $500K if he/she knows the money will be repaid with depreciated dollars? You think people are that stupid??

On Oct 14 01:01 PM Mark Anthony wrote:

> Even that is not true. The housing affordability has nothing to do
> with treasury bond yield. The dollar could collapse and the treasury
> bond yield can go to the moon, but you can still pretty much afford
> a decent house, if you understand that a house retains its intrinsic
> value while your debt will become worth less and less.
>
> Buy a house, rent it out. Chances are that the rent probably pays
> for the mortgage payment. From economic principle, the rent should
> ALWAYS be higher than the carrying cost of the house, otherwise there
> will be no house rental business.
>
> Alternatively, buy a house at $500K on a $500K loan. Then lease $500K
> worth of gold, using the house as mortgage. Use the gold to pay off
> the loan. And then from that point on you only needs to pay the lease
> rate of the gold. At 0.5325% one year lease rate, it costs you only
> $2662 per year, or $222 per month. How about owning a half million
> dollar house for a cost of only $222 per month?
>
> The rease rate of gold reflect the REAL interest rate, inflation
> adjusted.
>
> On Oct 14 08:34 AM Andrew Butter wrote:

Bond Expert Friday Wrap: Duration Rout

I wonder where the rate ceiling for Bernanke is (if any). 4% for a 10-Y treasury?
I asks this because I am contemplating shorting IEF or TLT. But if Bernanke monetizes "heavily" the longer durations ( to keep yields low), than it makes no sense to short.

Natural Gas: Worst Investment Ever?

With respect to LD, did you check the volume of this ETN? It's 5500 shares on average! With a share price of about $60, the amount of money moved each day in this ETN is $330,000! Very illiquid if you ask me.

Natural Gas: Worst Investment Ever?

This chart is useless and doubtful as of its accuracy at best.
SPOT WTIC on 01/01/2009 was about $48. As of 09/30/2009 SPOT WTIC was $70. A GAIN of about 46%. Why is this not reflected in the chart???

Marc Faber on Financial Markets and the Economy

CNBC:
"There has been a huge rally everywhere. He says he is not a buyer at these levels. "

NEWSLETTER:
"For equities, my favorite investment destination remains Asia, and I continue to find inexpensive equities around the region...,
Recently I also invested or increased positions in Thai Beverage..."

On Oct 08 05:05 PM smarttogether wrote:

> dieuwer,
> Your comment should have some supporting examples. Can you provide
> any?

Marc Faber on Financial Markets and the Economy

CNBC:

"But, he anticipates the commodity hoarding by China is about to end and that is bearish for industrial commodities as well as precious metals."

NEWSLETTER:

"People don’t seem to be talking about gold much on CNBC (aside from the coin commercials), another sign that a big move one way or the other could catch most people unaware.” I agree, some big moves in asset markets are coming and I lean toward the view
that gold will break out on the upside."


On Oct 08 05:05 PM smarttogether wrote:

> dieuwer,
> Your comment should have some supporting examples. Can you provide
> any?

Marc Faber on Financial Markets and the Economy

I would warn reader about statements Marc Faber SUPPOSEDLY makes in public. If you read his newsletter (subscription) you will get to know what the REALLY THINKS. All the other stuff is fake.

New derivatives-oversight legislation would give CFTC head Gary Gensler the power he's been seeking, to regulate commodity swaps and derivatives traded on foreign exchanges. It would have a particular effect on swaps investors such as the U.S. Natural Gas Fund (UNG), who bought swaps when it couldn't offer new shares.

You can always emigrate if you don't like how you are treated...