Armagedon

Total Rating:
0 / 0

11 Comments

    • Fri Nov 7th 16:52 PM | Rating: 0 0
      Commented on:
      Effects of the Long Dated Treasury Bubble
      Actually I have been on the deflationary recession camp for some time, and I too do not see how the US will pay its debt. The crisis will generate a huge whole in the US top-line on top of the already burdensome debt levels. I actually believe a US default is the most likely scenario given current debt levels.

      I think you will notice the market has already started pricing this in. My inverse treasury swaps are at the money despite the central banks lowering interest rates. That can only happen if the market is discounting a new risk factor.


      On Nov 07 12:01 PM JasonC wrote:

      >
      > Is everyone here very stoned?
      >
      > You do all realize, right, that exactly the brain trust making this
      > same one-note idiotic prediction are the ones who blew all these
      > bubbles, in real estate, in oil, in every commodity there is, in
      > metals. Because if infinite inflation is just around the corner
      > the right thing to do is get short dollar debt by borrowing to the
      > hilt to carry real assets. Oops, everyone on earth just tried that.
      > And it blew apart. Who'd pay them?
      >
      > In fact, the Fed left spendable money - M1 - unchanged for 3 straight
      > years, and all the debts are therefore real, and all the real-asset
      > bets against them went smash. And will go right on going smash,
      > until you-lot get this inflationary brainstorm out of your system.
      > Everyone holding debt is getting paid, and everyone betting against
      > it is being forced to give away every asset they own.
      >
      > Will any of the johnny one-notes ever admit that it is precisely
      > their hyperinflation prediction that just crashed and burned?
      View article »
    • Fri Nov 7th 16:48 PM | Rating: 0 0
      Commented on:
      Effects of the Long Dated Treasury Bubble
      Printing money in the US requires a debt obligation to be purchased by the Federal Reserve. If the Fed cannot off-load that obligation on banks then no money is printed. So no, the US cannot print its way out of this hole.


      On Nov 07 09:32 AM Rhunzzz wrote:

      > Ok. Could you explain why there is no way the US government can repay
      > its debt? When the economy recovers, the US government can cut spending
      > or raise taxes (even if the political will may not result in that
      > happening) or in extremis, they can always print more money. Yes,
      > that would be inflationary, but that is another issue. By the terms
      > of its nominal obligations, the US can always pay off its debt.
      >
      >
      > Still, it's very likely that long-term interest rates will have to
      > go up. There is no other logical outcome to the Treasury about to
      > issue oodles more debt. And that is ultimately what will tackle the
      > inflation that will soon be created, indeed, is being created now.
      View article »
    • Mon Oct 27th 17:41 PM | Rating: 0 0
      Commented on:
      Dollar Strength: An Illusion
      Edward,

      The dollar is strengthening precisely because the US is tanking/deleveraging. This causes a destruction of currency supply. Less supply gives you a higher price. It is that simple.

      The amount of currency being pumped is at least 10x less than the currency being destroyed, so no inflationary pressures will arise.

      Best,

      Arm
      View article »
    • Mon Oct 27th 17:34 PM | Rating: 0 0
      Commented on:
      Using the Regional Banking ETF to Play Bank Mergers
      This is a silly article. How can you profit in an merger arbitrage by holding an ETF of the sector? Merger abritrage generally requires you to short the acquirer and long the target. This is because merger arbitrage is a ZERO SUM GAME. If you hold the ETF you both hold the target and the buyer = no gain

      Maybe what the author intended to say is that if you buy the ETF you will benefit from a strengthening of regional banks through mergers... Unfortunately, this too does not make sense as the same principal applies.

      The only way for this trade to work would be if large banks came and purchased the regionals at ABOVE market prices (not the now so popular take-under). Unfortunately, banks have no intention or balance sheet to pay for the regionals.

      Conclusion - This trade idea requires an important quality control review.
      View article »
    • Mon Oct 27th 17:34 PM | Rating: 0 0
      Commented on:
      Using the Regional Banking ETF to Play Bank Mergers
      This is a silly article. How can you profit in an merger arbitrage by holding an ETF of the sector? Merger abritrage generally requires you to short the acquirer and long the target. This is because merger arbitrage is a ZERO SUM GAME. If you hold the ETF you both hold the target and the buyer = no gain

      Maybe what the author intended to say is that if you buy the ETF you will benefit from a strengthening of regional banks through mergers... Unfortunately, this too does not make sense as the same principal applies.

      The only way for this trade to work would be if large banks came and purchased the regionals at ABOVE market prices (not the now so popular take-under). Unfortunately, banks have no intention or balance sheet to pay for the regionals.

      Conclusion - This trade idea requires an important quality control review.
      View article »
    • Thu Oct 23rd 17:32 PM | Rating: 0 0
      Commented on:
      Why Oil and Gold Are Headed Much Higher
      Horrible article!!! Gold is a commodity. It is declining in price due to a contraction in monetary supply due to shrinkage in velocity of money (reduced lending). Pumping money into the economy does not compensate for the reduction in velocity and all asset prices will fall.

      If and only if banks start lending again (why would they when they can live off the interest of those government loan?) then would I even begin to worry about hyperinflation.

      Conclusion: No lessons learnt. Wall Street is still full of talking heads. The sell-side is not worth a cup of coffee.
      View article »
    • Wed Oct 15th 21:39 PM | Rating: 0 0
      Commented on:
      Fed Facing a 'Money Trap'
      The St. Louis Fed publishes the number for MZM, which is an acceptable proxy for M3. It is freely available on their website
      View article »
    • Mon May 5th 17:59 PM | Rating: 0 0
      Commented on:
      China Stocks: April Was Kind
      How can a government propping induced rally be viewed as a fundamental reason to buy? Chinese stocks are incredibly expensive with 40x and 50x P/E. The implied yield is 2% they would literally have to be safer than US Treasuries or the individual stocks would have to guarantee huge increases in sustainable growth. Please remember these are stocks not the Chinese economy. No company can grow into infinity at 10%. Furthermore, the Chinese economy is 20% export and 40% foreign direct investment. With Europe and the US heading to recession, what will happen to that 60% of the economy.
      View article »
    • Sun May 4th 20:09 PM | Rating: 0 0
      Commented on:
      Meredith Whitney Threatens Severe Deflation For Your Portfolio
      If analysts and short sellers are the enemy and can cause stocks to fall, then Efficient Market Hypothesis does not exist. If it does not exist, all financial alchemy has no backbone...

      That means Phill, your rant is fundamentally actually more dangerous to your stock position, than Whitney's comments. =D
      View article »
    • Mon Jan 7th 13:37 PM | Rating: 0 0
      Commented on:
      Fisking Ben Stein on Goldman's 'Wrongdoing'
      First let's start by saying that Chinese walls are a joke. Secondly, you are right Felix; this is not breach of fiduciary duty, legally it is called misrepresentation. Caveat Emptor applies to you not actually having to tell a client if there is a problem. Actively marketing a product you know to be flawed (as proven by shorting it) is nothing short of lying. And yes, there it is a crime, it is called misrepresentation. Pardon Ben Stein, he just misused the correct legal argument for what is essentially a plain cut moral question.

      I guess Goldman's 14 Principles are just another of the things it keeps for show. While we are add it. Let's get serious. Goldman has $40 Billion in level three assets and no significant losses... Are their problems really that serious that they refuse to even open the box?

      Best,

      View article »
    • Fri Dec 14th 20:15 PM | Rating: 0 0
      Commented on:
      PPI-CPI: I'm Even More Bearish Now
      Please! Given that inflation never really was under control before the Summer rate cuts began, I would not brag too much about predicting an increase in inflation. Actually, the increase in gold and commodities kind of tells us that the market knew this ages before this guy....
      View article »
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»