Msrpaul

The Treasury Short: Still Viable?

RYJUX is a better treasury short play than TBT for a long term hold, buy TBT only to short a panic in TLT. RYJUX leverage is about 1.25, and thus less worry of decay. More people should know this

Eight Reasons Bank of America Is Going to $20

In what year...2050? I'll likely be 6...feet under

Goldman Sachs Should Hit It Big in 2009

OK...and Goldmans is going to do....what?

M&A? That business is dead for a LONG time.
Leverage? From 40/1 to 10/1. Rates are low. Nothing there.
Gather deposits? From whom? I don't see a Goldman Sachs branch anywhere.
Trading? Maybe. But we all know that's now a good long term way to generate income.
Loan Securitisation? Nope.

These models are dead and never coming back. Goldman will wurvive, because there is a revolving door between the Central Bank and GS, so they wil get sweetie deals from the Feds. That will make their principals money. Stockholders? We're already a double from the low. I was actually thinking about shorting it with a stop at 100.

Where We Go from Here: Best and Worst Cases

In an economy where in all things we "humanely" call for no one to lose, everyone loses. We are broke. When the lenders stop lending to us, the music is over. OVER

Is Gold A Sucker's Bet?

Bankers hate gold Governments hate gold. They hate it because it is and always has been money. In good times, it's the rich mans idolatry. But in times of insecurity, it's everymans agreed form of real money, for one simple reason. Unlike FIAT currency, it can't be printed, it has to be mined, at considerable cost. It has been money culturally for thousands of years. The only difference is how many pieces of paper you're willing to trade it for.

You predict gold will fall, and it may. But your prediction is correlation to other commodities, which have industrial or consumptive value, that of course are tradeable for those pieces of paper, and in hard times, supply exceeds demand. Every governments response to such circumstance is the same. Print more paper to make people feel wealthy so they borrow and spend. But human behavior is different than that. In deflationary times, people avoid debt, consume less, and spend more time with family. Good for humanity, bad for economy.

The problem is, over time, the public grows to mistrust governments everywhere who use the printing press as a solution to bail out the corrupt. Gold is the one thing that equalizes the equation of citizens against their government. That's why it was illegal to own in the free USA for so many years.

Yes, governments through their central banks, because they know that as nation to nation, just as citizen to government, gold is money. It's why the Nazi's robbed very central bank in WW2. DO you think the Swiss were going to make tanks and ship them to Germany for marks?

Nope. Only gold shines in hard times.

There are times when I may choose not to go long gold, but I would NEVER short it. (neither would I short energy or food). Step aside if you think it is overvalued. But shorting any of these 3 is Russian roulette. It gold falls to 800, I'm bying. I'll buy more at 750. At 650, I'll gladly trade all my dollars in for gold. Because the government always responds to deflation the same way. print print print print

This Isn't a Bottom, It's a Disturbance in The Force

The thought of Maria squealing is certainly delightful, except of course I was short when she was squealing long, so I hated it. Now I'm naked long. Let the squealing commence till DOW 10000 where I will be short again.

Goldman Disses Solar - Cramer's Stop Trading ! (10/7/08)

That would be the same Jim Cramer who pumped FSLR all the way to 317, declaring a breakout.... where I got squeezed out at a large loss. Of course, Goldman, who did the IB work, made big bucks all the way along, pumping solar and energy while they made a fortune. Now that the gig is up, they spin a new report. And they wonder why so many people like myself have utter contempt for them.

Historic Strength for the Dollar

I'm amazed. With the twin trade and budget deficits, we continue to cund current liabilities with long term liabilities. Only because it's the world reserve currency and debts are paid off in such does it gain any strength. Long term, they will devalue it. They always do.

Dollar Soars

Dollar only strong as companies and indiiduals deleber. The macro trend is down until the twin defecits are dealt with.

Suggested Entry Point for Going Long Nasdaq

Good. You go first.

How the Fannie / Freddie Announcement Impacts Forex, M&A

They will buy dollars only because debts need to be paid. The dollar has been ruthlessly abused as a method for the government to confiscate savings and wealth from prudent people. Now the Fed kills foldm as deflation sets in. When everybody except the reckless IB's have been killed, in the name of "protecting the economy", which is code for maintaining the status quo, then the Fed will inflate. I have nothing but utter contempt for the privitisation of profits and socialising of losses. They created the bubbles to avoid reality. Now that people have been caught up in the bubbles seeking a return on their capital, they kill them. My loathing for them grows every day.
The dollar is worth nothing but bathroom functions.

Thursday Outlook: Commodities, Emerging Markets

David,

I always love your posts. I got out of commodities before the last final and rewarding run, and keep waiting to get back in. I am aghast at the markets' willingness to digest bad news, but then again, with the coffers of the Fed in their minds as a backstop, risk is the only way to go. The consumer lending market has ground to a halt, and lots of people are on the brink. I know, as I work in the financial industry and see them. There is huge overcapacity in the financial system, which is yet to be dealt with. And today, the Ambac's got downgraded, and the market RALLIED!!!! What's missing from this picture? In the end, we are experimenting with a great game, using assetts instead of income to try to maintain"wealth" i.e. borrowing to keep the debt spiral running. The housing market is deflating. Moreover, today, the market rallies on high oil. I just can't figure the twisted logic. And gold falls on a weaker dollar.

Bond ETFs: Are Treasury Bonds Entering a Downtrend?

Other than shorting the TLT, the only other way I can play this trade is RYJUX. I have been looking at this trade for weeks now, and only avoided it because another "shoe" dropping will send equity scardicats back to bonds, thus my conclusion is shorting the TLT is the same strategy as going long stocks....and that really wouldn't be economic diversification, would it?

The Bull Is Sharpening His Horns

Yup. All the bad debt is miraculously written off, consumers can once again tap home equity to finance consumption their incomes can't support, unemployment has peaked at 4.9%, lenders are again relaxing their lending standards. The 4-month recession of 2007-2008 is now officially over! But the whispers from banks, car dealers, and oversupply of homes that lasts into 2010 are less important than the technicals. I'm gonna go out and buy a new car. I hear I'm approved.

Wednesday Outlook: Commodities, Emerging Markets

As I say, they can only "gig" the news so long (sucking in the small investor). What everyone seems to so severely miss is that without real income growth- which we haven't had for years as we've been fueling our demand for things with credit growth-there can be no real GDB growth. Greasing the financial wheels prevents meltdown, but the underlying fundamentals of weakening American skills creating a more service based economy (especially on the low end) are not a driver for wealth.

In our incredible desire over the years to avoid normal and healthy corrections, we have built an artificial economy based on assetts, not income. Housing will regress to the mean, as supply and demand will ultimately trump any tricks the Fed can attempt.

Now commodities inflation will enter, and will exist for years.

Great charts David, I look for them every day.