xtronics

Enjoy These 'Dollar Days' - But Will They Last?

Not sure what effect the TEMPORARY shutdown of a large number of factories in China from the Earth quake - followed by more TEMPORARY shutdowns for the Olympics. I think it has pinched off oil demand - for a while. Oil has stopped falling - not sure it is a bottom - it sure isn't headed down to 90 in a hurry - if it isn't a bottom.

There sure seem to be signs of a dollar intervention - oh we aren't supposed to know? see blog.nowandfutures.com... starting at 8/10

I'm thinking it is a good time to buy some gold... (I'm usually wrong) I've never been good at timing - but I do understand the long picture.

Not sure how he can think there won't be inflation with M3 growing at 16-17%. That is way beyond population growth. (Could say our population just shrank with folks going back to Mexico due to lack of construction work). Tell me when the M3 - inflation connection was ever wrong?

I think some aren't tracking how it is completely possible to have a recession and inflation at the same time - read the primmers at www.shadowstats.com/se... .

Is the Commodities Bull Market Over?

strong dollar <rib splitting laughter> then why the intervention?


See 8/10/2008 at blog.nowandfutures.com...

With M3 at an amazing high - government spending out of control, I would expect some inflation to push commodities up further. It may be true there is no such thing as "peak oil" but there is something I call "peak cheap oil" ad I think we are there. China has a huge number of factories shut down and cars off the road - I would expect things to get interesting again after the Olympics are over and their demand back up.

There is also the fact that all stops are pulled out to paper over everything for the election.

What is less clear is the lead-weight of the mortgage situation - I see resets causing trouble out to 20012 - see:

www.therealestateblogg.../

and

online.wsj.com/article...

The question is - will this drag on the economy push down so hard for so long that it will destroy demand?

NYT - 'Prime Loans About to Implode': Where's the Evidence?

The author must not have looked at these graphs:

calculatedrisk.blogspo...

www.burbed.com/2008/06.../

Rearranging the chairs makes the situation opaque:

online.wsj.com/article...

Like the energizer bunny the resets keep on going until 20012. The short term

The real unknown variable is how sloppy and at what times were the credit checks? How many of these loans had no or poor collateral?

If what the author selling is true, why is the desperate act of a currency intervention going on (see blog.nowandfutures.com... entry on 8/10/08).

The Great Bubble of China: Next to Pop?

Not sure how to take this - the problems with corruption are true - but corruption is also rapidly infecting the USA where people are giving up fighting the government. The fundamental fact of China's balance of trade means that China is getting much richer - that isn't the same as Chinese people moving up, but up is up.

The tie with Taiwan is the big issue. It won't be a one sided deal - yet both parties have so much to gain that the move almost has to happen. Taiwan has management skills and expertise and China has cheaper labor - and lots of it.

Taiwan will bring more to the table - it will be a force to open up China to political reforms, if - and don't forget this if - if China moves to a point where there is a workable system to address the corruption, then the sky is the limit.

The social part of business is alive in all cultures - I understand the gifts and forming a click breeds corruption, but it also breeds cooperation. The problem is that the markets need to be opened - China has to realize that they are becoming more capitalistic than the USA and it is moving them up (while the USA rapid move to socialism is bringing us down).

If China tied their money to gold and opened it for trade and opened their stock markets to the world (no more separate A vs B stocks) the possibilities are endless.

So the real question is how much of an anchor is corruption on the actually capitalistic culture of China? Will it only slow China or will it keep China pinned down just as corruption keeps the Philippines from moving up?

Transparency International ( www.transparency.org/ ) rates China much above the Philippines and the Chinese seem to run most of the businesses in the Philippines in spite of the corruption.

I hope that the leaders in mainland China might read
'The New Institutional Economics of Corruption'
By Johann Lambsdorff
and realize the great economic cost of corruption and find ways to fight it. Will it happen overnight? No - but as China gets wealthier it is easier to fight corruption.

Bye Bye Bear - Cramer's Mad Money (7/30/08)

Cramer is just about a perfect contrary indicator. Sounds like the market is heading down.

Buying Berkshire

Why not look at BRK in terms of industrial metal? Or in Euros? If you use real inflation figures BRK hasn't really done very well after 2000 even if it did better than S&P. (search shadow stats)

Is a Ban on Short Financial ETFs on the Horizon?

"I can't say as to how any short financial ETF achieves its leverage and what percentage would come through naked shorting. "

Well, you might start by reading the prospectus. Why write such an article without doing basic research. From my read of the prospectus, it appears they are doing swaps and options - not shorts.

The naked-short ban is yet another move into socialism. Letting these corrupt institutions die will provide the scare to keep it from repeating (They call the very real risk of bailing out these thugs "Moral hazard" - a most opaque term)

Peak Oil, Crude Price and Equity Correlation

People use overly complex sentences when they don't really know what they are talking about, but want to impress people with how smart they are. He got burned shorting and the reality that Jim Rogers was right is slowly sinking in.