fatpitch2

Three Asset Classes that Can Actually Outpace Coming Inflationary Price Increases

Nice article, thanks.

I'm just going to toss out some random stuff here:

1) Indeed returns on gold do not seem to be well correlated with inflation but perhaps more correlated to periods of "unrest". So even without inflation on the horizon gold is not a bad place to park some cash?

2) Inflation vs. Deflation ... can't we have BOTH?
It seems to me it's not as simple as one or the other...
Certainly some assets/classes will be suffering "deflation" for years to come ... residential and commercial RE seem to have large inventories to work off for example. On the other hand it seems we could be in for shortages of ag. commodities, energy, and other "hard" assets. The stuff that the BRIC needs to build out their countries?

3) oil being held off the market - well I guess that could be the case, but a VLCC holds about 2M bbls, and with worldwide consumption at 80M+ bbls/day could there BE enough tankers willing to sit at anchor to really make a big difference???

Does Wealth Equal Money?

Jim:

Any thoughts on the "net" effect on interest rates for LT treasuries?

I do agree that we have vaporized far more "virtual" dollars than the puny stimulus levels can (currently) overcome... but I do expect our government to keep trying harder and harder....

Here we are at what... ~2.25% which is what a 200 year low, and implies that buyers do not expect any inflationary pressures for 10+ years?

This in a bond environment where the government is ever rolling over existing debt and piling on new debt at a rate in excess of $1T+ per year for the next several years?

Thanks!
Jim

Hedge Fund Redemptions May Crash Q1 Markets

I guess I wonder what is left to redeem?

Tudor Investment Group had $5.7 billion invested at June 30 as disclosed in its 13-F. Its September 30 filing shows only $453 million.

Atticus Capital, another much-celebrated hedge fund, went from $8.1 billion to $510 million.

SAC Capital, run by the Steven Cohen, went from $14.4 billion to $7.7 billion.

Vinik Asset Management, led by Jeffrey Vinik, who once ran Fidelity Magellan, went from $11.8 billion to $1.8 billion!

These numbers are as of September 30. So they do not include the awful months of October or November, so current assets at these funds would be even lower now, but if you are already down 90% .... who cares?

The reduction is of course the combination of selling to meet redemption requests, and a decline in market value of existing positions, if these funds are anywhere close to "typical" I have to conclude that downward pressure on the market on a go-forward basis has got to be minimal as ... well as they are all pretty much out of money....?

Bye Bye Greenback

I am current shareholder of both the Prudent Global Income Fund (PSFAX) and the BEARX fund. While the income fund has not done amazingly well it has held up in "relative terms". BEARX on the other hand I am pleased with....

Unfortunately the take over by Federated Investments results in the funds now becoming front-end load funds which is very disappointing for folks that are not current shareholders -- current no-load shareholders as of date of conversion are grandfathered into the no-load shares even for additional purchases ... at least as I understand it.

Reality Hits Oil Market, Dollar Could Benefit

The IEA has released its latest report --- It says peak oil won't get here until 2030 ... That's the headline anyway.......

When you read the rest of the article it says we only need to spend $1T+ per year and (unless you're a bank in trouble I don't see anybody getting ready to spend $1T a year on recovering more oil in a declining market...)

Oh yeah, and IEA says we need to go find 64 million barrels of oil equivalent a day of additional gross capacity between now and 2030 --- the equivalent of six times the amount Saudi Arabia produces today!

Piece of cake???? mmmmmmmmm I think not ....
Why invest in rigs and exploration ....

I think we will see declining supply soon -- production coming OFF-line shortly as the marginal cost is above market price this coupled continued yr-over-yr increases in world-wide demand for oil will (yes WW demand is still increasing even in this crappy envronment) ...

This will NOT be pretty ...

First Comes Deflation, Then Comes Inflation

I am very long energy at this point and have been for a long time...

I thought the $145/bbl was too much too quick and would not last but have up to now thought that the decline to ~$70/bbl was a bit overdone as result of unwinding of hedge fund positions & etc....

However at this point I am wondering if as a short term hedge against a further delcine to <????> $50/bbl it might be time to buy some short-term calls on something like DUG ... perhaps right after Friday's announcements by OPEC?

Any thoughts?