JasonC

Great Expectations for Obama, But Not the Markets

Um, what do you think all the ridiculous bubbles that just went smash were? They were bubbles in the real assets, money will go to zero, inflationary brainstorm trade. Everyone on the planet bet the moon that dollars would be worthless and real anything worth infinity. Guess what? They are all hopelessly wrong. So now when their trades all fail and they blow out, do they admit they were wrong about a particle of it? Why no, of course not. They think the world is wrong, but not them. They aren't in the most crowded trade in living memory, no siree, they are resolute contrarians, because they believed in every single 4-fold bubble and expect each one of them to magically reinflate to twice its previous maximum size.

Buy a clue already. Dollars are valuable and will remain so, they are not confetti, it matters what you pay for real assets, not that they are real assets rather than money. The insane attempt to profit by simply being in the right something without any regard to its actual price, is the problem, from the get-go. And until you all give up your inflationary "money isn't worth anything" brainstorm, you will be ground to powder.

Afterword, to be sure, there may be opportunities among all the busted bubble ideas. But they won't be merely the idea that the bubbles were all correct all along, and shouldn't have burst, and instead money just should have appeared out of the heavens until they were all correct, and the banks should just print enough to pay everyone on every bet they ever made - even when no one pays back those banks.

You will pay for capital or you won't have it. Banks will be profitable or you will get nothing and the price of everything will go down or sideways, never up. If a banker in New York can't get capital when he offers 10% for it, no one else on the planet will have any, either.