BrunoT

The Time to Buy Commodities Is Near

Epeon. It's very volatile. My Canadian royalty trust holding were down 13% today. So much for it already being discounted for the future recession! (even though it was already almost 50% down off highs)

I stick to the macro picture and let the traders gamble on the short term moves. Oil is a needed product and available relatively "cheap" today. It will move up with inflation, so it has some inflation hedge properties built in. I wouldn't own most stocks today though. Not a ton of upside.

The Time to Buy Commodities Is Near

Hey CLH. Never say "never". Why? Well, when's the last time world govn'ts printed money on this scale to bail out failed banking systems? So for that reason the previous rules are out. I really think too many people are still thinking in terms of "business as usual" investing. These are unprecedented times. Only if one can calculate the money leaving vs the money being injected accurately could you determine if it's falling or rising. I can't do that.

The fact that Mike Norman seems to agree with what my theory is (short term price falls and volatility followed by a long term move up in commodities as inflation hits) scary, though. He's been wrong for years now.

Bailout Cost, per Taxpayer, by Income

JasonC.

Interesting point. But did you stop to realize that aggregate GDP is not spread uniformly? What if most of the gains/benefits accrue to the top 5% (those who own stocks of these companies and others) yet the bonds are repaid by a broader spectrum? (those who consume most of their income)

And more things come to mind that should be considered. What of the costs of inflation caused by injecting dollars into the economy, which is born more heavily by "working class" people, as the costs of necessities is a higher percentage of their income. And what of the intangible costs of the moral hazard created? Put a value on that one! And from what I'm reading $700B is not the end of it. What happens when CDS and credit card and auto loans are added to bailouts? Where does it end? And once we're in for $700B, there would be severe pressure to "protect our investment" with further cash outlays.

I think the calculations required here are beyond any one page column.