lbsterling

The Stealth Commodity Index

Just adding to the chorus above: very interesting. Thanks for bringing new information to the table rather than rehashing known facts.

Bank Earnings: Revenues Falling, Losses Rising

I think you "overuse" smart quotes.

Global Ship Lease: Cash Flow More Important Than Dividends

Nice call on GSL.
The dividend is safe, shares are undervalued at $2, etc.
Any plans for an update of this article?

Global Ship Lease: Undervalued and Undiscovered

Nice call on GSL.
The dividend is safe, shares are undervalued at $2, etc.
Any plans for an update of this article?

Green Gold Trumps Black Gold

Interesting commentary.

I don't intend this as a petty (or paranoid) remark, but I don't trust the UN figures.

Something must be misleadingly or at least badly understated about how much is being invested in fossil fuel generation; the major oil companies alone spend more than $120B in investment annually on developing oil fields.

I understand the growth trend in sustainable energy investment is what's important here, but I think it's important to do a 'reality check' on a claim of such a major shift.

Citigroup to Increase Common Stock, Government to Reduce Spending - Are They Serious?

You'd lose 10 percent of your net worth on that bet, because Hoenig is right: rates are going to have to rise or else there will be no buyers for U.S. treasuries.

So yes, they will raise, and yes, "Splat" for housing and the markets.

The only other option is the Fed as sole buyer for treasuries, and that would mean mega-inflation and dollar collapse.

More likely is that they'll try to walk the line: slight rate increases AND heavier Fed buying of treasuries etc, leading to some inflation (who knows how much) AND more recession (who knows how much).

Stagflation is the best case scenario.

It's a wing and a prayer right now and the Fed has no good options.

Back to an Almost Record Curve

Affirmative. Regretfully I think the yields must and will rise, with all that entails.

Dangers of a Dollar Collapse

A sharp correction in the dollar has been my fear and expectation for some time now.

However, I think you are either disingenuous or naive in suggesting that all the countries of the world holding dollars would try to dump them at once.

Instead, the central banks of countries holding dollars have almost certainly agreed with the Fed in intervene in a coordinated way to slow a dollar disintegation.

"Wal Mart...would be the first to go under."

Wrong and fear-mongering. China has no interest in seeing the dollar collapse and choke off its sales to WalMart / exports to the U.S.

If a dollar correction is inevitable _ as has seemed the case, although until recently it was failing to materialize _ the interest of dollar-holding countries is to ensure that it happens gradually in order to give producers *some* time to adjust to the new situation.

Remind Me Again, What's a Bubble?

I'm all in favor of thinking about things in a new light, so I like the opening section of your article:
That the problem was mispriced debt rather than too much debt has the ring of truth.

But top to bottom I'd say your further analysis has too many flaws to be useful.

"Under this analysis, it would simply cost more as investors demand higher interest. And if so, what does that say about corporate earnings? Answer? Well, there is none. If consumers have to spend more on interest, maybe they borrow less and buy fewer things."

Higher interest rates during a downturn will be crushing, that's the "checkmate" scenario. Corporations will have trouble financing investments, and consumers, as you yourself suggest in the quote, won't be able to consume until deleveraging has run its course.

Hence the Fed's efforts to keep rates low.

Further, I think it's say that the relationship between yields and the S&P in the past 10 years is not going to be very useful for what happens in the next 10 years.

Finally, someone else above pointed out, a lot of the money IS gone _ and the Fed is working hard to re-create it, with results that are as yet unknown.

So thanks again for the article _ I will be curious to see how your thinking develops.

Fall in U.S. Credit Costs Is Most Significant Economic Development

I'm going to go with "going up" for question one and "going down" for question two.

I was paying attention, but I'm still not sure I got it right...

What Will the Winds of Change Bring?

"His background with Goldman Sachs (GS) and in the U.S. civil service has made him a slave to the system, and his perspective and understanding of the global financial crises is either extremely limited, in which case his intentions remain noble and just, yet shortsighted and underpowered, or complete and comprehensive, and thus imperialistic and oligarchic."

Flowery prose doesn't strengthen your case.

The Unintended Effects of Bad Policy

Manya05,

Yes, that clarifies things. Whereas the carry trade always has an element of currency risk, as interest rates approach zero everywhere, it's pure currency risk.

Why not just cut out the middleman and speculate in currency?

I know that one vision of the future says buy Australian dollars and Rand and watch as everything else implodes, but frankly I'm not planning to bet the farm on that scenario.


On May 18 08:33 AM manya05 wrote:

> lbsterling, all the speculator has to do now is borrow at zero interest
> in dollars, just carry it to a currency that is not being debased
> as much (even if it pays 0%), and just wait. The carry trade does
> not even need to be invested in shares, any currency healthier than
> the dollar will do.

The Unintended Effects of Bad Policy

But with all central banks racing to zero rates at the same time, where would speculators carry the dollar to?

The future is very hazy.

Jim Welsh on the Economy: Past the Point of No Return

Excellent commentary.

Sell in May and Buy in May

Reasonably prudent advice.