johnm

Dollar's Decline Has Contributed to Market's Recent 'Rise'

One more chart would be usefull. The S&P priced in ounces of gold.

Inflation: As Inevitable as Death and Taxes

There are winners and loosers in an inflationary environment
but I do not think it is as simple as you put it.

Some loosers I see are:
- wage earners that are in no position to negotiate
salary increases
- people on fixed incomes (retired people mostly)
- investors in long term fixed income instruments
- in general conservative people with savings

Some winners I see:
- owners of businesses that make usefull stuff and
can pass on price incresses to their customers
- leveraged investors in equities, fixed assets (real estate, land etc),
commodities
- in general the people that can borrow money at low rates
as soon as it leaves the feds printing press and invest it
wisely (as an example, not everyones wealth evaporated
during the Weimar Republic, a small group of investors with
access to loans levered up, bought businesses and made
a ton, of course we know what followed)


On Jun 23 06:04 AM Dave Wrixon wrote:

> Inflation favors the HaveNots against the Haves. It is a great leveler.
> Basically most existing wealth is destroyed and all that is left
> is peoples ability to generate income from their wits and their labor.
> It is devastating if you are retired on a fixed pension, but often
> much better if you have debts.
>
> Deflation favors the Haves against the HaveNots. It make the Rich
> richer (relatively) and the makes the Poor Poorer (absolutely). That
> is why the social repercussions are so much more severe. If you are
> going to have revolution, it is the disenfranchised youth rather
> than bitter octogenarians which pose the greatest threat.

Monday's Market Surge: Head-Fake or the Start of a Real Turnaround?

A lot of articles I read call for a bottom (some for the start of the bull)
yet at the same time they mention that the sentiment is very negative.
I thought that the contrary sentiment indicator meant that when all hope
for a bottom is lost is the time to buy.
Am I missing something?

Don't Be Fooled - Short Selling Restrictions Do Work

It could very well be that the short selling of financial shares is not a
bear raid or some deliberate attempt to dirve down the share price but
simply someone's hedge for a large CDS position.
Unfortunately this type of hedges generate a negative feedback loop
if the CDS notional is large (shorting stock to hedge against the probability of default depresses the prices increasing the probability of
default therefore needing more shorting).
The move to regulate the CDS market should fix this to some extent.