Charlie Stromeyer Jr

On Ben Graham, Bank Stocks, Jason Zweig and Tom Brown

I like this piece, and have a question:

A popular trade in Brazil about a month ago was to go long the preferred shares of Petrobras while simultaneously shorting the common shares. This was a very successful trade, but would it qualify as a "related hedge"? Thanks.

Disclosure: I engage in related hedging, trading Brazilian equities, and am long many financial companies but few here in the U.S.

Stock vs. Bond Valuations

bearfund, I should have been more explicit. What I meant is that the *core* rate of inflation was abnormally high during the 1970s compared with the past century. Paul Volcker finally took care of this problem and then the core rate trended lower and has stayed relatively low since then.

Note that over long periods of time in the U.S. economy that the headline rate of inflation has converged towards the core rate.

Disclosure: short 10 year Treasuries since a yield of 3.52

Housing: No Bottom Yet in Sight

carey_jim, my guess as to why this has been happening is that housing sales always bottom before home prices do and there has been stabilization of sales in just a few areas of the U.S.

Housing: No Bottom Yet in Sight

kurt walter, those of us who work in finance would like at least a rough estimate of when housing prices will bottom because housing prices are still the main collateral in the global financial system such as with ABSs.

Covered Bonds Are Indeed Covered - By You

I agree with optionsgirl because once the U.S. dollar bulls wake up and see how bad the U.S. federal deficit is going to be then gold should perform well.

Disclosure: long precious metals and related equities.

About That Silver Lining, Erin

Kevin, you should seriously consider firing yourself for watching crappy TV instead of working !-)

The "Science" of Monetary Policy

"Groupthink" was worse with both the Facists and Commies, but I agree with you that economics is rightfully known as the "dismal science".

For example, since WWII there have been double blind (often placebo controlled) experiments in medicine, but such experiments are not possible in economics.

Taylor Rules, Exchange Rates, and Speculation About the Dollar/Euro Rate

If this topic interests you then please read the comments on this post at Professor Chinn's blog:

www.econbrowser.com/ar...

Thanks.

Stock vs. Bond Valuations

Shouldn't you look at a chart over a longer period of time and also factor out the 1970s because during the past century inflation was abnormally high during the 1970s, and inflation is historically the worst enemy of 10 year U.S. treasuries?

Thanks.

All About Covered Bonds

Thanks for writing this great piece, and to see the underlying reason why covered bonds are now performing poorly in Europe please read my comment here:

seekingalpha.com/artic...

Thanks.

Covered Bonds Are Indeed Covered - By You

TBill, I agree with you, but I would prefer to have a short and sharp recession to get it over with than a long and shallower recession.

Jason Zweig on Graham and Bank Stocks: 'The Un-Intelligent Investor'

najdorf, please read this piece on why economists look at the prices-to-rents ratio:

www.frbsf.org/publicat...

Financials: How - And When - We Reached the Bottom

Thanks for your answer, Swiss_Buffett, which I agree with.

Disclosure: One of the board members of a company that I advise is a manager at State Street in Boston.

Beware the Covered Bonds

Good piece. For the reason why covered bonds are having trouble over in Europe please see my comment here:

seekingalpha.com/artic...

Housing: No Bottom Yet in Sight

Here's brand new evidence that the recent Barron's cover story about home prices having bottomed was dead wrong:

www.bloomberg.com/apps...

Note that Barrons is often a useful contrary indicator.