Amouna

Goldman Sachs Is Printing Money

I would buy into some of your points: Goldman is a very well run business and its people are widely recognized to be smart and very hard working. However, what IMO contributes to make it a money printing business is:

a) ZIRP almost everywhere on the face of earth. Money is free and leverage is still on their balance sheet (not a towering 40:1 ratio but probably around 20-25:1).

b) Tail Risk is still there

c) As to the collateral, I am curious to see what happened to level 3 assets held by GS as of end of 2008...


But I still believe it has a very strong business model.

Zero Interest Rate Policy: The Cruelest Tax of All

This is exactly what happens when government becomes overly involved in the daily economic activity. As one wise former president pointed it out on his inauguration day: "We look to the government for solutions but actually government is not the solution, government IS the problem"

cut useless spending, let failed business go bankrupt and restore a viable business environment where thrifty entrepreneurs and innovators can have access to resource capital, not consumers and speculators.


On Nov 03 02:02 PM Mr. Big wrote:

> Great article! You target an excellent point that interest rates
> determine the balance of savers and borrowers. And that explains
> why we have the zero-interest rate policy. The whole Obama strategy
> for the economic "recovery" is to eliminate the saver and boost the
> spender because savers do not contribute to GDP.....but spenders
> do.
>
> This is absolutely a redistribution of wealth, to steal from savers
> and transfer the benefit to borrowers. Again, this is another example
> of prudency being punished and recklessness rewarded, but this time,
> via zero interest rates.
>
> And let's add to this the destruction of the purchasing power of
> the US dollar. In a currency depreciating environment, the ones
> who spend the dollars first (i.e. spenders) wins over those who spend
> them last (i.e. savers). The zero interest rate policy further supports
> a weaker dollar and therefore adds even more punishment to the saver.
> All this....to benefit the borrower.
>
> That's why it is only a matter of time, when the saver will be squeezed
> to the point where there's nothing more to give to the borrower.
> When the treasury bubble finally pops. And the dollar carry trades
> unwind. And we will witness the massive selling in the markets to
> cover the dollar shorts, as the borrowers scramble to save themselves
> from financial ruin. As interest rates ramp up to the natural equilibrium
> between borrowers and savers, the still-weak economy will grind to
> a halt. And interest rates MUST go up, lest the Treasury find themselves
> without a lender, or should the Fed be that lender, risk further
> destruction of the USD (and hyperinflation).
>
> It is only a matter of time before one of the seams of this massive
> (and wasted) stimulus experiment breaks. And we will see first hand
> what the true state of the economy is....

Markets Will Ultimately Determine Long Term Interest Rates

If traders were not concerned about inflationary disease, they would not be dumping treasury paper at record pace so...YES, Mark Faber and Peter Schiff's talk, although many people pretend they talk a huge load of nonsense, depict pretty well the now defunct US economy


On May 28 07:17 AM Clive Corcoran wrote:

> Do you really think that Marc Faber's comments about hyper-inflation
> were taken seriously by traders yesterday?

Solar Industry's Long Term Outlook

You forgot to mention JASO: Great balance sheet, good products. Got hit by the same Lehman event as ESLR but Return on Equity is still excellent compared to many in the sector. The company is now ramping up on vertical integration. A name to watch..

First Solar Revives Hope for Alternative Energy

Zachary, are you still bullish on JA solar?

Genus Capital Bullish on Potash, Aecon Group and Husky Energy

George Soros is bullish on POT as well. He sees very good value in this stock. The same view is shared by Jim Rogers, who implicitly favors Commodities and stocks related to agriculture.

I am considering joining the bandwagon for POT. Less sure about Husky Energy. I might go with Suncor...

Natural Gas Is Heading to 1997 Levels, Should Stay There Awhile

A good play for this would be long Cheniere Energy (LNG). Their stock will take off to the moon in a matter of months....

Solar Stocks Look Ripe

A company that I like as well with a great balance sheet (which shows good management skills), ongoing contracts and a ramping up of production and vertical integration is JASO. Watch for this one as it may be one of the shining names to come from China in the years to come...

Financial Sector Ultra-Shorts: Must Have Protection Against Banking Sector Madness

Your articles are always of good added value. Thank you!

South Africa Still Shines Among Emerging Markets

Completely agree. Currency risk is very high as forex reserves are low. If the Commodities bear keeps going the devaluation risk for South Africa is a very possible scenario.


On Apr 23 01:10 PM Charlie Bottle wrote:

> Large current account deficits. Low on forex reserves. Currency
> is very risky. Miners which have US$ based prices are a good bet
> but companies focusing on the domestic market are not.

Ten Ways to Invest in Cuba

It can't be any worse than US one for now....



On Apr 16 06:46 AM Eric Fox wrote:

> Don't forget sovereign debt of Cuba:
>
> www.cubamania.com/cuba...
>
> if you really want to speculate.

General Growth Properties: A Really Big Bankruptcy

Check the article "GGP's Bankruptcy Filing: Thoughts and Info" by Todd Sullivan and the 8-K Filling. It gives a list of the consolidated partnerships filed in the bankruptcy court of the Southern District of New York, with the name of the malls..


On Apr 16 02:00 PM len811 wrote:

> RE: "Most of the company’s 200+ malls are part of the filing, although
> about 70 are not."
>
> Is there a list somewhere?

Moody’s Downgrades Finland’s Banking System to Negative

What Moody's fails to understand is that the Finnish banking system underwent a complete collapse in 1991 and emerged stronger and more Black-Swan resistant, which explains why the Finnish banks never gorged themselves on toxic assets when the party was raging over here.

Another absurd story was the downgrade of Moody's of New Zealand's Sovereign debt while the US keeps the printing presses running 24 hrs a day. How can we trust morons like these?

5 Perverse Bailout Consequences

If Americans think that we will have a free lunch by printing fresh money to bail out Wall Street failed institutions then...they better take an Economics 101 class. The price to pay for this behaviour is called "inflation" and this time, it will be severe and will make the seventies look like a sunday picnic...

Top 50 Brazilian Financials by Assets

I love Brazilian private sector (especially the Commodity sector). The banking sector is becoming increasingly appealing and I might dip some cash into it soon!

Thanks for the info, much appreciated!