lightwarrior

Wall Street Breakfast: Must-Know News

China itself seems to be in a bubble... inflation pressure will rise.
Once again, those overseas investors will pull the plug... nasty concentration of capital just distorting real economy and markets.

Money Flow Is Directing the Markets

I would like to know the difference of "the fundamental problem in the financial asset market is yet ‘too much money chasing too few assets’."
as in "bubbles" vs. inflation.

Buffett's (BRK.A) doubled his muni-bond holdings over the past nine months. "A few years ago, it would have seemed unthinkable that yields like today's could have been obtained on good-grade municipal or corporate bonds."

The fact that cities cannot print money or QE, but need to raise it through bonds, they need to offer higher yields. Warren has lots of cash and needs to invest it, given FED will do whatever to maintain low rates, and there must be some cities well managed, enough to be confident they will pay their debts.

Bernanke urges Congress to begin work on curbing soaring budget deficits. "With the ratio of debt to GDP already elevated, we will not be able to continue borrowing indefinitely to meet these demands." (full text)

If Obama bails out California, then we know there is not cut-back in budgets... voluntarily.

"The U.S. dollar remains a key driver of what lies ahead," government stats watchdog John Williams writes. Despite the recent market recovery, U.S. systemic-solvency issues are getting worse, he says. After a brief respite, the monetary base has returned to new highs.

Most fiat currencies are being debased as monetizing debt (printing money or QE) is done. To look at really what is happening with the purchasing power of money (inflation or deflation), it is important to observe dollar denominated hard assets such as commodities.

Bank of Japan vs. the Fed

In the short term, it provides cash to allow economy "function".
The money mainly goes to deleveraging (pay debt hole).
The problem I see with actual QE is that most of the money is not reaching the real economy, only getting to Wall Street. By the time it reaches real economy, it will be diluted and devalued.

"The whole world is dependent on the health of the dollar," says Russian President Dimitry Medvedev. "My idea is that at the moment the world needs a larger number of reserve currencies," and emerging markets may discuss the idea of a supranational currency at a Russian summit this month.

Given the amount of monetization of debt by the FED, it is quite clear that those countries holding reserves in USD are looking for exit strategies to preserve purchase power of their investments/savings.
Once American consumers stop saving (velocity of money increases), we will see a jump in USD inflation. I doubt the FED will cut back the money supply, it will try to inflate away debt, sponsored by taxpayers and countries USD reserves. Commodities will rise, some by real demand, but mostly because they are dollar-denominated.

Impact of the horrific attacks in India on that important emerging market: "It doesn't look like the Mumbai massacre will cause the Indian stock market to collapse, but for the first time Islamic extremists have targeted tourists and the financial district. Both are critical to India's growth and international standing."

Targeted to Extremist Islamic "enemies".

"As we look at the NetBook category, that’s a nascent category. There’s as best as we can tell not a lot of them getting sold." Steve Jobs during Apple's (AAPL) recent conference call.

People are cutting spending, specially the lower income bracket, where netbooks are targeted. Most likely Apple is still supported by a customer base with higher income that still haven't cut spending and also some of these are also turning away from Vista.

As Bank Industry Analysts Lose Jobs, Serious Blogs Take the Forefront

Anyone with real interest in putting their savings to work and increase savings and wealth, should be doing their own analyses, or at least understand the analyses.

The Dow's Lost Decade

We need to go back to basics and start thinking in long term investments and sustainable profitable activities.
If you need some adrenaline and feel you 'beat the house" on gambling, please go to Vegas or your favourite casino.
There is no "free" lunch.