mike904

Christmas Comes Early: Key Retailer CDS / Equity Relationships

If you can explain to be how sales are up and sales taxes are down, I'll be with you on this. We have a falling work week, 2 million more unemployed, higher gasoline prices, lower credit card limits, lower credit available and .... higher sales?

sure, why not.

Savings, Debt and the Global Economy

I think you have that backwards. The rise in savings was a result of the Chinese drop in debt demand. The Chinese don't have a "voracious demand" for US debt. The China trade is American manufacturers in China selling products produced by American companies and calling it "trade". That's labor rate arbitrage, not trade.

The Chinese aren't "buying bonds", they're exchanging cash for cash equivalents. The fact that Wall Street spent 7 years manufacturing cash equivalents is what made this "demand" appear.

The whole idea that central banks "invest" in government bonds is loonie. Governments NEVER pay their debts. Treasury bonds are just a debasing mechanism. Global free trade is lipstick on a tradewar pig.

Marc Faber Clarifies Gold Outlook

Without a new supply of gold and increasing storage with etf's it's hard to see gold going down,

Depression, PMI and China

It's hard to argue the merits of Smoot-Hawley in today's economic environment because the general consensus is "S-H bad, period." Often, economists are university theorists who seem unable to understand that we live in a POLITICAL world.

In the 20's the US funded much of it's overseas trade just as China did from 2000 to 2007. When liquidity dried up, the US attempted to hold onto the value of it's manufacturing by limiting imports. I suspect that unless our country is run by college professors with dictatorial powers this will happen again.

China is doing the same thing now. It's first fixing prices, by limiting farm export licenses. It's "helping" domestic farmers by setting up a crop reserve, which will help increase yuan grain prices and ease the transition of millions of people leaving the cities for their old lives back on the farms. It's using infrastructure projects, including 5 bullet trains, to hire excess workers. Sound familiar?

Rather than judging this to be right or wrong I would judge it to be natural, predictable and inevitable. China's goal, as it has been for 2,000 years is stability. In the US, 90% of economists are in complete agreement as to the solution to this problem, a situation I find terrifying.

As to the conclusion to the effects of Smoot Hawley, I have no clue other than to say Naill Ferguson said it had a minimal effect on the US.

Don't Miss the Coming Gold Bull

They do it all the time, but they don't dump it, they naked short it.

Paul Volker once said his biggest mistake was "letting the price of Gold get too high".

What does that tell you?




On Dec 31 06:40 PM aitvaras wrote:

> Comet1, I don't really believe it will drop like a rock but it has
> the potential to do so if additional forced selling comes into play.
> I'm pretending to be Greg Pinelli who has been tauting stocks of
> all stripes without rhyme or reason during a Bear Market in the middle
> of a severe recession.
>
> Every stock or ETF he picks is a long position. Meanwhile, since
> I believe we are still in a Bear Market and the Recession will get
> worse, I picked something he loves and UltraShorted it.
>
> Another reason, however miniscule, is that the Central Banks will
> dump more Gold than usual because of its current value and Gold is
> now up 8 years in a row.
>
> Are you willing to bet the Bank on 9, I am not.
>
> IMHO

2009: Expecting a Massive Rally

If this market is similar to the 80 to 84 market we could get a huge advance. IMO, we'll get an advance in commodities and basic industry offset by a continual drop in real estate and banking.

The problem this time is that in the 80'smost real estate was privately held in partnerships which didn't affect the averages. This time a pretty good % of the S&P is in REIT's which I really think are going to get utterly unhinged from any mooring.