He shouldn't have used that tone, but he made a good argument nevertheless. Any business that will fail at 1.5% short rate while surviving at 0.25% is not a sustainable one, and hence is not to be encouraged.
Fixing Wall Street: Reimagining - Not Just Repairing - Banking [View article]
Obviously, any anti-bank piece is going to be popular these days. It is amazing how we human beings inherently like to blame an evil bunch for our own failures. Banks or bankers don't live in vacuum, they are part of our system where all good and bad coexist. Trying to produce a system where only the good exist and the bad perish was, is, and will be futile. Because we human beings are the problem, with our greed and fear. I am so tired of hearing how banks spoiled everything. Just about everything can spoil everything! Only reward but no punishment? Really? BoA and Citi all got bailed out, but their stocks all fell 90+% from the peak anyways, didn't they? That's not punishment for the share holders? So their employees got paid too much? You are not hearing massive layoffs are coming from banking sector? In fact, all banking positions are open anyone who wants to have shot at it. You can try it too. How come nobody complains the rediculous fees trial lawyers charge, which undoubtedly contributed to many failures such as our medical system? Beating on the wounded is not only useless, but is also cowardly, because one dares not look at himself and say, I am at fault too.
Are Japanese Businesses Worth More Dead Than Alive? [View article]
When learned minds talk about the concept of value trap, they ususally cite Japanese under valued stocks as perfect examples. I know numerous asia focused H/F friends who have lingering bitter taste in their mouth brought by this sector. In fact, Japanese market is weird in many ways: a boyant currency despite horrid economical conditions and persistant puny yield, which itself is a puzzle defying common wisdom - you'd think nobody wants to own bonds from a government that virtually has no chance of repaying, that gets downgraded repeatedly. But hey, the Japanese investors seem to be a different bunch entirely.
Can Bernanke Pull A Rabbit Out Of His Hat? [View article]
Problem with printing money now is that the new money won't go to where it needs to. Corps are not looking for money, they are looking for customers. But the customers won't get any money, no matter how much you print them. Non housing assets will get a pop, but so what? If the Feds are really creative, they should figure out a way to expand the balance sheet by taking underwater homes as collateral and lend to the home owners. Now that, will put money in consumers' hands.
Bill Gross, Treasuries, And The Forecasting Follies [View article]
"There are no slam dunks in financial markets—nothing is easy. Your best bet is often just to go with the trend, until it ends"
This statement is logically flawed, for IF we can know when a trend ends, then we ARE able to bet against it - an action of forecasting. Calling an end of a trend IS forecasting.
How do we know that Gross' action of dumping Treasuries wasn't simply stopping out of a trend that he had reckoned as ending?
The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]
WMARKW, you must forgive Charles for not seeing it, because most people don't.
It is such a rediculous notion that when a debt is downgraded its yield should rise. Such notion fails to recognize the fundamental truth about debt: when it gets beyond a threshold, there is no way out. The creditor is literally OWNED by the indebted, and the former must keep financing the latter. Japan is a clear example. Nobody in his sane mind can expect Japan to ever pay down its debt, and yet the yield on Japanese government bond has been falling or staying low for as long as we can remember. I challenge Charles to count the dead bodies of hedge fund traders who betted on the rise of JGB yield over that past 30yrs.
Since we would never let our debt to default in a fiscal fashion, so technically it is risk-free, regardless how you rate it. And the savers (eventually all domestic ones) just pile in to keep the yield low. The consequence is a flight away from the underlying currency, till the day when such debt load is entirely absorbed by domestic creditors (as in Japan). During this course of currency flight, Gold price, as measured by the underlying currency, inevitablly rises.
And we are just at the beginning of these unfolding events. Human nature dictates that the most likely outcome be the one that causes the most pain to most people. I welcome anyone to challenge my reasoning.
I own a dual digital with 4 times payoff, to bet on Gold above 1800 AND 10yr treasury bellow 2.4%, by the end of year.
The Slow Decay Of The Microsoft Consumer [View article]
Q2 2012 Predictions Based On Apple Guidance History And Actual Growth [View article]
The U.S.A. Is Not The Roman Empire [View article]
A Transparently Dovish Fed [View article]
Fixing Wall Street: Reimagining - Not Just Repairing - Banking [View article]
What The Bulls Have To Do To Take Control [View article]
Are Japanese Businesses Worth More Dead Than Alive? [View article]
Treasury Yields Tumble [View article]
http://tgr.ph/nbCk4C/
Policymakers Need To Understand That These Are Not The 1970s [View article]
On the surface it looks like an infallable argument - what's wrong with one's debt virtually becomes worthless or trivial?
What's wrong is that whatever you earn buys you little at the same time. Alas, there is no free lunch after all...
Can Bernanke Pull A Rabbit Out Of His Hat? [View article]
What Could Go Right For Stocks? [View article]
Bill Gross, Treasuries, And The Forecasting Follies [View article]
This statement is logically flawed, for IF we can know when a trend ends, then we ARE able to bet against it - an action of forecasting. Calling an end of a trend IS forecasting.
How do we know that Gross' action of dumping Treasuries wasn't simply stopping out of a trend that he had reckoned as ending?
The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]
It is such a rediculous notion that when a debt is downgraded its yield should rise. Such notion fails to recognize the fundamental truth about debt: when it gets beyond a threshold, there is no way out. The creditor is literally OWNED by the indebted, and the former must keep financing the latter. Japan is a clear example. Nobody in his sane mind can expect Japan to ever pay down its debt, and yet the yield on Japanese government bond has been falling or staying low for as long as we can remember. I challenge Charles to count the dead bodies of hedge fund traders who betted on the rise of JGB yield over that past 30yrs.
Since we would never let our debt to default in a fiscal fashion, so technically it is risk-free, regardless how you rate it. And the savers (eventually all domestic ones) just pile in to keep the yield low. The consequence is a flight away from the underlying currency, till the day when such debt load is entirely absorbed by domestic creditors (as in Japan). During this course of currency flight, Gold price, as measured by the underlying currency, inevitablly rises.
And we are just at the beginning of these unfolding events. Human nature dictates that the most likely outcome be the one that causes the most pain to most people. I welcome anyone to challenge my reasoning.
I own a dual digital with 4 times payoff, to bet on Gold above 1800 AND 10yr treasury bellow 2.4%, by the end of year.
The Day After: Stay Away From Gold, Treasuries; Buy Solid Blue-Chip Stocks [View article]
Will China Ditch U.S. Treasures to Buy Gold? [View article]