Internet2k4

Wednesday Outlook: Commodities, Global Markets

The 3X funds are fun - I like minimizing absolute exposure for a cheap ticket on the roller coaster. After pulling the trigger too soon around $100, I managed to average into FAZ at $58 these past weeks and fully unloaded it between $82 and $88 yesterday - noticing the trading-screen opportunity accidentally, on an Obama-screen afternoon.

Re C and MS, and the rest, I feel like Eddie Murphy: "I can't be mad at you!" for taking history's biggest tax refund and using it to short the world economy instead of lending it to more losers. It's been a mean old (morally hazardous) world. Now that Vice-President Caligari and his Somnambulist Commander-in-Chief are gone, who knows? Maybe the guy in the driver's seat is actually in charge.

Hedging a Weakening Dollar With Currency ETFs

I'd agree the dollar is sinking this year on concerns about economic slowdown and a possible cut in the Fed rate while other central banks are trending up, but would think there is a practical floor. Long term would guess the buck will only decline ver-r-ry slowly, and only if and when the Euro zone develops decent levels of domestic consumption. It's not obvious to me that China or anyplace else in the next 30 years will be able to make the cultural, political and economic transitions to create a consumer alternative to the US - witness even Japan's paralysis right at the point where big changes were needed to create a dynamic economic and political system. Premature moves out of the dollar and failure to underwrite the US consumer would risk killing the goose that is laying the golden eggs for these economies. Talk about global warming: watch the oceans rise from sweat pouring off the foreheads of foreign politicians, business folk and eventually central bankers when the floating Euro pushes $1.40, the A$ or C$ push $0.90, not to mention the obviously manipulated Yen and Yuan rates.