Archive - Nov 19, 2010 - Blog entry

The three biggest problems with QE 2 are:

1) The potential for a US Dollar break-down
2) Treasuries falling and pushing interest rates UP
3) China retaliating.

Of these, #3 is the most worrisome for the global financial markets. Let’s be clear here, China is extremely adept at making investing/ financial decisions. And while we do need to take its decision to cut Treasury exposure seriously, I cannot believe China would actually telegraph that it was dumping Treasuries when the dumping really starts.

"Take a position. Do the right thing. Pass Bill C-216. It is the right thing to do. By doing nothing, by leaving us hanging, in my opinion, they are effectively giving their blessing to the court judge and lawyers we are dealing with to bury us alive. I do not know why. I do not understand what I and 400 other sick people did wrong to be treated like this."

- Jackie Bodie, Nortel disabled employee

Retailers are counting on holiday sales this year but on the other hand they are rather pessimistic. It remains to be seen if holiday sales will improve substantially this year. Bling yes.

I think we have created a Banksta thrashing Monsta...;-)

Things were going according to plan (even though the plan was horrifying) and everyone was happy but then Uncle Ben had to screw it up this morning when "The Bernank," speaking in Germany, indicated that the Fed would pull the plug on QE2 if they thought inflation would rise higher than "2 percent or a bit less."

Once we realize what we all agree on, we will have a much better chance of turning our economy (and country) around.

PG: A company that earns above its cost of capital (positive Economic Margins) and is growing its asset base is considered to be following a wealth-creating strategy. Back-tests have proven these companies to be more likely to outperform those companies following a wealth-destroying strategy (negative Economic Margins and growing assets). PG also is trading below it's intrinsic value.

Skip General Motors, which is getting over inflated through a combination of media and government hype. Today Toyota, the world’s largest car maker, has been slammed by the perfect storm. Toyota has become the BP of the auto industry. Since the company is Japan’s largest exporter, it would benefit greatly from any weakness in the yen. Buy when there is blood in the streets. (TM), (FXY).

I love big arbs. It means markets will be moving.

Steve Wozniack, Apple's cofounder, was actually quite accurate in his rather stark admission that Android will overcome Apple in the mobile phone market just as Windows overcame Apple. Lest anyone forget, Bill Gates and crew nearly put Apple out of business due to margin compression and the commoditization of Apple's high end - and eventually overpriced products. Android is doing the same, simply on a very compressed time horizon.

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