Archive - Mar 31, 2010 - Blog entry

The problems of aging and pensions were already challenging enough. Current attempts to buy short-term expansion with artificially low interest rates can only make the long-term problems greater than ever. Recent Treasury-bond auctions have seen fairly weak demand, forcing yields higher. Is this a sign of things to come?

With the world’s weakest major economy, Japan is certain to be the last country to raise interest rates. This is inciting big hedge funds to short yen to finance longs in every other corner of the financial markets. The world’s worst demographic outlook assures problems will only get worse. They’re not making Japanese any more. The sovereign debt crisis in Europe is prompting investors to scan the horizon for the next troubled country. Japan is at the top of the list. The Japanese long bond market, with a yield of 1.4%, is a disaster waiting to happen. (YCS).

Expect the other sovereigns and related domiciled banks that we have covered to follow suit within the next couple of quarters.

I can easily make the argument that a 40% gain in over a year implies strong momentum that is likely to continue. But I won't make that argument, and instead, I will just state that this appears to be what it is: another data point that doesn't provide too much clarity.

Thoughts on Vodafone and Russia

Is blogging making any real difference? Are bloggers turning the tide, or howling into the wind?

It’s really all about a few big car companies pandering to growing numbers of “green” consumers. The low hanging fruit for investors in the fuel efficiency race can be found by pushing forward existing, simpler, and cheaper technologies. A look at European “stop/start” technology. (XIDE), (JCI)

This is a very meaty piece, written for those who are serious about the true state of affairs in sovereign Europe as NOT reported in the mainstream media. Though not necessarily for freshmen, it is more than worthwhile for those who want to know what is not being said.

Economic contagion begets financial contagion, which will spread across much (if not most) of Europe, causing further economic contagion. This is what is written on the tea leaves in Ireland.