Archive - Sep 2010 - Blog entry

The hands on, from the trenches view from Oracle of Omaha Warren Buffet’s personal agent. The number of existing homes on the market is climbing from the current 4 million units to 5 million, versus a ten year annual trailing average sales of 2.5 million units. Record foreclosures are forcing reasonable sellers to compete against distressed sellers, driving prices down. The hurricane force headwinds of the retirement of 80 million baby boomers, the parsimonious attitude of banks, and the harsh reality of continued falling standards of living in the US aren’t helping. Do bank stock investors know this?

Retail Traders as a herd are wrong...most of the time (sorry guys its true).

This daily report is designed to help traders find opportunities to trade against this group. The premise is very simple we are looking for 66% of retail traders to be trading either long or short a currency pair, we then look for opportunities to fade (trade against) this group. For example if 72.99% of traders are long the USD/CHF we look for opportunities to short that pair.

"Incentives are part of total compensation and critical to the fund's long-term success as well as recruitment and retention of skilled investment professionals," Pacheco said in an e-mail.

Google unveiled a “transparency tool” that gives information about requests it receives for user data or content removal from government agencies. The most recent data set--Jan. 2010 to Jun. 2010--the U.S. reign supreme this time around with 4,287 data requests, up almost 20%.

Just thinking out loud...

Did you know?

Silver is now trading at a 30 year high, is overbought, and bumping up against key technical resistance. Mean reversion can be a bitch. Making 13% in a zero return world. For those who hold physical bars and coins, just keep it locked up and throw away the key. Waiting for $50 an ounce. You can always use your silver dollars to bribe the border guards.

The TRS offers additional answers to the hard questions posed in the media, but are they good answers? I drill in a little deeper, and hope not to piss anybody off. I'm pretty sure I failed.

For nearly twenty years, we haven’t flinched from our prediction that the massive debt build-up of the last generation would precipitate out as a deflationary bust. That is what we still expect, although we now believe there is likely to be a hyperinflationary phase at some point as the financial system implodes. But the bottom line is that no matter how things play out, America’s standard of living will fall more steeply than at any other time since the Great Depression.

Britain has the largest pensions gap in Europe and people need to put £10,300 a year more on average into their pension pot if they want to keep their current standard of living in retirement, new research claims.

The only significance in the FOMC report for September is that there is no change and they are still clueless and scared. They do see a glass half empty. Here's a brief report.

Regardless, the primary point is that the US credit bubble has not deleveraged in any meaningful way. The system remains debt saturated to the gills on a personal, corporate, state, and Federal level.

In plain terms, the entire US system is one giant debt bubble. And there are only three ways to deal with a debt problem:

1) Pay it back
2) Default/ restructure
3) Hyper-inflate it away

The US has no chance of #1, which leaves either #2 or #3. Both involve the Dollar taking a sizable hit, which might explain why Gold has begun breaking out while Treasuries are dipping.

We know where you live ...

President Obama and Secretary Geithner are talking yuan tough again as the currency has risen only 1.53% since June. Economists estimate the yuan is undervalued by 12% to 40%. This makes yuan an effective political diversion of the high U.S. unemployment in an election year. The prevailing argument in Washington is that a yuan appreciation would bring manufacturing jobs back to America. Nevertheless, I believe this is overly hyped, exaggerated, and mostly politically motivated. Besides, not everyone is as certain about how large a role the RMB's value would play in the U.S. economy.

Are "pension-protection bonds" the solution to the ongoing pension crisis? I don't think so...