Archive - May 2011 - Blog entry

First and foremost, China and Russia agreed late last year to begin trading with one another in their own currencies, NOT the US Dollar. In that step alone, two of the largest emerging markets (and economies) in the world moved away from the US Dollar. Add to this the fact that China just agreed to expedite trade relations with Brazil and you’ve got the beginnings of a flight from the US Dollar and the end of the Dollar’s reserve currency status.

Wanna buy a bridge? Uncle Sam has a few for sale.

In “Fight of the Century”, Keynes and Hayek weigh in on these central questions. Do we need more government spending or less?

So here’s a CEO, someone with actual business experience (not some moron academic who’s never run a business a day in his life) telling us the following: food prices are up a lot and going higher in the future, despite high food prices, farmers are quitting farming (lower supplies are coming), food companies will be going bankrupt (even lower supplies are coming).

As one of my readers noted, single family foreclosures have boosted the multifamily rental market, and of course, speculators are doing the bubble thing again. Damn, that was quick. But what happens when interest rates go up, stagflation becomes more prominent, or housing brings us back to recession (that is assuming you believe we ever left it). Alas, I'm getting ahead of myself...

Like last year, I took on the unenviable task of trying to capture everything that was said at this year's Berkshire Hathaway annual meeting. Over 18,000 words and 24 pages later, I hope my notes provide a fair representation of what Munger and Buffett had to say.

My open letter to our Prime Minister...

Stock and credit markets closed weaker today as Europe came back to the party from their long weekend. Equities underperformed credit (beta-adjusted) and HY underperformed IG as we see the debt-equity relationship starting to wave caution flags and skew compression enabling some downside.

TOTUS Edition...

A reader wrote me complaining about the nonsensical bubble blowing in multi-family properties before the last bubble was even finished bursting. I feel his pain. Let’s run through a quick pictorial of how I see the macro climate for real estate as of right now…Everybody is getting squeezed, businesses, consumers, homeowners… Everybody!

The mobile computing field is growing by leaps and bounds bringing the more innovative along with it, while potential casualties are already limping across the battle field before the second round of ammunition has been fired.

We have 13mm tonnes of this stuff?

A handy aid for keeping track...

The departure of several senior pension fund managers marks the tension at public pension funds over pay, as schemes struggle to retain their best talent...