Archive - Jun 1, 2011 - Blog entry

Is it time to do away with 2&20?

As the great Yogi says: "It ain't over 'till it's over" but May is now officially over and it was, in fact, a down month, despite the TREMENDOUS effort that was made in the past week to keep it from being a 5% loss.

That's what makes oil trading so much fun - it's all based on factors that are out of our control and half a World away, so the speculators have dozens of tools available to them to manipulate the market.

A major breakthrough!

Last month I warned that the Fed would LOVE to see another round of deflation so it could set the stage for more money printing in the second half of this year. My long-term forecast remains the same (serious inflation accompanied by a US debt default), however, it’s now clear that we’re heading into another round of deflation in a BIG way.

Are housing prices in free-fall? Are they stuck in some endless feedback loop whereby foreclosures drive down prices which causes more home owners to be under water which causes more defaults and drives down prices further, and ...

Other than that, everything is great!

The S&P 500 will go no higher that 1430 by 2020, a mere 90 points higher than it is today. The current multiple normalized over the past ten years is 23, making the market outrageously expensive. The historic average is only 14. We are only 17 months into a second lost decade for the stock market.

I find it odd (to say the least) that anyone on the planet even considers paying attention to the Fed’s CPI measure. According to CPI inflation has only risen 3.2% in the last 12 months. This is during a period in which gas rose 33% while ground beef, cheese, and vegetables are all up in the double digits as well. Heck, even RENT rates have jumped in the last year. But somehow because housing prices and iPads have fallen in price… inflation is under control.

The shiny metal still looks good ... in the long-run

This is, by far, the best time I've ever witnessed to be a consumer of mobile computing technology. Alas, this is going to be the worst of times for those companies that come in any where under 2nd place in the Mobile Computing Wars - including some pretty big names... RIM, NOK, MSFT? INTC?

Grains are probably going up, leading to higher liquor prices ... and wealthy people who have a taste for sake or shochu would probably pay top dollar for "clean", pre-Fukushima beverages ...

Tho only thing different this time is the date..."see you in the debt world and don't be late..."

The push for soft internet censorship, brought to you by your favorite oligarchs.

Banks, balance sheets, guaranteed crashes, and why no one ever asks who's going to backstop all of the sovereign debt CDS being written out there...