Archive - Jun 30, 2011 - Blog entry

"I ask my friends and colleagues: what would it take to bring you to the streets? My death? Your friend's death?, Your lover's death? Your child's death? Sunny was a dear friend, but he did not have a big enough sphere of friends to make problems for the cops when they killed him."

It was really easy getting that mortgage in Hungary, and the best of all, denominated in Swiss Francs, so the interest rate was low. Such a great plan, if it wasn’t for that currency risk.....

I know many of you are wondering where GW is. Yesterday he remarked that he is on a field trip and unable to check in more frequently. Fortunately, our own intrepid reporter of mayhem, oppression and the apocalypse has been sending postcards which I am happy to share with all of you.

The way we see it is quite simple. With every investor and every company in the world seeking exposure to China and betting on continued and unabated Chinese growth, what happens if they are wrong? Is it at least worth having some insurance in the portfolio to hedge against the risk of being wrong? If nothing else, we recognize that we are sometimes (often) wrong! GMO’s James Montier recently shared the following thoughts with investors...

Danger? What danger?

This is an ugly story.

A new interventionist, activist approach by governments towards the energy space. If the IEA’s strategy works, and prices stay down 10% over time, this would inject $300 billion into the world economy. Howls of leaked information and insider trading. . Traders may bet against the national interest, but now do so at their peril. This is the first real attempt by the consuming nations to eliminate the oil risk premium, estimated at up to $50 a barrel. Cutting Brent prices by a whacking great $30 a barrel. Is this QE3 in black?

... I would tend to believe that from here, things are more double sided than before, and risk-reward much less interesting than it used to be, because there are now external factors like government intervention which can kick the can, and screw valuations for a long time.

We passed the Greek Vote. Great news, but is the future all bright now? What about the rest of the World and it's Debt?

I was summoned into a meeting at the Caisse late yesterday afternoon and received a hard slap on the wrists...

Greed is Go(o)d? It sure seems the increasingly polarized American Society believes so. With the wealth getting even more concentrated among very few, this will cause the US big problems in future. The Elite is getting a rather skewed perception of what a CEO should be paid, and what rights they have. They are no uberperson, they are just human.