Archive - Jun 2011 - Blog entry

BIS is warning of higher rates to come.

"All financial crises, especially those generated by a credit-fuelled property price boom, leave long-lasting wreckage”

Bank for International Settlements

We have not recovered from the Great Recession and thus our current economic stagnation is less a new event than a continuation of the original collapse. The basis for the so-called “recovery” was a rise in GDP, that measure of what we have spent in the economy. It’s a fairly useless bit of data.

Many pundits talk about Europe, and we hear about experts on CNBC discussing the Greek situation, but have never understood what Europe is. It is not the United States of Europe. Geography, history, religion makes it very hard to integrate the different countries in Europe on the ideological front, but even harder when it comes to the Economy. Below a great summary for all those experts that don’t have a clue what Europe really is. Courtesey of Stratfor’s Papic.

The stock is up 35% on news of a non-exclusive content deal. To sell content into a market unaccustomed to paying for it. How could this possibly go wrong?

Regardless of what Greece does, the facts remain that we are headed into another Crisis in the near future. The global economy has already begun to roll over. Social unrest has spread from the Middle East to Europe. The US is now actively raiding pension funds to fund its debt issuance, and more.

May the farce be with you...

More nuclear mishaps?

Specialist hedge fund consultants are at “the leading edge of the phenomenon of many pension plans, especially public plans, moving to direct hedge fund investment,” said David Harmston, partner and global head of Albourne Partners' client group. Is he right?

In the current market environment, many investors are positioned in what they perceive to be ‘defensive’ market segments, such as healthcare, telecoms, staples and utilities. To us, this is the wrong choice!

The Fed is not backing off of its desire to stimulate the economy, all it is doing is backing off of its policy of steadily adding to that stimulus. The air is not, on net, leaking from the tire, it is still in the balloon. That stimulus is still working and the key question is how effective it has been and will be.

The world is awash in garbage debt. The only reason the banks and others haven’t taken the “hit” that they NEED to take is because they’ve bought out the politicians. Put another way, we are seeing clearly that the two primary principles of the West (capitalism and democracy) have both become jokes: alleged “capitalists” like the banks don’t ever actually see losses for mistakes and “democratically elected” leaders are in fact owned outright by the banks via donations/ bribes.

Just a guess on the future.

The outlook wasn’t brilliant for the Mudville recovery that day; The economic score stood four to minus two with but one inning more to play--And then when Greenspan died at first, and Summers did the same..A sickly silence fell upon of the patrons of that blasted monetary game.

Hey Mr. & Mrs. investment committee members, here's a strong investment idea. Let's take 30% of our money off of the table after losing 48% of it already, and reinvest 70% of it back into the original investment pool, but this time accept 20% in equity risk just as the country we're investing in is about to undergo a nasty, self-imposed austerity driven recession while our new fixed income position is subordinated in real time by the IMF, and soon likely to trade underwater just about as quickly. Now, where's my damn bonus??? I have an appointment with the Azimut dealer!

From China, to Greece, to Stocks and Bonds, European Debt, CDS, and finally the Dollar and Oil.