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Thu, 09/09/2010 - 13:26 | 572148 DarkMath
DarkMath's picture

"It does not mean that gold is your best bet. In fact, it is not."

I'm all ears....please enlighten me...what will outperform Gold in the next 10 years?

Thu, 09/09/2010 - 13:36 | 572180 Oquities
Oquities's picture

i think he's suggesting a selling climax in equities will bring bargains and that seemingly will not also happen in gold.  as to his next-to-last paragraph, i'm still trying to figure out what he's saying there.

Thu, 09/09/2010 - 14:46 | 572447 DarkMath
DarkMath's picture

So wait for the selling climax in equities...I guess I should wait for the big red neon sign that says Market Bottomed Here.

 

 

Thu, 09/09/2010 - 16:05 | 572715 midtowng
midtowng's picture

I believe the gold bull market will end some time this decade, but not in the next year or two.

Thu, 09/09/2010 - 22:41 | 573334 RockyRacoon
RockyRacoon's picture

Everybody has differing opinions on that.

Here are two articles with different conclusions using the same graphs!

Pick your poison, triple top or cup-and-handle...

Precious Metals Equity Index Forms Triple Top

http://www.minyanville.com/businessmarkets/articles/precious-metals-prec...

Technical Targets for Gold, Silver, and the Gold Stocks

http://www.minyanville.com/businessmarkets/articles/sentiment-technicals...

Thu, 09/09/2010 - 21:43 | 573261 prophet
prophet's picture

POT and probably about a thousand other securities.

-profd

Fri, 09/10/2010 - 09:03 | 573839 FLETCH
FLETCH's picture

i think he means that gold is not immune to deflationary forces, with the caveat that the currency is not destroyed in the process

Thu, 09/09/2010 - 13:26 | 572150 spartan117
spartan117's picture

Treasurys, bitches!  Er, I mean, Treasuries...

Thu, 09/09/2010 - 13:28 | 572152 citationneeded
citationneeded's picture

Does this assume that the Equities Markets return to their historical purpose of asset capital allocation rather than its current incarnation?

Thu, 09/09/2010 - 13:55 | 572234 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

That will return only after the corporations are truly profitable.

Thu, 09/09/2010 - 13:30 | 572163 yabs
yabs's picture

how come 6this nonce thinks deflation has ended?

its hardly even started

Thu, 09/09/2010 - 13:55 | 572232 spartan117
spartan117's picture

Two health insurers in California just raised their premiums by 19% and %16, I believe. I'm still waiting for deflation.

Thu, 09/09/2010 - 14:04 | 572268 doolittlegeorge
doolittlegeorge's picture

no shit.  and my reading material for the week is pretty simple:  hospitalists and "remimbursements."  The line that stood out was "United Healthcare's unpopularity has actually fallen among doctors from 92% to a mere 68%."  I think we may have reached a technical level here and am looking for arbitrage opportunties going forward.  Needless to say "rising reimbursement rates are a possible culprit."

Thu, 09/09/2010 - 18:09 | 572979 Rainman
Rainman's picture

Health insurance premiums have little to do with inflation and everything to do with extortion. It's the Obama put. Disregard.

Thu, 09/09/2010 - 13:30 | 572166 Traianus Augustus
Traianus Augustus's picture

He called stocks "real assets"...that's hilarious!!!  Based on what?! Fundamentals!!!  No stop it!!! I can't stand it anymore LMFAO!!!

Thu, 09/09/2010 - 14:04 | 572271 doolittlegeorge
doolittlegeorge's picture

it's because "when they go to zero...so do you."

Thu, 09/09/2010 - 13:31 | 572170 yabs
yabs's picture

he mentions the term reAL ASSET and stocks in one sentence

sorry this guy is full of shit

should I sell Gold then and buy stocks in BA a 'real" asset

Thu, 09/09/2010 - 13:38 | 572185 traderjoe
traderjoe's picture

Treasuries might be a good trade. But they will NEVER pay off. You wanna bet the US Gobermint can pay its obligations over the next 10/30 years in today's dollars? Without hyper-inflation or some sort of default? Did he call Treasuries some sort of insurance?

Shorting Treasuries for the long-haul (and not just for a trade) is also non-sensical - unless you can use the proceeds to buy something not in $'s. Otherwise you get paid back in the toilet paper dollar. 

Thu, 09/09/2010 - 13:40 | 572192 Oquities
Oquities's picture

stockholders in companies with little/no debt are claimants to the real assets, if any, those companies own.  being careful about goodwill and intangibles vs. plant and equipment, etc. of course.

Thu, 09/09/2010 - 13:44 | 572205 ShowMeTheTime
ShowMeTheTime's picture

His history and documented calls are pretty good..

Thu, 09/09/2010 - 14:09 | 572284 doolittlegeorge
doolittlegeorge's picture

timing is important as Treasuries were getting clobbered since December, 2008--"right up to the point at which they soared."  A tradeable rally?  If you're Bill Gross maybe and needless to say "he owns the Casino."  Still "good market calls are greatly appreciated" although you would think "treasuries are a fairly well covered asset class on Wall Street."  Nothing like surprises, no?

Thu, 09/09/2010 - 14:30 | 572368 bart.naf
bart.naf's picture

Indeed, his calls have been quite good.

 

"I saw a huge opportunity to profit from bad behaviour"

Nothing like seeing money laying around and picking it up...

Thu, 09/09/2010 - 15:24 | 572586 old_turk
old_turk's picture

'His history and documented calls are pretty good..'

 

It is but within context, but it appears (at least to me) he's way early on his 'deleveraging ist kaput' call.  He's probably spot on disinflation scenario, once the capitulation and abhorance of all things equity has been reached.

Just not yet ....

Thu, 09/09/2010 - 14:05 | 572272 bmusic
bmusic's picture

I'm also a little confused about what he's suggesting.  It seems like he's suggesting, selling Treasuries and buying Commodities (other than Gold).  It also seems like he's suggesting buying equities following some type of event driven crash.

Does this sound right?

Thu, 09/09/2010 - 22:46 | 573338 RockyRacoon
RockyRacoon's picture

Yes or no, probably or maybe, could be or not.

Either way, I ain't buying.  Going for the gold.

Bye.

Thu, 09/09/2010 - 14:20 | 572325 goldsaver
goldsaver's picture

OT, what happened to the DOW rally on "good employment news"? Hmmm... Guess we wil have to wait until 45 seconds before close to see it really hum.

 

Thu, 09/09/2010 - 14:57 | 572486 Cognitive Dissonance
Cognitive Dissonance's picture

The market wants to sell down. The Ponzi wants to buy all those who wish to sell. Pretty soon the Ponzi will be playing with itself. Hope it feels real good because it's going to be real ugly.

Thu, 09/09/2010 - 22:50 | 573343 RockyRacoon
RockyRacoon's picture

...Ponzi will be playing with itself

Charles Ponzi would be shocked at your language.

Thu, 09/09/2010 - 14:44 | 572438 Burnsy
Burnsy's picture

Disinflation conditions will create a market boom for stocks, since it reflects claims on real assets.

 

This statement is strange to me. While stocks are indeed claims on real assets (those are the stocks I want to own, anyway)-I don't see a period of controlled disinflation in the cards. Rather deflationary pressures followed by inflationary pressures, in which stocks with claims on real assets(e.g. oil, gold) should benefit. Can somebody explain his reasoning to me on this one? If he means buy after a severe downturn in anticipation of stimulus pressures causing (at least temporary) asset price reflation, I agree...

Thu, 09/09/2010 - 15:26 | 572596 tmosley
tmosley's picture

So disinflation won't cause corporates to default on their bonds?

Counterparty risk is the word in this market.  If you have assets that are exposed, you will lose them.  If you have assets that are not, you will keep them.  It's as simple as that.

Playing around in a burning building is fun, and looting can be profitable, until the building falls in on you, or a G-man shoots you for looting (what, you never heard of a "windfall tax"?).

Thu, 09/09/2010 - 16:33 | 572783 web bot
web bot's picture

Look... these video gamers sit behind screens and robots, so this is nothing more than a video game for them. Blow something up, no problem, you get multiple lives. Simply go to another part of the game and collect more points from the system (that means you and me) to cover.

They're in god mode most of the time... so they are immune from the inconveniences of life.

Thu, 09/09/2010 - 15:26 | 572599 TWORIVER
TWORIVER's picture

And on we go to 1250 SP 500 despite another chapter of, " how the world will end today."

Thu, 09/09/2010 - 16:28 | 572765 web bot
web bot's picture

I would like to see the rationale for dismissing inflation - ahem, I mean hyperinflation.

If you are a day trader, then this stuff's worth licking up. If you have a longer term horizon, longer than the tip of your nose, then I'd be cautious, very cautious.

We have an unstoppable deficit with no end in sight and a European debt problem that is on again, off again... something in any other time period would have people screaming up and down about.

Welcome to the new normal.

Thu, 09/09/2010 - 22:00 | 573284 web bot
web bot's picture

CAN SOMEONE FIGURE OUT JUST EXACTLY HOW MUCH DEBT IS TOO MUCH?

Just how much time do we really have until we have a USD crisis?

Thu, 09/09/2010 - 22:42 | 573335 cjbosk
cjbosk's picture

My guess is that we see inflation and deflation simultaneously.  Inflation in necessities i.e food, energy, etc. and deflation in big ticket items like appliances, televisions, shittery...

Hard to get hyperinflation however, when there's absolutely zero velocity to the dollars being printed.  Like throwing money in a burning trash can. 

Japanification bitchez!

 

Thu, 09/09/2010 - 22:55 | 573349 RockyRacoon
RockyRacoon's picture

Hard to get hyperinflation however, when there's absolutely zero velocity to the dollars being printed.

Are you sure that is the definition of hyperinflation?

Anybody want to jump in on that one?

Thu, 09/09/2010 - 23:51 | 573420 Let em push you...
Let em push you around's picture

That sounds about right to me.  They'll have to figure out what items are backstopped by inexorable human need and price gouge us all on these select items. 

I am also a bit confused on how disinflation is going to be a boon for stocks because they represent ownership in real assets.  I was under the impression that that reason was the excuse for why stocks can go up under INFLATION.  Besides, it seems to me that this system of ours is already DOA and will finally kick the bucket once their is too much blood in its dead adrenaline-veins, so I don't see how a slowdown in the "progress" of inflation bodes well either.

Fri, 09/10/2010 - 06:53 | 573700 Tic tock
Tic tock's picture

The conditions are here for Hyperinflation: and they're also primed for Deflation- we would know that if the actual numbers were forthcoming. We can tell that the numbers are, in fact, that bad because there is no inch given to a deflation-like scenario being propogated; which would be normal - for those confused, Hyperinflation, loss of confidence )in Uncle Sam paying Treasury coupons) and Deflation, collapse in US consumer and business earning power. ...the author makes the point that deflation, relating to stocks, seems to have largely gone out of the window...because there's a lot of capital based upon that pool and thus there is a policy at the highest level of the stock market consistently finding buying support. 

The question is, what are the ramifications of this policy? ..I feel that the supply of dollars into this equities rise is funding the spending of a section of the population. Looking at auto sales worldwide, Fiat, Ford, Peugeot , sales are flat on 2009 and the market is down overall 17.6% from last year while Audi, Porsche, Rolls, Mercs are showing spectacular strength.. huh! Fleet sales are making the difference for the economy sector and in a big way- I smell deferred purchase. But the point is that the absolute consumer numbers are down heavily, whereas the well-paid, the government contractors, the people who have money to manage, they've been able to eke a better income.

Most people are going to have less money going forward which is Fed is in an intersting position with regards to this: it is responsible for sorting out this mess, it needs to be able to measure the problem and we don't believe that it has taken steps to find these. The only policy it is pursuing is, by it's nature, a short-term, small-scale consumption effect. Though it can run the program for as long and as large as it would like to, it remains unlikely that the market will ever be convinced that this represents a meaningful structural wealth shift. Which is what, y'know, when the housing market nationwide collapses and thousands of banks are insolvent and employment is structurally deficient, energy costs are uncertain, is what the market is looking for.

This is getting a bit long, but in conclusion I just want to say this is the child trying to copy the parent: the Fed wants to support the entire economy- in the old days, govt.s could provide communications, power, food and then leave populations to go off and make their own little niche and expected that they would be content left to themselves -while the high and mighty would get on in business, generating knowledge, selling arms, whatever. Now, Democracies around the world have been made in the image of the US and these do not permit for the little people to live underneath and secure away from the interests of powerful, profit-seeking organizations... if the Fed can see that what it would like to do, is the same as other post-imperial administrations, that in itself would be quite welcome.         

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Fri, 10/15/2010 - 03:00 | 652026 nikejordan
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