Keynes implicit warning against fighting the tape or the Fed or the insanity is surely correct. That said, it is important to recognize the insanity and the degree to which it is off kilter. Then, when the trend changes, you will have the courage to wait and even wait again for confirmation and know not only have you not missed the boat but that the trip is still in its early stages. My guess is that there is a major dislocation on the horizon. My hope is recognize the market timing and resist being early. Early is death followed by frustration. You can tap out just before the move you have been waiting for. Don't predict -- react.
I can come down to name calling but would refrain. What Presidents like Reagan and Clinton benefited was the downswing in the commodity cycle. From 1982 to 2000 commodities were in down cycle hence economic growth was robust and so were the stock markets. From 2000 till 2016-18, commodities are on the upswing so economic growth is slow and stock markets end up giving their gains. Economic growth picture is not improving anytime soon. I would like Obama to be reelected. Being in the second term, he will be free to take hard decision and force the tough pills like balanced budgets on system. But this only if he wants to and rest of the Capital Hill morons give support. Btw, there are no trillions parked overseas, may be several hundred billions. When investors seek to invest, they do not look at regulation but as to how much they can earn above the cost of capital. Low interest rates situation is not improving over a long weekend and hence foreign markets look more promising on the macro basis. That is one major argument over not reducing taxes on the rich. This because rich do not find good returns in the US and hence money they save up from taxes is invested overseas seeking higher returns. Other than that only good thing going for US is by 2018 it will reach self sufficiency in the gas needs. This means no more sendig $1Trillion a year to Saudi and others to have cars running and industries humming. This is a $1 Trillon a year economic stimulus of sorts. If politicians screw even this opportunity then sadly Bill Gross words would come nearer to being true. No other power has ability to fill the vaccum left by US and hence global chaos and resulting after effects.
Your thinking is too trapped in a box. I have been making money off the US Dollar devaluation. I focus on and trade SI and CL long frequently and those trades have had massive opportunities for many years. They just keep working.
Plus we have over 15 trillion floated out to banks in US and Europe since 2008 to keep them solvent, from the US federal reserve. US Dollar devaluation acceleration, from a lack of demand for dollars in world oil import transactions, when all the banks and govts are broke is a brand new model never seen before.
PIMCO's record is public. They're the number#1 fund in the world by AUM and long-term performance, other than sovereign wealth funds (China). You're thinking buy and hold till maturity. PIMCO trades bond values like a stock. In and out. Profit off the difference, and sometimes collect until maturity. US Treasuries are unlikely to collapse. The FED purchases 75% of new issuances. It's an artificial market. Imagine where yields would be without the PPT (read: FED) buying every treasury in sight. THere's zero market for debt at these prices. And so goes the US (and global economy) - into that great depression that's so feared. No, short bonds isn't the play. Bernacke owns that market. The play is long commodities, real estate and some stocks versus the USD. Europe is going to shit and it's the same game. We're not playing one pair against the other. We're playing all fiat shit money against commodities, gold and real estate. Printing or a deflationary nuclear bomb is the only way out. BubbleBen wrote his thesis on preventing a second great depression. He's an avowed Keynesian. A money printer. All the central bankers of the world are!! Tarp 1 and 2, Maiden Lane 1, 2,3, QE 1, 2, 3. What does the writing on the wall say? All Gross said is we're fucked, and we are. There isn't much time left. Maybe a few years. Politically, Washington handed itself martial law powers. Think about it. They know whats coming down the pipeline. US Army Manuals were leaked that detail operational procedure for internment camps of US citizens, in America!!!! The NDAA authorizes indefinite military imprisonment of US citizens with no lawyer or trial. The Federal Appeals Court upheld it!! 50% of Americans are on some type of Government handout. 45 million on foodstamps. What happens when that SS cheque, medicare stipend, food voucher and housing credit only goes half as far? What happens when most of the labor force see their purchasing power cut by 30 or 40%, in a month? What happens to consumption? Output? GDP? Do the math. This isn't a bump in the road. This is Argentina. First world to Second world in a few months. With a shitload of gun-toting mutherfuckers tripping cause they can't make their grocery bill with a hungry, scared family at home. And they know they've been fucked. Anyhow. GOOD LUCK.
"This is Argentina. " +1 achilles: your post is posted to my thread is the US the next argentina. http://www.elitetrader.com/vb/showthread.php?s=&postid=3646889#post3646889
You're exactly right. I'm not sure why you and I always butt heads. We're on the same page on pretty much every issue. As far as my temper, the willful ignorance on here astounds me. Every word on PIMCO's newsletter should be taken as a gift. Anyway, you and I know this stuff is elementary. Happy Thanksgiving
The western industrialized nations are playing with fire. There is the story about the economist that was asked how bad a depression can get and his reply was "Have you read about the Dark Ages." Depressions that get deep enough can lead to massive wars, repression, total collapse of the social order. It is not an exaggeration to suggest that the type of leverage that Central Banks and other agencies are using is life threatening for us all.
A lot of the problems are not adequately coped with by the politicians imho. They are too busy getting in votes and stuffing public money into their accounts I suppose. Did I hear it right - Romney is going to increase the US military presense in the Middle East ??? A classic case of proving Einstein's theory of insanity I guess !