Look, everyone makes bad predictions. But Gross has been killing the market since the 70's. And Greenspan's opinions are VERY likely to correlate with most of the FOMC, that is my point. Not that he cant go wrong but that whatever his opinion is, is likely to be similar to Bernanke and co And he is not in the hawk camp at this point, says UR will stay high for quite a while so does Bernanke The pimco-greenspan trick probably provides an edge in the 6-8 month ZQ contracts that is not currently priced in the market even though its public information
Siegel writes a good article here http://www.ft.com/cms/s/0/0f4b12dc-b210-11de-a271-00144feab49a.html?nclick_check=1 I defended him back in Feb or Mar when he said the market was not expensive in a PE basis because financials writedowns were distorting the PE numbers. He was right yet everyone made fun of him, that seemed a contrary indicator. Right now I dont see many folks scorning him And I agree with him, US equities for the next 10 years are likely to make money. But since people only care about the short-run I remain bearish as economic/earnings data is likely to dissapoint for the next 6-12 months and a wave of fear ala 2002 seems likely
Gartman says gold is rising due a 'disdain for currencies' http://www.bloomberg.com/avp/avp.ht...//media2.bloomberg.com/cache/v6_ZvnEZ4qxU.asf That is consistent with my bet that gold will outperform the DX. We will see if thats right for the next few years
Another rise in the stock market and another fall in interest rates. E$ ZQ had a nice day, UST as well
PDF version also available here: http://www.zerohedge.com/article/deep-thoughts-kyle-bass-0 http://www.zerohedge.com/sites/default/files/hayman.pdf March 2009: http://www.zerohedge.com/article/deep-thoughts-kyle-bass http://www.marketfolly.com/2009/03/kyle-bass-hayman-capital-letter-to.html
Australia UR is actually falling so their situation is VERY different from the US http://www.bloomberg.com/apps/news?pid=20601081&sid=a1CIRaRrL4Ag
Some people seem to take the concept of 'liquidity trap' too far. Yes banks arent lending and people are paying off debt(effectively converting M1/M2 to bank reserves) but the fed does hold certain degree of control over M1 and M2. Back in late 2008 when the fed sent the monetary base soaring M1 and M2 also soared. If a bank decides to convert some of their excess reserves into income yielding assets such as USTs or GSE MBS/debt they will be sending their monetary base to a non-bank which then makes it M1 or M2(If the asset seller was a bank, the transaction doesnt change much). So monetary base pump becomes money supply pump And banks have been buyers of UST and GSE stuff. Even with net credit going down you can still see a rising M1 and M2
The Fed purchases also can increase the money supply. When the primary dealers are selling for a client that increases M1 or M2 directly When they are selling their own stock they will increase their excess reserves which they might decide to generate yield with by buying USTs or GSE from a non-bank(at some point in the future), converting their bank reserves to M1 and M2 likely through the Fedwire payment system So IMO, the Fed can prevent deflation if they want regardless of zombie banks, by just buying the whole market, then M1 and M2 will soar
Even though deflation could became an issue in 2010 that is very much reversible The Fed's doubling of its balance sheet lead to M1 to grow at almost 60% annual rate for a period. M2 at 25%, even though the financial system was locked up And even though the velocity of M1/M2 declined its very much alive and well, as shown by the simple fact that nominal GDP is $14T, nominal GDP = M * V The reason M2 has been weak is because the fed has been reluctant to increase the balance sheet more as the green shoot kool-aid has been passed around
Looks like Jeffrey Lacker found his lost Paxil package http://www.bloomberg.com/apps/news?pid=20601087&sid=ad8SpIBLn0Pk