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  • Why Oil Will Head Higher
    How come so many of those really smart fund managers lost 40% last year?


    On Jan 08 09:53 AM Sean Hyman wrote:

    > Many are wrong over the short term. However, its the "smart" institutional
    > money that tends to get it right over the long haul. They do it full
    > time, have more data, resources, better systems and better contacts.
    > This will always be an edge over the "average Joe" that does this
    > in his spare time from his home PC after work.
    Jan 08 22:03 pm |Rating: 0 0 |Link to Comment |View article
  • Market Ideas - If Everyone Agrees, It's Probably Wrong
    The number of stock market bears seems to get smaller every day.
    -- I feel so lonely! But you all will be back.

    ...there are trillions of dollars on the sidelines, just waiting to get in
    -- A lot more trillions didn't get out in time.
    Jan 08 19:15 pm |Rating: 0 0 |Link to Comment |View article
  • 12 Reasons Stocks Will Decline in 2009
    "While trying to debase the dollar may give asset prices a temporary boost, we believe debasing the currency is not the road to prosperity.....There is however a small problem with this strategy. Not only can US citizens buy foreign assets and currency, but foreigners can sell their US assets. Both will be problems if the US continues to undertake a strategy of quantitative easing. Foreigners will sell US assets if they believe that the currency will weaken dramatically."

    QE creates inflation. Inflation increases asset prices. Foreigners would be wise to buy US assets while their dollars are still relatively strong, then profit from asset price increases when the dollar weakens. A dollar today could buy what $10 does next year. Regardless of currency, real assets like property and profitable companies have their own value. Now debt is a different matter. Anyone holding fixed-interest debt in this scenario will get wiped out. Ditto for anyone living on a fixed income. There are winners and losers in every scenario.
    Jan 08 13:50 pm |Rating: 0 0 |Link to Comment |View article
  • Two Indications of Oversold and Overbought Market
    Stocks are rising on expectations that the economy will improve a few months from now. I think that is premature. These indicators tell what is happening now, not what is coming next.
    Jan 08 13:42 pm |Rating: 0 0 |Link to Comment |View article
  • Oil Could Be Set to Rally Judging from the Past
    Simmons, all of your posts are ads for other sites. Enough, already!
    Jan 08 13:40 pm |Rating: 0 -1 |Link to Comment |View article
  • How Will Obama's 'Trillion Dollar Deficits' Affect the Markets?
    Dead-on article! This is the future we have been setting ourselves up for, at an accelerating rate, for a very long time.

    The last REAL balanced budget was under Eisenhower. Clinton's "surpluses" are only such because of the "unitary budget", which allows the government to spend the Social Security and Medicare surpluses without counting them in the P&L. The national debt went up while we were running those surpluses. Johnson created a fake surplus in 1969 by shoving expenses into the neighboring years. It's been 60 years since the federal government really spent less than it took in in taxes. Quite a trend, and not likely to reverse any time soon.

    On the other hand, the Republicans were supposed to be the party of fiscal responsibility. When Reagan became president, the national debt was $1 trillion. Now it is over $10 trillion and rising rapidly. One trillion of that increase comes from the Clinton years. The other $9-10 trillion (from a starting point of $1T) occurred under Reagan and the two Bushes. Go figure.

    For decades, the American people have elected and re-elected politicians who told us we could have the government services we want without having to fully pay for them. This is a sad indictment of our democracy.
    Jan 08 13:37 pm |Rating: +2 0 |Link to Comment |View article
  • Things We Don't Talk About (But Should): National Debt and $2 Trillion Deficits
    On Jan 08 10:45 AM Jubilee Year wrote:

    > The solution to all of our problems is quite simple, but quite "outside
    > the box": we need to cancel our debt. All of it. With no debt load,
    > price levels could harmlessly deflate, and our productive economy
    > would get a stimulus like no other.

    I think this is more or less what will happen.

    DOES ANYONE REALLY BELIEVE WE ARE GOING TO PAY BACK ALL THIS DEBT, EVER?

    Since our debts are in our own currency, we could just write every creditor a check and say see-ya-later. The dollar would drop like a rock, and don't plan to borrow in dollars ever again, but as a one-time escape, it could happen. It probably won't be that extreme, but increasing the money supply (e.g., the Fed "buys" treasuries with dollars it creates out of thin air) will lead to inflation and a drop in the value of the dollar. Theoretically, creditors can force up interest rates by withholding their dollars until that happens. But with the USG able to create money instead of debt, they don't have control. Japan recently suggested the US issue yen-denominated bonds. What a non-starter that was in Washington.

    There are some up-sides to all this. Inflation will largely "solve" the financial and foreclosure problems by reinflating asset values. Homeowners will have equity and lower mortgage payments compared to higher cheap-dollar incomes. Mortgage-backed securities have some backing again. A cheaper dollar will make the US more competitive and reduce the trade deficit. On the other hand, prices will rise faster than incomes (especially imports -- we WILL use a LOT LESS oil) and Americans as a whole will be poorer. Those on fixed incomes will be hurt the worst.
    Jan 08 13:26 pm