bearfund

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+5 / -1

497 Comments

    • Fri Oct 3rd 23:50 PM | Rating: 0 0
      Commented on:
      Jobs Contraction a Serious Story
      Spot on, as always when you stick to the facts. Now we will see how much money is printed in an effort to reverse this. It won't, of course, but it will manage to increase the price of everything. Higher prices are just what people without jobs want, right?
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    • Fri Oct 3rd 23:28 PM | Rating: 0 0
      Commented on:
      Bailout 1.1 Passed. Will We Have to Go Back to the Well for v2.0?
      Deflation is not bad in and of itself if you have money. The bad thing about deflation is all the stuff governments do in an effort to prevent it.
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    • Fri Oct 3rd 23:23 PM | Rating: 0 0
      Commented on:
      Wachovia for Free? Citi Still Paid Too Much
      I think the author's point wasn't that Wachovia is worth less than nothing but rather that it has no value to Citi specifically. Whether WFC will profit from its offer is a different question altogether.
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    • Fri Oct 3rd 23:14 PM | Rating: 0 0
      Commented on:
      5 Reasons Why the $700B Bailout Could Translate to $250 Oil
      Will oil go to $250/bbl?

      Yes, absolutely.

      When?
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    • Fri Oct 3rd 11:47 AM | Rating: 0 0
      Commented on:
      7 Rules For Investing During the Fourth Quarter
      There's only one real question anyone should be asking: where's the next bubble going to be? We don't have an economy any longer, we have a giant monetary oscillator with positive feedback. Every move up is bigger than the last; every move down is more terrifying - and met with ever larger monetary and fiscal "stimulus". This has no real effect on the downward leg (its fundamental underpinnings having been established firmly during the last up cycle) but serves as liquid oxygen feeding the fires as the downward leg ends.

      The Fed and other powers that be are 90 degrees out of phase with the reality on the ground; the harder they try to be countercyclical, the more positive feedback they induce. The only question that matters is where their misplaced and mistimed flood of money will end up this time. All money is made by buying bubbles on the way up and shorting them as they burst. Investment is dead, its real returns dwarfed by the easy money to be had in speculation and the deep pockets of the manipulators. Don't be a schmuck, thinking that a "solid company" with "consistent earnings" or "a strong balance sheet" will deliver returns. It won't. Find the bubble. Get long. Then get longer. Then get very, very short. All money is made that way. If you want to make money, you have to play that game.
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    • Fri Oct 3rd 01:11 AM | Rating: 0 0
      Commented on:
      Gold Bulls: Beware
      Good luck getting physical metal. You can probably get 400 oz bars on COMEX; anything smaller is either unavailable or priced at a ruinous premium to spot. Silver, same thing only moreso. Nothing other than 1000 oz bars is available at any price.
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    • Thu Oct 2nd 00:55 AM | Rating: 0 0
      Commented on:
      Corporate Bonds: When Safe Asset Classes Become Risky
      carey_jim, if you don't believe in gold, I can't imagine what you own. A lifetime supply of canned food? It doesn't keep that long. A gun? Me too. It might help me survive someday, but it mightn't be enough. Land? They can take it as surely as the right to short doomed banks. I have absolute faith that my gold will always be worth something. I can't say that about anything else.
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    • Thu Oct 2nd 00:51 AM | Rating: 0 0
      Commented on:
      Whether Bailout Passes or Not, Implications for USD Are Bad
      The nice thing about being in gold as opposed to dollars right now is that the dollar is very much in heads the dollar loses, tails gold wins territory right now. Bonds are expensive, the dollar is overvalued. If things improve, the risk aversion tade will unwind. If not, the horrifying balance sheet of the US Treasury will come into play. It's impossible to imagine the dollar doing well in this market, at least relative to gold (which is the one true store of value and thus the only thing that matters). The euro may well do even worse, so by all means short it, but overall the only thing you want to own right now is gold. And keep shorting Treasuries - supply is going higher no matter what.
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    • Thu Oct 2nd 00:38 AM | Rating: 0 0
      Commented on:
      Talk Me Down From the Wells Fargo Ledge
      Wellsguy, WM made it through the Depression too.
      View article »
    • Thu Oct 2nd 00:37 AM | Rating: 0 0
      Commented on:
      Talk Me Down From the Wells Fargo Ledge
      Regarding USB, I too have taken my profits. Loved it at 22, can't see staying in at 36 across the earnings call. It's a great bank, which is to say it will still be in business 5 years from now, but I can't see paying so much for it. I don't see how WFC is as strong as USB, and I suspect it's surviving mostly on reputation at this point. If you're long, I'd get out. Where's the upside?
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    • Thu Oct 2nd 00:20 AM | Rating: 0 0
      Commented on:
      There's Still a Better Bailout Available
      Sure, "we" can't make money from the bailout, but I sure can. I'll just keep shorting Treasuries. Not only will it be tremendously profitable, it helps me be less angry about the inevitable passage of a pork-bloated, unconstitutional, unconscionable bailout. That's the system. Learn to love it. Short Treasuries, long gold.
      View article »
    • Tue Sep 30th 22:34 PM | Rating: 0 0
      Commented on:
      Corporate Bonds: When Safe Asset Classes Become Risky
      Folks, the only safe asset is gold. That was true last month, last year, and last century. Yes, these bonds are cheap given their relatively strong credit backing. But the chickens of the Fed's ultra-low interest rates are coming home to roost: LQD is yielding less than 6%. That's not a bad return in this market, but it's only 500bp better than cash and not even 200bp better than FDIC-insured CDs. In other words, the yield, such as it is, is not much in absolute terms. And even if one supposes that dollar debasement will cost only the "official" 3-4% per year, it's basically nothing. Under the circumstances, the after-tax, after-debasement real return on these instruments is, charitably, no more than 1%. Anyone else think 1% of those issuers might end up in default in the next year?

      Bottom line: we're not being paid to take the risk at these yields. You want safe, stick with gold. You want to take risks, be sure you're getting paid for doing so.
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    • Sun Sep 28th 13:35 PM | Rating: 0 0
      Commented on:
      The Deal's Getting Done, But Will It Work?
      "Let them lever up 10:1..."

      Yes. Do more of EXACTLY WHAT CAUSED THE PROBLEM IN THE FIRST PLACE. Great idea there. Should we also put a couple hundred million into capitalising some new real estate agencies who will be responsible for reminding people that real estate only goes up? How about a few billion to take the place of all the builders who've gone belly-up? Right now, houses aren't getting built and it's up to the government to remedy this drag on the economy.

      Nice work taking a dumb idea and making it dumber. For my part, I will continue to oppose the plan by voting with my wallet (the only vote that matters). Short Treasuries, own gold. As David Fry points out, this is how traders give Hankie the Jersey salute.
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    • Sat Sep 27th 22:47 PM | Rating: 0 0
      Commented on:
      Liberating the Indebted States of America
      Debt is rarely if ever necessary. It is a crutch allowing marginal businesses to deliver returns sufficient to interest investors, at the cost of dramatically increased risk. Cheap credit means a notionally larger economy, but at the cost of more weak participants. The more credit is available and the cheaper it is, the larger the number of increasingly weak participants there will be, and the greater the risk to the economy as a whole.

      This is even more true of individuals. There is simply no reason whatever to borrow money at rates above that of debasement for any purpose other than investment (and then only rarely; as I note above, if your business plan requires significant leverage or borrowing at very low interest rates in order to generate decent ROE, it's probably unsound in the first place). Investment is not the same as "buying assets that [may] appreciate." A work of art and a bar of gold may "appreciate" in dollar terms, but they cannot produce the income needed to pay the interest on the debt you take on to buy them. Therefore these assets should not be acquired with borrowed money. Your residence is a special case: it does not produce income, but it does eliminate the need to provide income to someone else. If the total cost (in interest as well as the opportunity cost or forgoing the risk-free rate of return on the entire purchase price) of purchasing your residence with borrowed money is lower than the cost of renting it, a lightly-leveraged purchase may make sense. But I would not recommend taking on debt for this purpose even in those rare cases in which it may make financial sense to do so. Taking on debt is a risk, and personal debt is a risk no one is paying you to take.
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    • Sat Sep 27th 17:57 PM | Rating: 0 0
      Commented on:
      On Board the 'U.S.S. Titanic'
      For those who think this is about "you and your family keeping your jobs and being able to make loans...", I would ask: why does your employer need so much credit? Why do you? Where are your savings, that would see you through a lengthy and deep recession? And, finally and most importantly, why should it be my concern whether you keep your job? In this context, I am Mr. Market, and if I say that your labour is not worth the price you demand, you shall not work and you shall not be paid; my decision is final and absolute and cannot be appealed. Pricing your labour properly and saving your earnings from the good times to cover the bad is your responsibility and yours alone. Do not attempt to place a claim on my savings to pay for your own profligacy.
      View article »
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