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thepeel
Joined: 08 Aug 2004
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 Posted: Mon Nov 12, 2007 5:27 am Post subject: |
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Sometimes, governments merely think they are in control of monetary policy. But like Ari Gold learned in regards to control, you only know how much control you had when you've lost it.
A managed currency combined with massive FDI and totally unknown monetary expansion (and corruption in the Bank of China itself). This is a recipe for disaster. I'm not saying there will be one, but dudes like Jim Rodgers completely discard the lessons of Argentina, AFC and others. I think that is naive. |
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Big_Bird
Joined: 31 Jan 2003
Location: Sometimes here sometimes there...
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| Posted: Mon Nov 12, 2007 6:49 am Post subject: |
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Here's a vaguely related article by Paul Craig Roberts ( who was Assistant Secretary of the Treasury in the Reagan administration and also an Associate Editor of the Wall Street Journal editorial page). Some of you may or may not find it interesting.
Dollar's Fall Collapses the American Empire |
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thepeel
Joined: 08 Aug 2004
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| Posted: Mon Nov 12, 2007 7:23 am Post subject: |
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After what Los Angeles money manager Arnold Silver called "a brutal three days," the question is: What now for the market?
A Wall Street superstar this year who runs Balestra Capital Partners, Jim Melcher, says he's "worried about a recession. Not a normal one, but a very bad one. The worst since the 1930s. I expect we'll see clear signs of it in six months with a dramatic slowdown in the gross domestic product."
Balestra Capital, a $350 million New York hedge fund, was up 3% for the past three market sessions, when the Dow Jones Industrials, spearheaded by widespread declines in financial stocks and fears of more billion-dollar-plus asset write-downs, tumbled more than 677 points, or about 4.5%. The Nasdaq fared worse, skidding about 7%, triggered by across-the-board declines in those fast-stepping technology stocks.
Balestra has increased in value by 175% so far this year, Mr. Melcher tells me. A 9-year-old fund, it has posted compounded annual growth of about 30% since its inception.
Mr. Melcher, a market bear, had some pretty discouraging words. "What I think is not good for the country, but good for me." he says. His basic advice to the country's roughly 80 million stock players: Run for the hills � the worst is far from over. An investor's stock portfolio now, he believes, should be only about half of what it might normally be.
With the housing market in a state of collapse � and he says he believes it is far from over � Mr. Melcher argues that average homeowners will not be able to withstand the kind of recession he sees, given the added burdens of rising energy and food costs, and continued deterioration in the credit markets.
Noting that consumption is already slowing, Mr. Melcher figures sharply rising unemployment is inevitable. Another of his worries is that central banks around the globe, America's included, are debasing their currencies, which is setting the stage for a new round of higher inflation. Our bear figures the next six to 12 months will be awful for investors as the market goes down "pretty substantially." His frightening outlook calls for an additional 20% to 30% decline from current levels. A drop of that magnitude would put the Dow down in a range of roughly 9,100 to 10,400.
Asked how he could conceivably give credibility to such an ominous forecast, Mr. Melcher observes: "I've never seen a market with more risk and what's significant is that risk is not yet priced in."
Given his grim expectations, he says there is no equity market in the world he would play right now. "When the American market goes down, other equity markets around the world should follow," he says.
As of now, his portfolio is pretty much devoid of stocks, save for an exchange-traded fund focused on leading companies in oil services, which he regards as an ongoing growth industry. The ETF, the Oil Services Holders Trust, trades on the American Stock Exchange under the symbol OIH. Although enthusiastic about the industry's growth prospects, Mr. Melcher says he would be reluctant to recommend oil services stock because he believes the price of oil could easily drop 50% in the recession he envisions.
Another danger he sees for the market is the prospect of huge withdrawals of funds from America by foreign investors due to the falling dollar, the credit crisis, and a slowing economy.
At the moment, Mr. Melcher's chief investment strategy is shorting stocks and certain bonds, notably mortgage-backed and junk bonds, through the use of derivatives, put options, and credit default swaps. He is also short ABEX, an index of residential mortgage-backed securities.
His short strategy is largely responsible for his super performance this year, as are his holdings in gold. The fact he's sticking to this strategy is evidence that he firmly believes the chaos in the financial markets is far from over. Mr. Melcher is also gung-ho on several currencies, particularly the Swiss franc and the Japanese yen.
The average investor, he believes, should seek to protect his assets by raising cash, putting money to work in short-term treasuries, and buying some gold (notably through StreetTRACKS Gold Trust, an ETF that tracks the price of the precious metal and trades on the Big Board under the symbol GLD).
Is the world coming to an end? I asked our bear. "I don't think so," he replied, "but as I mentioned, the ingredients are in place for the worst kind of a recession, which means it's the wrong time to own stocks." |
http://www.nysun.com/pf.php?id=66268&v=3392884911 |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Nov 12, 2007 9:10 am Post subject: |
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| Big_Bird wrote: |
Here's a vaguely related article by Paul Craig Roberts ( who was Assistant Secretary of the Treasury in the Reagan administration and also an Associate Editor of the Wall Street Journal editorial page). Some of you may or may not find it interesting.
Dollar's Fall Collapses the American Empire |
Very interesting.
Sounds just like Ron Paul.
After being so far ahead of the world, perhaps the mainstream is finally catching up to Ron Paul.
The old ideas of government control, empire and socialism have failed. The only new ideas, the only ideas that can save America from disaster are the libertarian principles of liberty and the free market. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Mon Nov 12, 2007 9:11 am Post subject: |
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| Paul Craig Roberts 9-11 conspiracy theorist |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Nov 12, 2007 9:18 am Post subject: |
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| Joo Rip Gwa Rhhee wrote: |
| Paul Craig Roberts 9-11 conspiracy theorist |
links? Curious as to which of the various possible and not so possible cospiracies he espouses. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Nov 12, 2007 9:48 am Post subject: |
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Roberts does question the government 911 report, but in none of those links does he actually endorse any of the competing conspiracy theories. Calling for a new investigation and attempting to answer questions is not the same as asserting definitively that the twin towers and building 7 were brought down by explosives or thermite. He does cite others who claim those things as evidence that a new investigation is needed, but I did not see where he actually endorses those claims.
I think a new investigation is needed as well. Although it seems clear that building 7 fell due to fire, its bad design meant that only one truss had to fail to bring down the whole building, it also seems likely that the twin towers fell due to impact damage alone, and that the fires did not precipitate the failure. And everyone has miscalculated the theoretical freefall collapse time by using the incorrect number of floors. |
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Joo Rip Gwa Rhhee
Joined: 25 May 2003
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| Posted: Mon Nov 12, 2007 2:30 pm Post subject: |
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Roberts said: "They (neo cons) are making such fatal mistakes and are about as insane as Hitler and the Nazi Party when they invaded Russia in the dead of the winter...
"The real story is not Morgan Reynolds or myself, but why have so many former Republican conservatives and top ranking officials who disagree with the neo cons been systematically run out of Washington? And, also, why is the media so intent on covering up the Bush-neo con agenda and all the mistakes surrounding it?
"I guess the real story about 9/11 is about what the people are actually saying. I�ve gotten hundreds of emails in response to my columns and many of them talk about not getting the truth from the government or the media about what really happened at the World Trade Center. I know many qualified engineers and scientists have said the WTC collapsed from explosives. In fact, if you look at the manner in which it fell, you have to give their conclusions credibility."
~~~
http://www.lewisnews.com/article.asp?ID=1055
The guy is a "truther"
http://shoestring911.blogspot.com/2007/03/paul-craig-roberts-reviews-new-david.html |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Mon Nov 12, 2007 3:12 pm Post subject: |
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| Big_Bird wrote: |
Here's a vaguely related article by Paul Craig Roberts ( who was Assistant Secretary of the Treasury in the Reagan administration and also an Associate Editor of the Wall Street Journal editorial page). Some of you may or may not find it interesting.
Dollar's Fall Collapses the American Empire |
We have a free market economy, the best minds on the planet, a trillion in GDP. I'm not really scared. |
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Kuros
Joined: 27 Apr 2004
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| Posted: Mon Nov 12, 2007 4:12 pm Post subject: |
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| mindmetoo wrote: |
| Big_Bird wrote: |
Here's a vaguely related article by Paul Craig Roberts ( who was Assistant Secretary of the Treasury in the Reagan administration and also an Associate Editor of the Wall Street Journal editorial page). Some of you may or may not find it interesting.
Dollar's Fall Collapses the American Empire |
We have a free market economy, the best minds on the planet, a trillion in GDP. I'm not really scared. |
Maybe Roberts is right, but there's a lot of stuff in the article that seems largely irrelevant. I'll take my economics news from economists, thank you.
Things may not be pretty in the States for the next few years, but at least we haven't resorted to price controls on oil. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Mon Nov 12, 2007 4:26 pm Post subject: |
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| mindmetoo wrote: |
| Big_Bird wrote: |
Here's a vaguely related article by Paul Craig Roberts ( who was Assistant Secretary of the Treasury in the Reagan administration and also an Associate Editor of the Wall Street Journal editorial page). Some of you may or may not find it interesting.
Dollar's Fall Collapses the American Empire |
We have a free market economy, the best minds on the planet, a trillion in GDP. I'm not really scared. |
Would an end to the empire scare you? |
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igotthisguitar
Joined: 08 Apr 2003
Location: South Korea (Permanent Vacation)
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| Posted: Mon Nov 12, 2007 7:08 pm Post subject: |
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Canada Dollar Takes Biggest One-Day Dive In 36 Yrs
Mon Nov 12, 5:12 PM
By John McCrank
TORONTO (Reuters) - The Canadian dollar plunged almost 3 percent against the U.S. dollar on Monday, its biggest one-day fall since January 1971, as risk aversion and the unwinding of carry trades knocked the currency well down from its recent modern-day high.
The Canadian dollar unofficially closed at US$1.0307, valuing each U.S. dollar at 97.02 Canadian cents, down 2.9 percent from Friday's close of US$1.0606, or 94.28 Canadian cents. It was fourth straight session that the Canadian unit dropped versus the greenback. |
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mindmetoo
Joined: 02 Feb 2004
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| Posted: Mon Nov 12, 2007 8:17 pm Post subject: |
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| thepeel wrote: |
| mindmetoo wrote: |
| Big_Bird wrote: |
Here's a vaguely related article by Paul Craig Roberts ( who was Assistant Secretary of the Treasury in the Reagan administration and also an Associate Editor of the Wall Street Journal editorial page). Some of you may or may not find it interesting.
Dollar's Fall Collapses the American Empire |
We have a free market economy, the best minds on the planet, a trillion in GDP. I'm not really scared. |
Would an end to the empire scare you? |
What empire? Please, America was called an empire in decline in the late '80s in the face of Japan. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Mon Nov 12, 2007 8:49 pm Post subject: |
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| I don't think American economic hegemony is at a fatal juncture. I asked you if you feared it, if/when it did happen. Because you said "I'm not really scared". |
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