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B4 The Belll Frieday October 22


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I know it's your business, bearbones. You know more than I do.

 

But,

 

How much interest would you charge an entity that has very little income (in a depression), very few assets and uses credit to pay his almost infinite debt?

In that situation, I would have nothing to lend. The government would have taken it all.

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Bones - gold was legal tender then. not now.

Commodity prices in general went up during that time period. To be fair, there was not a great deal of government bond supply during much of that time period either. Many of the charts you see from that period (like Ibbitson's) actually have an imputed government bond rate for some of that time period taken from the corporate bond market.

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One could also say that human evolution is inherently inflationary....are we, and our decisions and creations, not an inextricable part of the natural universe?

 

I don't necessarily agree with the predicitons of this chart, but I certainly don't that were on the brink of TEOTWAWKI either.

 

But this is all just mental masterdebation...... What will you be trading tomorrow? ;)

post-20-1098667755_thumb.jpg

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Sounds to me like pistolpapa's got it right. Anyone buying the long bond as a deflation hedge is in serious trouble. At best it will end up being the perpetuity bond. The recyclying of the foreign account deficit is the reason for the action in bonds -- it has nothing to do with inflation or deflation -- yet.

That would explain the bond market here but not globally where rates on sovereign bonds are moving lower. l

There is something going on in the global bond market that bears watching.

Emerging market bond spreads to U.S. treasuries have been narrowing. One of Snow's henchman came out recently with the observation that this was a sign of international fiscal strength. I think he was wrong. I believe the narrowing spreads may be an indication of the narrowing credit quality of the U.S. versus places like Brazil. It's still wide when compared to junk corporate bonds, but the credit quality of the U.S., like that of Japan, is fraying at the edges

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LOL Brian.... Butterfield I guess you are now confirmed on your suspicions. The dollar is down over $2.00 in less than a week on the composite index. Perhaps the earthquake is expected to weaken Japan's interest in supporting the dollar and diverting it to other matters. Perhaps there might be rumors of all kinds of stuff going around this week.

 

Best wishes everyone.....

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Today?s report:

Leaders and Laggards by ChartSpeak?

We take a break from our options discussion to go over the market?s leaders and laggards by using

relative strength charts. When the market is moving up you want to be in the stocks that are

outperforming the market, but when the market is dropping, short the laggards.

 

http://www.leavittbrothers.com/chartspeak/...peak_102404.pdf

 

 

However, it seems to me that they are ducking the current issues. JMHO

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LINK

 

 

Eisuke Sakakibara, who was known as ``Mr. Yen'' when he directed Japan's foreign exchange policy from 1997 to 1999 at the Ministry of Finance, said Japan is less likely to direct the Bank of Japan to sell the yen until it rises to around 100 per dollar, given the economy is in better condition to cope with a rising currency.

 

The dollar will fall to an eight-year low of 100 yen as soon as next month on concerns over a slowing U.S. economy and a record current-account deficit, said Sakakibara.

 

 

 

 

From Thomas at PB

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What will I be trading... well I am long gold, oil, and coal and short the spoo's and the cubes and merck... futures have just collapsed as has the merican Peso. Gravity has returned as it always does. ;)

I'm short the cubes and Yoohoo for an added kick. Cash waiting for the miners to perk up.

 

It looks like the miners are mostly finishing up a B of an ABC correction. Two weeks of general equity flushing should provide some tasty set-ups.

 

Anyone agree?

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