HEDGING FOR ARMADEGGON

[Ruth]

Whether they are "discredited" with some undefined groups of persons - and whether their Bear Market position is profitable -- is irrelevant to the validity of their science.

No it isn't. Reality is the final arbiter and final judge of their 'science'. If one is consistently wrong in the real world - not some ivory tower where results are not important- one is rightly discredited and sent packing.

Human beings find bad news appealing - I can only assume this is because life keeps getting better and better - just look at life expectancy.

Probably the bottom line for myself is that politics simply does not affect my daily life - be it left or right in the US or here in NZ.

As a very wise libertarian said to me a few years ago " People are not interested in ideas - they just want to be told over and over again that they are right."

[Brant Gaede]

Whether they are "discredited" with some undefined groups of persons - and whether their Bear Market position is profitable -- is irrelevant to the validity of their science.

No it isn't. Reality is the final arbiter and final judge of their 'science'. If one is consistently wrong in the real world - not some ivory tower where results are not important- one is rightly discredited and sent packing.

Human beings find bad news appealing - I can only assume this is because life keeps getting better and better - just look at life expectancy.

Probably the bottom line for myself is that politics simply does not affect my daily life - be it left or right in the US or here in NZ.

As a very wise libertarian said to me a few years ago " People are not interested in ideas - they just want to be told over and over again that they are right."

Politics does affect your daily life, at least to the extent that you do not realize it; you should. You've been anesthetized. Ayn Rand was affected--in Russia. She had her face shoved into it. She never had the luxury of not understanding there is a world of evil and it is evil.

As for people wanting to be told over and over again that they are right, that's why they recycle and believe in global warming.

--Brant

[Brant Gaede]

Thanks, Michael. While you added these to the wrong thread this one will work just fine.

The decline of 115 Dow points today is insignificant. While I think averages can go much higher on this Bear Market rally, once investors figure out these bailout plans won't work they will head for new lows, as low as DOW 3-4000 in the next two-three years. What's important is not how low they will go but the time needed. It's going to take up to twice the time to halve the averages again as the first time--17 months. If they don't go down as low as I fear that'll still probably be a bottom. This decline will be punctuated by violent rallies of considerable strength. I'd be very scared if this rally isn't good for at least another 1000 DOW points, for that'd mean in this information age that many investing professionals have figured out that Washington these days just produces crap and that stimulus significantly subsidizes consumption only.

--Brant

(I have to quote myself to bring this situation up to date.)

Manipulated financial results by Goldman and Wells Fargo--manipulated in the sense they can be considered manipulable out of opacity considering all the government interventions--pushed financials up and now down in thin markets this week so far. I really thought momentum would carry the DOW up another thousand points, even 1500 points--by mid-summer, but Goldman announced a big secondary offering on the back of its earnings sending the unmistakable message of getting what they can while they can. The people at Goldman know the most and do the most in equity markets and are the smartest Wall Street people there are.

While bonds can be held for now, equities should be sold and should stay sold (for now).

This is not the best time to be buying gold except using dollar cost averaging. Gold's ten-year upside is at least 3-4000 dollars an ounce, but it could go down 20% in the next few months.

If you want to own financial (bank) stocks and are willing to accept even 50% down, it is very possible they'll be going up by a factor of 2-3 by the end of 2010 because of their ability to turn liabilities into assets by mortgage refinancing. Stay away from Capital One and American Express, which are credit cards. Insurance companies are at great risk because of commercial loan, life, annuity and multiple regulatory exposures. Nevertheless, I wouldn't own any of this without first selling naked put options which would put money into my brokerage account immediately and let me buy a stock I wanted to buy in the first place but at a cheaper price when the option is "put" to me. Notice, I said "wanted to buy in the first place." I don't want to own any financial.

--Brant

(edit) Caveat: Some very good investors are anticipating 1000-1100 on the S&P 500 this year. It's about 850 right now.

Edited April 15, 2009 by Brant Gaede

[tjohnson]

Hey Brant, haven't heard much from you about the economic situation lately. Are things unfolding pretty much as you expected? Any surprises?

[Brant Gaede]

Well, I missed the snap-back rally for safety's sake. I also missed the implosion that beggared so many people.

I really have tended to avoid posting on these subjects here because of lack of interest. Wolf and I went back and forth in early 2008, but he left.

You're lucky to have Canadian dollars to deal with. The US dollar is turning into a Mexican peso.

There is a giant carry trade going on in which people borrow dollars at low cost and invest in markets denoted in foreign currencies purchased with the borrowed dollars. God help those markets if the dollar gets stronger and money flows the other way.

The coming China collapse will be spectacular, but who knows when that will happen?

Enjoy Canada. With your natural resource-based economy you can always go out and shoot some bears if you're hungry.

--Brant

maybe I'll move to Alaska--my brother's best friend was famously eaten by a bear there in 2003

[tjohnson]

Well, I missed the snap-back rally for safety's sake. I also missed the implosion that beggared so many people.

I really have tended to avoid posting on these subjects here because of lack of interest. Wolf and I went back and forth in early 2008, but he left.

You're lucky to have Canadian dollars to deal with. The US dollar is turning into a Mexican peso.

There is a giant carry trade going on in which people borrow dollars at low cost and invest in markets denoted in foreign currencies purchased with the borrowed dollars. God help those markets if the dollar gets stronger and money flows the other way.

The coming China collapse will be spectacular, but who knows when that will happen?

Enjoy Canada. With your natural resource-based economy you can always go out and shoot some bears if you're hungry.

--Brant

maybe I'll move to Alaska--my brother's best friend was famously eaten by a bear there in 2003

The strong Canadian dollar hurts exporters though. It's great for the business I'm in because we import stuff from the US and resell it. I'm more concerned about freezing in the dark than going hungry. I'm think you will be much happier in Arizona!

[Brant Gaede]

Well, I missed the snap-back rally for safety's sake. I also missed the implosion that beggared so many people.

I really have tended to avoid posting on these subjects here because of lack of interest. Wolf and I went back and forth in early 2008, but he left.

You're lucky to have Canadian dollars to deal with. The US dollar is turning into a Mexican peso.

There is a giant carry trade going on in which people borrow dollars at low cost and invest in markets denoted in foreign currencies purchased with the borrowed dollars. God help those markets if the dollar gets stronger and money flows the other way.

The coming China collapse will be spectacular, but who knows when that will happen?

Enjoy Canada. With your natural resource-based economy you can always go out and shoot some bears if you're hungry.

--Brant

maybe I'll move to Alaska--my brother's best friend was famously eaten by a bear there in 2003

The strong Canadian dollar hurts exporters though. It's great for the business I'm in because we import stuff from the US and resell it. I'm more concerned about freezing in the dark than going hungry. I'm think you will be much happier in Arizona!

Especially because of the general lack of Canadians! Or is that "Canucks"?

I drove an 18-wheeler in Montreal in a snowstorm once. The wipers gave me an eight-inch window to look out of. So much for Quebec! Ontario was another nice place to drive away from. What's charming about Quebec is the fellow you meet who only speaks French!

--Brant

[Peter]

On 10/11/2008 at 1:23 PM, Brant Gaede said:

T. Boone Pickens is down about a billion. For someone like T. Boone that's just the way it sometimes goes.

Work eight hours and sleep eight hours, and make sure they are not the same eight hours. T. Boone Pickens, businessman.

[Brant Gaede]

Ignore these old postings by me.

--Brant

[Peter]

4 hours ago, Brant Gaede said:

Ignore these old postings by me.

--Brant

But I thought they were hip and funny . . . oh, I get it. Reverse Psychology!

[Peter]

The police arrested a man selling “secret formula” tablets he claimed gave eternal youth. It was actually the fifth time he had been caught for committing the same medical fraud. He had been arrested in 1794, 1856, 1928, and 1983. From Reader's Digest

[Brant Gaede]

8 hours ago, Peter said:

But I thought they were hip and funny . . . oh, I get it. Reverse Psychology!

I don't have time to bring the financial context up to date.

--Brant