NT = way too recessionary

[finnns2003]

so what kinds of things are you looking for this summer? right now i only have cash positions and metals

 

[dey know yayo]

bearish positions in financials.

 

[finnns2003]

Originally Posted by Dey Know Yayo

bearish positions in financials.

i'm guessing you're planning to short

 

[dey know yayo]

currently heavily short.

 

[theone2401]

Originally Posted by Dey Know Yayo

i don't know how anyone can be a deflationist long term. the FDIC insures $4.4 TRILLION worth of deposits. it is insolvent but it is getting its first round of "bailout" already and you can expect that to continue. $4.4 TRILLION. That is $4.4T that cannot by law leave the monetary supply. the existence of the FDIC itself (and the Fed's printing press + Treasury's spending keeping it capitalized) proves any long-term deflationist argument wrong.

i brought this up during a junior analyst meeting at the fund i work for while i was in NYC two months ago and everyone, including the VPs present, was dumbfounded.

Well I am not a perma-deflationista

. But I will be aT-Bill bull until credit stops being destroyed faster then it is created. I have some things that I am looking for but I can not put a time frame on it.Consumer credit has a ways to go, housing has a ways to go, shadow banking system has more de-leveraging to do, wages falling, etc I just dont see ityet

Yes the fed is "printing" some but a lot of it is justexchanging government debt for bad debt that should have a neutralizing effect and as the markets fall (they will) there is going to be a ton of demand for USdebt. When this stuff changes though I will switch my stance.

 

[dey know yayo]

i mean of course the Fed is reflating a treasury bubble but it is unsustainable and is months away from collapse. inflation will resume late 2009-early 2010.that will be the end of the "recession" but that doesn't mean anything abotu real growth.

 

[he told on me]

I just wanted to know how much it cost for information.

 

[theone2401]

Oh there is no way the economy is going to grow anytime soon all of these mal-investments are going to have to be unwound just like every other time thegovernment/Fed causes them. I cannot predict the future, there could always be a "black swan" or something but I dont even see an inflection pointyet but that could change fast.

 

[dey know yayo]

the economy will be growing again in nominal terms within MONTHS. look at what the FDIC insures. look at what the Fed is printing. look at what the Treasury isspending. the government CAN and WILL wipe up losses with taxpayer wealth to keep it from affecting bank equity and keep deflation from continuing for a longtime.

the malinvestment will be purged through currency depreciation rather than capital destruction.

zimbabwe's economy is "growing" in nominal terms.

the credit expansion of today is literally unprecedented.

 

[theone2401]

where is the velocity? Bank lending is contracting. Most of the money given to banks is just sitting in reserves. Most of the money going into the shadowbanking system is in exchange for debts that are going to default or be marked down tremendously in the future.

I mean of course there will be inflation but where do you see it? I believe this "re-flation" trade will unwind just as fast as it blew up. I meanthere has to be a rush to the exits type of event.

 

[justscoreda100]

From the articles I've read it appears that right now were in a deflationary environment due to the massive write offs and digital dollars that are beinglost. A lot of people are pointing towards inflation because of the massive amount of paper that the federal reserve is flooding the system with. Personally, Idon't believe we well see the effects of inflation until we hit the bottom of this recession and start moving out of it.

 

[no escapin this]

What happended to your prediciton of gold going over 1500 months ago ?

 

[fightingfrog62]

were gunna be in it for awhile

 

[dey know yayo]

Originally Posted by theone2401

where is the velocity? Bank lending is contracting. Most of the money given to banks is just sitting in reserves. Most of the money going into the shadow banking system is in exchange for debts that are going to default or be marked down tremendously in the future.

I mean of course there will be inflation but where do you see it? I believe this "re-flation" trade will unwind just as fast as it blew up. I mean there has to be a rush to the exits type of event.

i don't see inflation anywhere yet, that is why i am bearish on the economy and still bearish on stocks. but i believe this will be the last leg down.

bank money is sitting in reserves because THE FED IS GIVING INTEREST ON IT FOR THE FIRST TIME IN HISTORY. that is not sustainable and is being done to letbanks raise as much cash as possible through equity issuance and bailouts.

inflation won't happen until RATES START RISING. which will happen in a matter of months.

i still thikn gold will be over 1500-2000/oz in coming months and once it goes parabolic near the end of the inflationary period, itll be five digits easily.

we will be out of this recession in a matter of months. the fed is printing too much and the governemnt is spending too much for us not to have a nominalrecovery. a real recovery will take several years, however.