Chicken Little
Soro's, Gates and Buffett; what do they have in common? The obvious, they are all extremely wealthy. However, they've all gone short on the dollar and have not been shy to tell the media. In the short term, they are proving that having alot of money, does not make you smart. The long term is TBD.
Last year, some intelligent friends called me Chicken Little when I called for $50 a barrel for oil. They laughed again this year when I said $60 a barrel and $2.50 a gallon for regular gas.
The same people laugh when I say, don't bet against the dollar and the Fed funds rate being over 4% by year end. They really howl when I say by 2008, their house will be worth 60% of what it is now, if they are lucky. They think it can't happen. We shall see.
On Jan 3rd, we got very defensive, March 7th went to cash. Since, we have shorted the market proxies, RUT and NDX. So far, its working. Last week fears were interest rates, today fears are economic slowdown, tommorrow it will be deaccelerating corporate earnings growth, all will happen. Let the cycle play and take it day by day.
I will tell you what I have been thinking lately. The bond market's recent reaction has long term rates headed in the wrong direction (down). With a yield curve inversion imminent, expect Uncle Al to shock some people with a 50 basis point increase by the end of this summer.
Since oil hit $50 & $60 as predicted... Oil hit $50 today, with a reduction in "demand" due to a "slowdown", rising interest rates and a stronger dollar, oil is going to $40 - 42 a barrel.
Long term macro does not look good for the markets, whether we have a recession or not. Stocks, bonds, commodities and especially real estate are all severely overvalued and will have major pullbacks.
All I have to say is, keep laughing. When you laugh, it makes me feel good. When you agree with me, that's when I get worried. Chicken Little's motto is: Keep your eyes peeled to the sky, cause it might be a name brand that lands on you.
Last year, some intelligent friends called me Chicken Little when I called for $50 a barrel for oil. They laughed again this year when I said $60 a barrel and $2.50 a gallon for regular gas.
The same people laugh when I say, don't bet against the dollar and the Fed funds rate being over 4% by year end. They really howl when I say by 2008, their house will be worth 60% of what it is now, if they are lucky. They think it can't happen. We shall see.
On Jan 3rd, we got very defensive, March 7th went to cash. Since, we have shorted the market proxies, RUT and NDX. So far, its working. Last week fears were interest rates, today fears are economic slowdown, tommorrow it will be deaccelerating corporate earnings growth, all will happen. Let the cycle play and take it day by day.
I will tell you what I have been thinking lately. The bond market's recent reaction has long term rates headed in the wrong direction (down). With a yield curve inversion imminent, expect Uncle Al to shock some people with a 50 basis point increase by the end of this summer.
Since oil hit $50 & $60 as predicted... Oil hit $50 today, with a reduction in "demand" due to a "slowdown", rising interest rates and a stronger dollar, oil is going to $40 - 42 a barrel.
Long term macro does not look good for the markets, whether we have a recession or not. Stocks, bonds, commodities and especially real estate are all severely overvalued and will have major pullbacks.
All I have to say is, keep laughing. When you laugh, it makes me feel good. When you agree with me, that's when I get worried. Chicken Little's motto is: Keep your eyes peeled to the sky, cause it might be a name brand that lands on you.
Comments
I think a 50bp raise is out of the question now and even a 25bp raise is questionable.
JMO.