Re: Anyone Else At The Panic Point On The Dollar?
 

I'm not a conspiracy nut myself. Rather, I think random players acting on thier own self interest can create these situations. There is no smoke filled room where people decided to issue $480 trillion in credit derivatives, or create the subprime market, or print money like crazy. Individual actors just kept pouring it on out of percieved self interest.

If you want a real inflation hedge I recommend commodities.

Re: Anyone Else At The Panic Point On The Dollar?
 

[ QUOTE ]
I'm not a conspiracy nut myself. Rather, I think random players acting on thier own self interest can create these situations. There is no smoke filled room where people decided to issue $480 trillion in credit derivatives, or create the subprime market, or print money like crazy. Individual actors just kept pouring it on out of percieved self interest.

If you want a real inflation hedge I recommend commodities.

[/ QUOTE ]

inflation is a global phenomenon. the best inflation hedge you can get is an unhedged global inflation linked bond allocation. commodities help but i don't think can be expected to hedge your overall inflation exposure as well as a global IL bond allcoation.

however, commodities are easy to get while IL bonds are tough to get.

Barron

Re: Anyone Else At The Panic Point On The Dollar?
 

[ QUOTE ]
[ QUOTE ]
That's right,except "everyone" doesn't already know the dollar is going to get weaker. People routinely underestimate how bad things are going to get, and come to believe that the worst is already past. But, they often don't understand that things can continue to get worse for quite a bit longer than they thought.

Things can get quite a bit worse for the dollar, because the economy in the US will likely get quite a bit worse over the next several years. I'm not saying the dollar will keep going down, but I don't think the dollar is pricing in everything that can wrong by a long shot. There are too many reasons to not buy the dollar and buy other higher yielding currencies.

[/ QUOTE ] But there is no real economic evidence in this post.

The only evidence apparent to me is that imports are flat while output and exports are skyrocketing. Europe can hardly afford to import lots of goods into the US anymore, nor compete with US imports into their domestic markets. Companies that ignore this are being censured strongly by the business press for missing out on staggering cost savings.

If nothing else we have far and away the best freight infrastructure on Earth (every other country is completely lol except a couple in Asia) and an extremely well educated and skilled workforce. And we a like to be paid in dollars. And that's not going to change any time soon.

Please explain to me how American labor productivity has collapsed in the last few months and maybe I'll heed your conclusions. The fact that people routinely underestimate problems is just as irrelevant as the fact that people routinely overestimate problems, unless you have some basis that the whole market (not just some people) are underestimating the problem.

[/ QUOTE ]

Yea, but the problem with the dollar are inherent to the dollar itself not the economy in which it is used as an exchange.

In essence (it is of course more complex than this) the dollar is cheap because there is an over supply of dollars.

If foreign governments decide to release their reserves of dollars this supply will increase thus driving the price down even further.

Re: Anyone Else At The Panic Point On The Dollar?
 

TIPS and such would be great if they weren't lying about CPI, which TIPS are based off of.

Re: Anyone Else At The Panic Point On The Dollar?
 

[ QUOTE ]
TIPS and such would be great if they weren't lying about CPI, which TIPS are based off of.

[/ QUOTE ]

so then you're implying that every government in the world that issues IL bonds lies about its inflation index?

because a global IL bond index would be not dependent on any one country.

Barron

Re: Anyone Else At The Panic Point On The Dollar?
 

I always find it interesting when everyone is short the dollar. I have been short for nearly a year now and I am not looking to build my position or anything. Very seldomly has every bit of the media been clamoring the same thing and it to happen as said. I highly doubt that any "crash" or "recession" will live up to current expectations. Eveyone thinks the sup-prime crisis is such a huge issue, but in reality it is only a small part of the housing market.

Although in the last couple of years over 10% of mortagages were subprice, out of all US mortgages, approximately 2% are subprime. Out of these, only approx. 13% have defaulted. So the total mortgage defaults in the US is well under 0.5%. Yes this does hurt some and the issues the banks are having with CDO's and MBS's hurts more, but this in not some catastrophic financial event.

To be honest, I am not buying back dollars or unwinding my other trades in foreign markets or commodities, but I begin to reevaluate when every market pundit is saying to make these exact trades. I recently saw a Jay-Z video where he throws Euro's in the air instead of dollars. Typically when this type of thing hits mainstream culture (e.g. the Grandma buying tech stocks) it probably is not as attractive as everyone is convinced it is.

Re: Anyone Else At The Panic Point On The Dollar?
 

You just have too look at the fundamentals. When everyone was buying tech there was no fundamental basis for it. The US dollar has huge fundamental problems that aren't going away.

Re: Anyone Else At The Panic Point On The Dollar?
 

[ QUOTE ]


The only fact is that the market price at the moment is correct, since the market is always right.

[/ QUOTE ]

LOL.

Re: Anyone Else At The Panic Point On The Dollar?
 

[ QUOTE ]
I always find it interesting when everyone is short the dollar. I have been short for nearly a year now and I am not looking to build my position or anything. Very seldomly has every bit of the media been clamoring the same thing and it to happen as said. I highly doubt that any "crash" or "recession" will live up to current expectations. Eveyone thinks the sup-prime crisis is such a huge issue, but in reality it is only a small part of the housing market.

Although in the last couple of years over 10% of mortagages were subprice, out of all US mortgages, approximately 2% are subprime. Out of these, only approx. 13% have defaulted. So the total mortgage defaults in the US is well under 0.5%. Yes this does hurt some and the issues the banks are having with CDO's and MBS's hurts more, but this in not some catastrophic financial event.

To be honest, I am not buying back dollars or unwinding my other trades in foreign markets or commodities, but I begin to reevaluate when every market pundit is saying to make these exact trades. I recently saw a Jay-Z video where he throws Euro's in the air instead of dollars. Typically when this type of thing hits mainstream culture (e.g. the Grandma buying tech stocks) it probably is not as attractive as everyone is convinced it is.

[/ QUOTE ]

people are only pricing a small fraction of the problems. to think the problems only exist in sub-prime is part of the problem.

the problem extends through the entire loans market. credit cards, prime mortgages, equity financing, etc.

Re: Anyone Else At The Panic Point On The Dollar?
 

[ QUOTE ]
I always find it interesting when everyone is short the dollar. I have been short for nearly a year now and I am not looking to build my position or anything. Very seldomly has every bit of the media been clamoring the same thing and it to happen as said. I highly doubt that any "crash" or "recession" will live up to current expectations. Eveyone thinks the sup-prime crisis is such a huge issue, but in reality it is only a small part of the housing market.

Although in the last couple of years over 10% of mortagages were subprice, out of all US mortgages, approximately 2% are subprime. Out of these, only approx. 13% have defaulted. So the total mortgage defaults in the US is well under 0.5%. Yes this does hurt some and the issues the banks are having with CDO's and MBS's hurts more, but this in not some catastrophic financial event.


[/ QUOTE ]

The real problem is housing itself. You're right that subprime is a small part of the housing market, which just means that it is a small part of the problem. If you think housing as a whole is fine, you should be buying every housing-related stock, since the market certainly doesn't agree with you by a wide margin.