Todd Harrison: I am Gross
Well Harrison didn’t exactly say that, but he mentions that after reading Bill Gross’ latest missive, their views are becoming more closely aligned. Deleveraging is the big issue and things get jiggy when rates near the zero bound. One scenario posited by Harrison is a bounce to S&P 1360 based on the reverse head and shoulders, plus the fact that this is an election year. Then a big crash based on the fundamentals of deleveraging and running into the zero bound of interest rates, unless of course rates go negative.
Charles Hugh Smith: Putting Iran Out of Business
Smith offers a novel idea of how to topple Iran’s regime without risking the lives of soldiers and billions of dollars in military expenditures. Oh, and it will make it cheaper to fill up your gas tank and heat your home too. But there is one catch…
Gregor: Food Price Increases
Why food prices are rising: bad weather, running out of arable land, running low on water, changing rain fall patterns, rising energy prices, rising NPK prices and population growth. Countries that are low on water or on energy can synthetically import these commodities by importing food. But when countries like China and India with two billion hungry people to feed import food, they have a global impact on food prices.
ZeroHedge: Hedge Fund Winner and Losers
It must feel good to be Jim Simmons and horrible to be John Paulson. Simmons’ RIEF is up 34.66% for 2011, while Paulson’s Advantage Plus is minus 47.77% (that will leave a mark). I hope that your portfolio contained a few hedge fund winners in 2011.
Zero Hour: The Zero Bound of Interest Rates
Now we only need $4 of debt to create a dollar of GDP. What can go wrong with this?
Mish: Hyperinflation is not a monetary event
Need I say more?
“As a general rule, losses make you strong and profits make you weak.â€
~ William Eckhardt [If you don’t know who Eckhardt is, you don’t deserve to call yourself a trader.]
Todd Harrison: Ten Themes for 2012
Some of the more interesting themes include: higher interest rates, all eyes on Germany regarding further debt issuance, more geopolitical strife, financial asset performance driven by policy makers instead of fundamentals, and family values will gain in importance.
Bill Gross is shifting from a muted growth “new normal” to a bimodal fat tailed forecast, which includes black swans. We risk massive deleveraging and deflation on the one hand or monetization and enormous inflation on the other hand. And who gets to decide which outcome occurs, omniscient policy makers, of course.
Mish: 2012 Debt Rollovers
If you thought Europe had it bad, take a look at Japan, it has to roll $3T of debt in an economy with a GDP of $5.5T. If rates ever go up to 3% in Japan, they are going to have to spend all of their tax revenue on interest alone.
To Be Awesome
Chris Guillebeau: “To be awesome in 2012, ask what the world truly needs that you can genuinely provide. Then, spend some time every day for the rest of the year building that thing. Better get to work: you only have 361 days left.”