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TMFAleph1 (96.00)

May 2011

Recs

11

The Bull 'n Bear on Howard Marks' Warning

May 31, 2011 – Comments (0) | RELATED TICKERS: HYG , JNK , LQD

A couple of weeks ago, I wondered aloud whether high-yield bonds really merited their name, writing:  [more]

Recs

8

The Bull 'n Bear on Irrelevant Debates, Commodity Index Funds

May 27, 2011 – Comments (1) | RELATED TICKERS: USO , TLT , GS

Yesterday, I referred to the dysfunctional approach our leaders are adopting regarding the federal debt ceiling. Glenn Hubbard, the (fomer?) dean of Columbia Business School has an interesting piece in the FT, Forget the Debt Ceiling, Focus on Debt, that highlights how this squabbling has nothing to do with the problem we must solve.The zinger that sums up the absurdity of the situation:   [more]

Recs

11

The Bull 'n Bear on Default, Deflation and Tetris

May 26, 2011 – Comments (7) | RELATED TICKERS: BRK-B , BAC , GLD

Watching this short video from the FT's James Mckintosh, A U.S. Default is No Longer Unthinkable, it really hit me how shambolic and dysfunctional our political leadership is. The sort of brinkmanship that could push us to the edge/ into technical default really isn't useful, to put it mildly. Given the amount of hidden risk and uncertainty in the financial system, who knows what effects an unprecedented event of this sort could trigger? It could well accelerate our creditors' efforts to diversify out of the dollar, for example, thus diminishing its role as the world's reserve currency. While that process is inevitable, and even desirable, over the long term, this surely isn't the way to go about it. That's just a relatively benign effect I can think of -- one can easily imagine siutations that are much more alarming.  [more]

Recs

5

The Bull 'n Bear's Retraction on Commodities Bubble, Mark Haines

May 25, 2011 – Comments (2) | RELATED TICKERS: GLD , SLV

In a post from this month, I completely mischaracterized Jeremy Grantham's position by writing that he had highlighted the bubble in commodities bubble in his April Quarterly Letter. In fact, it's exactly the opposite: Grantham showed that commodities prices suggests that they are in a bubble -- across the board. However, the breadth and magnitude of what, at first glance, appear to be cyclical variations around the long-term trend isn't representative of a bubble; rather, there has been a structural shift in the trend towards permanently higher commodity prices.  [more]

Recs

6

Is Bernanke Out of Touch on Inflation?

May 24, 2011 – Comments (3) | RELATED TICKERS: PG , PEP , KO

Is Bernanke Out of Touch on Inflation?

You can follow me on Twitter.

Alex Dumortier

Recs

1

AIG Share Sale: Who Gains?

May 24, 2011 – Comments (0) | RELATED TICKERS: AIG , C , GM

AIG Share Sale: Who Gains?

Recs

10

The Bull 'n Bear on the Breakup of Commodities

May 24, 2011 – Comments (3) | RELATED TICKERS: JJC , GLD , IAU

The commodities complex is "exploding," that is, the correlation between the different commodities is breaking down/ reverting to pre-crisis levels. There is an interesting piece highlighting this phenomonenon in today's WSJ.  [more]

Recs

5

The Bull 'n Bear on the Mojave and 'Paper Gold'

May 23, 2011 – Comments (7) | RELATED TICKERS: GLD , SLV

I don't usually write about things that are not related to finance, but I spent last weekend in the Mojave desert. The trailhead for our hike is accesible by a road off I-40 that is roughly midway between Barstow and Needles. 8-9 mile hike to the camp ground, which was at an elevation of 5,600 feet (we were the only ones there.) The trip only confirmed my opinion that American Southwest is the most beautiful region in the United States. I don't think I've ever seen as many stars as I did on Saturday night (Las Vegas did produce a glow from far away.)  [more]

Recs

7

The Bull 'n Bear on the Chinese Copper Trick

May 20, 2011 – Comments (4) | RELATED TICKERS: LNKD , SCCO , FCX

This week, I alluded to the unintended consequences of central planning in the Chinese electricity market. Today, the Wall Street Journal's Heard on the Street column (the best part of the newspaper) highlights a distortion in the copper market with its origins the Middle Kingdom. Apparently, Chinese companies take out letters of credit to buy copper in London and ship/ store it in China -- once they have sold it locally, the can use the proceeds until the letter of credit must be repaid (typically, in 3 months). Why do they do this? Because letters of credit are easier to obtain than bank loans due to the Chinese government's lending restrictions.  [more]

Recs

6

The Bull 'n Bear on IPO Traps and Central Planning

May 18, 2011 – Comments (1) | RELATED TICKERS: GS , NEM , PTR

Frothy IPOs are the new contrarian indicator. Professional social network LinkedIn has raised the indicative pricing of its shares by 30% -- unheard of since the tech bubble. Commodities producer/ trader Glencore which is also preparing to list also raised its pricing range. Finally, bond/ distressed debt investment firm Oaktree is also preparing to transfer its listing from a semi-private market organized by Goldman Sachs to the NYSE. Oaktree will not be raising any money in this transaction. Nevertheless, these 3 IPOs are emblematic of the ambient enthusiasm for risk assets. Be fearful when others are greedy, as Mr. Buffett likes to say. Glencore are savvy money men -- one should be very wary of buying when they are selling. Here's a historical example that illustrates why it pays to be wary: The returns to shareholders of Goldman Sachs (NYSE: GS) since the investment bank's listing have been inadequate.  [more]

Recs

5

Bill Miller: Commodities Bear, Stock Bull

May 11, 2011 – Comments (3) | RELATED TICKERS: SLV , JPM , INTC

Bill Miller: Commodities Bear, Stock Bull

You can follow me on Twitter.

Alex Dumortier

Recs

5

Don't Even Think About Owning Treasuries!

May 11, 2011 – Comments (2) | RELATED TICKERS: TLT , GLD , LMT

Don't even think about owning Treasuries!

You can follow me on Twitter.

Alex Dumortier

Recs

4

The Bull 'n Bear on a Greek default and High-yield(?)

May 11, 2011 – Comments (0) | RELATED TICKERS: NBG , BRK-B , GS

In today's press:  [more]

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12

The Bull 'n Bear: Short in May and Go Away?

May 10, 2011 – Comments (17) | RELATED TICKERS: GLD , NBG , BRK-B

Is is just me, or is this market starting to look like that of 2010? Last year, the S&P 500 (and investor complacency) peaked in April above 1,200. Then Europe's sovereign debt woes took center stage; combined with fears of a double-dip recession in the U.S. economy, these factors were the catalysts for a significant correction that lasted until July, with the market falling below 1,050. Sound familiar?  [more]

Recs

10

The Bull 'n Bear on Commodities Bubbles and Fast Money

May 09, 2011 – Comments (1) | RELATED TICKERS: SLV , BAC , GLD

There is a lot of interesting stuff in today's press:  [more]

Recs

15

The Bull 'n Bear on Silver Decline

May 04, 2011 – Comments (11) | RELATED TICKERS: SLV , GLD

Last Friday, I published two articles defending the idea that both gold and silver are in bubble territory and that their prices could suffer substantial declines (on the order of two-thirds, according to my calculations).  [more]

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