Diehard fans know that the NCAA Tournament play in game is tonight between Florida A&M and Niagra (Calvin Murphy's alma mater I believe?).The broad market seems to have forgotten about sub prime as the news and reactions by the specific names in the group seems to be getting worse.
From the start I have thought the sub prime issue had the potential to be a piece of the liquidity constraint puzzle but not the entire thing.
I wish the stock market was more concerned about sub prime than it appears to be.
A necessary ingredient for a rising market, as you know, is some sense of fear. The speed with which we appear to have tossed aside sub prime strikes me as an uh-oh.
If you have read this site for a while you know I am more concerned about potential problems than the greatest story never told because the greatest story never told means accounts go up in value.
This post might simply be an exploration of no consequence which would be just fine with me.
7 comments:
Roger, How does one take delivery of gold or silver? Last night Cramer...ok i see him when i'm switching stations....expects the fed to lower rates, not once but twice. As in fed bail out. The mere expectation is talking to me about a us dollar going down further. If I want some insurance in the form of gold or silver, is it necessary to have the hard asset or will etf exposure do the job. Is this kind of thinking just for the paranoid survivor nut jobs?
there are multiple facets here. My opinion is that ETFs suffice. I have faith the American society will be fine with a recession as recessions are normal.
There are folks that things will be really bad. Bill Cara has a post up calling for depression and almost looting in the streets (my impression) but he does use the words angry mob.
If you fall into that camp, and again I do not, you should have the actual metal.
Niagara will need Viagra to win this game. But I am a Duck fan, so what do I know. Say, on the subject of safe havens from the potential recessionary storm:
1. GLD,SLV,IAU ETF's
2. Bond Funds. How do they typically respond to interest rate adjustments?
3. Cash. (but with a weaker dollar, it loses value=inflation)
4. FXY, the Yen ETF, or FXE
Which do you like, and what allocations %'s on average do you like? Also, i couldn't find the ICEQ Iceland ETF you mentioned. Thanks. Scoot.
Niagra needs Viagra? great line.
if rates somehow go up leveraged CEF will probably get smacked hard, this has been the case in the past.
As far as things to own within the context of the question you have pretty much have the right list.
You ask about yen or euro. For the short run the yen has been the better low correlation exposure but longer term I prefer the Aussie in the context and have disclosed own that for some clients and the Swedish krona for most clients.
You ask about cash; a weaker dollar matters more for non-food stuff so may not be a HUGE impact. Yes inflation devalues the dollar but if inflation stays below 3% the impact is not that great,IMO.
Roger - did you happen to catch this line in the transcript of the GS call?
"Our investment banking backlog increased during the first quarter and is now the highest since 2000."
Hmmmm, you don't say?
Roy you are a beacon of good cheer, lol.
nice catch!
Anon 7:11 quiped: "Roger, How does one take delivery of gold or silver? Last night Cramer...ok i see him when i'm switching stations....expects the fed to lower rates, not once but twice."
Cramer also expects Tinker Bell to fly in the window tonight and take all investors to all to Never-Never Land. Which is far more likely than the Fed lowering interest rates twice this year BTW.
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