Comments on: One Dozen Observations on the Current Market Stress

By: Ted Murphy

Ted Murphy — Wed, 03 Dec 2008 15:40:00 +0000

David,

> This could be what finally does in the dollar.

I think the biggest question right now for the future of the dollar is whether or not the US government will lose money on the $3 trillion (?) they have put up to support the US financial system.

Do you have an inkling on that? I heard a smart guy last night swear that we wouldn’t lose a penny; shocked me, I must admit. And he is very negative on the economy. I’m just saying that the answer is not obvious.

By: Amicus

Amicus — Wed, 03 Dec 2008 00:20:29 +0000

David, sorry to hear about your long-too-early thingy.

Just a note (since I was just looking at this today), the ratio on TIPs can be less than one (it’s the principal at maturity that is no less than par).

By: Chris

Chris — Wed, 03 Dec 2008 00:11:59 +0000

Hi David, you mentioned that you are lightening up on equities. What are you holding instead? cash?

Thanks.

By: matt

matt — Tue, 02 Dec 2008 22:24:34 +0000

The softening RMB makes me a little nervous. The export lobby in China is very powerful and has been pushing for a weaker RMB all year. If there is already an overcapacity problem, this will make it worse and extend the problem.

By: bkm

bkm — Tue, 02 Dec 2008 16:45:22 +0000

David, I can’t understand why you would be long this year. The warning signs were everywhere.

Why would the Fed buy long and flatten the yield curve? It doesn’t make sense. A sharper yield curve would give the banks more of an incentive to lend long. If anything, the T should be issuing 30yr by the boatload.

D: for the first time this year(last week) I’m net long for a trade. Looking for 1100 before finding a new low