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Minyan Mailbag: Making My Head Spin


The only way to rectify the imbalances created is for a massive transfer of assets...


Professor Succo-

As I survey the landscape of complete lunacy in the markets currently, what the Heck is going on? The crosscurrents are just incredible. I mean Copper, HGX, the Piggies, the 10 Year, the Large Caps, the Dollar, etc. are making my head spin.

I guess I am being forced to again look at the big picture. Liquidity is in serious decline, housing "expansion"...dead. The consumer is tapped out and seasonality coming to an end...

Any thoughts for a bewildered Minyan???



I said long ago that this is the great experiment. Never in the history of the world have we seen economic imbalances, central bank hubris, debt levels, and currency debasement anywhere close to this magnitude.

The end of globalization is "sharing of ownership." The only way at this point to rectify the imbalances created (the borrowing of labor by the U.S.) is for a massive transfer of assets: The U.S. must be willing to sell assets that foreigners want to buy. They are tired of buying bonds, and debts that we can just print dollars to satisfy. Now they want stocks (we see them buying big caps now) and/or real estate. But this is small now. The U.S. Congress must be willing to allow large sales of companies and real estate to satisfy global flows. If we become protectionist the whole thing falls apart.

Your frustration is borne, I think, of massive intervention interrupting normal market mechanism. Things don't make sense day to day as governments are extremely active. Does it make any sense that the Chinese government is net long real Copper and wants to buy more, yet because a rogue trader got them short a smaller amount of forwards they decide to dump $400 million of copper to drive the price down? That is ridiculously stupid. Yet that is what we are dealing with in the markets: governments being the biggest players. Governments do not act as economic entities normally would so market flows are making little sense.

Eventually big governments cannot control markets. The Chinese will wind up paying even higher prices for their copper once their folly is complete.


Thank You, will all end in disaster imo as it always has...In my view all you need to look at is FNM for confirmation...

Minyan MS

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