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Hussman showed a characteristic of the Dividend Growth model that I found interesting http://www.hussmanfunds.com/wmc/wmc120507.htm I've used this model(modified) in the past to estimate stock returns because it's simply a expected value type equation that shows how much one should pay for a...

There are signs that it is happening again, says Louise Cooper from BGC Partners. If Italians were the biggest foreign buyers of top properties in London last year, the French are catching up this year in the £3m to £5m range. “London property is like German Bunds - somewhere safe to park...

History buffs will remember the events of 1936 when Leon Blum’s Front Populaire came to power with “New Deal” rhetoric and Communist backing. Investors rushed for the exits, forcing the franc off the Gold Standard. The money crossed the Channel. “Conversations in French became...

It seems that what you are saying is that because the fed might ignore short-term fluctuations in the most volatile components like energy that will leave the investment very exposed to energy fluctuations. I'd agree with that. I don't agree that it "becomes increasingly more so with time". I'd...

If the PCE avgs 2% for the next 7 years then CPI will likely be higher than 2.15%, I don't know why would one think otherwise. The fed is targeting the PCE thats why I mentioned You would be right if the relationship between the PCE and the CPI are likely to break down but I'm not sure why it...

Very interesting chart. Shows that support for the bailouts is almost over. EUR support is still high but without bailouts what is the alternative? Full default and EUR membership I suppose, but I don't think that will be EUR positive at all

What you mean its a energy trade?If the Fed hits their target of 2% PCE, based on historical relationships to the CPI, TIPS will provide an additional return. For USTs to be a better value one must think the Fed will fail Japan style

Well, in a fixed income portfolio its all about relative basis isn't it. I'm referring more to 5-10y tips "Assuming the Fed is successful in its targeting efforts and the CPI averages 2.35% over the next five years, a buy-and-hold position purchased at par and held to maturity in five-year...

Very interesting different perspective http://www.businessinsider.com/david-bianco-high-profit-margins-sustainable-2012-5

If you are talking about USD investment only. I'd say TIPS are quite cheap

Its hard to put a number on it. I just have a small short at this point One strong counter-argument to my thesis I found is Latvia They had a 30% GDP drop. UR went from 5%ish to 21%, yet they STILL have a peg to the EUR(They are in the application process). It seems that the insanity of...

Are those equities and bonds from the US? What is your thesis behind the play?

As you know if the peg were exactly 1.20 at all times shorting CHF would be exactly equal to shorting EUR. At this stage its sorta half EUR half CHF. When it deviates from being EUR(it rises from 1.20) that benefits my trade Of course I have to be right about the peg

Its not no exposure at all. I'm indirectly short it because as a long the CHF peg holds they are EUR effectively just with a different risk reward profile from my perspective

Actually it seems that the IV of FXE calls are almost the same as the ones in FXF(Franc ETF), kinda bizarre. Not sure how the options in the 'real' FX world look like right now

This would work but it would be bad for EUR too, since it would mean they would all deval as QE would go rampant. I'm not sure this is a baseline though, Germany even RAISED interest rates in 1931, their pain threshold seems quite a bit high SPECIALLY now given that they got a good economy. If...

This view also raises a question of, since I'm long EURCHF and short EURUSD(And looking to add if I don't see strong counter arguments to the thesis), whether is better to go long USDCHF(Since that is the position I would have on basically) There should be a interest income savings in that...

It seems that are 2 interesting ways to play this trade -Buy black swan type long-term puts on EUR -Short right after a country leaves, the currency will probably be down a lot that day, if feels un-natural to 'chase' the trade. But just imagine the people with huge EUR portfolios who now...

BTW, I believe even the market agrees with my view. Back when Greece was threatening a EUR referendum and full default the EUR dropped 500bps. Its a matter of what the probability is, the market thinks its small so they keep the currency at the current level. I believe its much higher so I'm short

To me this mine field analogy is the real killer. IME people totally hate to lay odds in bets, everyone wants to bet getting 6-1 on their money not offer 6 for everyone 1 that is bet. Having EUR on a country that can devalue will be effectively laying odds on your wealth. You can lose a lot to...