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Capital is currently concentrating in gold. It's rising against all major currencies, even as capital is flocking into the dollar and into US treasury bonds. This trend seems to be the result of a new Plaza Accord whereby the EUR is being devalued against the USD and the dollar against the CNY...

I'd say that this is a result of mark-to-model accounting. If you're a bank making a market that's illiquid and has large spreads then it's very easy to register a profit on every trade that you make. The model that you're using to value the trades would be the same model that you'd use in...

The article makes some bad arguments. 1) According to the article the data shows that 1% of day traders are predictably profitable. They conclude from this that you'd be better of playing roulette. Yet 0% of roulette players are predictably profitable since it's a game of chance where the...

PG bèta: .54 Higher premiums are demanded for the SPY, which by definition has a bèta of 1.

Exactly Prometheus, trading should be done in order to exponentially increase your capital. The nature of trading doesn't even allow for "making a living" as it's not a business where incremental and steady returns are to be expected. What you can expect as a trader is to make outsized...

Forced liquidation of a major portfolio just as bids are pulled. This could drive a stock down to the minimum bid of 0.01 on just a few lots. This really just follows the universal law of market liquidity: it's always there until you need it the most.

This doesn't have anything to do with erroneous trades or electronic trading. Moves like this are the logical result of a markets that's highly correlated across all asset classes and which vectors are the binary risk on/risk off. This translated into forced liquidation which caused the spike...

It's likely that Goldman Sachs will not survive this. We've seen with Bear Sterns and Lehman Brothers how quick an investment bank can go under once counterparties and clients remove liquidity and halt their business relationships. A large portion of GS's balance sheet is tied up in collateral...

Can't be good for their reputation, that's an understatement. Goldman Sachs is done for. Their business model is based on the relationships with their clients and counterparties. A flood of lawsuits is going to be filed and apart from the potential liabilities those entail, their former clients...

Ghost of Cutten, you're misunderstanding the SEC's allegation. Their allegation is that Goldman Sachs told clients that the products were structured by an objective organisation, an independant credit analist called ACA Management LLC, which was also the collateral manager in the deal. According...

Yes, stock markets are zero-sum provided that one actually sells the stocks that one bought. If a profit is made on a stock then there is a transfer of capital from the buyer to the seller. That buyer then comes in and finances the seller's profit by buying the stock at a higher price. This...

This could make sense as a speculation, but not as a hedge to a situation like the one Faber is expecting. If you're not a native to the country you're looking to purchase in then your land holdings will probably be confiscated by the government in times of a crisis. As a hedge it only really...

Yes, Long term bonds have a negative correlation to inflation. The perception that the future holds higher inflation also has an impact on yields though, so it isn't just the most current cpi number that's taken into account.

You're right, delfation in America will be worse than it was in Japan. But this is not a good reason to think that it won't happen. Yes, Japan had trade surpluses with foreign nations. Yes, they had and still have a high savings rate. But these are, as you state, condition that softened their...

It's the people that have saved and have been prudent with personal debt that are pulling the long end. They're not victims in any way, in fact they will be amongst the few who willl be able to maintain the lifestyle that they're used to during this recession. The argument is moral as it...

Governments will probably do something similar in order to help local governments, public institutions and private corporations alleviate their debt burden. This makes sense and shouldn't be opposed based on the supposedly moral principals that I often hear. Ultimately this is just patch work...

If your economy is contracting rapidly due to overcapacity and slumping exports then the demand to pick up the slack won't be there. Governments will ofcourse try to create the demand through deficit spending and job programs. Governments around the world will do what they must do and can do to...

We're done with. I agree with you. This recession will last a few more years until debt has been brought back to servicable levels. Your basic argument is that we'll have inflation because politicians want inflation: "Because with a severe deflationary recession/depression, debt service...

Your argument seems to be based on what you think governments want to do but it pays no attention to what they actually can do. Just how is money actually printed? How is this to be circulated? If we do succeed in creating inflation, how do we keep interest rates artificially low without...

The attempt to create inflation, or better yet the attempt to reinflate has proven quite succesful over the recent months when it comes to asset prices. Commodities, equities, high yield bonds and other 'risk' assets have risen exponentially, as have interest rates on treasuries and mortgages...