The Credit Crisis Financial Stocks Short Journal

Ralph, I read you would be focusing more on options from here on and you have articulated your view about commodities being overvalued a few times as well but I would be gratefull if you could briefly share your view on currencies and stocks from here on out as well.

Cheers.
 
Quote from Debaser82:

Ralph, I read you would be focusing more on options from here on and you have articulated your view about commodities being overvalued a few times as well but I would be gratefull if you could briefly share your view on currencies and stocks from here on out as well.

Cheers.
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Well, I belive that we're in a slow, grinding debt deflation, so, at a general level, would be bearish commodities, especially industrial commodities for which China appears to be the marginal bid. That doesn't mean there won't be some great opportunities on the long side - I'm just not that focused on it right now (I'd look at the grains though. We haven't had rain in forever in the Phila area and now its turning blazing hot w/still no rain in the forecast. If its this bad in the midwest, the crops have to be suffering).

I'm bearish the AUD for reasons I've talked about at length on here - I'm currently short the AUD by being long OOM puts. I'm bearish on the stock market, but not short any stocks. I am long OOM VXX calls. I'm also long Aussie short interest rate futures - the options weren't available, so I'm long the outright futures.
 
Nice to see stock futures through the roof in the next trading session after Biggs' bearish comments hit the tape.:D

Excellent Bloomberg piece about Aussie housing. I love all the comments about strong demand and shortages ... duh, in bubbles of any sort, there is always strong demand and shortages. That's what creates the bubble.

Grantham comments that it will take higher interest rates to pop the Aussie housing bubble. I believe we have already seen the higher rates and that the bubble has popped. These things take time to show up though. Its clear now that the American housing bubble popped in 2005, but the party kept going for another 18 months.

http://noir.bloomberg.com/apps/news?pid=20601068&sid=a4vbRYnAyv_A
 
I can't remember where I heard it, but during the last week someone on TV referred to Australia as a 'Chinese colony'.

The suggestion was that if and when the Chinese economy slows down further, this will hurt the Aussie mining industry, which in turn will pop the housing bubble.

Quote from ralph00:

Nice to see stock futures through the roof in the next trading session after Biggs' bearish comments hit the tape.:D

Excellent Bloomberg piece about Aussie housing. I love all the comments about strong demand and shortages ... duh, in bubbles of any sort, there is always strong demand and shortages. That's what creates the bubble.

Grantham comments that it will take higher interest rates to pop the Aussie housing bubble. I believe we have already seen the higher rates and that the bubble has popped. These things take time to show up though. Its clear now that the American housing bubble popped in 2005, but the party kept going for another 18 months.

http://noir.bloomberg.com/apps/news?pid=20601068&sid=a4vbRYnAyv_A
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Hussman commentary
http://www.hussmanfunds.com/wmc/wmc100706.htm

He makes an interesting critique regarding fiscal stimulus. Says private investment doesnt have to be fixed as assumed by Keynes, government can perhaps create "tax incentives, R&D credits, and other means" to stimulate investment by private entities, also government should focus on necessary spending that can only be done by them or that historically has worked

In any event even though he disagrees with some Keynesians , he is calling for government fiscal intervention during recessions which might not please some free market purists
 
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